(Bloomberg) -- Van Eck Associates Corp. failed to properly disclose the role of controversial social-media influencer Dave Portnoy, founder of Barstool Sports Inc., in helping promote the launch of an exchange-traded fund in 2021, according to the US Securities and Exchange Commission.

New York-based Van Eck paid $1.75 million to settle the probe, neither admitting to nor denying the SEC’s findings, the agency said in a statement Friday. Van Eck agreed to a cease-and-desist order and a censure in addition to the civil penalty. A spokesperson for Van Eck declined to comment.

Ahead of launching the VanEck Social Sentiment ETF, which has the ticker BUZZ and tracks an index based on “positive insights” from social media and other data, Van Eck failed to disclose to the ETF’s board Portnoy’s planned role in promoting the index — something that broke securities rules, the SEC said.

“That’s news to me,” Portnoy said in an email when asked for comment. “I was very transparent the entire time.” 

Portnoy isn’t named in the SEC’s statement. About $438 million worth of shares in the ETF changed hands in its first day of trading, make it the third-best ETF debut on record at the time. The fund was designed to follow an index that uses artificial intelligence to scan online sources such as blogs and social media to identify the 75 most-favorably mentioned companies.

Van Eck didn’t tell the ETF’s board about Portnoy’s involvement or key details about the planned fee structure of the fund, the SEC said. Portnoy was compensated on a sliding scale depending on how successful the ETF was at attracting investors and was offered and accepted an ownership stake in a related index provider, according to the SEC. ETFs are required to have independent boards under securities rules.

“Van Eck Associates’ disclosure failures concerning this high-profile fund launch limited the board’s ability to consider the economic impact of the licensing arrangement and the involvement of a prominent social media influencer as it evaluated Van Eck Associates’ advisory contract for the fund,” Andrew Dean, co-chief of the enforcement division’s asset-management unit at the SEC, said in the statement.

Portnoy, who has at times gone by the nickname “Davey Day Trader” when discussing finance, promoted the ETF across his social-media platforms and throughout financial media. He’s best known as the founder of Barstool Sports. He sold the company to Penn Entertainment Inc., which used the brand to launch an online gambling business.

But Portnoy was accused of sexual misconduct, generating controversy for himself and the company. He has denied the allegations. Penn sold Barstool back to its founder for $1 last year, taking a loss of as much as $850 million.

After its hot debut, VanEck Social Sentiment ETF and other social-sentiment focused funds have struggled to continue to attract investors. The VanEck ETF, which has a market capitalization of $63 million, is down more than 15% since its launch.

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