SEC Marketing Rule - Cherry-Picked Data and Selective Presentation

To meet the sec marketing rule - cherry-picked data and selective presentation requirement, you must prevent any advertisement from becoming false or misleading by selectively showing only favorable performance, time periods, or outcomes without fair balance, clear context, and support. Operationalize this by enforcing pre-use compliance review, claim-by-claim substantiation, consistent disclosures, and immutable archiving across every channel. (17 CFR 275.206(4)-1)

Key takeaways:

• Treat cherry-picking as a “misleading advertisement” risk: omission and selective framing can violate the rule. (17 CFR 275.206(4)-1)
• Require claim-by-claim substantiation and a “fair-balance check” before anything is published.
• Keep audit-ready archives: final content, approvals, substantiation, and the exact disclosures that shipped.

Cherry-picked data rarely looks like an outright false statement. It shows up as selective time periods, “best ideas” lists, favorable composites, backtests without comparable context, selective testimonials, or graphs that hide drawdowns. Under the SEC Marketing Rule’s general prohibition, the compliance question is simple: would a reasonable investor be misled by what you included, what you excluded, or how you framed it? If the answer could be “yes,” you need controls that force context, balance, and documentation before dissemination. (17 CFR 275.206(4)-1)

This requirement page is written for a CCO, Compliance Officer, or GRC lead who needs a requirement-level playbook that can be implemented in workflow tomorrow. You’ll get: (1) a plain-English standard for “selective presentation,” (2) scope and applicability across channels and third parties, (3) a step-by-step operating procedure for review and substantiation, (4) the evidence package exam teams ask for, and (5) common failure modes that cause findings.

The SEC’s Division of Examinations continues to focus on Marketing Rule compliance, so teams should expect exam questions that pressure-test both the content and the process behind it. (2025-exam-priorities)

Requirement: prevent cherry-picked data and selective presentation in advertisements

Plain-English interpretation (what the rule requires)

The SEC Marketing Rule prohibits an investment adviser from disseminating any advertisement that includes an untrue statement of material fact or is otherwise false or misleading. “Misleading” includes communications that create a false impression through selective presentation, omitted context, or one-sided framing, even if each individual fact is technically true. (17 CFR 275.206(4)-1)

Operator standard you can enforce: Any performance, results, rankings, case studies, “best of” lists, or outcome claims in marketing must be presented in a way that a reasonable investor would not misinterpret. That means you must (a) support the claim, (b) provide enough context to prevent a false inference, and (c) avoid selecting only favorable slices unless you also explain the full picture with comparable prominence.

Who it applies to (entity and operational context)

Applies to:

• Registered Investment Advisers (RIAs) and their supervised persons producing or approving advertisements. (17 CFR 275.206(4)-1)

Operational contexts where cherry-picking occurs:

• Pitch decks, RFIs/RFPs, DDQs, one-pagers, factsheets, market commentary
• Website pages, blogs, downloadable PDFs, webinars, podcasts, email campaigns
• Social media posts and short-form graphics (where context is often truncated)
• Third-party marketer content that you approve or that promotes you (requires governance if it becomes your advertisement in practice)
• Model/strategy performance snapshots, backtests, extracted “since inception” charts with missing periods
• “Representative account” examples, selected trades, selected recommendations, “top contributors”

Examination context: The SEC has stated a focus on Marketing Rule compliance in its examination priorities, which increases the likelihood that exam staff will request your marketing inventory, substantiation, and review workflow evidence. (2025-exam-priorities)

Regulatory text

General prohibition (excerpt): “It shall constitute a fraudulent, deceptive, or manipulative act, practice, or course of business…for any investment adviser to disseminate any advertisement that includes any untrue statement of a material fact, or that is otherwise false or misleading.” (17 CFR 275.206(4)-1)

What you must do operationally: build a repeatable process that prevents false or misleading implications caused by selective presentation. The rule language is principle-based, so the control strength comes from your workflow: pre-dissemination review, documented substantiation, consistent disclosures, and post-use surveillance with documented remediation. (17 CFR 275.206(4)-1)

What you actually need to do (step-by-step)

Step 1: Define “advertisement” inventory boundaries and channels

1. List all distribution channels where performance/results or outcomes appear (website, PDF library, CRM email templates, social accounts, webinars, third-party platforms).
2. Create a marketing content inventory with owner, channel, audience, and whether it contains performance/results, comparisons, rankings, case studies, or testimonials.
3. Tag high-risk content types for cherry-picking review: performance extracts, “best ideas,” representative accounts, backtests, selective time periods, and any “top” list.

