SEC Charges Inspire Investing for Misleading Statements and Compliance Failures

The SEC announced charges against Inspire Investing LLC, an Idaho-based investment adviser, for making misleading statements and compliance failures regarding its “biblically responsible investing” strategy. Inspire claimed to use a data-driven approach to avoid investing in companies involved in activities inconsistent with biblical values. However, from 2019 to March 2024, the SEC found that Inspire primarily relied on manual research and often did not evaluate individual companies. 

Additionally, Inspire lacked written policies to assess companies’ activities, leading to inconsistent application of its criteria. As a result, Inspire invested in companies that contradicted its stated principles, misleading investors.

Corey Schuster, Co-Chief of the SEC’s Asset Management Unit, emphasized that investors rely on advisers to follow their declared strategies, which Inspire failed to do. Inspire consented to the SEC’s order, acknowledging violations of the Investment Company Act and the Investment Advisers Act of 1940. Inspire agreed to a cease-and-desist order, a censure, and a $300,000 penalty without admitting or denying the findings. The firm also committed to hiring an independent compliance consultant to address the issues.