--- title: Remember, It's Not Just What You Say, But How and Where You Say It description: Remember, It's Not Just What You Say, But How and Where You Say It --- [![Jacko Law Group, PC - Securities Law](https://resources.jackolg.com/hubfs/Jackolawgroup%20February2018/image/brand.png)](http://www.jackolg.com/) Call Today for a Consultation San Diego 619-298-2880 San Francisco 415-766-3599 Los Angeles 213-631-2549 Menu [Contact](http://www.jackolg.com/Contact.shtml) - [Home](http://www.jackolg.com/) - [Firm Overview](http://www.jackolg.com/Firm-Overview/) - [Professionals](http://www.jackolg.com/Professionals/) - [Events](http://www.jackolg.com/Events.shtml) - [News](http://www.jackolg.com/News-Room/) - [Blog](http://www.jackolg.com/blog/) - [Videos](http://www.jackolg.com/Videos.shtml) - [Contact](http://www.jackolg.com/Contact.shtml) # Understand. Define. Achieve. 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View Our Practice Areas - [SEC/FINRA Regulatory Counsel](http://www.jackolg.com/Regulatory-Examinations-and-Inquiries-SEC-and-FINRA/) - [Private Equity & Hedge Fund Counsel](http://www.jackolg.com/Private-Equity-Counsel/) - [Investment Adviser Services](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/Investment-Adviser-Counsel.shtml) - [Breakaways And Transitions](http://www.jackolg.com/Legal-Considerations-for-Breaking-Away/) - [General Corporate Counsel](http://www.jackolg.com/Corporate-Counsel/) - [Broker- Dealer Counsel](http://www.jackolg.com/Broker-Dealer-Counsel/) #### News - [Legal Tips](http://www.jackolg.com/News-Room/) - [Publications](http://www.jackolg.com/News-Room/Publications.shtml) - [Blog](http://www.jackolg.com/blog/) # Jacko Law Group Blog # Remember, It's Not Just What You Say, But How and Where You Say It Recently, the Securities and Exchange Commission (“SEC”) issued an [Order Instituting Administrative and Cease-and-Desist Proceedings](http://www.sec.gov/litigation/admin/2013/ia-3574.pdf) against ZPR Investment Management, Inc. (“ZPR”) and Max E. Zavanelli (“Zavanelli”) alleging that ZPR and Zavanelli made false and misleading advertisements in several financial magazines and in monthly newsletters to clients and prospective clients. The SEC goes on to specify that ZPR, through Zavanelli, omitted material information about the firm’s historical performance results (specifically that their period to date performance was underperforming its benchmark index) and claimed compliance with Global Investment Performance Standards (“GIPS Standards”) when in fact they were not in compliance. If convicted, ZPR and Zavanelli face civil penalties, cease-and-desist orders, and other remedial actions. This case is an important reminder that although the rules governing advertising by investment advisers are sometimes difficult to navigate, compliance with such rules is mandatory and regularly enforced by the SEC. Section 206 and Rule 206(4)-1 of the Investment Advisers Act of 1940 (the “Advisers Act”), give statutory guidance on advertising regulations. Section 206 provides for the general anti-fraud provision of the Advisers Act, which applies to all investment advisers, whether registered with the SEC or not. Additionally, Rule 206(4)-1, commonly referred to as the “Advertising Rule,” defines certain types of advertisements by investment advisers as fraudulent, deceptive or manipulative, which provides the basic legal framework for investment advisory advertising standards. However, the brevity of the Advertising Rule should not be viewed casually, for most advertising governance is regulated through no-action letters, enforcement actions and deficiency letters provided to advisers through the SEC’s examination process. For an in depth discussion on the rules governing advertisements for investment advisers, please see [*Investment Adviser Performance Marketing and Advertising – What You Need to Know*](http://www.jackolg.com/CM/Careers/Investment%20Adviser%20Performance%20Marketing%20and%20Advertising%20-%20What%20You%20Need%20to%20Know%20-%20July%20August%202012.pdf). Further complicating compliance with advertising rules is the broad definition of what constitutes an “advertisement.” According to Rule 206(4)-1, an advertisement is any “….notice, circular, letter or other written communication addressed to more than one person…..” As such, any materials posted via a website, blog, newsletter or social media outlet (*i.e.*, Facebook, LinkedIn, etc.) can constitute an advertisement, and must be in compliance with SEC regulations. Often advisers find themselves in trouble with the SEC for items they didn’t realize were advertisements to begin with. Therefore, it is very important that you understand not only what can be communicated to clients and/or prospective clients, but also what communications are considered advertisements and subject to SEC review. 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