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SEC Charges Five Investment Advisers for Marketing Rule Violations

SEC Charges Five Investment Advisers for Marketing Rule Violations

The Securities and Exchange Commission announced today that five registered investment advisers have settled charges for Marketing Rule violations. Each of the five firms has agreed to settle the SEC’s charges and pay combined penalties totaling $200,000.

The advisory firms involved are:

  • GeaSphere LLC
  • Bradesco Global Advisors Inc.
  • Credicorp Capital Advisors LLC
  • InSight Securities Inc.
  • Monex Asset Management Inc.

According to the SEC’s orders, these firms advertised hypothetical performance to the public on their websites without adopting policies and procedures to ensure that the hypothetical performance was relevant to the intended audience’s financial situation and investment objectives, as required by the Marketing Rule. Bradesco, Credicorp, InSight, and Monex received reduced penalties due to corrective steps taken before being contacted by the SEC staff.

Additionally, GeaSphere was found to have violated other regulatory requirements, including making false and misleading statements in advertisements and failing to substantiate performance shown in its ads. The firm also committed recordkeeping and compliance violations and made misleading statements about its performance to a registered investment company client.

Corey Schuster, Co-Chief of the SEC Enforcement Division’s Asset Management Unit, emphasized the importance of the Marketing Rule’s provisions in protecting investors from misleading advertising claims. He stated, “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.”

All firms consented to the orders without admitting or denying the SEC’s findings. They agreed to be censured, cease and desist from violating the charged provisions, and comply with certain undertakings. GeaSphere agreed to pay a civil penalty of $100,000, while Bradesco, Credicorp, InSight, and Monex agreed to pay civil penalties ranging from $20,000 to $30,000.

These cases are part of an ongoing targeted sweep concerning Marketing Rule violations, following the Commission’s charging of nine advisory firms in September 2023.

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The SEC’s investigations were conducted by Marilyn Ampolsk, Anne Hancock, Jonathan Menitove, Donna Norman, and Emily Shea under the supervision of Colin Forbes, Brianna Ripa, Mr. Schuster, and Andrew Dean of the Division of Enforcement’s Asset Management Unit. The team received assistance from accountant Rory Alex; Alex Lefferts of the Division of Enforcement’s Office of Investigative and Market Analytics; Janet Grossnickle, Julia Gilmer, Jennifer Paul, and Jennifer Sawin of the SEC’s Division of Investment Management; Stuart Jackson of the SEC’s Division of Economic and Risk Analysis; and Robert Baker, Michael McGrath, and Kamran Beikmohamadi of the SEC’s Division of Examinations.

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