Federal regulators appear to be preparing to smite a publicly traded, $106-billion-AUM (as of yesterday) asset manager over a trio of now-defunct ETFs.

Jonathan Laurence "Jono" Steinberg WisdomTree Investments, Inc. CEO

On Tuesday (August 6), Marci Frankenthaler, chief legal officer for WisdomTree [profile], revealed in a brief filing that the folks at the U.S. Securities and Exchange Commission (SEC) sent the New York City-based fund firm a Wells notice the day before (i.e. Monday, August 5). The notice warns that the SEC's staff have made a preliminary determination to recommend an enforcement action, against WisdomTree, "alleging violations of the U.S. federal securities laws."

The filing doesn't identify the alleged violations, but it does describe the funds involved: three ESG ETFs that the WisdomTree team liquidated back in February 2024. The filing doesn't name the shuttered ETFs, but from the timing it would seem that the ETFs in question were: the WisdomTree International ESG Fund (RESD), the WisdomTree Emerging Markets ESG Fund (RESE), and the WisdomTree U.S. ESG Fund (RESP).

"We maintain that [WisdomTree's] actions have been in compliance with all applicable laws and regulations and intend to pursue the Wells Notice process, which will include the opportunity to respond to the SEC staff's position," a WisdomTree spokesperson tells Pensions & Investments. "We have cooperated at every step of this process, and we will continue to do so." 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE