SEC v. Betterment LLC (tax-loss harvesting disclosures, 2023)

Settled

Checked against the primary document on October 2, 2026. The library's summary, tags and figures for this record were compared with the regulator's own document by an AI model (Claude) following written instructions, with sampled and disputed records read a second time. No lawyer has reviewed them. A checked record can still contain errors, and checked does not mean endorsed. See how we check records or report a correction.

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In April 2023, the SEC settled charges against robo-adviser Betterment LLC, ordering a US$9 million penalty over its tax-loss harvesting service and related disclosures and advertising.

The record

Structured fields for this action, as recorded in our case library.
Agency	SEC
Release number	IA-6288
Date filed	2023-04-18
Date resolved	2023-04-18
Status	settled
Asset class	bonds
Criminal parallel	No
Defendants	Betterment LLC (entity)
Cited as charged or alleged	Advisers Act s.206 (statutes and rules cited in the document; not a finding that they were violated)
Techniques

What was ordered

Civil penalty: $9m
Disgorgement: —
Prejudgment interest: —
Total relief: $9m
Alleged gain: —

A dash means the release did not state a figure we could extract, not that the figure is zero. Penalty and disgorgement are stored separately so aggregates across the library do not double-count the same dollars.

What is alleged to have happened

The Securities and Exchange Commission announced this matter on April 18, 2023 as release IA-6288. The respondents named are Betterment LLC (0 individuals, 1 entity).

The order finds that Betterment's tax-loss harvesting algorithm and its descriptions of it were flawed. The "wash sale" in the order is the tax rule that disallows a loss when a substantially identical security is bought within 30 days. It has nothing to do with manipulative wash trading.

This library applies no technique tag to the matter. The "wash sale" here is the tax-loss rule, which differs from market-manipulation wash trading.

A $9 million civil penalty, a censure, and cease-and-desist relief.

Betterment consented to the order without admitting or denying the findings.

Timeline

2023-04-18 Administrative proceeding instituted (cease-and-desist)

Primary documents

Everything on this page derives from the documents below. Where our summary and the primary document disagree, the primary document is right.

SEC order

The linked release is a work of the United States government and is not subject to copyright. Our summary and narrative above are our own writing.

Record added September 10, 2026. submit a correction.