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Matthias Knab, Opalesque: The Securities and Exchange Commission today charged New York-based investment adviser WisdomTree Asset Management Inc. with making misstatements and for compliance failures relating to the execution of an investment strategy that was marketed as incorporating environmental, social, and governance (ESG) factors.
According to the SEC's order, from March 2020 until November 2022, WisdomTree represented in prospectuses for three ESG-marketed exchange-traded funds, and to the board of trustees overseeing the funds, that the funds would not invest in companies involved in certain products or activities, including fossil fuels and tobacco. However, the SEC's order finds that the ESG-marketed funds invested in companies that were involved in fossil fuels and tobacco, including in coal mining and transportation, natural gas extraction and distribution, and retail sales of tobacco products. According to the SEC's order, WisdomTree used data from third-party vendors that did not screen out all companies involved in fossil fuel and tobacco-related activities. The SEC's order further finds that WisdomTree did not have any policies and procedures over the screening process to exclude such companies.
"At a fundamental level, the federal securities laws enforce a straightforward proposition: investment advisers must do what they say and say what they do," said Sanjay Wadhwa, Acting Director of the SEC's Division of Enforcement. "When inve...................... To view our full article Click here
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