The Securities and Exchange Commission charged Titan Global Capital Management USA LLC, a fintech investment adviser on Monday for “using hypothetical performance metrics in advertisements that were misleading." The commission found that the advisor had used misleading claims from August 2021 to October 2022.
“When offering and marketing complex strategies, investment advisers must ensure the accuracy of disclosures made to existing and prospective investors.,” said Osman Nawaz, Chief of Enforcement’s Complex Financial Instruments Unit.
The New York fintech advisor has agreed “to a cease-and-desist order, a censure, and to pay $192,454 in disgorgement, prejudgment interest, and an $850,000 civil penalty that will be distributed to affected clients,” according to the regulator.
The commission said that Titan misguided retail investors and also failed to obtain client signatures for certain transactions that required such.
The charge is the first time the regulating body is taking action on its advisor marketing rule, which became effective in 2021. The rule was updated to reflect market developments and regulatory changes that had not been amended since the 1970s, according to the Securities and Exchange Commission.