Deliverable: Marketing inventory spreadsheet or GRC record with risk tags and owners.

Step 2: Implement a pre-dissemination compliance review gate (non-negotiable)

1. Require compliance approval before publishing any advertisement (including updates).
2. Standardize an intake form: what’s being claimed, where it will be used, target audience, and the substantiation source.
3. Add a “fair and balanced” checklist that explicitly tests for selective presentation:
   • Are time periods chosen for a reason other than looking best?
   • Are down periods, limitations, fees, and material assumptions missing or minimized?
   • Would an investor infer “typical results” from a non-representative example?

Deliverable: Workflow ticket with compliance approval and checklist completion.

Practical note: The simplest enforcement mechanism is refusing publication without a completed substantiation packet. Most cherry-picking issues surface when a reviewer asks, “Why this period, and what happens if I extend it?”

Step 3: Require claim-by-claim substantiation (link every statement to evidence)

For each claim in the advertisement, require:

1. Claim text copied verbatim
2. Classification (performance, risk statement, ranking/award, comparison, case study, operational capability)
3. Substantiation source (portfolio accounting report, benchmark data file, methodology memo, third-party report)
4. Assumptions and limitations
5. Required disclosures mapped to the claim

Deliverable: Substantiation matrix that references underlying books-and-records.

This is the operational heart of preventing cherry-picking. A marketer can’t “selectively present” without creating an undocumented narrative; the matrix forces transparency.

Step 4: Enforce “fair balance” presentation rules in content standards

Create house rules that content creators can follow without guessing:

• Time period rules: If you show a selected period, document why it is presented and include enough additional context to prevent a misleading inference. If you cannot justify the selection, do not publish it. (17 CFR 275.206(4)-1)
• Representative example rules: If you show a specific account, trade, or “top contributor,” document representativeness criteria and what is excluded. If it’s not representative, label it clearly and add context so it cannot be read as typical.
• Prominence rules: Put limitations/disclosures close to the claim and in comparable prominence. If a chart is the hero element, the key limitations must not be buried elsewhere.

Deliverable: Marketing content standard (style guide + disclosure library + required footnotes by claim type).

Step 5: Lock down disclosures with version control

1. Maintain a disclosure library with owner, version, effective date, and approved use cases.
2. Require reviewers to link the specific disclosure version used in the final piece.
3. Prevent “copy/paste drift” by embedding approved disclosure blocks in templates.

Deliverable: Disclosure register and approved template set.

Step 6: Archive immutable books-and-records for every final advertisement

Your retention set should allow an examiner to reconstruct what was disseminated, when, to whom, and why it was not misleading. (17 CFR 275.206(4)-1)

Deliverable: Immutable archive (WORM or equivalent controls) containing final content plus approvals, substantiation, and disclosures.

Step 7: Run ongoing surveillance and fix drift

1. Sample across channels (web, social, PDFs, email) to catch inconsistent claims and outdated disclosures.
2. Log findings and remediation with dates, owners, and corrective action.
3. Feed lessons learned into content standards and reviewer training.

Deliverable: Marketing surveillance log with remediation evidence.

Where Daydream fits naturally: If you struggle to keep a unified inventory, substantiation matrix, and immutable archive linked to each approval, Daydream can act as the system of record that ties each claim to its evidence and the exact shipped disclosure version.

Required evidence and artifacts to retain (exam-ready)

Use this checklist as your “production package” per advertisement:

• Final disseminated version (PDF, screenshot, web capture, recording, social post export)
• Distribution context (channel, dates active, audience list or campaign ID where applicable)
• Approval evidence (ticket, sign-offs, reviewer comments, redlines)
• Substantiation matrix with source references
• Underlying substantiation files (performance reports, methodology memos, data pulls)
• Disclosure version ID and the disclosure text included in the final piece
• If revised: prior versions, change log, and rationale for changes
• Surveillance results and remediation records (if the item was part of sampling)

Common exam/audit questions and hangups

Expect questions aligned to “show me your process” plus “show me your proof,” especially given stated exam focus on the Marketing Rule. (2025-exam-priorities)

Common asks:

• “Provide a list of all advertisements disseminated during the period and the associated approvals.”
• “Show support for each performance or outcome claim and how you determined it was not misleading.” (17 CFR 275.206(4)-1)
• “How do you prevent selective time periods or representative examples from implying typical results?”
• “How do you control third-party marketing content that mentions your firm?”
• “Show your training materials and how you monitor social media and website updates.”

