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

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