Titan Global Capital Management is facing charges from the U.S. Securities and Exchange Commission (SEC) for disseminating deceptive “hypothetical performance predictions” concerning its cryptocurrency investment offering. In addition to this, the firm is alleged to have breached the marketing rule, having showcased hypothetical performance figures without adhering to the necessary procedures.
Incorrect Implementation of Hedge Provisions
On August 21, the SEC disclosed that it had brought charges against Titan Global Capital Management, a financial technology investment adviser situated in New York, for conveying misleading particulars about its crypto investment service. According to the regulatory agency, Titan Global is additionally charged with “numerous compliance infringements” that culminated in the issuance of “deceptive statements regarding the custody of clients’ crypto holdings.”
The SEC attributes these compliance lapses to the unlawful utilization of “hedge provisions” within client contracts. These violations also encompassed the unlawful procurement of client signatures and “an absence of policies pertaining to crypto asset trading by staff.”
Simultaneously, the U.S. securities regulator, within its formal order, accentuated its apprehensions regarding the investment adviser’s deceptive marketing practices.
The regulator’s order states, “Titan’s advertisements were deceptive, as they omitted essential details, such as the fact that the hypothetical performance predictions presupposed that the strategy’s initial three-week performance would persist for an entire year.”
An Admonition to Investment Advisers
Furthermore, Titan Global faces allegations of breaching the marketing rule by showcasing hypothetical performance data without implementing the obligatory measures. The SEC indicates that the supposed infractions occurred between August 2021 and October 2022.
Osman Nawaz, the Chief of Enforcement’s Complex Financial Instruments Unit, provided remarks on the SEC’s judgment against the financial technology investment adviser:
The advertisements and statements from Titan crafted an illusory image of some of its investment strategies. This legal action stands as an admonition to all advisers to uphold compliance.
The Commission additionally disclosed that Titan Global had collaborated with the inquiry and acquiesced to the issuance of an SEC order. Titan Global thereafter consented to a cease-and-desist order, along with a disgorgement fee totaling $192,454 and a civil fine of $850,000, which will be apportioned to impacted clients.
Frequently Asked Questions (FAQs) about SEC
What has Titan Global Capital Management been charged with by the SEC?
Titan Global Capital Management has been charged by the U.S. Securities and Exchange Commission (SEC) for disseminating deceptive “hypothetical performance predictions” related to its cryptocurrency investment offering. The firm is also alleged to have breached the marketing rule and committed “numerous compliance infringements,” including the unlawful use of “hedge provisions” in client contracts, and the lack of policies concerning crypto asset trading by staff.
Who led the enforcement against Titan Global Capital Management?
The enforcement against Titan Global Capital Management was led by the U.S. Securities and Exchange Commission (SEC), specifically by the Chief of Enforcement’s Complex Financial Instruments Unit, Osman Nawaz.
What penalties have been imposed on Titan Global Capital Management?
Titan Global Capital Management has consented to a cease-and-desist order, along with a disgorgement fee totaling $192,454 and a civil fine of $850,000, which will be distributed to the clients affected by the violations.
What time period did the alleged violations occur?
The alleged violations committed by Titan Global Capital Management occurred between August 2021 and October 2022, according to the SEC’s statement.