Unsubstantiated Marketing Claims and Misleading Statements

To meet the unsubstantiated marketing claims and misleading statements requirement, you must prevent any advertisement from containing an untrue statement of a material fact or anything otherwise false or misleading, and you must be able to prove the basis for every objective claim at the time it’s disseminated (17 CFR 275.206(4)-1). Operationalize this with claim-by-claim substantiation, pre-use compliance review, and immutable archiving across all channels.

Key takeaways:

• Treat every marketing claim as “guilty until substantiated” and document support before publication (17 CFR 275.206(4)-1).
• Build a claim substantiation matrix tied to each final approved version and keep it in your books-and-records archive.
• Test the controls the way the SEC will: cross-channel sampling and evidence that review happened before dissemination (2025-exam-priorities).

This requirement shows up in exams as a basic question with an operationally hard answer: “Show me how you know what you said is true.” Under the SEC Marketing Rule’s general prohibitions, an investment adviser commits a fraudulent, deceptive, or manipulative act by disseminating an advertisement with any untrue statement of a material fact or anything otherwise false or misleading (17 CFR 275.206(4)-1). The risk is rarely a single bad sentence; it’s a repeatable process failure: marketing publishes quickly, disclaimers drift, performance narratives get simplified, and “industry-leading” claims become detached from evidence.

A CCO or GRC lead can make this tractable by converting marketing review from subjective editing into an evidence workflow. Your job is to define what counts as a “claim,” what documentation is required for each claim type, who approves it, and how you lock the final record so you can reproduce exactly what the public saw and what support you had on file at the time.

The SEC has stated it will focus on compliance with the Marketing Rule in examinations (2025-exam-priorities). That makes this requirement a practical priority: you need controls that work across websites, pitch decks, social posts, third-party platforms, and one-to-one communications that meet the definition of “advertisement.”

Regulatory text

Rule requirement (operator meaning): The SEC provides that it is a fraudulent, deceptive, or manipulative act for an 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, as the operator, must do:

1. Stop untrue statements before dissemination. Your process must prevent publication of material factual inaccuracies in any advertisement (17 CFR 275.206(4)-1).
2. Stop “true but misleading” statements. Even if a sentence is literally true, it can still be misleading if it lacks context, omits key facts, implies certainty, or suggests results that are not supported (17 CFR 275.206(4)-1).
3. Maintain support for claims. The rule text is about false or misleading statements; in practice, examinations test whether you can produce contemporaneous support that your claims were not misleading when disseminated (17 CFR 275.206(4)-1; 2025-exam-priorities).

Plain-English interpretation (what this requirement really means)

If marketing says it, you must be able to back it up. If it’s not provable, rewrite it as an opinion, qualify it, or remove it. Your standard should be: a third party reviewer (SEC exam staff, an auditor, or plaintiff’s counsel) can read the claim, review your backup, and reach the same conclusion without guesswork.

What counts as a “claim” for substantiation purposes

Use a practical definition in policy and training: any statement that a reasonable investor could read as a factual representation about your firm, people, process, products, or results. Examples:

• “Top quartile manager” (needs dataset, time period, methodology, and peer group definition).
• “Risk-managed strategy reduces drawdowns” (needs analysis and limitations).
• “Former [regulator/bank] team” (needs accurate bios and current status).
• “Proven track record” (needs what “track record” refers to and how it’s measured).

Who it applies to (entity and operational context)

Entity scope: SEC-registered investment advisers and their supervised persons involved in communications that qualify as advertisements (17 CFR 275.206(4)-1).

Operational scope: Any function that creates, edits, approves, distributes, or hosts marketing content, including:

• Marketing/IR teams producing decks, DDQs, factsheets, case studies, website copy, podcasts, webinars, and social posts.
• Portfolio teams contributing performance commentary and “market outlook” pieces when used to promote advisory services.
• Third parties acting on your behalf (PR firms, placement agents, website developers, social media agencies) where your firm disseminates or endorses the content.

Channel scope: Your website, client portals, email campaigns, mass mailings, slide decks, RFP/RFI responses used broadly, paid ads, and content on third-party platforms. Treat “quick” channels (social, blogs) as high-risk because speed degrades review discipline.

