Fintech firm Titan to pay over $1 million to settle US SEC charges

investing.com:

By Chris Prentice

NEW YORK (Reuters) -Fintech investment adviser Titan Global Capital Management USA LLC agreed to pay over $1 million to settle charges from the U.S. Securities and Exchange Commission (SEC) that it misled investors about performance metrics and custody of clients' crypto assets.

Titan, a New York-based registered investment adviser, misled investors with statements made on its website about hypothetical returns from August 2021 to October 2022, the SEC said in a statement.

That included touting annualized crypto performance results as high 2,700% without telling investors they were extrapolated from a «purely» hypothetical three-week period, the SEC said in a charging document. The resolution marks the first violation under a recently-amended SEC rule that allows advisers to use such hypothetical metrics only if they meet certain requirements designed to prevent fraud.

Titan, which did not admit to or deny the SEC's findings, said in a statement it fully cooperated with the SEC's inquiry and continues to make «significant investments to build and enhance its compliance program».

Regulators also found Titan made conflicting statements to clients about how it handled custody for crypto assets and failed to adopt policies for employees' personal trading in crypto assets, among other violations, the agency said.

Reuters previously reported the SEC was investigating investment advisers over whether they are meeting rules around custody of client crypto assets.

Titan agreed to pay a $850,000 civil penalty that will be distributed to affected clients and give back ill-gotten gains and interest of over $192,000, the SEC said.