The Securities and Exchange Commission announced that registered investment adviser Van Eck Associates Corporation has agreed to pay a $1.75 million civil penalty to settle charges that it failed to disclose a social media influencer’s role in the social media influencer’s role in the launch of its new exchange-traded fund (ETF).
The SEC‘s press release and its order did not name the social influencer, only referring to the Influencer “a well-known and controversial social media influencer” and “who was known for commenting on sports, investing, and other topics.”
While the SEC did not name the influencer, numerous press and social media reports have identified him as Dave Portnoy, the caustic founder of sports media and marketing empire Barstool Sports.
According to an SEC statement, a partner that Van Eck used to operate the fund informed the company it was going to retain an influencer to promote the new product. The arrangement involved paying the influencer, on a sliding scale where his fees would increase with the size of the fund. The agency said Van Eck never informed it of the arrangement, in contravention of disclosure laws.
“However, as the SEC’s order finds, Van Eck Associates failed to disclose the influencer’s planned involvement and the sliding scale fee structure to the ETF’s board in connection with its approval of the fund launch and the management fee,” according to the SEC.
Mark Astarita is a nationally recognized securities attorney, who represents investors, financial professionals and firms in securities litigation, arbitration and regulatory matters, including SEC and FINRA investigations and enforcement proceedings.
He is a partner in the national securities law firm Sallah Astarita & Cox, LLC, and the founder of The Securities Law Home Page - SECLaw.com, which was one of the first legal topic sites on the Internet. It went online in 1995 and is updated daily with news, commentary and securities law related links.
