The U.S. Securities and Exchange Commission (SEC) has imposed a $1.75 million penalty on investment advisor VanEck for failing to disclose details around the 2021 launch of its Social Sentiment exchange-traded fund (ETF).
According to the SEC, VanEck collaborated with an unnamed influencer to promote the ETF on social media without revealing to the fund’s board that the influencer’s compensation was tied to the fund’s growth. This violated the board’s oversight duties during advisory contract discussions.
The SEC said VanEck’s lack of transparency around the influencer deal prevented the board from properly evaluating the advisory contract and economic impact. VanEck agreed to the SEC’s cease-and-desist order and fine without denying or admitting the findings.
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