SEC Hits 5 RIAs With Marketing Rule Fines

“Today’s actions show that we will continue to employ targeted initiatives to ensure that investment advisers fully comply with their obligations under the rule,” Schuster said. “They also serve as a reminder of the benefits to firms that take corrective steps before being contacted by Commission staff.”

GeaSphere also violated other regulatory requirements, “including by making false and misleading statements in advertisements, advertising misleading model performance, being unable to substantiate performance shown in its advertisements, and failing to enter into written agreements with people it compensated for endorsements,” the SEC found.

The order further finds that GeaSphere committed recordkeeping and compliance violations and made misleading statements about its performance to a registered investment company client and that the misleading statements were included in the client’s prospectus filed with the commission.

This is the second set of cases that the commission has brought as part of an ongoing targeted sweep concerning Marketing Rule violations after charging nine advisory firms in September 2023.

Natasha Vij Greiner, deputy director of the SEC’s Division of Examinations, who’s now director of the SEC’s Division of Investment Management, said on March 7 that examiners will be ”focusing on marketing in almost every exam. How do you look at a firm without looking at their marketing materials?”