Invesco Advisers has been fined $17.5m by the SEC for inaccurately claiming a high proportion of its assets under management were ESG integrated.
The Atlanta-based investment adviser suggested that 70-94% of its parent company’s assets were ESG integrated, according to its marketing materials and client communications. However, the SEC’s findings reveal that these figures included assets in passive ETFs that did not incorporate ESG considerations in their investment decisions.
The SEC’s scrutiny uncovered that Invesco lacked a formal written policy to define what constitutes ESG integration, casting doubt on the veracity of their ESG claims. The investigation led by Jonathan T. Menitove and Richard Rodriguez of the SEC, with support from several regional offices, culminated in charges against Invesco for willfully violating the Investment Advisers Act of 1940.
Sanjay Wadhwa, Acting Director of the SEC’s Division of Enforcement, criticised Invesco’s approach, highlighting the misuse of ESG as a marketing tool. “As stated in the order, Invesco saw commercial value in claiming that a high percentage of company-wide assets were ESG integrated. But saying it doesn’t make it so,” Wadhwa said. “Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords.”
Without admitting or denying the findings, Invesco has agreed to cease any further violations and accept the imposed penalties including a cease and desist order, a censure, and the $17.5m civil penalty.
Copyright © 2024 RegTech Analyst
Copyright © 2018 RegTech Analyst
