SEC Settles Eight Enforcement Actions for Violations of Advertising Rule and Pay-to-Play Rule

SEC Settles Eight Enforcement Actions for Violations of Advertising Rule and Pay-to-Play Rule


By: Jessica Forbes, Stacey Song, Joanna Rosenberg

On July 10, 2018, the Securities and Exchange Commission (the “SEC”) announced five settlements (the “Advertising Rule Settlements”) in connection with violations of Section 206(4) of the Investment Advisers Act of 1940 (the “Advisers Act”) and Rule 206(4)-1(a)(1) thereunder. Each of the Advertising Rule Settlements involves the improper use of testimonials on social media. In addition, the SEC announced settlements with two registered investment advisers and one exempt reporting adviser relying on the venture capital adviser exemption for violations of Advisers Act Rule 206(4)-5.

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