SEC fines nine investment advisers combined $1.2M in ‘ongoing’ marketing rule sweep

The SEC said in a press release Tuesday that its “ongoing sweep” also found that the investment advisers made “untrue or unsubstantiated statements of material fact or testimonials, endorsements, or third-party ratings that lacked required disclosures.”

The agency noted that the violations occurred after the amended marketing rule took effect in November 2022. In April, the SEC published a risk alert that detailed violations of the marketing rule found by SEC examiners.

In the latest round of violations, the agency found exaggerations and omissions that misled investors about the firms or their performance.

South Carolina-based Abacus Planning Group was fined $150,000. The firm claimed in an advertisement posted on its website that it was rated a Top 12 financial adviser by Barron’s, when in fact it was ranked a Top 1,200 financial adviser by the publication, the SEC said in its order.

Texas-based Integrated Advisors Network was fined $325,000. Integrated claimed on its website that the firm was “a true fiduciary that puts the client first by aligning incentives and eliminating conflicts of interest” without providing any context for this claim, the SEC said in its order. Integrated had disclosed several conflicts of interest in its Form ADV Part 2A brochures, the SEC said.

New York-based Richard Bernstein Advisors was fined $295,000. The firm posted advertisements on its website from November 2022 through June 2024 touting its principal being named one of Fortune Magazine’s “All-Star Analysts” and one of Smart Money Magazine’s “Power 30,” without disclosing the date those awards were given. They were bestowed between 2001 and 2004, the SEC said.

Other firms receiving fines included:

• AZ Apice Capital Management, $70,000;
• Beta Wealth Group, $80,000;
• Droms Strauss Advisors, $85,000;
• Howard Bailey Securities, $90,000;
• Professional Financial Strategies, $60,000; and
• TS Bank d/b/a Callahan Financial Planning, $85,000.

The firms agreed to settle the charges without admitting or denying the SEC’s findings. Each firm agreed to review its advertisements and submit, in writing, a certification of compliance with the SEC’s amended marketing rule within 50 days.

The series of fines marked the fourth time the SEC has punished marketing rule violations since the amended rule took effect.

In April, the SEC fined five investment advisers a total of $200,000 for marketing rule violations.

In September 2023, the SEC announced fines totaling $850,000 levied against nine firms, and handed down a penalty of $1 million against Titan Global Capital Management USA in August 2023.