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Important information

• Government Actions:

  Government Action: BBB reports on known government actions involving business’ marketplace conduct:

  Securities Exchange Commission in the Matter of The Pacific Financial Group, Inc.
  

  The following describes a government action that has been resolved by either a settlement or a decision by a court or administrative agency. If the matter is being appealed, it will be noted below.

  
  

   

  
  

  On August 9, 2024, the United States of America before the Securities and Exchange Commission, in the matter of The Pacific Financial Group, Inc. issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to the Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order.

  
  

   

  
  

  The Securities and Exchange Commission settled charges against The Pacific Financial Group, Inc. (“Pacific Financial”), a registered investment adviser based in Bellevue, Washington, for violating the Marketing Rule. The charges concerned Pacific Financial Group advertising hypothetical performance on its public website without adopting and implementing policies and procedures required by the Marketing Rule. The SEC’s order finds that Pacific Financial Group willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-1(d) thereunder.

  
  

   

  
  

  Without admitting or denying the order’s findings, Pacific Financial Group consented to a cease-and-desist order, a censure, to comply with undertakings not to advertise hypothetical performance without having the requisite policies and procedures, and a civil penalty of $430,000. In March 2024, Pacific Financial Group appointed a new Chief Executive Officer, Chief Compliance Officer, and Chief Legal Officer. This new leadership team promptly assessed the facts and cooperated fully with the staff.

  
  

   

  
  

  Under amendments to the Marketing Rule that took effect on November 4, 2022, registered investment advisers are prohibited from including any hypothetical performance in their advertisements unless they have adopted and implemented policies and procedures reasonably designed to ensure the hypothetical performance is relevant to the likely financial situation and investment objectives of the intended audience of the advertisement. The SEC’s order finds that for more than 13 months, from November 4, 2022, through December 15, 2023, Pacific Financial Group advertised a quarterly performance report on its public website that provided hypothetical performance for 23 portfolios it offered to clients. However, Pacific Financial Group’s policies and procedures failed to specify how it would identify the intended audience of its advertisements or ensure hypothetical performance was relevant to the likely financial situation and investment objectives of the intended audience.

  
  

   

  
  

  For more information, please contact the Securities and Exchange Commission at https://www.sec.gov/about/contact-sec or 202-551-2100.

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