Advertising Review Workshop - FINRA€¦ · Advertising Review Workshop. Thursday, October 8, 2015....

Advertising Review Workshop

Advertising Review Workshop Thursday, October 8, 2015

3:15 p.m. – 4:45 p.m.

Friday, October 9, 2015 10:30 a.m. – 12:00 p.m.

Apply advertising rules to several mock advertisements and uncover the hidden concerns during this highly interactive and dynamic session. Attendees and online participants work in small groups and present their findings to all other workshop participants while moderators present the regulatory perspective, clarify any misperceptions and answer questions. Moderator: Anthony Maher Manager FINRA Advertising Regulation Panelists: Kimberly Flanders Principal Investigator FINRA Advertising Regulation Stephanie Gregory Principal Investigator FINRA Advertising Regulation

Lynn Lawson Associate Manager FINRA Advertising Regulation

I. Introduction II. Open discussion and analysis among workshop attendees in small groups

III. Presentation of analyses to audience IV. Department presentation

Communication #1: Blast Email – Red Wing Distributors, Inc.

From: Red Wing Distributors, Inc. [email protected]: We Stand OutDate: September 16, 2015To: [email protected]

Fund inception date: 01/01/2010Disclosures: All investing involves risk, including loss of principal. There can be no assurance that the Fund will achieve itsinvestment objectives. The Fund is subject to the risks associated with Large Cap Value Funds.

As of 08/31/2015, for each fund with at least a three‐year history, Diamond Point calculates a Diamond Point Rating basedon a Diamond Point Risk‐Adjusted Return measure that accounts for variation in a fund’s monthly performance (includingthe effects of sales charges, loads, and redemption fees), placing more emphasis on downward variations and rewardingconsistent performance. The top 10% of funds in each category receive 5 diamonds, the next 22.5% = 4 diamonds, the next35% =3 diamonds, the next 22.5% =2 diamonds and the bottom 10% =1 diamond. The Overall Diamond Point Rating for afund is derived from a weighted average of the performance figures associated with its three‐, five‐ and ten‐year (ifapplicable) Diamond Point Rating metrics.

Past performance is no guarantee of future results. Current performance may be lower or higher than the performanceshown. Contact us for more information.

Before investing you should carefully consider the Fund’s investment objectives, risks, charges and expenses. This and other informationis in the prospectus and summary prospectus, a copy of which may be obtained by calling 1‐800‐555‐1234. Please read the prospectus orsummary prospectus carefully before you invest.

This email was sent to [email protected] by [email protected] | Privacy PolicyRed Wing Distributors, Inc. | Member FINRA, SPIC. | 123 Main Street| Suite Pleasantville, USA|23456

Top Peer Group Performance for

Year‐to‐Date, 1‐ & 3‐ Year PeriodsRed Wing Large Cap Value Fund

vs Diamond Point Large Cap Value Category

(through 6/30/2015)

Outperformed Peer Group by

7.56% (since inception through 6/30/2015)Red Wing Large Cap Value Fund

vs Diamond Point Large Cap Value Category(since inception through 6/30/2015)

WE STAND ABOVE & BEYOND THE CROWD

Diamond Point Overall Rating Out of 190 Funds in the Diamond Point Large Cap Value category

Red Wing Large Cap Value Fund received the 5 diamond rating for the 3‐year period ending 08/31/15 based on risk‐adjusted performance.

Additional Information

Filing Information

Email Sent to financial advisors as a sample to use with prospective investors Filed with the Advertising Regulation Department on September 16, 2015 Date of registered principal approval: September 5, 2015 Date of first use: September 2, 2015

Red Wing Large Cap Value Fund Information:

Open‐end mutual fund Investment objective: seeks capital appreciation and income The principal risk factors of the fund include, but are not limited to:

Value investing Market Non‐diversification Sector specific risks:

Energy Healthcare Information technology

Class A shares are subject to a 5.75% sales load Total annual fund operating expense ratio is 1.10%

Fund Ranking Information:

Rankings backup documentation: Overall, 5 Diamond Point rating 1‐year, 4 Diamond Point (out of 375 funds) 3‐year, 5 Diamond Point (out of 257 funds) 5‐year, 4 Diamond Point (out of 190 funds) Large Cap Value category as of August 31, 2015

