The Securities and Exchange Commission said Wednesday that investment-management firm VanEck has agreed to pay $1.75 million in penalties for failing to disclose a social-media influencer’s role in the launch of its VanEck Social Sentiment exchange-traded fund, known as BUZZ. The SEC complaint does not name the “well-known and controversial influencer,” although Barstool Sports founder Dave Portnoy heavily promoted the launch of the ETF
BUZZ
in March 2021.
Portnoy announced an “emergency press conference” at the time to promote the fund, saying that he was putting his “face” and “reputation” behind the product. VanEck consented to the entry of the SEC order but neither admitted nor denied the SEC’s findings. VanEck declined to comment to MarketWatch. Portnoy didn’t immediately respond to a request for comment. The SEC’s order says that the involvement of the influencer “was not disclosed to the independent trustees of the VanEck ETF trust,” nor were they informed of the financial arrangement between the company and the index provider that created the BUZZ index upon which the ETF is based. “To incentivize the influencer’s marketing and promotion efforts, the proposed licensing fee structure included a sliding scale linked to the size of the fund so, as the fund grew, the index provider would receive a greater percentage of the management fee the fund paid to Van Eck Associates,” the SEC press release said. VanEck failed to disclose to the board both the influencer’s involvement in the fund and the sliding fee scale, according …
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BUZZ
in March 2021.
Portnoy announced an “emergency press conference” at the time to promote the fund, saying that he was putting his “face” and “reputation” behind the product. VanEck consented to the entry of the SEC order but neither admitted nor denied the SEC’s findings. VanEck declined to comment to MarketWatch. Portnoy didn’t immediately respond to a request for comment. The SEC’s order says that the involvement of the influencer “was not disclosed to the independent trustees of the VanEck ETF trust,” nor were they informed of the financial arrangement between the company and the index provider that created the BUZZ index upon which the ETF is based. “To incentivize the influencer’s marketing and promotion efforts, the proposed licensing fee structure included a sliding scale linked to the size of the fund so, as the fund grew, the index provider would receive a greater percentage of the management fee the fund paid to Van Eck Associates,” the SEC press release said. VanEck failed to disclose to the board both the influencer’s involvement in the fund and the sliding fee scale, according …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]