: SEC penalizes robo-adviser Betterment $9 million, settling charges of misleading customers


Robo-adviser investment firm Betterment LLC agreed late Tuesday to pay a $9 million penalty to settle charges by the Securities and Exchange Commission that it misled customers about its automated tax loss harvesting (TLH) service. The penalty will be disbursed to affected customers by Betterment, the SEC said. “From 2016 to 2019, Betterment, in communicating with clients, misstated or omitted several material facts concerning TLH, a service that scans clients’ accounts for opportunities to reduce their tax burden,” the SEC said in a statement. “According to the order, at different times, Betterment failed to disclose a change in the software related to its scanning frequency, failed to disclose a programming constraint affecting certain clients, and had two computer coding errors that prevented TLH from harvesting losses for some clients.” That affected more than 25,000 client accounts, resulting in clients losing about $4 million in potential tax benefits, the SEC said. Betterment has raised $435 million over 10 funding rounds with Bessemer Venture Partners, Menlo Ventures, Globespan Capital Partners, Citi Ventures, and Kinnevik among lead investors, according to Crunchbase data.

This article was originally published by Marketwatch.com. Read the original article here.

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