Sofi Wealth Llc

Allegations: FOLLOWING SOFI WEALTH'S APRIL 12, 2019 TRANSITION OF CERTAIN CLIENT FUNDS FROM THIRD-PARTY ETFS TO SOFI-SPONSORED ETFS, THE SEC STAFF REQUESTED DOCUMENTS AND INFORMATION FROM SOFI WEALTH, INVESTIGATING AND SEEKING DISCLOSURES BY SOFI WEALTH TO CLIENTS REGARDING THE TRANSITION OF FUNDS. SOFI WEALTH FULLY COOPERATED WITH THE SEC'S INVESTIGATION AND ELECTED TO MAKE AN OFFER OF SETTLEMENT TO THE SEC, AND BASED ON INFORMATION THAT SOFI WEALTH PROVIDED, THE SEC ISSUED AN ORDER INSTITUTING ADMINISTRATIVE CEASE-AND-DESIST PROCEEDINGS AGAINST SOFI WEALTH ON AUGUST 19, 2021 (THE "ORDER"). THE SEC ALLEGED THAT SOFI WEALTH FAILED TO PROVIDE ITS CLIENTS WITH FULL AND FAIR DISCLOSURE OF ITS CONFLICTS OF INTEREST RELATING TO THE TRANSITION, INCLUDING THAT IT (1) HAD A PREFERENCE FOR PLACING CLIENTS INTO SOFI-SPONSORED ETFS RATHER THAN THIRD-PARTY ETFS, AND SOFI'S ECONOMIC INTEREST IN THESE SOFI-SPONSORED PRESENTED A CONFLICT OF INTEREST FOR SOFI WEALTH, (2) WAS INVESTING CLIENT ASSETS IN THESE SOFI-SPONSORED ETFS TO HELP MARKET THE SOFI BRAND AS HAVING A BROADER ARRAY OF SERVICES AND PRODUCTS THAN PREVIOUSLY OFFERED, AND (3) INTENDED TO USE CLIENT ASSETS TO CAPITALIZE THE NEW SOFI-SPONSORED ETFS, MAKING THE ETFS MORE LIQUID AND FAVORABLE TO THE MARKET. THE SEC ALLEGED THAT SOFI WEALTH VIOLATED SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER. THE SEC, AMONG OTHER THINGS, CENSURED SOFI WEALTH AND ORDERED SOFI WEALTH TO CEASE-AND-DESIST FROM ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER, AND PAY A $300,000 CIVIL PENALTY. SOFI WEALTH CONSENTS TO THE ORDER WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS (EXCEPT AS TO JURISDICTION AND THE SUBJECT MATTER OF THE ACTION, WHICH WAS ADMITTED). PRIOR TO THE ENTRY OF THE ORDER, SOFI WEALTH IMPLEMENTED ADDITIONAL REMEDIAL MEASURES TO ADDRESS POTENTIAL CONFLICTS OF INTERESTS AND HOW THEY ARE EVALUATED. MOREOVER, PRIOR TO THE ENTRY OF THE ORDER, SOFI WEALTH REIMBURSED CLIENTS IN THE SOFI INVEST AUTOMATED INVESTMENT PROGRAM FOR TAX LIABILITIES THEY POTENTIALLY INCURRED AS A RESULT OF GAINS REALIZED ON THE APRIL 12, 2019 SALE OF THE THIRD-PARTY ETFS TO BUY SOFI-SPONSORED ETFS. Status: Final Sanction Detail: ONE HUNDRED PERCENT OF THE $300,000.00 CIVIL MONETARY PENALTY WAS LEVIED AGAINST SOFI WEALTH, LLC AND WAS PAID IN FULL ON AUGUST 26, 2021. Summary: THE SEC CENSURED SOFI WEALTH AND ORDERED SOFI WEALTH TO CEASE-AND-DESIST FROM ANY FUTURE VIOLATIONS OF SECTIONS 206(2) AND 206(4) OF THE ADVISERS ACT AND RULE 206(4)-7 PROMULGATED THEREUNDER, AND PAY A $300,000 CIVIL PENALTY. SOFI WEALTH ALSO AGREED TO: UPDATE ITS RELEVANT DISCLOSURES CONCERNING USE OF SOFI-SPONSORED ETFS; REVIEW ITS POLICIES AND PROCEDURES RELATED TO POTENTIAL CONFLICTS OF INTEREST; AND PROVIDE AFFECTED CLIENTS WITH NOTICE OF THE ORDER. REMEDIAL EFFORTS ARE SET TO BE COMPLETED WITHIN 30 DAYS OF THE ENTRY OF THE ORDER (SEPTEMBER 18, 2021). PAYMENT OF THE CIVIL MONEY PENALTY WAS MADE TO THE SEC ON AUGUST 26, 2021.