The Securities and Exchange Commission on Friday charged Invesco Advisers, Inc. with making misleading statements about the percentage of company-wide assets under management that integrated environmental, social and governance factors in investment decisions.
The Atlanta-based registered investment adviser agreed to pay a $17.5 million civil penalty to settle the SEC’s charges.
According to the SEC’s order, from 2020 to 2022, Invesco told clients and stated in marketing materials that between 70 and 94 percent of its parent company’s assets under management were “ESG integrated.” However, in reality, these percentages included a substantial amount of assets that were held in passive ETFs that did not consider ESG factors in investment decisions.
The SEC’s order also found that Invesco lacked any written policy defining ESG integration.
“As stated in the order, Invesco saw commercial value in claiming that a high percentage of company-wide assets were ESG integrated. But saying it doesn’t make it so,” said Sanjay Wadhwa, acting director of the SEC’s Division of Enforcement, in a press release announcing the charges.
“Companies should be straightforward with their clients and investors rather than seeking to capitalize on investing trends and buzzwords.”
The order charges Invesco with willfully violating the Investment Advisers Act of 1940. Without admitting or denying the order’s findings, Invesco agreed to cease and desist from violations of the charged provisions, be censured and pay the $17.5 million civil penalty.
An Invesco spokesperson told WealthManagement.com that the firm was pleased to resolve the matter.
“The SEC order makes no allegations or findings related to disclosures about specific funds or investment strategies. Invesco has not issued public reports of firmwide ESG integration levels since late 2022,” the spokesperson said. “Invesco Advisers, Inc. cooperated fully with the investigation and will continue to take a client-led approach of offering investment strategies tailored to the specific investment objectives of its clients.”
The SEC’s investigation was conducted by Jonathan T. Menitove of the Asset Management Unit and Richard Rodriguez of the Atlanta Regional Office with assistance from Robert K. Gordon. It was supervised by Ruth Hawley of the San Francisco Regional Office, Stephen E. Donahue of the Atlanta Regional Office, and Andrew Dean and Corey Schuster of the Asset Management Unit.
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