Investment adviser Van Eck Associates has agreed to pay $1.75 million to settle claims by the Securities and Exchange Commission (SEC) regarding its failure to disclose the involvement of a social media influencer in the launch of an exchange-traded fund (ETF).

According to The Wall Street Journal, the settlement, which includes a cease-and-desist order, censure, and monetary penalty, comes after the SEC accused Van Eck of withholding information about the role of a social media influencer in promoting the VanEck Social Sentiment ETF, launched in March 2021. The ETF aimed to track an index based on the performance of 75 large-cap U.S. stocks with positive investor sentiment, primarily sourced from online content.

According to the SEC's order, the index provider proposed hiring a "controversial" social media influencer to promote the ETF. The influencer was later revealed to be Dave Portnoy, founder of Barstool Sports Inc. Still, it was not disclosed to the ETF's board during the approval process, nor were the licensing agreement details between the index provider and the influencer. 

While agreeing to the settlement, Van Eck has not admitted to or denied the SEC's findings, and the firm declined to comment on the resolution. The Wall Street Journal opines that the SEC's action underscores the importance of transparency and disclosure in launching and promoting financial products, particularly when involving influential personalities in marketing campaigns.

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