Communication #2: Social Media – ConnectOn

2Home Profile Friends Career

1,025 people viewed your profile in the last 90 days

13,008 followers

About Contact Us Privacy & Terms ConnectOn Inc. © 2015

Winterfell Financial Services, Inc.Investment Management500‐1000 employees

Following

Employees

What is ConnectOn? Join Today Sign In

13,008 connections

Winterfell Financial Services, Inc. was founded in 1993 and has over 20 solid years of investment management experience. Winterfell and its affiliates provide clients with an array of investment strategies and solutions. From our cutting edge suite of mutual funds, that have provided investors with consistent and profitable returns to ETFs, bonds, non‐traded REITs, and private placements, Winterfell is your one stop shop for ALL your investment needs!!!Website Industry Typewww.winterfell.com Investment Management Public

CareersInterested in jobs at Winterfell?8 jobs posted

See Jobs >

See connections >

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Winterfell Check out our family of top of the line mutual funds. Specifically, our new Value Opportunity Fund – which has out performed! www.winterfell.com/home/ValueOpp

Like . Comment . Share . 21 hours ago

Winterfell Have you seen our latest blog post? Investing for a happy retirement. www.winterfell.com/blog

Like (4) . Comment . Share . 2 days ago

Winterfell REITS ‐ Looking for stability in a rising interest rate environment and protection from market volatility? Very compelling article about non‐traded REITs by our friends over at REITS ‘R US. www.reitsrus.com/article

Like (2) . Comment . Share . 4 days ago

Recent Posts

Investing for a happy retirement –Retirees want income but can’t afford volatility.

Bill Burns, CEO of Winterfell, discusses our High Yield Bond Fund. Check it out!

About Us

As of 9/30/15: YTD 1 Year 5 year Since Inception (1/1/08)Value Opportunity ‐.32% 1.46% 5.92% 5.75%Benchmark ‐.75% 2.02% 6.35% 6.43%


Filing Information:

• Social media homepage• Obtained during a sweep focused on social media• “About Us”

Became available to the public on February 1, 2014 Not reviewed or approved by a registered principal of the firm Not filed with the Advertising Regulation Department

• “Recent Posts” Not reviewed or approved by a registered principal of the firm Not filed with the Advertising Regulation Department Interactive portion of the ConnectOn page Contains a link to the firm website that includes a prospectus offer for the Winterfell Funds

• The “Investing for a happy retirement” article: Discusses the Winterfell High Yield Bond Fund Reviewed and approved by a registered principal on September 14, 2015 Date of first use: September 14, 2015 Filed with the Advertising Regulation Department on October 1, 2015

• Winterfell High Yield Bond Fund Information: Investment objective: seeks to maximize total return Investment strategy: invests up to 80% of its portfolio in below investment grade bonds

• Winterfell Value Opportunity Fund Information: The hyperlink for the Winterfell Value Opportunity Fund links directly to standardized

performance. Performance:

Other Information

• REITS ‘R US is not affiliated with Winterfell.• Winterfell links go to the Winterfell homepage that includes a discussion of the risks associated

with the Winterfell mutual funds, REITs, and other products.

Communication #3: Newspaper Advertisement – Marco Polo

Alternative Investments.No Longer Exclusive.

Marco Polo Global Multi-Asset Income Fund.An Alternative Investment for the Masses.Delivering twice the yield of its category average.With Less Risk.*

At a time of interest rate uncertainty, decreasing liquidity and wild volatility in the stock markets, you should consider a fund that is flexible and can go anywhere in search of income. Going beyond traditional strategies and products, but maintaining a low risk profile.

Talk with your financial advisor about how the Marco Polo Global Multi‐Asset Income Fund can improve the quality of your investment portfolio.

Marco Polo Alternative FundsDiscovering a New World of Opportunities

*Source: Evening Star Metrics. Based on 30‐day SEC yield as of June 30, 2015. The Fund’s SEC yield during this time period was double that of the Evening Star Global Bond Index. Past Performance is no guarantee of future success. There is no guarantee that the fund will achieve its investment objective. The fund is subject to the typical risks associated with investing.

