Van Eck to pay $1.75 million fine over social sentiment ETF -SEC
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FILE PHOTO: The seal of the U.S. Securities and Exchange Commission (SEC) is seen at their headquarters in Washington, D.C., U.S., May 12, 2021. REUTERS/Andrew Kelly//File Photo
NEW YORK (Reuters) -Van Eck Associates Corporation has agreed to pay a $1.75 million fine to settle U.S. Securities and Exchange Commission charges related to the 2021 launch of its social media-focused exchange-traded fund, the regulator said on Friday.
The registered investment adviser failed to disclose a social media influencer's role in the launch of its VanEckSocial Sentiment ETF in March 2021, the SEC said in a statement. The ETF, backed by Barstool Sports founder David Portnoy, was launched to track stocks that were gaining popularity on social media.
Van Eck did not disclose the influencer's planned promotion efforts or a licensing structure to the ETF's board when it sought approval of the fund launch and of the management fee, the SEC said.
A spokesperson for Van Eck, which consented to the SEC's order, declined to comment. Reuters could not immediately reach Portnoy, who was not charged by regulators, for comment.
(Reporting by Chris PrenticeAdditional reporting by Jonathan StempelEditing by Nick Zieminski)
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