VanEck Associates Corp has been charged by the Securities and Exchange Commission (SEC) with the allegation that not enough information was released to the public about the involvement of a social media influencer in the launch of the new exchange-traded fund (ETF).
In March 2021, Van Eck introduced the VanEck Social Sentiment ETF (NYSE: The BUZZ (Buzz), a product that monitors an index based on socially sourced content and positive brand sentiments. Nevertheless, the investigation uncovered that VanEck did not disclose significant facts about an unknown social media analyst who would be dealing with the ETF launch and the underlying payment structure.
Understanding Regulatory Consequences
Andrew Dean, Co-Head of the SEC’s Asset Management Unit, asserted that the absence or false information from the Van Eck Association resulted in the board not being aware of the economic effect of the licensing agreement and social media influencer involvement.
The SEC emphasized the need for proper disclosures, specifically within the financial sector, especially regarding customer contracts and new funds. As agreed with SEC’s order, Van Eck Associates must pay the civil penalty of $1.75 million along the line of receiving the cease-and-desist order and censure.
VanEck has promised to assign 5% of the fund profits to the Bitcoin cooperative. In addition, the SEC granted the company approval to list its spot Bitcoin ETF.
Also, VanEck is planning on experimenting with the Ethereum blockchain through the incorporation of the VanEck Ethereum Strategy ETF (EFUT). The fund specializes in Ethereum futures, providing an investment sector to the investors that enables them to participate in Ethereum’s future at a tax-efficient rate.
About VanEck
VanEck is a pioneering asset manager with a 70-year history of excellence in the international market. The company, with its headquarters in NYC, is recognized for its expertise in developing ahead-thinking, intelligent financial products. One of the first companies in asset management from the States to open the gateway to international markets and thus facilitate an unprecedented growth of gold was VanEck. Through the year 1955, John van Eck, who was well-known for international as well as gold investments, founded and set up International Investors Incorporated.
Now, under Jan van Eck’s leadership, the firm is acting pervasively and offers many services. In 2006, it started its ETF business, which has now expanded to be one of the world’s giants in ETF sponsorship. The company deals with ETFs, which are available on the global level, equity, and other sectors. VanEck’s investment teams specialize not only in active but also in passive investment processes that are backed by well-established procedures. They are standing by those who are willing to find more opportunities besides the financial markets today, presenting a large number of investment selections in natural resources, emerging markets, as well as gold in mutual funds, ETFs, and institutional and separately managed accounts.