The regulator noticed an undisclosed detail, which was that the influencer’s fee was tied to the fund’s growth, guaranteeing higher compensation as the fund expanded.
VanEck Associates Corporation will pay a $1.75 million fine to resolve Securities and Exchange Commission (SEC) charges linked to its 2021 launch of a social media-focused exchange-traded fund (ETF).
The United States SEC imposed a civil penalty on the investment adviser. On Feb. 16, the SEC revealed in a statement that during the VanEck Social Sentiment ETF launch in March 2021, VanEck did not fully disclose the participation of a prominent social media personality in marketing the product.
The ETF aimed to follow an index using “positive insights” from social media and other data sources. However, the SEC discovered that seeking to boost the fund’s success via social media, VanEck collaborated with an influential and divisive online personality to enhance the fund’s appeal.