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

Step 1: Inventory all advertisement channels and owners

Create a register of:

• Channel (website, LinkedIn, webinars, third-party profile pages, pitchbook library).
• Business owner (Marketing, IR, Product, HR for bios).
• Publication method (CMS, PDF distribution, email platform).
• Whether content is evergreen or campaign-based. This becomes your sampling frame for ongoing testing (2025-exam-priorities).

Step 2: Build a “Claim Substantiation Matrix” (CSM)

Make the CSM a required attachment for every marketing item. Minimum columns:

• Exact claim text (copy/paste the sentence).
• Claim type (performance, credentials, comparative, process, client outcomes, operational capability).
• Risk rating (high/medium/low based on investor impact and verifiability).
• Substantiation (document name, location, and excerpt/page reference).
• Required context/disclosures (what must appear near the claim so it’s not misleading).
• Owner (who provided the support).
• Compliance disposition (approved/approved with edits/rejected).
• Version control (final file hash or unique ID; disclosure version tied to it).

Operational rule: No CSM, no publish. This is how you enforce “unsubstantiated marketing claims and misleading statements requirement” without debating tone in every review.

Step 3: Set pre-dissemination review gates (what gets reviewed by whom)

Implement a two-tier review model:

• Tier A (Compliance required): performance-related statements, comparisons (“best,” “leading,” “lowest fees”), client outcomes, ESG/impact claims, testimonials/endorsements, and any “guarantee-like” language.
• Tier B (Marketing + spot Compliance): general brand content that still contains factual statements (AUM figures, office locations, registrations, product availability).

Your workflow should show compliance approval occurred before dissemination (17 CFR 275.206(4)-1).

Step 4: Create standard substantiation packages by claim type

Don’t reinvent evidence each time. Maintain “ready-to-use” substantiation binders:

• AUM and firm metrics: source of truth report, extraction date, calculation method, and who certified it.
• Personnel credentials: HR-verified bios, licensing/registration checks, and a re-verification cadence.
• Comparative statements: data provider agreement (if any), methodology memo, and limitations.
• Process claims: documented investment process, committee minutes structure, and exception handling evidence.

Step 5: Control the final version and archive immutably

Retain:

• The final disseminated piece (PDF, screenshot, recording, landing page HTML export).
• The approval record (who approved, date/time, redlines/comments, final sign-off).
• The linked disclosures that were in effect at dissemination.
• The CSM and all supporting evidence. Make archives immutable (write-once or permission-restricted) so you can prove no post-hoc edits.

Step 6: Run cross-channel testing and remediate

Perform periodic sampling across channels to detect:

• Claim drift (website says “X,” deck says “Y”).
• Out-of-date metrics (AUM, team size).
• Disclosures missing on one channel. Document issues, root cause, fix, and preventive action. Examinations are focused on Marketing Rule compliance, so you need a testing story, not just a policy (2025-exam-priorities).

Required evidence and artifacts to retain

Keep these in a single audit-ready folder per item (or per campaign) and make them searchable:

• Marketing review policy and approval workflow description.
• Inventory of advertising channels and content owners.
• Claim Substantiation Matrix (completed, dated, versioned).
• Supporting documentation (reports, third-party data extracts, HR attestations, methodology memos).
• Final disseminated versions and distribution list or posting evidence.
• Approval records (ticketing system export, email approvals, annotated drafts).
• Disclosure library with version history and effective dates.
• Periodic sampling logs and remediation tickets.

Common exam/audit questions and hangups

Expect these, and pre-build the evidence:

1. “Define advertisement and show what you treat as advertising.” Provide channel inventory and scoping logic (17 CFR 275.206(4)-1).
2. “Show me support for these 10 claims.” Your CSM should make this a one-click exercise.
3. “Prove pre-dissemination review.” Auditors will test timestamps and version control, not just that “Compliance looked at it.”
4. “How do you prevent outdated information?” Show data owners, refresh triggers, and re-validation.
5. “How do you supervise third parties?” Show contractual requirements, review gates, and monitoring of external postings.

