Regulatory Alert
Summary
The United States Securities and Exchange Commission (“SEC”) recently announced an enforcement action against and settlement with an investment adviser firm related to solicitation arrangements with online content providers. The investment adviser firm allegedly paid over $8 million to more than 200 social media influencers and online newsletter providers for prospective client referrals without adhering to the required disclosure and documentation under the former Rule 206(4)-3 of the Investment Advisers Act of 1940. The investment adviser firm has agreed to a cease-and-desist order, censure, and a $250,000 civil penalty to settle the charges by the SEC.
