{"id":80706,"date":"2022-02-11T01:22:28","date_gmt":"2022-02-11T06:22:28","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=80706"},"modified":"2022-02-11T01:21:54","modified_gmt":"2022-02-11T06:21:54","slug":"robo-adviser-charged-with-misleading-clients","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/02\/2022\/robo-adviser-charged-with-misleading-clients.html","title":{"rendered":"Robo-Adviser Charged with Misleading Clients"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has charged New York-based robo-adviser <strong>Wahed Invest, LLC<\/strong> with making misleading statements and breaching its fiduciary duty, and for compliance failures related to its Shari\u2019ah advisory business.<\/p>\n\n\n\n<p>According to the SEC\u2019s order, from September 2018 through July 2019, Wahed Invest advertised the existence of its own proprietary funds when no such funds existed, and also promised investors that it would periodically rebalance their advisory accounts, but did not do so.<\/p>\n\n\n\n<p>The SEC\u2019s order further finds that when Wahed Invest ultimately launched a proprietary ETF in July 2019, it used its clients\u2019 advisory assets to seed the ETF without prior disclosure to clients of any conflicts of interest.<\/p>\n\n\n\n<p>The order also finds that Wahed Invest marketed itself as providing advisory services compliant with Islamic, or Shari\u2019ah law, including marketing the importance of its income purification process on its website. Despite these representations, the order finds that Wahed Invest did not adopt and implement written policies and procedures addressing how it would assure Shari\u2019ah compliance on an ongoing basis.<\/p>\n\n\n\n<p>\u201c<a href=\"https:\/\/www.investor.gov\/introduction-investing\/investing-basics\/glossary\/robo-adviser.\">Robo-advisers<\/a>, like other advisers, must ensure that their marketing materials are not misleading and that conflicts are disclosed to investors,\u201d said Adam S. Aderton, Co-Chief of the SEC Enforcement Division\u2019s Asset Management Unit. \u201cRegistered investment advisers like Wahed Invest must also adopt and implement written policies and procedures reasonably designed to prevent the adviser from deviating from its claimed investment process.\u201d<\/p>\n\n\n\n<p>Wahed Invest consented to the entry of the SEC\u2019s order finding that the firm violated Sections 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-1(a) and 206(4)-7. Without admitting or denying the SEC\u2019s findings, Wahed Invest agreed to a cease-and-desist order, to pay a $300,000 penalty, and to retain an independent compliance consultant among other undertakings.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has charged New York-based robo-adviser Wahed Invest, LLC with making misleading statements and breaching its fiduciary duty, and for compliance failures related to its Shari\u2019ah advisory business. According to the SEC\u2019s order, from September [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16,3,16048],"tags":[],"class_list":["post-80706","post","type-post","status-publish","format-standard","hentry","category-hedgeco-networks-press-releases","category-hedgeco-news","category-hedgecovest-news"],"_links":{"self":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80706","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/comments?post=80706"}],"version-history":[{"count":1,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80706\/revisions"}],"predecessor-version":[{"id":80707,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/80706\/revisions\/80707"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=80706"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=80706"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=80706"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}