Call 555-867-5309 for a prospectus (or summary prospectus), which you should read carefully before investing. The prospectus (and summary prospectus) discuss the Fund’s investment objectives, risks, charges and expenses.Marco Polo Funds Distributors LLC Member FINRA SIPC


Filing Information:

• Print ad appears in a nationally circulated newspaper for a retail audience• Filed with the Advertising Regulation Department on August 28, 2015• Date of registered principal approval: August 25, 2015• Date of first use: August 30, 2015

Marco Polo Global Multi‐Asset Income Fund (the "Fund") Information:

• Investment objective: seeks a high level of current income as its primary investment objective.• Secondary objective: seeks to maximize total return, but only to the extent consistent with its

primary objective.• Primary investment strategy: invests at least 80% of its assets in fixed income securities (U.S. or

foreign) including, but not limited to: Corporate, municipal, MBS, CMOs, U.S. Government and foreign debt securities Emerging market securities and currency derivatives. Investment grade or below investment grade securities.

• The Fund may invest up to 65% of its assets in any one asset class or market segment.• 65% of the Fund’s assets are allocated to below investment grade bonds (as of June 30, 2015

Annual Report and Prospectus).• Performance:

• The yield presented in the ad represents the 30‐Day SEC yield for the Class I shares.

1‐year 5‐year Since Inception (01/01/2008)Class A 0.41% 6.46 4.10%Class I 5.89% 7.23% 5.10%Benchmark 6.30% 7.79% 5.89%

Class A 30‐Day SEC Yield 2.22%Class I 30‐Day SEC Yield 4.68%Benchmark Avg. 30‐Day Yield 2.30%

Communication #4: REIT Seminar Presentation – Faber Capital

Faber Capital Investment Advisors, LLPProspective Client Seminar Presentation

Slide Speaker’s Notes

Introducing the Faber Capital Real Estate Investment Trust

Managed by Faber Capital Investment Advisors, LLPSecurities distributed by Faber Capital Markets, Inc.

Good morning.

My name is Kent Dorfman and today I am with my partners, Larry Kroger and Robert Hoover. We manage a number of real estate trusts across the real estate spectrum, including the Faber Capital Real Estate Investment Trust.

At Faber Capital Investment Advisors, we are strong advocates of portfolio diversity. No investor should invest their entire portfolio in just stocks and bonds. Investors should also have assets allocated to real estate.

Diversification and Stability

As you may be aware, the stock market has fluctuated wildly in recent months and there are no signs that the volatility will abate.

Non‐traded REITs like the Faber Capital Real Estate Investment Trust are not subject to stock market fluctuation. They are a more conservative approach to investing and can effectively hedge the risks associated with the stock market.

For instance, if the stock market crashes tomorrow, the value of your investment in the Faber Capital Real Estate Investment Trust will not change. The value is stable.

Income

All investors, especially seniors and those approaching retirement are seeking income.

Where are you going to find income?

CDs? Not!

Money market funds? Not!

Treasuries? Not!

The Faber Capital Real Estate Investment Trust pays distributions every single month!


(Page 2)


Distributions

The Faber Capital Real Estate Investment Trust pays 6.5% distributions!

6.5%! Where can you find that income?

A $100,000 investment at the beginning of this program, would have earned, by now, $19,500 in income! Almost $20,000!

And remember, you do not have to worry about market volatility!

Tangible

This is not a stock. It is a direct investment in real estate. It is a tangible investment. You are buying stone and concrete – you can see what you invest in as you drive by shopping centers or malls. You are investing in more than a piece of paper!

Anticipated Liquidity

A natural question you may have is “when do I get my money back?”

We intend to liquidate the Trust on approximately December 31, 2017.

This could mean that we list the Trust on an exchange, merge with another Trust or sell to another entity.

We will negotiate to get the best deal for our investors and have done so in the past.

Also, the Trust offers redemptions for investors that may need money sooner.


(Page 3)


Risks

Another natural question addresses risk. “What are the risks associated with an investment in the Trust?”

The Trust is subject to the normal risks associated with real estate ownership.

The distributions may consist of income, but also may come from other sources.

As with any investment, there is no guarantee that an investor will receive a specific return on an investment.

Benefits

The benefits of owning real estate and the Trust far outweigh the risks!

You receive income from the 6.5% distributions! No where else can you find such income!

And you get that income without the agony and stomach ulcers from watching your stock investments gyrate on a daily basis.

