Randazzo Capital Management, LLC | Advertising and Marketing

Definition of Advertisement

An advertisement is any notice, circular, letter or other written communication addressed to more than one person, or any notice or other announcement in any publication or by radio or television, which offers:

1. Any analysis, report, or publication concerning securities, or which is to be used in making any determination as to when to buy or sell any security, or which security to buy or sell;

2. Any graph, chart, formula or other device to be used in making any determination as to when to buy or sell any security, or which security to buy or sell;

3. Any other investment advisory service with regard to securities; or

4. An advertisement that is distributed to many people and only immaterially differentiated (e.g., by a slightly different cover letter) may be deemed an advertisement to more than one person.

Such material may include, but is not limited to, the Firm’s website, presentation material, performance advertisements and disclosures, print advertisements, and newsletters.

Anti-Fraud

1. All advertisements by investment advisers must comply with §275.604(4)-1 (general anti-fraud provisions).

2. Whether any advertisement is false or misleading depends upon the facts and circumstances surrounding its use, including:

   1. The form and content of the advertisement;

   2. The implications or inferences arising out of the advertisement in its total context; and

   3. The sophistication of the client or prospective client.

3. The technical aspects of various aspects of the advertising rules are summarized below. However, because of the technicalities of the rules and because of the gravity of noncompliance, no person shall distribute any advertisement to any client or potential client or the public at large or any broker or other individual unless it has been reviewed and approved by the CEO.

Four Specifically Prohibited Advertising Practices (§275.604(4)-1)

1. Testimonials – No advertisement can be made that contains any direct or indirect reference to a testimonial of any kind regarding the advice or any other services the adviser may offer. A testimonial generally includes statements of a customer’s experience or an endorsement by a client. Testimonials are deemed to be misleading because they may give the inference that the experience of the individual giving the testimonial is typical of the experience of all the adviser’s clients.

2. Past Specific Recommendations – In general, no reference may be made, either directly or indirectly, to past specific recommendations, which were or would have been profitable to any person unless the investment adviser furnishes a list of ALL recommendations made by the investment adviser during the preceding year, plus other disclosure.

a..Prohibited: Reference to profitable recommendations, omitting unprofitable recommendations or investment advice.

b. The list of recommendations must include:

i..The name of each security recommended;

ii. The date and nature (e.g., buy, sell, hold) of each recommendation;

iii. The market price at the time;

iv. The price at which the recommendation was to be acted upon;

v. The market price of each security as of the most recent practicable date; and

vi. On the cover page in type as large as largest type in the piece, disclosure that “it should not be assumed that recommendations in the future will be profitable or will equal the performance of the securities in this list.”

c. A list of current recommendations is not governed by any prohibition against past recommendations.

3. Charts or Formulas – No claim can be made in an advertisement that a graph, chart, formula or other device being offered can be used to determine which securities to buy or sell, UNLESS the limitations and difficulties regarding the use of the device are prominently disclosed.

4. Free Reports or Services – An advertisement cannot claim that any type of advisory services will be provided free of charges if there are any conditions or obligations connected with such service.

Performance Advertising

Randazzo Capital’s policy is that advertisements of performance will be in compliance with applicable rules or laws. Performance data included in marketing materials will reflect performance of Randazzo Capital’s actual client accounts, and will not reflect model or hypothetical performance. Performance results will be shown net-of fees or with gross-of-fee performance shown alongside and in equal prominence with net-of-fee performance. In calculating net-of-fee performance, Randazzo Capital will deduct advisory fees, brokerage commissions and other expenses that have been paid by the client. The following fees need not be deducted in calculating net-of-fee performance: custodial fees, trustee fees, and recoverable taxes.

RCM policy also requires that any claims of being in compliance with the performance presentation standards set forth by the CFA Institute, such as GIPS, must be in full compliance with those standards. Any performance presentation not fully in compliance with the presentation standards may not carry a claim of compliance. If Randazzo Capital intendeds to comply with GIPS, Randazzo Capital will maintain separate written policies and procedures with respect to the creation of composites and the adverting of performance in compliance with GIPS and all performance advertisements will conform to GIPS.

