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  <p lang="en" dir="ltr">Today we announced charges against <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a> Global Capital Management USA for using hypothetical performance metrics in ads that were misleading. This marks the first violation of the SEC’s amended marketing rule.https://t.co/W23wbvQBsV</p>  
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  <p>— U.S. Securities and Exchange Commission (@SECGov) August 21, 2023</p> 
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 <p><span data-preserver-spaces="true">Between August 2021 and October 2022, Titan used misleading information in its advertisements, promoting hypothetical “annualized” performance results as high as 2,700 % for its Titan Crypto strategy.</span></p>  
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 </div> 
 <p><span data-preserver-spaces="true">However, the SEC has revealed that <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a>’s advertisements left out crucial information. Significantly, the hypothetical performance projections wrongly assumed that the strategy’s performance in its first three weeks would continue throughout the year. Moreover, <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a>’s advertising violated the SEC’s&nbsp;</span><span data-preserver-spaces="true">marketing rule</span><span data-preserver-spaces="true">, amended in December 2020, as the firm did not adopt the required policies and procedures or take the steps outlined in the law.</span></p> 
 <h2 id="strong-span-data-preserver-spaces-true-compliance-failures-and-misleading-disclosures-span-strong"><strong><span data-preserver-spaces="true">Compliance Failures and Misleading Disclosures</span></strong></h2> 
 <p><span data-preserver-spaces="true">Besides misleading performance metrics, the SEC’s order also found that <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a> made conflicting disclosures about how it custodied clients’ crypto assets and included liability disclaimer language in its client advisory agreements, creating the false impression that clients had waived non-waivable causes of action against the firm.&nbsp;</span></p>  
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 <p><span data-preserver-spaces="true"><a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a> also self-reported that it failed to obtain client signatures for specific transactions in client accounts and agreed to settle related charges. Additionally, contrary to its representations, <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a> did not adopt policies and procedures concerning employee personal trading in&nbsp;</span><span data-preserver-spaces="true">crypto assets</span><span data-preserver-spaces="true">.</span></p> 
 <h2 id="strong-span-data-preserver-spaces-true-titan-s-cooperation-to-charges-and-settlement-span-strong"><strong><span data-preserver-spaces="true">Titan’s Cooperation to Charges and Settlement</span></strong></h2> 
 <blockquote> 
  <p><span data-preserver-spaces="true">“When offering and marketing complex strategies, investment advisers must ensure the accuracy of disclosures made to existing and prospective investors. The Commission amended the marketing rule to allow for hypothetical performance metrics but only if advisers comply with requirements reasonably designed to prevent fraud,” said Osman Nawaz, Chief of Enforcement’s Complex Financial Instruments Unit.&nbsp;</span></p> 
 </blockquote> 
 <p><span data-preserver-spaces="true">Hence, <a rel="noopener noreferrer nofollow" title="Titan" href="https://thebittimes.com/tag/titan.html">Titan</a>’s advertisements and disclosures provided a misleading impression of some of its strategies for investors. This action serves as a warning for all advisers to ensure compliance.</span></p> 
 <p><span data-preserver-spaces="true">Titan cooperated with the SEC’s investigation and consented to the entry of the SEC’s order finding that it violated the&nbsp;</span><span data-preserver-spaces="true">Advisers Act</span><span data-preserver-spaces="true">. Without admitting or denying the SEC’s findings, Titan agreed to a cease-and-desist order, a censure, and to pay $192,454 in disgorgement, prejudgment interest, and an $850,000 civil penalty that will be distributed to affected clients.</span></p> 
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Breaking: US SEC Charges Fintech Giant Titan Global

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