Frequent implementation mistakes (and how to avoid them)

• Mistake: Treating substantiation as optional for “soft” language. Fix: define “objective vs. subjective” language. Ban unsupported superlatives (“best,” “top,” “leading”) unless the CSM cites a credible basis.
• Mistake: Disclosures stored separately with no linkage to versions. Fix: tie each artifact to a disclosure version ID and keep both in the same archive package.
• Mistake: Website edits bypass the workflow. Fix: require CMS permissions so publishing requires a compliance-approved ticket number.
• Mistake: One-and-done review. Fix: run cross-channel sampling and log remediation (2025-exam-priorities).
• Mistake: Third-party profiles drift. Fix: assign an owner and require periodic attestations from the person accountable for that profile.

Enforcement context and risk implications

The SEC frames false or misleading advertisements as fraudulent, deceptive, or manipulative conduct under section 206(4) when an adviser disseminates them (17 CFR 275.206(4)-1). Even without citing specific enforcement matters here, your risk posture should assume that inaccurate or poorly qualified claims can trigger deficiencies, remediation requirements, reputational harm, and follow-on legal exposure. The Division of Examinations has stated a focus on Marketing Rule compliance, which increases the likelihood this topic appears in exam requests and testing (2025-exam-priorities).

Practical execution plan (phased, operator-ready)

Immediate phase: stop the bleeding

• Freeze publication of new content unless it goes through a documented approval gate.
• Publish a one-page “marketing claims rules” cheat sheet: banned phrases without evidence, required disclosures, and where to find approved metrics.
• Stand up a central archive folder structure and start capturing final versions.

Near-term phase: make it repeatable

• Build the channel inventory and assign owners.
• Implement the Claim Substantiation Matrix as a required attachment for every review.
• Create standard substantiation packages for AUM, credentials, comparisons, and process claims.
• Add CMS and shared-drive permission controls so only approved versions can be posted.

Ongoing phase: prove it works

• Run cross-channel sampling, document results, and track remediation to closure.
• Retrain marketing and IR quarterly or when guidance changes.
• Refresh “source of truth” metrics on a defined cadence and invalidate stale materials in the content library.

Where Daydream fits (without changing your operating model)

If you already have a ticketing system and an archive, Daydream can act as the practical layer that standardizes claim-by-claim substantiation, ties each claim to its evidence, and keeps approvals and final versions packaged for exam production. The goal is faster reviews with fewer judgment calls because the evidence is structured.

Frequently Asked Questions

Do we need substantiation for every sentence in a pitch deck?

You need substantiation for every factual claim a reasonable investor could rely on, and you need enough context so the statement is not misleading (17 CFR 275.206(4)-1). Treat superlatives, comparisons, and outcome statements as high-risk and require explicit backup.

Can a statement be misleading even if it’s technically true?

Yes. The standard includes statements that are “otherwise false or misleading,” which captures true-but-misleading claims that omit context or imply certainty without support (17 CFR 275.206(4)-1).

How should we handle “industry-leading” or “best-in-class” language?

Either (1) remove it, (2) convert it into clearly framed opinion that does not imply a verifiable ranking, or (3) substantiate it with defined peer group, time period, and methodology documented in your claim matrix.

What evidence format is acceptable for substantiation?

Use durable, reproducible evidence: source reports, data extracts, methodology memos, HR-verified records, and internal calculations with clear inputs and sign-off. Keep the evidence linked to the final disseminated version so you can reproduce the basis later.

Do we need to review third-party content about our firm (e.g., platform profiles)?

If you disseminate it, adopt it, or direct prospects to it as part of marketing, treat it as in-scope and apply the same review and archiving discipline (17 CFR 275.206(4)-1). Assign an owner for each third-party profile and monitor for drift.

What will the SEC exam team likely request first?

Expect requests for marketing materials, policies and procedures, and evidence supporting specific claims, with testing focused on Marketing Rule compliance (2025-exam-priorities). If you can produce a claim matrix plus immutable archives quickly, the exam becomes far more manageable.