SEC Issues Risk Alert About Performance Advertising

posted in: Advertising & Marketing | 0

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.