The Financial Supervisory Commission fined two investment trust companies: hiring online armies and exaggerating returns in press releases.
Recently, the Financial Supervisory Commission continuously fined two well-known investment trust companies, specifically for advertising violations by Cathay Securities Investment Trust Co., Ltd. and Shin Kong Securities Investment Trust Co., Ltd., with each fined 600,000 New Taiwan dollars.
According to announcements from the Securities and Futures Bureau of the Financial Supervisory Commission, both cases involved using potentially misleading language when promoting investment products, leading people to mistakenly believe that investments could guarantee profits or the safety of principal.
Shin Kong Investment Trust was penalized for commissioning online armies to manipulate public opinion.
According to the announcement of penalties from the Securities and Futures Bureau of the Financial Supervisory Commission on August 22, Cathay Investment Trust was found to have commissioned 'Web Praise Strategy Company' and 'Tipsy Media Co., Ltd.' for online forum public opinion manipulation during inspections in February this year.
These online marketing companies posted comments in forums using fake accounts, emphasizing advertisements about returns.
One of the comments targeted by the Financial Supervisory Commission read: 'The possibility of losing money on U.S. bonds is zero; as long as you hold long enough, just collecting interest will cover the cost, how could there be a loss? I currently hold 687B and it's already up about 10%.'
The Financial Supervisory Commission believes that such wording clearly misleads people into believing that the safety of principal or guaranteed profits can be assured, violating the regulations of the management rules for securities investment trust enterprises and the regulations on advertising business solicitation and promotional activities in the financial services industry.
Further reading:
Cathay United Bank's customer service fraudulently charged nearly 7 million on customer credit cards! The Financial Supervisory Commission imposed a heavy fine of 12 million, revealing three major internal control deficiencies.
Source: Financial Supervisory Commission penalty document; Cathay Investment Trust was fined 600,000.
Shin Kong Investment Trust was penalized for exaggerating investment performance forecasts in press releases.
The violation situation of Shin Kong Investment Trust was found in media press releases. The Securities and Futures Bureau stated that in a press release provided to the media on November 19 last year, it contained statements such as 'U.S. investment-grade bonds have a 100% increase rate during interest rate cuts, with an average increase of 38.1%' and immediately recommended specific bond ETF products.
The Financial Supervisory Commission pointed out that although the attached table in the press release showed that the increase during the most recent interest rate cut period had significantly dropped to only 7.7%, the text still expressed it as an average increase of 38.1%, which may mislead investors.
In addition, the press release also contained investment performance forecasts for funds that had not yet been raised, which violated relevant management regulations.
Source: Financial Supervisory Commission penalty document; Shin Kong Investment Trust was fined 600,000.
Investment trusts need to be cautious in promoting products; the once-popular 00940 ETF was also penalized.
Investment trust operators must be particularly cautious when promoting products and avoid using potentially misleading language.
Reviewing past cases, the Yuanta 00940 ETF, which went viral in Taiwan in 2024, was also fined for improper promotion.
The Financial Supervisory Commission pointed out at that time that Yuanta Investment Trust used phrases emphasizing fixed income, such as 'Passive income is not a dream, increase your salary every month' and 'Investing 2 million, receiving monthly interest of 14,333 yuan' when promoting ETF 00940, resulting in a fine of 900,000 yuan.
Source: Financial Supervisory Commission penalty document; Yuanta Investment Trust was fined 900,000 for promoting the 00940 ETF.
These cases show that whether through online forums, media press releases, or cooperation with influencers, investment trust operators cannot use expressions that guarantee profits or the safety of principal in marketing.
The Financial Supervisory Commission also stated that it will continue to strengthen the supervision of advertising behavior by investment trust operators, reminding operators to comply with relevant regulations to protect investors' rights and avoid misleading the public's investment judgment due to improper promotion.
See more news related to the Financial Supervisory Commission:
Cathay Digital Asset Forum) The Financial Supervisory Commission revealed the progress of special laws; does Taiwan also need an RWA platform?
The Taiwan Stock Exchange also needs to help combat fraud! The Financial Supervisory Commission plans to include VASP in the fraud prevention program, linking currency flow with capital flow.
The Financial Supervisory Commission removed four virtual asset operators; currently, there are only eight compliant VASPs left!
'Cathay hired online armies to claim that buying U.S. bonds cannot lose money, and Shin Kong's advertisements exaggerated bond returns! Both were fined 600,000.' This article was first published in 'Crypto City.'