The CEO or designee will be responsible for maintaining Randazzo Capital performance advertisements and disclosures. Any advertisement or marketing material that includes a Randazzo Capital performance record must be accompanied by a complete and accurate disclosure of that record. Prior to the use or distribution of any performance advertisement, the CEO will review and approve those documents for compliance with the above-mentioned advertising policy. A copy of approved performance materials will be maintained in appropriate files.  No Supervised Person may use performance material unless it has been reviewed as required above.

No General Solicitation of Advertising Activities

Randazzo Capital does not offer securities through general solicitation.

Client Communications

All client communications and disclosures will comply with the following:

1. Communications may not be untruthful or misleading or omit a material fact;

2. Communications may not include a promise of specific results or forecasts of future returns;

3. Information that is for “Internal Use Only” may not be distributed to clients;

4. Neither tax nor legal advice will be rendered by Randazzo Capital; and

5. Testimonials will not be used.

Company Website

The Randazzo Capital company website is advertising and the use of a company website must adhere to the above advertising policies. Additionally, the following policies and procedures apply:

1. The website must be kept current and information on the website that becomes out of date must be amended promptly;

2. Websites are advertising material and advertising material must be maintained as part of the firm’s required books and records. Therefore, each time a page is updated on the website, a copy of the page must be made and kept in the firm’s advertising records; and

3. The website must be reviewed no less than annually to ensure it remains current and accurate.

Blogging

Statements relating to the Firm or investment advice made by investment advisers and/or their representatives in chat rooms or posted on blogs, either on the adviser's website or in a public internet forum, are generally considered to be advertising and therefore subject to all applicable laws and rules. Randazzo Capital currently does not allow blogs on its website.  

Supervised Persons of Randazzo Capital are prohibited from participating in discussions in chat rooms, the Firm’s website, and/or public Internet forum blogs, without prior written approval from the CEO regarding the following: 

1. Randazzo Capital’s services;

2. Specific investment recommendations or advice; or

3. Management of investments in general.

All posts made by Supervised Persons including those made by the CEO will be done only after careful consideration of the Firm’s fiduciary duty and its responsibilities under current advertising laws and rules and these policies.  

Supervised Persons will provide the CEO with copies of all information posted by the Supervised Person, which will be reviewed and maintained in an appropriate file as part of the Firm’s books and records.

Social Networking Sites

Randazzo Capital generally prohibits reference to or use of the company’s name on its Supervised Persons’ personal social networking sites (e.g., Facebook, Twitter, MySpace).  Exceptions may be made only when such references are used for business purposes (e.g., LinkedIn) and when the content is pre-cleared in writing by the CEO.

1. The CEO will monitor blogs, chat rooms or futures-related forums hosted by Randazzo Capital or its employees and take down any misleading or fraudulent posts. The CEO will have the authority to ban any users for repeated or egregious violations of the rules.

2. The CEO will keep records of any posts that are deleted, and any users that are blocked.

3. The CEO will also have the authority to monitor personal websites or online social networking sites used by employees. The CEO will conduct and document such review no less frequently than once every quarter and more frequently as necessary.

4. All employees are required to review and sign off on Randazzo Capital’s policies regarding social media on an annual basis; and

5. Records of such reviews will be kept as part of Randazzo Capital’s books and records.

Linked-In & Instagram

The CEO or his designee will have the authority to share articles or presentations via Linked-In or Instagram. Such postings may include articles or presentations. 

Audio and Networking Sites

Randazzo Capital may, on occasion, use audio or visual advertisements or other content through radio, webcasts, or through websites such as YouTube. The CEO or his designee must approve the content at least 10 days prior to use. Randazzo Capital will use [name, e.g., Vimeo] to store its audio or visual advertisements. 

