Results of Preliminary Research

• After looking through SEC Guidance and performing a relevant press search, we found no further definition on what they mean by condition or obligation. We did not have time to search FINRA.
• We did discover that the law is meant to address testimonials, cherry picking, and false advertising, and not necessarily providing free information in return for a name or email address.

• According to Cornell Law, this is the area of the rule in which there is confusion: "Which contains any statement to the effect that any report, analysis, or other service will be furnished free or without charge, unless such report, analysis or other service actually is or will be furnished entirely free and without any condition or obligation, directly or indirectly; or (5) Which contains any untrue statement of a material fact, or which is otherwise false or misleading.
• Furthermore, the confusion is surrounding the phrase, "entirely free and without any condition or obligation, directly or indirectly".

SEC Bulletin Regarding Advertising Compliance

• The SEC published a bulletin entitled "Risk Alert- The Most Common Advertising Rule Compliance Issues".
•  Topic: Advertising Rule compliance issues \identified in deficiency letters sent to SEC registered investment advisers.
• There is no mention of the phrase "entirely free and without any condition or obligation, directly or indirectly"
• There were multiple articles addressing the "testimonial" section from the SEC.

SEC Guidance

• Using the guidance database we searched for any articles that were on 206(4). We found one that provided guidance on engagements and another on political contributions.
• The SEC also published an extensive guidance on Commission Interpretation Regarding Standard of Conduct for Investment Advisers with no mention of the issue.

National Society of Compliance Professionals

• The National Society of Compliance Professionals provided an excellent and comprehensive guidance article that may be viewed here. Other than mentioning the rule, there is no further definition given to what and obligation or condition truly means.

Press Search

•  LawCast provided a good overview and reasons why the law is in effect. There was no mention of the issue. It stated: The Advertising Rule specifically prohibits: (i) any advertisement that directly or indirectly refers to any testimonial concerning the adviser or any report or service rendered by the adviser; (ii) an adviser from advertising past specific recommendations that were profitable to any person; (iii) any advertisements claiming that any graph, chart or formula can by itself determine whether to buy or sell a security; and (iv) advertisements that offer purportedly free reports, analysis or services.
• When looking at interpretations and guidance, BrightLine offered this: "(4) prohibits an advertisement from representing that any report, analysis, or other service will be obtained for free or without charge unless it is in fact entirely free and subject to no conditions or obligations.
• In 2018, the SEC announced five settlements that dealt with (206)4. None of them were for not offering something for free. They were for misrepresentation, cherry picking, and using social media as a testimonial.