# SEC — In re Van Eck Associates Corporation (BUZZ ETF) — 2024

**Primary artifact:** `sec-vaneck-buzz-2024.pdf` (archived in this folder; 8 pp, PDF v1.7)

- **Source URL:** https://www.sec.gov/files/litigation/admin/2024/ic-35132.pdf
  (Press release: SEC 2024-20, "SEC Charges Van Eck Associates for Failing to Disclose Influencer's Role in Connection with ETF Launch")
- **Pinpoint cite:** In the Matter of Van Eck Associates Corporation, Investment Advisers Act of 1940 Release No. 6560 / Investment Company Act of 1940 Release No. 35132, Admin. Proc. File No. 3-21857 (Feb. 16, 2024).
- **Access method:** curl with SEC-required contact User-Agent (`-A "Clinq Labs Research research@clinqlabs.ai"`). Note: the release-number path `.../ia-6560.pdf` 404s; the archived filename is keyed to the Investment Company Act release, `ic-35132.pdf`.
- **Retrieved-date:** UNKNOWN (pulled during a session dated 2026-07-01; retrieval clock not independently verified — left UNKNOWN per anti-fabrication rule)
- **Status:** primary-archived

## Why this matters for creator/finfluencer comp

This is the canonical "undisclosed AUM-linked finfluencer comp" order. The influencer (widely reported as Dave Portnoy) was compensated via a **sliding-scale licensing fee that grew as the ETF's assets under management crossed thresholds** — i.e., success-linked / asset-based comp rather than a flat fee — plus an equity stake in the Index Provider. VEAC's failure to disclose that asset-linked arrangement (and the influencer's role) to the fund's independent board drove the charges. For a Clinq creator-distribution structure, the line to watch is: **flat, fixed licensing/marketing fee vs. compensation that scales with AUM/assets raised** — the latter is what the SEC treated as material, undisclosed, and sanctionable here.

## Key sections flagged (verbatim, with locators)

**Summary ¶2 — the AUM-threshold fee change (flat → success-linked):**
> "The provider of the BUZZ Index ("Index Provider") informed VEAC that it planned to retain a well-known and controversial social media influencer (the "Influencer") to promote the BUZZ Index in connection with the launch of the BUZZ ETF. To incentivize the Influencer's marketing and promotion efforts, the Index Provider, among other things, requested a change to the proposed licensing fee structure that would provide the Index Provider with a larger percentage of the fee when assets under management of the BUZZ ETF met certain thresholds. VEAC agreed to these requests."

**Facts ¶8 — the original flat proposal (20% of the management fee):**
> "In early October 2020, VEAC proposed economic terms for a license from the Index Provider. VEAC proposed to pay to the Index Provider a fee equal to 20% of the management fee it received from the ETF in exchange for an exclusive license to use the index in the United States."

**Facts ¶9 — the pivot to a sliding scale tied to the Influencer's promotion:**
> "In particular, the Index Provider represented that, as the Influencer would receive a share of the licensing fee VEAC would pay to the Index Provider, a sliding scale licensing fee would incentivize the Influencer to raise awareness of the BUZZ Index and would offer the Influencer a significant monetary incentive if the BUZZ ETF reached sufficient scale."

**Facts ¶10 — the success-linked scale (20% → as much as 60%) + equity:**
> "Under the new economics of the proposed licensing agreement, the Index Provider would receive from VEAC at least 20% of the net management fee VEAC accrued (after netting out four basis points attributed to expenses) and as much as 60% of the management fee if the new ETF had in excess of $1.25 billion in assets under management within eighteen months of launching the fund. The Influencer was offered an ownership interest in the Index Provider, which he accepted."

**Facts ¶15 — the disclosure defect (disclosed 20% flat, hid the sliding scale):**
> "The memorandum to the Board misstated the anticipated terms of the licensing fee, which was to be paid by VEAC to the Index Provider, disclosing that it would equal 20% of the net management fee but failing to disclose the sliding scale, which would provide a larger share of compensation to the Index Provider as BUZZ ETF's assets reached certain thresholds."

**Facts ¶24 — sliding-scale AUM comp as a material profitability/economies-of-scale factor:**
> "The sliding scale arrangement provided for the Index Provider to garner a larger proportion of the management fee if the asset levels of BUZZ ETF increased to meet certain thresholds. The Board did not have the ability to consider the economic impact of the sliding scale arrangement, which would have been a relevant factor in evaluating VEAC's profitability and the extent to which economies of scale would be realized as the BUZZ ETF grew."

**Violations ¶¶27-29 — the charged provisions:**
> "¶27. ... VEAC willfully violated Section 15(c) of the Investment Company Act, which makes it the duty of an investment adviser to a registered investment company to furnish such information as may reasonably be necessary for the investment company's directors to evaluate the terms of any contract ...
> ¶28. ... VEAC willfully violated Section 206(2) of the Advisers Act, which prohibits an investment adviser, directly or indirectly, from engaging 'in any transaction, practice, or course of business which operates as a fraud or deceit upon any client or prospective client.' Scienter is not required to establish a violation of Section 206(2), which may rest on a finding of simple negligence. ...
> ¶29. ... VEAC willfully violated Section 206(4) of the Advisers Act and Rule 206(4)-7 promulgated thereunder, which require a registered investment adviser to adopt and implement written compliance policies and procedures reasonably designed to prevent violations of the Advisers Act and the rules thereunder."

**Order §IV.C — sanction:**
> "Respondent shall pay a civil money penalty in the amount of $1,750,000." (also: cease-and-desist, §IV.A; censure, §IV.B.)