SEC Institutes Settled Order as to North Carolina Investment Adviser for Disclosure Failures Related to Its Robo-Advisor Accounts

ADMINISTRATIVE PROCEEDING
File No. 3-22617

March 23, 2026 – The Securities and Exchange Commission today announced settled charges against Ally Invest Advisors Inc. for failing to fully and fairly disclose material facts concerning its selection of a thirty percent cash allocation for its no advisory fee Cash-Enhanced “robo-advisor” accounts, including the resulting conflict of interest, and Ally Invest’s application of its stated investment methodology in the Cash-Enhanced accounts.

According to the SEC’s order, from September 2019 until August 2025, Ally Invest allocated thirty percent of client assets in its Cash-Enhanced accounts to cash, but failed to disclose that it had a conflict of interest in setting this allocation because the allocation percentage was selected, in part, to make up for the revenue Ally Invest lost from not charging an advisory fee on these accounts. In addition, the SEC’s order finds that from September 2019 to October 2022, Ally Invest inaccurately disclosed that its portfolio management services for its Cash-Enhanced accounts were based on an investment methodology called Modern Portfolio Theory when, in fact, only the non-cash portion of the assets in the Cash-Enhanced accounts was managed according to Modern Portfolio Theory.\

As a result, the SEC’s order finds that Ally Invest willfully violated Section 206(2) of the Investment Advisers Act of 1940. Without admitting or denying the findings, Ally Invest agreed to a cease-and-desist order and a censure, to pay a civil penalty of $500,000, and to certify that it has undertaken the remedial efforts described in the SEC’s order.

The SEC’s investigation was conducted by Heather E. Marlow of the Division of Enforcement’s Asset Management Unit. The investigation was supervised by Chrissy Filipp of the SEC’s San Francisco Regional Office and Corey Schuster of the Asset Management Unit.