Remember, real estate should be in every investor’s portfolio – the Faber Capital Real Estate Investment Trust is the vehicle of choice.

OBJECTIVE Diversified portfolio of retail properties anchored by national retail chains

OFFERING 350,000,000

SHARE PRICE $10/share

DISTRIBUTION YIELD 6.75%

MINIMUM INVESTMENT $10,000

Risk The Trust entails a high level of risk and investors should be able to bear the potential loss of their entire investment.

(Read Slide)


(Page 4)


Faber Capital Advisors, LLC. is acknowledged for its expertise and exceptional track record spanning more than 25 years:

Kent Dorfman is the founder of Faber Capital Advisors, and has been a figure in the real estate industry for more than 25 years. He has raised more than $750 million in a number of investment programs, and looks forward to continued success with the Faber Capital Real Estate Investment Trust.

Larry Kroger serves as marketing genius at Faber Capital.

Robert Hoover is the financial sleuth that discovers the retail shopping center gems that provide consistent income and the potential for long‐term growth.

Faber Capital Advisors has participated in more than 28 investment programs with assets totaling more than $6 billion.

(Read slide)

Questions ?


Filing Information:

Obtained during a routine examination by a FINRA District Office Not filed with the Advertising Regulation Department Date of registered principal approval was August 23, 2015 Date of first use was August 23, 2015

Faber Capital Real Estate Investment Trust Information:

Prospectuses available to all attendees of the seminar. The Faber Capital Real Estate Investment Trust began operations on June 1, 2012. Since inception:

The Trust has paid a 6.5% distribution. The Trust has been unable to generate sufficient funds from operations to fund

distributions. For the 6 months ended June 30, 2015, 40% of distributions were funded using funds from

operations; 30% were funded using borrowings; and 30% were funded using offering proceeds. For the year ended December 31, 2014, 30% of distributions were funded using funds from

operations; 40% were funded using borrowings; and 30% were funded using offering proceeds. Share Redemptions are limited to 3% of outstanding shares for any 12‐month period. The Board

may terminate, suspend or amend the program at any time. Some risks include:

Distributions are not guaranteed. There is no limit to the amount of offering proceeds or borrowings that may be used to

fund distributions. Distributions paid from offering proceeds or borrowings may constitute a return of capital

and reduce investor returns. The Trust is illiquid. There is no assurance that a liquidity event will ever occur. There is no public trading market for the common shares, and one may never develop. The Trust will pay substantial fees to its advisor and affiliates. Substantial leverage may be employed to acquire assets and the Trust may acquire

properties that are in depressed or overbuilt markets. Failure to qualify or remain qualified as a REIT would subject the Trust to U.S. federal

income tax and potentially state and local tax, and would adversely affect operations andthe market price of the common shares.

Communication #5: Social Media – Chirps

home @friends #tag

2,991 Chirps

52 Following

350 Followers

©2015 ChirperAbout Help Careers Privacy Terms Advertisers

Compose a new Chirp…

ChirpsJamie Lannister @JLannister 3 weeks ago

The start of #school is #stressful and chaotic!! Making my mornings difficult! GRRRRR!!!

Jamie Lannister @JLannister 3 weeks ago

Value Opportunity Fund seeks to limit risk and protect you against market downturns. https://www.winterfell.com/home/ValueOppsFund


#FriendsandFamily Winterfell’s Value Opportunity Fund has more than doubled its benchmark! You’re welcome! Dinner is on you! #Steakhouse


#Home. #Vacation was fabulous! Now it’s time to get back to work for my clients! They all deserve vacations too!


Market was down 400 points yesterday. #YIKES! My Winterfell REIT has not dropped a dime. #nomarketfluctuation


A little light #beach #reading. If you are looking for capital preservation and high yield, you have to look into our Winterfell High Yield Bond Fund. Check out our latest blog post: Investing for a Happy Retirement. www.winterfell.com/blog


Need help with a #vacation fund? #College fund? #Retirement? I can take a look at your portfolio. I know what’s important and how to get there. I can help.


#Family... What it’s all about. Thankful for my success. Thankful for Winterfell’s investment performance so I can provide this vacation opportunity for my family.


Had a great year! #Cashing in on my #success!!! Particularly the returns of the Value Opportunity Fund and Winterfell REIT.

