WisdomTree pays $4 million over SEC 'greenwashing' charges (updated)

Wisdomtree

21/10/2024 22:34

(Adds more context throughout; spokesperson comment in final
paragraph)
       WASHINGTON, Oct 21 (Reuters) - New York-based investment
adviser WisdomTree Asset Management agreed to pay $4 million to
settle Securities and Exchange Commission (SEC) charges it
misleadingly marketed three funds as having an environmental,
social, and governance (ESG) investment strategy.
    
    WHY IT’S IMPORTANT
    The order is another example of the SEC cracking down on
so-called "greenwashing," whereby investment managers - in a bid
to attract cash - market funds as having ESG investment
strategies even though they may actually invest in fossil fuel
or other types of companies they claim to screen out. 
        
  
        CONTEXT
  
    *From March 2020 until November 2022, WisdomTree said three
exchange-traded funds did not invest in fossil fuel and tobacco
companies, but the SEC found the funds in fact invested in
companies that were involved in coal mining and transportation,
natural gas extraction and distribution, and retail sales of
tobacco products. 
    *WisdomTree used data from third-party vendors that did not
screen out all companies involved in fossil fuel and
tobacco-related activities, the SEC found. It added that did not
have any policies and procedures to ensure the screening process
excluded such companies.
    *WisdomTree agreed to a cease-and-desist order and censure
and to pay a $4 million civil penalty, without admitting or
denying the SEC's findings. 
    *A WisdomTree spokesperson said the funds concerned were
very small and have since been liquidated. "We take our
regulatory and compliance responsibilities very seriously. We
are proud of our investment track record and our transparency
with investors," the spokesperson added. 

 (Reporting by Michelle Price; additional reporting by Suzanne
McGee
Editing by Chris Reese and Aurora Ellis)
 ((michelle.price@thomsonreuters.com; +12026041711; Twitter:
@michelleprice36;))