Mind the (Marketing) Gap
Welcome to FundFire's weekly news brief, a roundup of recent key stories.
Earlier this month, the Securities and Exchange Commission cracked down on five firms for violating its 2022 marketing rule. In all, the firms were told to hand over $200,000 in penalties with half of that coming from one shop: Rhode Island-based GeaSphere.
The agency then followed up with a risk alert, highlighting the marketing rule compliance shortcomings it sees over and over again.
A big one? Recordkeeping.
The rule calls for a review of all materials – ranging from fact sheets to websites to social media posts. Firms must ensure that any time such materials include any kind of claim about a strategy or investment thesis, firms can back it up in writing.
But a snap poll of attendees of the ACA Group's compliance conference in Nashville earlier this month showed that 82% of the 69 respondents struggle to decipher what materials are actually subject to the rule.
Social media has been a big focus of SEC examiners to date, but there are a host of client-facing materials that may fall under that umbrella.
"I think it comes down to sensitizing the vast group of people who prepare these materials to that requirement," said Invesco Chief Compliance Officer Josh Levit at ACA's conference.
The latest risk alert highlights "gaps" in compliance on nearly every aspect of the rule, Vigilant Compliance director Thayne Gould told FundFire.
The actions show "how detailed the SEC is intending to be," he said.
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Heavy-Hitters Take Haircuts
CEOs at dozen of the 20 large, publicly-traded firms FundFire tracks saw their total compensation shrivel in 2023, compared to the year prior.
And among the four largest by assets – BlackRock, State Street, Goldman Sachs and Morgan Stanley – pay for the top exec dropped by 15% or more.
Meanwhile, in all but four cases, median employee compensation rose, generally out pacing 2023's 3.4% inflation, documents show. See the snapshot below. Get the details here.
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