Hangups that slow teams down:

• Missing “final as disseminated” copies (only drafts exist).
• Substantiation stored in email threads or personal drives.
• Disclosures inconsistent across channels because templates diverged.

Frequent implementation mistakes (and how to avoid them)

1. Approving “true but incomplete” claims.
   Fix: reviewer checklist must explicitly test for omissions and investor takeaways, not just factual accuracy. (17 CFR 275.206(4)-1)

2. Selective graphs with hidden context (fees, benchmark selection, start dates).
   Fix: require chart standards: labeled periods, methodology footnotes, and consistent benchmark documentation.

3. One-off exceptions for sales teams (“just for this meeting”).
   Fix: treat 1:1 pitch materials as advertisements when they meet the rule’s definition and route through the same approval gate. (17 CFR 275.206(4)-1)

4. Disclosure sprawl.
   Fix: central disclosure library with version control; prohibit editing in-line without compliance re-approval.

5. No linkage between claims and source data.
   Fix: claim-by-claim substantiation matrix is mandatory, and the approval cannot close without it.

Enforcement context and risk implications

The SEC frames dissemination of false or misleading advertisements as fraudulent, deceptive, or manipulative under Section 206(4) when the general prohibition is violated. (17 CFR 275.206(4)-1) Practically, cherry-picking creates risk in three places: (1) investor harm via misinformed decisions, (2) exam findings tied to weak review/records, and (3) reputational damage from having to correct public-facing claims.

The SEC’s Division of Examinations has indicated continued attention to Marketing Rule compliance, so weak controls can convert quickly into exam escalations because issues are visible and easy to sample across channels. (2025-exam-priorities)

Practical execution plan (30/60/90-day)

Day 1–30: Stabilize and stop new risk

• Stand up a mandatory pre-dissemination approval workflow for all marketing.
• Build an initial content inventory and tag high-risk items (performance/results-heavy).
• Publish a “no selective presentation” reviewer checklist and require it on every approval.
• Start an immutable archive process for final-as-disseminated versions.

Day 31–60: Standardize substantiation and disclosures

• Implement the claim-by-claim substantiation matrix template.
• Centralize disclosure language with version control and approved templates.
• Train marketing and sales on “selective presentation” red flags with real examples from your inventory.
• Remediate the highest-risk existing pieces first (homepage, flagship deck, factsheets).

Day 61–90: Add surveillance and tighten governance

• Launch cross-channel sampling with documented remediation.
• Add controls for third-party content (approval requirement, monitoring, takedown process).
• Establish KPIs for process health (for example: % of items with complete substantiation packages, aging of open remediations) without relying on unsupported external benchmarks.
• Consider consolidating inventory, approvals, substantiation, and archiving into Daydream to reduce evidence fragmentation and speed exam response.

Frequently Asked Questions

Does cherry-picking violate the Marketing Rule only if the data is false?

No. The general prohibition covers advertisements that are “otherwise false or misleading,” which can include selective presentation or omission that creates a misleading impression. (17 CFR 275.206(4)-1)

Are one-on-one pitch decks and RFP responses covered?

They can be, depending on whether the communication meets the rule’s definition of an advertisement. Operationally, firms commonly route these materials through the same review gate because they often contain performance and outcome claims. (17 CFR 275.206(4)-1)

What’s the minimum substantiation standard for a performance claim?

Keep a claim-by-claim substantiation record that links the exact claim text to the underlying performance reports or calculations and documents any assumptions and limitations. If you cannot produce support quickly, don’t publish the claim. (17 CFR 275.206(4)-1)

How do we handle short-form social posts where disclosures don’t fit?

Treat short-form as higher-risk. Either (a) avoid performance/outcome claims in the post, (b) use a compliant short disclosure with an immediate link to fuller disclosures, or (c) don’t post it. The key is preventing a misleading impression from the post itself. (17 CFR 275.206(4)-1)

Do we need to keep drafts, or only the final version?

The must-have is the final disseminated version and the records that show why it was approved and substantiated. Keeping key drafts and redlines often helps demonstrate supervision and review rigor if questions arise. (17 CFR 275.206(4)-1)

What will SEC examiners focus on for this topic?

Expect requests for your marketing inventory, your review/approval workflow, substantiation for performance and results claims, and your books-and-records showing what was disseminated. The Division of Examinations has stated focus on Marketing Rule compliance. (2025-exam-priorities)