SEC IA Ad Rule

Stressed businessman tripping above green meadow to catch his flying file folders

Deficient advertising P&Ps cost adviser $1M

The adviser would 'periodically' have its disclosures 'reviewed and revised by WAM’s internal and external legal and compliance professionals, but those revisions did not adequately disclose the methodologies used to create the index'

Problems around hypothetical ads under the old rule costs adviser

While the firm's compliance policy required advertising materials to be accurate, it did not adopt procedures for compliance personnel to verify the accuracy or completeness of disclosures used in advertising or procedures to supply compliance personnel with sufficient information to make that assessment

Another adviser settles for hypothetical ads on its website

Elm Partners published on its website at that constituted advertisements because they offered Elm Partners’ investment advisory services with regard to securities to prospective clients and offered new investment advisory services with regard to securities to current clients

Enforcement case shows you must update P&Ps for hypothetical ads

Hypothetical performance is defined as performance results that were not actually achieved by any portfolio of the investment adviser



About this page

A new SEC investment adviser advertising rule is now in place. The new rule opens the gates to a wider use of social media by advisers, permits the use of testimonials and endorsements, sets requirements around disclosures and establishes standards when using performance or hypothetical advertising, among other changes. The new rule affects private fund advisers as well. This editorial tent-pole collects in one place all that you’ll need to comply with the new rule.



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