Violations of Marketing Rule adding up (AdvisorHub)

There are new enforcement actions against investment advisers for non-compliance with the SEC’s Marketing Rule. In these cases, the SEC focused on the advertisement of hypothetical performance on the firms’ websites that violated the Rule, as well as other false or misleading statements made. Amy Lynch, FrontLine’s Founder and President, has the exclusive comments in the AdvisorHub story detailing the cases brought by the SEC. She explains why investment advisers need to be extra cautious when marketing hypothetical performance claims to retail investors. Ms. Lynch states that the SEC does not want firms to mass distribute these claims and is concerned that individual customers could be taken advantage of through misleading statements. She recommends firms market hypothetical performance to a more limited group within a client portal or only to certain prospects. This is the third round of enforcement cases on the Marketing Rule brought by the SEC since the Rule’s compliance date in November 2022. See AdvisorHub, “SEC Fines Five RIAs $200K Over Marketing Rule Violations“