SEC Charges Investment Adviser Titan Global Capital Management for Misleading Advertisements

The SEC today charged Titan Global Capital Management USA LLC, a FinTech investment adviser based in New York, with using hypothetical performance metrics in advertisements which were misleading. Additionally, the SEC also reported various compliance failures that resulted in misguiding disclosures about custody of client's crypto assets, the use of “hedge clauses”, as well as unlawful use of clients' signatures and the lack of established policies related to trading in crypto assets by employees. Specifically, the SEC noted that from August 2021 to October 2022, Titan advertised annualized returns as high as 2,700% without disclosing the assumptions used or providing material information. The SEC found that Titan violated its marketing rule by failing to adopt necessary policies and procedures for advertising its services. Furthermore, it was also determined that Titan made conflicting disclosures regarding custody of client's assets, included liability disclaimer language which deceived their clients into waiving non-waivable claims, failed to obtain signatures from clients and made inaccurate representations about employee trading policies. As a result, Titan agreed to pay $192,454 in disgorgement, interest, and an $850,000 penalty to be distributed amongst affected clients.