WisdomTree subsidiary receives ‘Wells Notice’ from SEC

In a regulatory filing earlier, WisdomTree disclosed that on August 5, WisdomTree Asset Management, , or “WTAM,” a wholly-owned subsidiary of WisdomTree, Inc., received a “Wells Notice” from the staff of the U.S. Securities and Exchange Commission advising WTAM that the Staff has made a “preliminary determination” to recommend that the SEC file an enforcement action against WTAM alleging violations of certain provisions of the U.S. federal securities laws. “The recommendation may involve a civil injunctive action or other action allowed by law, and may seek remedies that include injunctions, disgorgement, pre-judgement interest, civil money penalties and such other relief as may be available. The alleged violations relate to three exchange-traded series of WisdomTree Trust managed by WTAM that pursued ESG-focused investment strategies. The Board of Trustees of WisdomTree Trust, after careful consideration of various factors, including the persistent lack of investor demand and limited prospects for future asset growth, approved the liquidation of the ESG Funds in December 2023. Each ESG Fund completed its liquidation in February 2024. During their periods of operations, the ESG Funds had, in the aggregate, average assets under management of approximately $119 million. A Wells Notice is neither a formal charge of wrongdoing nor a final determination that the recipient has violated any law. WTAM maintains that its actions have been in compliance with all applicable laws and regulations, and intends to pursue the Wells Notice process, which will include the opportunity to respond to the Staff’s position,” the filing stated.