The ‘Social Sentiment’ Fine Story

– The SEC has fined investment advisor VanEck $1.75 million over undisclosed details regarding its ‘Social Sentiment’ ETF launch in 2021.
– The SEC charges revolve around the participation of a popular social media personality in the product marketing.
– This influencer’s fee was, interestingly and controversially, tied to the fund’s growth, ensuring more money in the pocket as the fund ballooned.
– The ETF, which aimed to utilise “positive insights” from social media and other data sources, was heavily promoted on social media to maximize its reach and success.
– The undisclosed details and deceptive practices have led to significant scrutiny and penalties from the SEC.

The Hot Take

Well, it seems everyone’s favourite financial watchdog, the SEC, has once again dished out a mega fine. This time, it’s VanEck who’s getting a date with the SEC’s mighty gavel. Did they think following an index from social media is like following Kim Kardashian’s Instagram? Nice try, but it’s a no from the SEC!

The lesson here is as old as business itself – transparency and disclosure are non-negotiable. Always remember, kids: if the payoff of your influencer is tied to your fund’s growth, maybe put that in the brochure next time, yeah? Until then, it’s a million-dollar fine for dessert.

Now let’s all take a moment to appreciate that even in the wild, wild west of financial innovation, the old-school sheriff of SEC still rocks those cowboy boots. #VanEck #SECPatrol #FineDining

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Original article: https://cointelegraph.com/news/vaneck-admits-violation-agrees-to-sec-fine-in-etf-marketing