Proposals and Questionnaires

Randazzo Capital may receive requests for proposal or questionnaires, including consultant questionnaires, to be completed for various third parties. All proposals must be accurate, truthful, and must not be misleading. The advertising materials procedure outline above must be followed. Prior to sending a response to a proposal or questionnaire, the CEO or his designee will review and approve the proposal. Approval will be documented in writing and kept in a designated location. No Supervised Person may send out a response to a proposal or questionnaire unless it has been reviewed and approved as required above. 

Communications with the Press

Supervised Persons should refrain from communications with the press unless communication has been specifically authorized. All inquiries from the press or questions regarding Randazzo Capital’s policy in this area should be referred to the CEO.

Circulation of Rumors

No Supervised Person shall originate or circulate in any manner a rumor concerning any security which the Supervised Person knows or has reasonable grounds for believing is false or misleading or would improperly influence the market price of such security. Supervised Persons must promptly report to the CEO any circumstance, which reasonably would lead the Supervised Person to believe that any such rumor might have been originated or circulated.

Fee Sharing and Solicitation Arrangements

Randazzo Capital may compensate persons for the referral of clients. Randazzo Capital’s policy is that referral fee arrangements will be in compliance with applicable state and federal rules or laws. Randazzo Capital will enter into a written agreement with each solicitor.

Affiliated & Unaffiliated Solicitors

Partners, officers, directors, or employees of Randazzo Capital who solicit services on behalf of the Firm are considered to be Affiliated Solicitors. Affiliated Solicitors are required to disclose the nature of his or her relationship with Randazzo Capital at the time of the solicitation. For example, the Affiliated Solicitor may provide a Randazzo Capital business card to the prospective client. Affiliated Solicitors are not required to disclose the specific terms of his or her solicitation arrangement with Randazzo Capital, including the level of compensation the Affiliated Solicitor is to receive from Randazzo Capital for a client referral. 

All other persons soliciting services on behalf of Randazzo Capital are considered to be Unaffiliated Solicitors. Unaffiliated Solicitors are required to provide a written disclosure document to each client or prospective client to whom Randazzo Capital’s services are solicited, which contains the following information:

1. The name of the solicitor;

2. The name of the investment adviser;

3. The nature of the relationship, including any affiliation, between the solicitor and the investment adviser;

4. A statement that the solicitor will be compensated for his solicitation services by the investment adviser;

5. The terms of such compensation arrangement, including a description of the compensation paid or to be paid to the solicitor; and

6. The amount, if any, for the cost of obtaining his account the client will be charged in addition to the advisory fee, and the differential, if any, among clients with respect to the amount or level of advisory fees charged by the investment adviser if such differential is attributable to the existence of any arrangement pursuant to which the investment adviser has agreed to compensate the solicitor for soliciting clients for, or referring clients to, the investment adviser.

For each solicitation arrangement with an Unaffiliated Solicitor, the written agreement between the Unaffiliated Solicitor and Randazzo Capital must:

1. Describe the solicitation activities to be engaged in by the solicitor on behalf of the investment adviser and the compensation the solicitor will receive for these services;

2. State that the solicitor must perform his/her duties under the agreement in a manner consistent with the instructions of the adviser and the provisions of the Advisers Act and the rules thereunder; and

3. Require that the solicitor, at the time of any solicitation activities for which he/she will be compensated, provide the client with a current copy of the adviser’s ADV 2A brochure and the solicitor’s written disclosure document.

For each solicitor that is not an affiliate of Randazzo Capital, the CEO or his designee will make reasonable inquiry that the solicitor is an Investment Adviser Representative (IAR) currently registered with another RIA.

Prohibitions

Randazzo Capital will not engage in the following practices with respect to solicitation arrangements:

1. Randazzo Capital will not enter into solicitation arrangements where the Firm is required to pay the solicitor non-cash referral fees, such as directed brokerage arrangements.

2. Randazzo Capital will not knowingly pay referral fees to a fiduciary of an ERISA plan in exchange for securing investment management services for such plan, unless the solicitation arrangement is structured to comply with applicable ERISA regulations.