Atkins-Led SEC Brings First Enforcement Action for Compliance Failures Under the Marketing Rule

On September 4, 2025, the U.S. Securities and Exchange Commission (SEC) brought its first enforcement action under the Marketing Rule since Chair Paul Atkins was sworn in earlier this year—charging Meridian Financial, LLC (Meridian) with violations arising from website statements that it “refuse[d] all conflicts of interest” that were inconsistent with disclosures in its Form ADV. The SEC’s settled administrative order also found that Meridian violated other provisions of the Investment Advisers Act of 1940 (Advisers Act), specifically the books and records and compliance rules. This matter suggests that the SEC remains willing to bring enforcement actions for clear violations of more technical provisions of the Advisers Act that do not necessarily involve fraud or investor harm. While Meridian served as an investment adviser to individuals, the violations in the SEC’s order would be equally applicable to private fund managers.

The Marketing Rule violations were premised on Advisers Act Rule 206(4)-1(a)(2), which prohibits investment advisers from including material factual statements in advertisements that they do not have a reasonable basis to believe could be substantiated upon demand by the SEC. While Meridian stated on its website that it “refuse[d] all conflicts of interest,” its Form ADV contained contradictory statements, which disclosed several conflicts inherent in its advisory business. The Commission found that, since Meridian conceded that it in fact had conflicts in its Form ADV, the firm lacked a reasonable basis to substantiate its website claim if challenged.

The SEC also found that Meridian failed to preserve copies of the advertisements that appeared on its website, in violation of the books and records requirements (Advisers Act Rule 204-2(a)(11)). Meridian relied on a third-party service provider to construct and manage its site, but neither Meridian nor the vendor retained the required records. As a result, Meridian could not provide historical advertisements to the SEC during the investigation.

The order further alleged broader compliance program failures. Meridian’s compliance manual required it to obtain contractual assurances from any third parties responsible for maintaining records, but the firm did not secure such an undertaking from its website vendor. The manual also stated that Meridian would conduct annual reviews of the adequacy and effectiveness of the compliance program as required by Advisers Act Rule 206(4)-7. The SEC also found that Meridian did not carry out meaningful reviews of its compliance program in either 2023 or 2024—one review was limited to a cursory check of Form ADV, while the following year’s review relied on an outdated compliance manual that did not reflect the requirements of the Marketing Rule.

For these violations, the SEC ordered Meridian to pay a civil monetary penalty of $75,000.

Key Takeaways

• The substantiation requirement is in focus. The SEC grounded this case in the Marketing Rule’s substantiation requirement—a technical compliance obligation rather than an anti-fraud provision. Advisers should be prepared to support marketing claims with evidence in response to SEC examination or enforcement requests.
• Advertisements should be consistent with disclosure documents. Meridian’s claim that it “refuse[d] all conflicts of interest” directly contradicted its Form ADV. This allowed the SEC to ground its claim in the substantiation requirement, and the SEC did not, and did not need to, allege that Meridian’s website statement was materially misleading to actual or prospective clients. Advisers should carefully review marketing materials—including websites and social media—to ensure they are consistent with disclosures in Form ADV, fund offering documents, due diligence questionnaires and other client-facing materials.
• Books and records maintained with third-party vendors may still be subject to retention and inspection rules. The SEC faulted Meridian for failing to maintain copies of its website advertisements as required by the recordkeeping rules. Advisers who rely on vendors for marketing or recordkeeping should ensure contracts require the vendor to preserve records and consider conducting periodic diligence to confirm that such records are in fact available upon request.
• Annual compliance reviews must be meaningful. Annual compliance reviews are a specific requirement of the Advisers Act. The SEC found that Meridian failed to meet its regulatory obligations by conducting annual reviews that were cursory and incomplete. To avoid similar criticisms, advisers should ensure that annual reviews include a meaningful assessment of the particularized compliance risks of their business. It is also important for advisers to document their annual reviews in a manner that will allow them to demonstrate that they are both substantive and complete in the event of an SEC exam.  
• Maintain strong compliance policies, but don’t get “hoisted on your own petard.” The SEC followed its age-old tactic of citing Meridian’s compliance manual as a basis for its charges, noting that the firm failed to meet obligations it had imposed on itself. This highlights the danger of drafting expansive policies that reflect the best of intentions but may be difficult to implement consistently. Advisers should aim for compliance procedures that are clear, practical and enforceable in day-to-day operations.