{"id":85666,"date":"2023-08-22T00:30:39","date_gmt":"2023-08-22T04:30:39","guid":{"rendered":"https:\/\/www.hedgeco.net\/news\/?p=85666"},"modified":"2023-08-22T00:33:37","modified_gmt":"2023-08-22T04:33:37","slug":"fintech-investment-adviser-charged-for-misrepresenting-hypothetical-performance-of-investments","status":"publish","type":"post","link":"https:\/\/hedgeco.net\/news\/08\/2023\/fintech-investment-adviser-charged-for-misrepresenting-hypothetical-performance-of-investments.html","title":{"rendered":"New York FinTech Investment Adviser Charged for Misrepresenting Hypothetical Performance of Investments"},"content":{"rendered":"\n<p>(HedgeCo.Net) The Securities and Exchange Commission has charged <strong>Titan Global Capital Management<\/strong> USA LLC, a <strong>New York<\/strong>-based FinTech investment adviser, for using hypothetical performance metrics in advertisements that were misleading. The SEC also charged Titan with multiple compliance failures that led to misleading disclosures about custody of clients\u2019 crypto assets, the use of improper \u201chedge clauses\u201d in client agreements, the unauthorized use of client signatures and the failure to adopt policies concerning crypto asset trading by employees.<\/p>\n\n\n\n<p>According to the SEC\u2019s order, for a period ranging from August 2021 to October 2022, Titan, which offers multiple complex strategies to retail investors through its mobile trading app, made misleading statements on its website regarding hypothetical performance, including by advertising \u201cannualized\u201d performance results as high as 2,700 percent for its Titan Crypto strategy. The order alleges that Titan\u2019s advertisements were misleading because they failed to include material information, for example, that the hypothetical performance projections assumed that the strategy\u2019s performance in its first three weeks would continue for an entire year. The order also finds that Titan violated the marketing rule by advertising hypothetical performance metrics without having adopted and implemented required policies and procedures or taking other steps required by the Commission\u2019s marketing rule, which was amended in December 2020.<\/p>\n\n\n\n<p>The SEC\u2019s order further finds that Titan (1) made conflicting disclosures to clients about how Titan custodied crypto assets; (2) included in its client advisory agreements liability disclaimer language that created the false impression that clients had waived non-waivable causes of action against Titan; and (3), contrary to representations, failed to adopt policies and procedures concerning employee personal trading in crypto assets. The order also states that Titan self-reported to the SEC staff that it failed to ensure that client signatures were obtained for certain types of transactions in client accounts and agreed to settle related charges.<\/p>\n\n\n\n<p><strong><em>\u201cWhen offering and marketing complex strategies, investment advisers must ensure the accuracy of disclosures made to existing and prospective investors. The Commission amended the marketing rule to allow for the use of hypothetical performance metrics but only if advisers comply with requirements reasonably designed to prevent fraud,\u201d said Osman Nawaz, Chief of Enforcement\u2019s Complex Financial Instruments Unit. \u201cTitan\u2019s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance.\u201d<\/em><\/strong><\/p>\n\n\n\n<p>Titan cooperated with the investigation and consented to the entry of the SEC\u2019s order finding that it violated the Advisers Act. Without admitting or denying the SEC\u2019s findings, Titan agreed to a cease-and-desist order, a censure, and to pay <strong>$192,454<\/strong> in disgorgement, prejudgment interest and an <strong>$850,000<\/strong> civil penalty that will be distributed to affected clients.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>(HedgeCo.Net) The Securities and Exchange Commission has charged Titan Global Capital Management USA LLC, a New York-based FinTech investment adviser, for using hypothetical performance metrics in advertisements that were misleading. The SEC also charged Titan with multiple compliance failures that [&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-85666","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\/85666","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=85666"}],"version-history":[{"count":2,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/85666\/revisions"}],"predecessor-version":[{"id":85668,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/posts\/85666\/revisions\/85668"}],"wp:attachment":[{"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/media?parent=85666"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/categories?post=85666"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/hedgeco.net\/news\/wp-json\/wp\/v2\/tags?post=85666"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}