(Reuters) — Robo-advisor Betterment LLC has agreed to pay $9 million to settle U.S. Securities and Exchange Commission charges related to wrongdoing, as well as disclosure and record-keeping failures.
Improvement misrepresented or omitted facts when communicating with customers about its automatic tax loss service from 2016 to 2019, the SEC found after its investigation. It also failed to notify customers of contract changes and failed to maintain certain records, the regulator said.
The SEC said the issues affected more than 25,000 accounts, resulting in those customers losing about $4 million in potential tax benefits.
Betterment, which did not admit or deny the SEC̵
7;s allegations, said in a statement that it has made significant investments to strengthen its compliance program since 2019.“Betterment is, as always, committed to its mission of making people’s lives better and seeks every opportunity to improve its services and business to achieve that goal,” the company said.
A lawyer for Betterment also did not immediately respond to requests for comment.
Automated tax loss harvesting is a service offered by many robo-advisors that automatically sells securities at a loss in order to offset the tax impact of capital gains from the sale of other securities.
Betterment, which provides robo-advice and cash management services, has more than $34 billion under management and more than 770,000 clients, according to its website.
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