The US Securities and Exchange Commission announced charges against Titan Global Capital Management claiming that it made misleading disclosures due to compliance failures around client crypto assets.
Titan agreed to a cease-and-desist order, a censure, and will pay over $1 million which includes an $850,000 civil penalty and over $190,000 in prejudgment interest. However, according to a press release, Titan did not admit to or deny the SEC’s filings.
Under the SEC’s amended marketing rule, Titan did not provide material information when advertising hypothetical performance.
The rule, amended in 2020, requires advisers to “standardize certain parts of a performance presentation in order to help investors evaluate and compare investment opportunities, and will include tailored requirements for certain types of performance presentations.”
The Monday press release claims that the violations occurred between August 2021 and October 2022.
Additionally, the SEC claims that Titan “made conflicting disclosures to clients about how Titan custodied crypto assets.” It also failed to “adopt policies and procedures” centered on personal trading in crypto for employees.
“The order also states that Titan self-reported to the SEC staff that it failed to ensure that client signatures were obtained for certain types of transactions in client accounts and agreed to settle related charges,” the SEC’s press release said.
The SEC alleges that Titan advertised an annualized performance result of up to 2,700% for the Titan Crypto Strategy, which the SEC claims was a misleading statement.
“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,” said Osman Nawaz, chief of enforcement’s Complex Financial Instruments Unit.
Titan did not immediately respond to a request for comment.
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