The Securities and Exchange Commission (SEC) today announced settled charges against five registered investment advisers for violations of the Marketing Rules.
All five companies agreed to settle the SEC charges and pay $200,000 in combined penalties.
The five consulting firms are:
- GeaSphere LLC
- Bradesco Global Advisors Inc.
- Credicorp Capital Advisors LLC
- InSight Securities Inc.
- Monex Asset Management Inc.
The SEC’s orders found that the five companies advertised hypothetical performance to the general public on their websites without adopting and implementing policies and procedures reasonably designed to ensure that the hypothetical performance was relevant to the public’s likely financial condition and investment objectives for every advertisement. required by the Marketing Rule. Bradesco, Credicorp, InSight and Monex received reduced penalties because of the corrective actions they took before being contacted by SEC staff.
According to the order, GeaSphere also violated other regulatory requirements, including making false and misleading statements in advertisements, advertising misleading model performance, failing to document the performance shown in its advertisements, and failing to enter into written agreements with individuals it compensated for endorsements. The decision further finds that GeaSphere committed recordkeeping and compliance violations and made misleading statements about its performance to a registered client of the investment firm and that the misleading statements were included in the client’s prospectus filed with the Commission.
Without admitting or denying the SEC’s findings, all of the companies agreed to enter orders that found them in violation of the Investment Advisers Act of 1940 and ordered them to be fined, to cease and desist from violating the charged provisions, and to comply with certain covenants . GeaSphere agreed to pay a $100,000 fine. Bradesco, Credicorp, InSight, and Monex agreed to pay civil penalties ranging from $20,000 to $30,000, which reflected certain corrective actions each of these companies took before being contacted by Commission staff.
This is the second series of cases the Securities and Exchange Commission has brought as part of an ongoing targeted investigation into marketing rule violations after nine advisory firms were charged in September 2023.