SEC Hits 9 Firms in Marketing Rule Crackdown

Howard Bailey ”also advertised endorsements that did not disclose that the endorser was a paid, non-client of Howard Bailey in videos, on social media, and on physical objects such as bags and flags,” the order states.

Finally, as set forth in the orders, Abacus, Beta Wealth, Professional Financial and Richard Bernstein Advisors “included in their advertisements third-party ratings, some of which were more than five years old, without disclosing the dates on which the ratings were given or the periods of time upon which the ratings were based,” the SEC said.

The Marketing Rule’s “provisions regarding truthfulness, substantiation, and disclosure are critical to protecting investors,” Corey Schuster, co-chief of the SEC Division of Enforcement’s Asset Management Unit, said in a statement.

“The advertisements at issue in each of these actions violated the Marketing Rule and posed a serious risk of misleading investors. Investment advisers must comply with all aspects of the Marketing Rule, and we will continue to hold them accountable when they fail to do so,” Schuster said.

Without admitting or denying the SEC’s findings, all of the firms consented to the entry of orders finding that they violated the Investment Advisers Act of 1940 and ordering them to be censured, cease and desist from violating the charged provisions, comply with certain undertakings, and pay the civil penalties referenced above.