We have previously reported on U.S. Securities and Exchange Commission cases against influencers for violating the anti-touting statute.  On August 22, 2023, the SEC announced settled charges against Washington, D.C.-based investment adviser Fundrise Advisors, LLC arising from the firm’s solicitation arrangements with online content creators.

The following information is taken from the Order.  Fundrise has been registered with the SEC as an investment adviser since September 25, 2014 and, as of March 31, 2023, reported approximately $3.3 billion in assets under management.  Between February 2016 and December 2021, Fundrise paid over $8 million to over 200 social media influencers and online publishers (“content creators”) to solicit Fundrise advisory clients without the disclosure and documentation required under former Advisers Act Rule 206(4)-3, which was then in place (the “Cash Solicitation Rule”).

The Cash Solicitation Rule, in pertinent part, prohibited a registered investment adviser from paying a cash fee, directly or indirectly, to a solicitor for soliciting clients for the investment adviser unless: (1) there is a written agreement between the solicitor and the investment adviser that (a) describes the solicitation activities to be engaged in by the solicitor on behalf of the investment adviser and the compensation to be received for such activities; (b) contains an undertaking by the solicitor to perform his duties under the agreement in a manner consistent with the instructions of the investment adviser and the Advisers Act and the rules thereunder; and (c) requires the solicitor, at the time of the solicitation of the client, to provide the client with a current copy of the investment adviser’s brochure and a separate written statement disclosing the nature of the relationship between the solicitor and the investment adviser and the terms of their compensation arrangement, among other things.

Starting in February 2016, Fundrise  contracted with content creators to promote Fundrise’s online real estate investment platform on their blogs, websites, newsletters, and social media channels. As part of these contractual arrangements, the content creators agreed to include hyperlinks to Fundrise’s platform in their online promotions.  Fundrise paid the content creators based on the number of individuals who clicked on the hyperlinks and entered their email addresses.  Fundrise paid more than $8 million to over 200 content creators, who referred more than 66,000 new clients to the adviser. To date, those clients have accounted for more than $300 million of Fundrise’s assets under management.  It also yielded over $655,000 in advisory fees for the firm.

Fundrise made these payments to the content creators without the disclosure and documentation required under the Cash Solicitation Rule.  Specifically, the content creators did not provide solicited clients with the required written disclosure document.  As a result of Fundrise’s conduct, clients were not fully informed of the content creators’ financial interests in promoting Fundrise’s online real estate platform and investment advisory services and therefore lacked the information necessary to evaluate the content creators’ recommendation of Fundrise.

Under the agreed-on settlement, Fundrise agreed to cease and desist from committing or causing any violations and any future violations of the Cash Solicitation Rule (and its successor statute) and to pay a $250,000 civil money penalty.  Fundrise consented to the entry of the SEC’s order finding that the firm willfully violated the relevant statutes, but did so without admitting or denying the findings,


David Zaslowsky has a degree in computer science and, before going to Yale Law School, was a computer programmer. His practice focuses on international litigation and arbitration. He has been involved in cases in trial and appellate courts across the United States and before arbitral institutions around the world. Many of David’s cases, including some patent cases, have related to technology. David has been included in Chambers for his expertise in international arbitration. He is the editor of the firm's blockchain blog.