Wahed Invest Llc

Allegations: THE SEC ALLEGED THAT FROM NOVEMBER 4, 2022 THROUGH MAY 2024, WAHED DISSEMINATED CERTAIN ADVERTISEMENTS ON ITS PUBLIC WEBSITE AND VIA SOCIAL MEDIA AND EMAIL CONTAINING ENDORSEMENTS FROM SEVERAL PROFESSIONAL ATHLETES THAT FAILED TO PROVIDE THE DISCLOSURES REQUIRED UNDER SECTION 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1 THEREUNDER (THE "MARKETING RULE"). THE 2024 SEC ORDER FURTHER ALLEGES THAT WAHED DISSEMINATED ADVERTISEMENTS ON ITS PUBLIC WEBSITE THAT PRESENTED HYPOTHETICAL, BACKTESTED PERFORMANCE WITHOUT ADOPTING AND IMPLEMENTING REQUIRED POLICIES AND PROCEDURES DESIGNED TO ENSURE THE HYPOTHETICAL PERFORMANCE WAS RELEVANT TO THE LIKELY FINANCIAL SITUATION AND INVESTMENT OBJECTIVES OF THE INTENDED AUDIENCE, ALSO IN VIOLATION OF THE MARKETING RULE. Status: Final Sanction Detail: N/A Summary: BY VIRTUE OF THESE ACTIONS, THE SEC ALLEGED THAT WAHED VIOLATED SECTION 206(4) OF THE ADVISERS ACT, AND RULE 206(4)-1 THEREUNDER. THE SEC CENSURED WAHED AND ORDERED IT TO CEASE-AND-DESIST FROM ANY FUTURE VIOLATIONS OF SECTIONS 206(4) OF THE ADVISERS ACT AND RULE 206(4)-1 THEREUNDER; ORDERED WAHED TO PAY A CIVIL MONETARY PENALTY OF $250,000; AND ORDERED WAHED TO COMPLETE CERTAIN UNDERTAKINGS. WAHED CONSENTS TO THE 2024 SEC ORDER WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS (EXCEPT AS TO JURISDICTION AND THE SUBJECT MATTER OF THE ACTION, WHICH WAS ADMITTED).

Allegations: THE SEC ALLEGED MISLEADING STATEMENTS AND COMPLIANCE FAILURES BY WAHED INVEST LLC. IN JULY 2019, WAHED INVEST ALSO LAUNCHED A SHARI'AH-COMPLIANT EXCHANGE-TRADED FUND, THE WAHED FTSE USA SHARIAH ETF (TICKER: HLAL) (THE "WAHED ETF"). THE SEC ALLEGED THAT PRIOR TO THE LAUNCH OF THE WAHED ETF, HOWEVER, FROM SEPTEMBER 2018 TO JULY 2019 WAHED INVEST DISSEMINATED FALSE AND MISLEADING MARKETING MATERIALS ABOUT ITS ADVISORY BUSINESS AND FURTHER ALLEGED THAT IT FAILED TO REBALANCE CLIENT ACCOUNTS AS PROMISED TO ITS CLIENTS AND PROSPECTIVE CLIENTS. THE SEC ALSO CLAIMED THAT WAHED INVEST FURTHER BREACHED ITS FIDUCIARY DUTY IN CONNECTION WITH ITS JULY 2019 INVESTMENT OF CLIENT ASSETS INTO THE NEWLY LAUNCHED WAHED ETF BY FAILING TO PROVIDE ITS CLIENTS WITH PRIOR FULL AND FAIR DISCLOSURE OF ITS CONFLICTS OF INTEREST RELATING TO THE TRANSACTIONS. FINALLY, THE SEC ALLEGED THAT WAHED INVEST FAILED TO ADOPT AND IMPLEMENT WRITTEN POLICIES AND PROCEDURES RELATED TO THE AFOREMENTIONED ISSUES AND ITS SHARI'AH ADVISORY BUSINESS. Status: Final Sanction Detail: $300,000 PAID PRIOR TO DATE OF THE ORDER AND NON OF THE PENALTY WAS WAIVED. Summary: THE SEC AND FIRM MUTUALLY ACCEPTED AN OFFER FOR SETTLEMENT AND, WITHOUT ADMITTING OR DENYING THE ALLEGATIONS MADE, THE FIRM AGREED TO CERTAIN ADDITIONAL STIPULATIONS UNDER THE SEC'S ORDER INCLUDING THE RETENTION OF AN INDEPENDENT COMPLIANCE CONSULTANT TO REVIEW THE MATTERS FOCUSED UPON IN THE SEC'S ALLEGATIONS.