SEC Fines Fintech Advisory Titan in 1st Marketing Rule Charge

The regulator calls the charges a ‘warning’ to investment advisers about how they can market offerings.


The Securities and Exchange Commission on Monday announced a fine of more than $1 million issued to financial technology investment advisory Titan Global Capital Management USA LLC for using misleading hypothetical performance metrics in its advertisements.

The SEC’s charges are the first under its new marketing rule, which went into effect in November 2022 and has since been broadened and amended. Designed to prevent advisers from misleading clients, the rule expanded the definition of advertising when it comes to investments and added disclosure requirements for marketing materials.

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In Monday’s order, the SEC charged Titan with “multiple compliance failures” that led to misleading disclosures about the custody of clients’ crypto assets, the use of improper “hedge clauses” in client agreements, the unauthorized use of client signatures and the failure to adopt policies concerning crypto asset trading by employees. The SEC noted that Titan consented to the SEC’s order finding that it violated the Investment Advisers Act of 1940 but did not admit or deny the findings.

The New York-based firm agreed to a cease-and-desist order, to a censure and to pay $192,454 in disgorgement, prejudgment interest of $7,598 and an $850,000 civil penalty that will be distributed to affected clients, according to the SEC.

“When offering and marketing complex strategies, investment advisers must ensure the accuracy of disclosures made to existing and prospective investors,” Osman Nawaz, chief of the SEC enforcement division’s complex financial instruments unit, said in a statement. “Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance.”

The SEC alleged in the order that Titan made misleading statements on its website and mobile app regarding hypothetical performance, including an advertisement of annualized performance results as high as 2,700% for its cryptocurrency offering. The regulator found the advertisements misleading because they failed to include the fact, among others, that the performance cited was based on just three weeks of outcomes.

The order also found that Titan violated the marketing rule by advertising hypothetical performance metrics without having “adopted and implemented required policies and procedures or taking other steps required by the Commission’s marketing rule.”

The SEC’s order further found that Titan:

  • made conflicting disclosures to clients about how Titan custodied crypto assets;
  • included in its client advisory agreements liability disclaimer language, or “hedge clauses,” that created the false impression that clients had waived non-waivable causes of action against Titan; and
  • contrary to representations, failed to adopt policies and procedures concerning employee personal trading in crypto assets.
Titan has been a registered investment adviser since December 8, 2017, and has about $548 million in regulatory assets under management with 52,000 account holders, according to the order.

Advisory M&A

Innovest adds Jansson as retirement plan consultant; Wealth Enhancements adds $341M First Capital Advisors; Latimer joins Steward Partners in Florida expansion push; and more.

Innovest Expands West Coast Retirement Practice

 Investment consultancy Innovest Portfolio Solutions is expanding on the West Coast with the addition of Tomas Jansson as a vice president and retirement plan consultant.

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Denver-based Innovest announced that Jansson, based out of San Francisco, will be joining the firm’s retirement plan practice group. He will focus on helping plan sponsors design, optimize and govern their workplace retirement plans.

Jansson joins the firm from a role as managing director of institutional consulting at First Republic Investment Management. Previously, he was vice president at Newport Group and a financial adviser with the Merrill’s private client group in San Francisco.

“With his significant retirement plan expertise and years of experience, Tomas will help us continue to provide our clients with the industry’s best retirement plan consulting services,” Wendy Dominguez, Innovest’s president and co-founder, said in a statement.

Investment managers and recordkeepers have expanded their retirement planning and product distribution capabilities to plan sponsors, both with internal promotions and through outside hiring, earlier this year. Principal Asset Management and T. Rowe Price expanded their retirement planning and product distribution capabilities, in July. Voya Financial appointed Shelly Nolfi and Holly Monday to the newly created positions of assistant vice president for client management and expansion, with both starting last week. 

Wealth Enhancement Group Acquires First Capital Advisors

Wealth Enhancement Group has acquired First Capital Advisors Group LLC, a registered investment advisory with $341 million in assets under management.

The acquisition will bring over First Capital managing partners Jim Hiles and Jeff Schulte, who operate out of Little Silver, New Jersey, and Blue Bell, Pennsylvania, respectively. The RIA offers financial planning, investment management, retirement planning and estate planning to high-net-worth individuals, business owners, executives and medical professionals.

Prior to co-creating First Capital, Schulte was a founding member of eMoney Advisor Inc. in May 2000. The firm was acquired by Fidelity Investments in 2015.

“In today’s wealth management space, being independent is a major advantage, but having state-of-the-art resources and a deep bench of experience to draw upon is vital to provide the optimum service for our clients,” Hiles said in a statement. “We believe that Wealth Enhancement Group provides those resources and will allow us to be extremely competitive in our marketplace.

The acquisition brings Minneapolis-based Wealth Enhancement to $70.8 billion in client assets, according to the announcement.

Latimer Wealth Management Joins Steward Partners

Steward Partners Global Advisory LLC is bringing on Latimer Wealth Management, with a team including Ted Latimer, partner, managing director and wealth manager, and Denise E. Hoffman, senior registered client administrative manager.

Latimer Wealth is based in Winter Park, Florida, and manages about $175 million in client assets. The acquisition will be Steward Partners’ second location in Florida, with “plans for further expansion in the state,” according to the announcement.

“We have tremendous growth plans in Florida, and doing so with a veteran, high-quality advisor like Ted exemplifies our partnership’s core values—a commitment to fostering a culture of excellence and conducting business with integrity,” Jeffrey Gonyo, managing director and Southeast senior divisional president, said in a statement.

Latimer Wealth specializes in working with high-net-worth individuals, families and business owners on areas including trust and estate planning services, risk management solutions, wealth management and retirement planning, and business planning solutions. Ted Latimer had worked as a senior vice president and senior financial adviser with Merrill since 2002 in central Florida. Hoffman has worked at Merrill since 1992 and was previously a registered senior wealth management client associate.

Sanford Joins Cetera, Bringing $110M in Client Assets

Cetera Financial Group announced that financial adviser David K. Sanford, based out of Springfield, Missouri, has joined the RIA, bringing more than $110 million in client assets under administration and assets under management.

Sanford offers wealth management and retirement planning to clients and has worked in the industry since 1997, when he founded Sanford & Associates CPA. He has also been affiliated with Cetera in the past, according to the announcement.

“I’ve worked with a Cetera community in the past, and I’m excited to be back under the umbrella with like-minded advisors and tax professionals, where I know my team will receive boutique services that allow us to offer unique and flexible strategies to help clients achieve their financial goals,” Sanford said in a statement.

Cetera has more than 8,000 financial professionals overseeing about $330 billion in assets under administration and $116 billion in assets under management.

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