SEC Slaps VanEck Associates with $1.75M Fine

The Securities and Exchange Commission (SEC) has
charged VanEck Associates Corporation for concealing a social media
influencer’s role in the launch of its new exchange-traded fund (ETF).

In March 2021, Van Eck introduced the VanEck Social
Sentiment ETF (NYSE:BUZZ), designed to track an index based on positive
insights from social media and other data sources. However, an investigation by the regulator found that VanEck
had failed to disclose crucial information regarding a prominent social media
influencer’s planned involvement and the fee structure tied to the launch of the ETF.

Andrew Dean, the Co-Chief of the Enforcement Division’s
Asset Management Unit at the SEC, mentioned: “Van Eck Associates’ disclosure failures
concerning this high-profile fund launch limited the board’s ability to
consider the economic impact of the licensing arrangement and the involvement
of a prominent social media influencer as it evaluated Van Eck Associates’ advisory
contract for the fund.”

According to the press release, the SEC emphasized
the importance of accurate disclosures in the financial industry, particularly
concerning issues that could affect advisory contracts and fund launches. According to the regulators, Van Eck Associates has
consented to the SEC’s order. As part of the settlement
Settlement

Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer’s name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2

Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer’s name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2
Read this Term, the firm agreed to pay
a civil penalty of $1.75 million and accept a cease-and-desist order and
censure.