$75,000 Penalty for Marketing Rule and Recordkeeping Violations

September 10, 2025

What Happened?

On September 4, 2025, the SEC issued an administrative order (“the order”) against a registered investment adviser (“RIA”) for compliance violations related to the Marketing Rule and the Books and Records Rule, among others. The RIA agreed to pay $75,000 in civil penalties for the violations.

The Violations

• Marketing Rule – Substantiation: The adviser’s website contained the material statement of fact that it “refuse[d] all conflicts of interest” without providing any context for this claim. The RIA recognizes and discloses conflicts of interest inherent to providing investment advisory services in its Form ADV Part 2A brochure. For this reason, the SEC concluded that the RIA lacked a “reasonable basis for believing it would be able to substantiate upon demand by the Commission the material statement of fact appearing in its advertisement that it “refuse[d] all conflicts of interest.””
• Books and Records Violations – Third-Party Service Provider Could Not Produce Records: The RIA also failed to keep true, accurate, and current copies of advertisements published on its public website as required. The RIA had retained a third-party service provider to construct and maintain its website, but neither the RIA nor the service provider kept copies of all of the advertisements. When the SEC staff requested copies of all advertisements published during the examination review period, the RIA was unable to produce them.
• Other Compliance Failures: The RIA failed to implement policies and procedures designed to prevent the above violations of the Advisers Act. Additionally, the RIA failed to conduct an annual compliance review that assessed the adequacy of policies and procedures and failed to comply with the annual review procedures set forth in the compliance manual.

What does this mean for me? 

Any RIA that charges a fee has a conflict of interest. This is one in a series of enforcement actions that charged an RIA for claims that cannot be substantiated. Claims that an RIA “eliminated all conflicts,” is “conflict free,” or can give advice “free from conflicts of interest” have all been cited as violations. RIAs cannot eliminate all conflicts of interest. The SEC knows this. PR firms, marketing staff, and web editors need to understand this too. Effective review and approval of marketing material should be on the lookout for this issue and catch any instances. These claims cannot be substantiated, and advertisements containing such claims pose a risk to your firm.

Recordkeeping is only as good as the records you can produce upon demand by the SEC. Here, the RIA relied too much on a service provider. Vendor due diligence may have caught on to this gap in recordkeeping earlier. Effective compliance testing would spot this lack of records too. Work with your web administrators and vendors to confirm that you have records of every post published on your firm’s website and every version of the website before and after any changes.

The annual compliance review is a central pillar of an effective compliance program and one of the primary requirements of the Advisers Act. As the name suggests, annual reviews must be completed annually. An annual review must include a thorough review of written policies and procedures for their adequacy and effectiveness. Completion of the review must also be documented to satisfy the Books and Records Rule.

At Fairview, we review advertisements for clients and regularly prevent violations like these. We retain copies of all advertisements we review, maintain a marketing log, and produce compliance records, like advertisements, in real time during SEC examinations. If you have questions about marketing practices, completing effective annual reviews, or could use support in your next SEC examination, let us know.