In a Risk Alert issued today, the SEC’s Office of Compliance Inspections and Examinations has provided a list of compliance issues relating to Rule 206(4)-1 (the “Advertising Rule”).
These compliance issues were most frequently identified in deficiency letters recently sent to SEC-registered investment advisers and as part of an examination initiative that focused on advisers’ use of accolades in their marketing materials. The deficiencies identified include:
- Misleading Performance Results
- Misleading One-on-One Presentations
- Misleading Claim of Compliance with Voluntary Performance Standards
- Cherry-Picked Profitable Stock Selections
- Misleading Selection of Recommendations
- Inadequate Compliance Policies and Procedures
A copy of the Risk Alert can be found here.