VanEck Agrees to $1.75M Fine by SEC Over ETF Promotion Violation
- A civil penalty was levied on the investment advisor by the U.S SEC.
- The financial watchdog did not specifically identify the influencer.
In order to settle U.S SEC accusations related to the 2021 launch of an exchange-traded fund (ETF) centered on social media, VanEck agreed to pay a fine of $1.75 million.
A civil penalty was levied on the investment advisor by the SEC. In a statement issued on February 16th, the SEC disclosed that VanEck failed to adequately disclose that a well-known social media influencer was involved in the promotion of the VanEck Social Sentiment ETF during its March 2021 launch.
Far-reaching Consequences
With the use of positive insights gleaned from various data sources, the ETF hoped to track an index. But the SEC found out that VanEck wanted to make the fund more popular on social media and teamed up with a controversial online influencer to do so.
The financial watchdog did not specifically identify the influencer, but prior reports from 2021 linked Barstool Sports founder David Portnoy to the marketing of the VanEck ETF. An unreported fact was brought to the attention of the regulator: the influencers fee was linked to the funds development, ensuring that their remuneration would increase as the fund increased.
The secret contract was slammed by the SEC, who pointed out that VanEck should have told the ETF board about the influencers planned participation. The board failed in its responsibility to supervise financial matters during talks of the advising contract, and this concealed arrangement had far-reaching consequences for the management contract and the operations of the fund.
As part of its compliance with the SECs ruling, VanEck acknowledged that it had violated the Investment Advisers Act and the Investment Company Act. Without admitting or rejecting the conclusions, the corporation took the necessary financial penalty, censure, and cease and desist order.
Highlighted Crypto News Today:
Yuga Labs Acquires Moonbirds NFT Collection Creator Proof
Read more: https://thenewscrypto.com/vaneck-agrees-to-1-75m-fine-by-sec-over-etf-promotion-violation/
Text source: TheNewsCrypto – Blockchain & Cryptocurrency News M
