The investment adviser VanEck faces a $1.75 million fine from the U.S. Securities and Exchange Commission (SEC) for their failure to provide information regarding the launch of their Social Sentiment exchange-traded fund (ETF) in 2021.
According to the SEC, VanEck reportedly worked with an unidentified social media influencer to market the ETF, but did not disclose to the board of the fund that the influencer’s pay was dependent on the fund’s performance. When the advising contract was being discussed, this went against the board’s supervision responsibilities.
The board was unable to adequately assess the advisory contract and economic impact, according to the SEC, because of VanEck’s lack of openness on the influencer deal. Without acknowledging or contesting the findings, VanEck consented to the SEC’s penalties and cease-and-desist order.
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