The US SEC fines Titan Global Capital Management $850,000 for misleading investors with hypothetical performance metrics and compliance failures.
Facts
- Titan Global Capital Management USA LLC, a New York-based fintech investment advisor, has been fined $850,000 by the SEC.
- Titan allegedly used misleading hypothetical performance metrics in its advertising from August 2021 to October 2022, including annualized performance results as high as 2,700 percent for its Titan Crypto strategy.
- These metrics omitted essential information and violated SEC marketing rules amended in December 2020, as Titan failed to implement the required policies and procedures.
- The amendment allowed Titan to use hypothetical performance metrics but with additional anti-fraud requirements.
- Titan also provided conflicting disclosures to clients about custody of crypto assets and gave the impression of waiving non-waivable causes of action against Titan through improper hedge clauses.
- Osman Nawaz, chief of the enforcement’s complex financial instruments unit, emphasizes the need for accuracy in disclosures to investors and warns all advisers to ensure compliance.
- Titan, without admitting guilt, cooperated with the SEC’s investigation and will pay disgorgement, prejudgment interest, and an $850,000 civil penalty, with funds going to affected clients.
