SEC Charges Inspire Investing with Misleading Investors and Related Compliance Failures

Posted on October 18th, 2024 at 3:20 PM
SEC Charges Inspire Investing with Misleading Investors and Related Compliance Failures

From the desk of Jim Eccleston at Eccleston Law

The Securities and Exchange Commission (SEC) recently charged Inspire Investing LLC, an Idaho-based investment adviser, with making misleading statements and failing to maintain compliance with its own "biblically responsible investing" strategy. As reported by WealthManagement, the SEC found that Inspire misrepresented how it screened companies for alignment with biblical values and lacked appropriate compliance procedures.

From 2019 to March 2024, Inspire claimed to use a data-driven methodology to avoid companies that participated in certain business practices contrary to biblical values. However, according to the SEC's order, Inspire primarily relied on manual research and often did not evaluate individual companies based on the stated investment criteria. This lack of diligence led Inspire to invest in companies engaged in activities it had pledged to avoid.

Inspire Investing consented to the SEC’s order, which found it in violation of the antifraud provisions of both the Investment Company Act of 1940 and the Investment Advisers Act of 1940. Without admitting or denying the findings, Inspire agreed to a censure, a cease-and-desist order, a $300,000 penalty, and the retention of an independent compliance consultant to address its compliance deficiencies.

 

Eccleston Law LLC represents investors and financial advisors nationwide in securities, employment, transition, regulatory, and disciplinary matters.

Tags: eccleston, eccleston law, sec

Return to Archive

TESTIMONIALS

Previous
Next

Thank you so very much for your guidance, patience, and expertise.

Beth and Steve K.

LATEST NEWS AND ARTICLES

November 20, 2024
Hightower Drops Claims Against Former Advisor Amid Non-Compete Dispute

Hightower, a Chicago-based RIA firm, recently dropped its lawsuit against former advisor Lars Knudsen just days before a federal judge in Illinois was set to rule on the firm’s injunction request.

November 19, 2024
Osaic Services Fined $250,000 for Supervisory Failures in Options Trading

Osaic Services, formerly SagePoint Financial, recently agreed to pay a $250,000 fine and accept censure for failures in supervising excessive and unsuitable options trading from June 2018 to August 2019.

November 18, 2024
Wahed Invest Settles SEC Charges Over Undisclosed Endorsements and Ad Rule Violations

The SEC recently settled charges with Wahed Invest, a faith-based robo-advisor that markets itself to Muslim clients, over violations of the SEC’s marketing rule.