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Robo-Advisor's $1M Fine Shows Risks of Hypotheticals in Ads  

Monday, Sep 04 2023
Regulatory & Compliance
Written by  PFA News

Robo-advisor Titan Global Capital Management USA has agreed to pay more than $1 million to settle the Securities and Exchange Commission’s charges that it broke the regulator’s marketing rule by marketing eye-popping performance that hadn’t happened. So reports InvestmentNews.

SEC Seal of the United States Securities and Exchange CommissionThe SEC claimed in its order that from August 2021 to October 2022, Titan advertised annualized returns of 2,700% without disclosing that the numbers were for a “purely hypothetical account.”

Compliance experts told the magazine that the enforcement action is a reminder for investment advisors that use hypothetical performance in their ads to double-check their practices and disclosures.

Read the full article from InvestmentNews.

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