Jamie Lannister@JLannisterHusband. Father. Son. Registered Rep with Winterfell Financial Services, Inc.

As of 9/30/15: YTD 1 Year 5 year Since Inception (1/1/08)Value Opportunity ‐.32% 1.46% 5.92% 5.75%Benchmark ‐.75% 2.02% 6.35% 6.43%


Filing Information:

Registered representative’s personal Chirper page Obtained during a sweep focused on social media Page not reviewed or approved by a registered principal of the firm

Deemed a personal Chirper page

Winterfell High Yield Bond Fund Information:

Investment objective: seeks to maximize total return. Investment strategy: invests up to 80% of its portfolio in below investment grade bonds.

Winterfell Value Opportunity Fund Information:

Investment objective: seeks total return. The Winterfell Value Opportunity Fund performance:

Additional Information:

The “Investing for a happy retirement” article discusses the Winterfell High Yield Bond Fund. The 8th Chirp contains a link to the fund’s homepage. Winterfell allows personal Chirper accounts.

Communication #6: Sales Idea Flyer – Touchdown Financial Services

# 1 Rollover Your Clients’ IRA Balances with EaseClients nearing retirement or changing employers look for a roadmap when it comes to deciding whether to transfer assets from employer‐sponsored retirement plans (401ks) to an individual retirement account (IRA). Rollover assets with limited hassle so that you can focus on making appropriate recommendations for your clients. Touchdown Financial Services (TFS) offers :

#2 Provide Income with High Yield BondsEvery financial adviser wants to limit downside risk in client portfolios and provide more income. Accomplish this goal without chasing yields during the current period of low interest rates. Consider the TFS High Yield Bond Fund which offers consistent and reliable income.

#3 Protect Against the Threat of Rising Interest RatesMaximize cash yields while seeking to protect against rising interest rates. The looming and inevitable rise in interest rates and upcoming money market reforms have investors rethinking their cash strategy. It may be time for your clients to shift out of money market funds and passive short‐duration index strategies. Today’s risk averse investor may need a slightly more aggressive strategy to hedge against uncertain events. Consider the TFS Low Duration Active ETF, an actively managed ETF that can boost returns, reduce overall portfolio volatility and hedge against rising interest rates.

CALL THE WINNING PLAYS FOR YOUR CLIENTSHow can you best meet the needs of your clients?

For more information, please contact Lennie Unitas at 1‐555‐812‐3021. Touchdown Financial Services, LLC. Member FINRA, SIPC.

A fund’s investment objectives, risks, charges, and expenses should be considered carefully before investing. This and other important information are contained in the fund prospectus and summary prospectus, which can be obtained by calling 1‐800‐555‐5555 and should be read carefully.

FOR INVESTMENT PROFESSIONAL AND INSTITUTIONAL USE ONLY.Should not be shown or distributed to the public.

Be Confident in Any Market.

TFS®

Broad array of investment options Financial planning services 24‐hour customer service Online account access

SALES IDEAS

Not a deposit Not FDIC‐insured Not insured by any federal government agency

Not guaranteed by any bank or savings association May go down in value


Filing Information:

Flyer discovered during a routine cycle examination

Date of registered principal approval: May 6, 2015

Date of first use: May 2, 2015

Used with registered representatives from different broker/dealers

TFS Rollover IRA Account Information:

TFS Rollover IRA accounts allow investors to transfer tax‐free cash or assets from retirement

plans to an IRA account. Investors pay $0 account opening or maintenance fees.

Other account fees, fund expenses and brokerage commissions apply. Minimum required to

open an account is $1000.

TFS High Yield Bond Fund Information:

Open‐end mutual fund

Investment objective: seeks total return, consisting of a high level of current income and capital

appreciation.

Investment strategy: invests 80% of the Fund’s assets in debt securities that are below

investment grade.

Principal investment risks include, but are not limited to:

Credit

High yield securities

Interest rate

Emerging markets

TFS Low Duration Active ETF Information:

Investment objective: seeks maximum total return, consistent with preservation of capital and

prudent investment management.

Investment Strategy:

Maintain a weighted average portfolio duration of 3 years or less. Up to 10% of Fund

assets may be invested in below investment grade securities (“junk bonds”).

