SEC charges Titan with misleading Ads, compliance violations

The US SEC has taken action against Titan Global Capital Management, a FinTech investment advisor based in New York. The company is accused of using misleading information in its advertisements.

The SEC accuses Titan of compliance errors, including making misleading statements about the custody of clients’ crypto assets and including inappropriate “hedge clauses” in customer contracts.

Titan Global Capital Management is a company that provides financial advice and services related to investments. It operate in the field of FinTech. 

The company is based in New York and offers various strategies for investing to individuals through a mobile trading app. 

The SEC states that Titan, which offers complex investment strategies, claimed to have achieved a significant profit of 2,700% from August 2021 to October 2022. However, the SEC states that these numbers are not accurate.

A new rule initiated by the SEC allows companies to use hypothetical performance metrics to showcase the success of their investments, provided they adhere to regulations to prevent fraudulent practices. 

Titan’s ads and statements were inaccurate and portrayed a different narrative regarding the success of their investments. 

“The Commission amended the marketing rule to allow for the use of 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. 

“Titan’s advertisements and disclosures painted a misleading picture of certain of its strategies for investors. This action serves as a warning for all advisers to ensure compliance.”

Titan helped with the investigation and agreed with the SEC that they did not follow the rules. As part of the agreement, Titan will pay a total of $1,042,000, but they did not admit to doing anything wrong.

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