WisdomTree Asset Management, a prominent name in asset management, is currently under the microscope of the U.S. SEC.
According to Environmental Finance, on 5 August, the firm received a Wells Notice from the SEC, indicating a preliminary decision to recommend enforcement action due to alleged violations concerning the management of three ESG-themed exchange-traded funds (ETFs). These funds, which focused on ‘US’, ’emerging markets’, and ‘international’ ESG strategies, were closed by WisdomTree in February due to a lack of investor interest and limited growth prospects, with assets totalling approximately $119m at the time of closure.
Despite the looming threat of enforcement, which could include financial penalties, WisdomTree maintains its innocence. “WisdomTree has consistently acted in compliance with all applicable laws and regulations, and intends to engage fully in the Wells Notice process, including responding to the SEC’s concerns,” WisdomTree CEO said. This statement underscores the firm’s readiness to address and contest the SEC’s allegations through the regulatory process.
This development is significant as it highlights ongoing regulatory scrutiny in the sector, particularly around ESG investments, which have been under the spotlight for their marketing practices and fund management. The outcome of this case could have broader implications for the FinTech and asset management industries, particularly in how ESG funds are marketed and managed.
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