Invests at least 65% of its total assets in a diversified portfolio of fixed income

instruments of varying maturities, which may be represented by forwards or derivatives

such as options, futures contracts, or swap agreements.

Communication #7: Retirement Income Seminar Invitation – Rufus T. Firefly

Protecting Your Assetsand Securing a Comfortable Retirement

During Uncertain Times

With the wild swings in today’s markets, investors are increasingly concerned about their financial well-being as they

invest and plan for retirement.

This seminar will discuss the fluctuating market and the potential impact on your investments. We will also discuss how to secure a comfortable

retirement with guaranteed income.

Wednesday, October 14, 2015 6:00 p.m. – 8:00 p.m.

Marx Bros. Chophouse Restaurant440 S. LaSalle St.Chicago, IL 80237

Call for reservations! 555‐230‐5100Securities products and services offered through Cocoanuts Investment Services, Inc.

Member FINRA/SIPC

Please join us for an exclusive seminar. While there is no cost to attend this event, seating is limited to you and one guest.

A complimentary dinner will follow the presentation.

Our guest speaker is nationally recognized andrespected financial guru, Rufus T. Firefly. Mr.Firefly has authored several books on investingand has his own syndicated live radio show. Hehas also lectured extensively on what he refers toas Smart Investing: Investing for Growth and Incomefor a Secure Retirement.

Rufus T. Firefly

Topics will include:

What is driving the volatility in today’s markets? How to best position your assets in light of the volatility. How to minimize risk in your portfolio. Why selling now may be a costly mistake. Why you need to look beyond stocks, bonds and mutual funds. How sitting on cash and old investments may be a bad idea. Why guaranteed investments belong in your portfolio. Will you have enough retirement income? Will it be guaranteed? How to never outlive your retirement income!

Mutual funds and fixed and variable annuities will be discussed. For more information on mutual funds or variable annuities, including investment objectives, risks and charges, please contact our financial consultants at the number below to obtain a prospectus. Please read the prospectus before investing.


Filing Information:

• Retirement seminar• Filed with the Advertising Regulation Department on September 14, 2015• Date of registered principal approval: September 21, 2015• Date of first use: September 21, 2015

Products and Services Offered:

• References to guaranteed investments/retirement income pertain to City Slickers Variable Annuityand the optional Guaranteed Minimum Withdrawal Benefit (GMWB) rider.

Offers tax‐deferred growth with over 100 investment options. Investment options are subject to market risks associated with investing, including loss of

principal. GMWB is an optional feature that offers investors guaranteed income for life. Early withdrawals made prior to age 59 ½ are subject to federal income taxes and a 10%

penalty tax. Costs of investing in the VA and the GMWB:

• 1.25% mortality and expense risk charge• $30 annual contract charge• .95% average expense of the underlying investment funds• .70% GMWB fee• 6.0% declining contingent deferred sales load

Additional Information:

Rufus T. Firefly became a registered representative in 2012. An exhaustive internet search of Mr. Firefly revealed that he had authored one book; however, he only wrote the forward and the first chapter. The remaining chapters were ghostwritten. The book was not a bestseller. Additionally, while his radio show broadcasts live, the compliance department at the firm reviews and approves Mr. Firefly’s scripts for the show in advance. Currently, his only market audience is the Chicago metro area.

Advertising Review Workshop

Answers for

Hands‐On Sample Communications

Communication #1: Blast Email – Red Wing Distributors, Inc.

Main Concerns:

Procedural:

• Not approved by a registered principal prior to use or prior to filing with the Advertising Regulation

Department.

Exaggerated, Unwarranted, Promissory or Misleading Statements and Claims:

• “Top Peer Group Performance”

• The heading should not be used as the Fund is not actually ranked first in the category.

FINRA Rule 2212 (Rankings) Issues:

• Presents rankings that cover a period of less than one year.

• Fails to disclose the number of funds in the ranking universe for each ranking time period.

SEC Rule 482 Issues:

Fails to include the Fund’s standardized performance

Necessary because of the 7.56% outperformance claim.

The performance legend is incomplete as it does not disclose:

“…the investment return and principal value of an investment will fluctuate so that an

investor’s shares, when redeemed, may be worth more or less than their original cost”

and

a toll‐free (or collect) telephone number or a website where an investor may obtain

performance data current to the most recent month‐end.

