The Securities and Exchange Commission (SEC) today announced charges against registered investment adviser Twenty Acre Capital LP for misleading, and not fair and balanced, performance advertising.
According to the SEC’s order, from at least November 2021 through February 2023, when advertising to prospective investors the performance of a private fund that it advised, Twenty Acre presented performance returns that were experienced by a single investor and that did not constitute fund performance.
As set forth in the order, Twenty Acre’s advertisements did not disclose that this investor’s performance, at times, differed substantially from, and was significantly higher than, the fund’s overall performance and the returns achieved by other investors in the fund due to investment restrictions under certain FINRA rules, including rules that prohibit some individuals from purchasing securities in initial public offerings.
The SEC’s order finds that Twenty Acre violated the antifraud provisions of Section 206(4) of the Investment Advisers Act of 1940 and Rules 206(4)-1(a) (commonly known as the Marketing Rule) and 206(4)-8 thereunder.
Without admitting or denying the SEC’s findings, Twenty Acre agreed to a cease-and-desist order and censure. Twenty Acre also will pay a $100,000 civil penalty.