Communication #2: Social Media – ConnectOn

Main Concerns:

Procedural:

“About Us” section • Should have been reviewed and approved by a registered principal of the firm• Should have been filed with the Advertising Regulation Department within 10 business days

of first use• The “Investing for a happy retirement” article was filed late with the Advertising Regulation

Department.

Exaggerated, unwarranted, misleading or promissory statements and claims:

• “From our cutting edge suite of mutual funds, that have provided investors with consistent andprofitable returns…”

The reference to “cutting edge” appears unwarranted, as no basis is provided. The claim “consistent and profitable returns” is unwarranted and promissory.

• The reference to “top of the line” in the statement, “Check out our family of top of the line mutualfunds” is exaggerated.

• “Specifically, our new Value Opportunity Fund—which has outperformed!” The reference to “outperformed” is unwarranted and misleading because the Fund

outperformed its benchmark only for the year‐to‐date time period and the Fundperformance is currently negative.

• “Investing for a happy retirement—Retirees want income but can’t afford volatility.” The article is about the Winterfell High Yield Bond Fund—which invests in below

investment grade bonds. The suggestion in the title that it is not volatile is misleading.• The claim “Looking for stability in rising interest rate environment and protection from market

volatility” is unwarranted. Further, it is Winterfell’s responsibility to ensure that any third‐party linksare not misleading. An article about non‐traded REITs that suggests they are stable and withoutvolatility is misleading.

Communication #3: Newspaper Ad – Marco Polo

Main Concerns:

Omission of material information:

• Fails to: prominently disclose that the statement “Delivering twice the yield of its category

average” applies only to institutional class shares; and disclose the key risks associated with an investment in the Fund.

Exaggerated, unwarranted, promissory or misleading statements or claims:

• “Delivering twice the yield” The claim is promissory of future positive performance.

• The prominent “With Less Risk*” phrase, along with the statement “Going beyondtraditional strategies…but maintaining a low risk profile”

These statements are unwarranted and exaggerated.• “…can improve the quality of your investment portfolio”

• Given that 65% of the Fund’s assets are allocated to below investment gradesecurities, as stated in the most recent annual report for the Fund, the claim is falseand misleading.

SEC Rule 482 Issues:

• The prospectus offer is incomplete.

Communication #4: REIT Seminar Presentation – Faber Capital

Main Concerns:

Omissions of material information:

Fails to disclose: there is no assurance that a liquidity event will occur; the limitations or restrictions regarding the redemption program; the significant risks of an investment in the Trust (misleadingly mitigates the minimal

discussion of risks); the Trust may not be appropriate for all investors; whether or not the images represent actual holdings of the Trust; and the sources of the distributions and the subsequent effect on the investment.

Exaggerated, unwarranted, misleading, or promissory statements and claims:

“Non‐traded REITs like Faber Capital Real Estate Investment Trust are not subject to stockmarket fluctuation” and “The value [of your investment in the Faber Capital Real EstateInvestment Trust] is ‘stable.’” Claims that the REIT is “stable” or not subject to market volatility are false and

misleading. “Distribution Yield 6.75%”

Identifying the distribution rate as a yield is false and misleading (see Regulatory Notice13‐18).

“They are a more conservative approach to investing and can effectively hedge the risksassociated with the stock market.” Claims that the Trust is “conservative” or a hedge against stock market risks are

misleading. “You receive income from the 6.5% distributions! No where else can you find such income!”

Given that significant portions of the distributions have been provided from sourcesother than funds from operations, referring to distributions as income is inaccurate andmisleading.

“Where are you going to find income? CDs? Not! Money Market Funds? Not! Treasuries? Not!” Comparison of “income” from a non‐traded REIT to income from CDs, money market

funds, or Treasuries is unwarranted and misleading. “A $100,000 investment at the beginning of this program, would have earned, by now, $19,500

in income! Almost $20,000!” Example of $100,000 investment yielding almost $20,000 in “income” is misleading.

“You are buying stone and concrete…” Characterizing the non‐traded REIT as a tangible investment is inaccurate and

misleading. Investors own shares of the Trust, which purchase properties. There is nodirect real estate ownership.

• “Remember, real estate should be in every investor’s portfolio – the Faber Capital Real EstateInvestment Trust is the vehicle of choice.”

The implication that REITs are suitable for all investors is unwarranted. Additionally, thisstatement implies that this product is the most preferable investment.

Communication #5: Social Media – Chirps

Main Concerns:

Exaggerated, unwarranted, misleading or promissory statements and claims:

“#Cashing in on my success!!! Particularly the returns of the Value Opportunity Fund andWinterfell REIT!” The statement is exaggerated and unwarranted, as it suggests positive results in

investing in the fund and REIT. “Thankful for my success. Thankful for Winterfell’s investment performance so I can provide

this vacation opportunity for my family.” The statement is unwarranted, as it suggests that investing with Winterfell will result

in family vacations. “Capital preservation AND high yield!”

The statement is misleading, exaggerated , and unwarranted because the WinterfellHigh Yield Bond Fund is not designed for capital preservation.

“My Winterfell REIT has not dropped a dime. #nomarketfluctuation” The statement is misleading and unwarranted. Claiming that REITs are not subject to

market fluctuation or don’t lose value is a concern. “#FriendsandFamily Winterfell’s Value Opportunity Fund has more than doubled its

benchmark. You’re welcome!” The statement is misleading. While the Fund doubled the performance of its

benchmark for the year‐to‐date period, the performance is negative. In addition theFund underperformed in every other timeframe.

“Value Opportunity Fund seeks to limit risk and protect you against market downturns.” The statement is false and misleading, as it is inconsistent with the objective in the

prospectus. The objective of the Fund is total return.

Main Concerns:


• For Sales Idea #1: fails to explain that there are other options for investors to consider when

contemplating to rollover assets from a 401(k) to an IRA (see Regulatory Notices 13‐45and 13‐23).

fails to disclose the risks associated with high‐yield, below investment‐grade bonds.• For Sales Idea #3:

fails to disclose that an actively managed ETF may not be suitable for all investors, as itinvolves higher risks.


• For Sales Idea #2: “Provide Income with High Yield Bonds”

The heading and statement indicating that the Fund offers “consistent andreliable income” is exaggerated, promissory and misleading in its implicationthat income is assured from an investment in the Fund.

• For Sales Idea #3:• “Protect”

References to protection and similar language are unwarranted• “maximize cash yields”

This and similar language is exaggerated.• “…will boost returns, reduce overall portfolio volatility and hedge against rising

interest rates” This statement is promissory.

Communication #6: Sales Idea Flyer – Touchdown Financial Services

Communication #7: Retirement Income Seminar Invitation – Rufus T. Firefly

Main Concerns:

Procedural:

• Failed to obtain principal approval prior to filing the communication with the AdvertisingRegulation Department.


• Fails to: disclose that the guaranteed income referred to in the invitation pertains to a specific

variable annuity with an optional Guaranteed Minimum Withdrawal Benefit rider(GMWB);

disclose that the variable annuity is subject to insurance costs (e.g., M&E charge andadministrative charge and the GMWB fee) as well as underlying subaccount expenses.

disclose that there are limitations, restrictions, and additional costs associated withthe GMWB;

balance the “guaranteed retirement income” references with disclosure that theguarantees are subject to the claims‐paying ability of the issuer, i.e., the insurancecompany;

disclose that early withdrawals made prior to age 59 ½ are subject to federal incometaxes and a 10% penalty tax;

include general risk disclosure regarding the risks associated with investing in avariable annuity (e.g., that account values are not guaranteed and will fluctuate basedon market conditions). This additional information is necessary because an investmentin a variable annuity is subject to market risks; and

explain the relationship between Rufus T. Firefly and the member firm.


• “nationally recognized and respected financial guru” and “he authored several books oninvesting”

The claims are exaggerated and unwarranted.• “Protecting your assets,” “…secure a comfortable retirement with guaranteed income” and

“…never outlive your retirement income!” Given that the variable annuity with the GMWB rider is subject to limitations and

restrictions, the above references appear exaggerated, unwarranted or promissory.SEC Rule 482 Issues:

• Incomplete prospectus offer; should state that investor should consider the investmentobjectives, risks, and charges and expenses of mutual funds and the City Slickers VariableAnnuity (and its underlying investment options) carefully before investing, and that theprospectus contains this and other information.

NOTES

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