Under MSRB advertising rules, which scenario would be considered misleading?

• A. Providing complete risk disclosures with every advertisement.
• B. Advertising yields that are guaranteed.
• C. Omitting material facts about risk in an advertisement regarding a municipal issue.
• D. Including only generic statements with no performance data.

Answer: (C)

Under MSRB advertising rules, communications with the public must be fair, not misleading, and provide information that a reasonable investor would find necessary to evaluate the investment. Omitting material facts about risk in an advertisement regarding a municipal issue is misleading because investors rely on disclosed risk information to assess the true risk and potential return. When important risk details are left out, the advertisement can create a false or incomplete impression about the safety or suitability of the issue, violating the obligation to present a balanced view.

Providing complete risk disclosures with every advertisement aligns with these rules and helps ensure ads are not misleading. Advertising yields as guaranteed would mislead investors, since yields on municipal securities are not guaranteed and such guarantees misrepresent the investment’s nature. Including only generic statements with no performance data isn’t inherently misleading if it doesn’t make specific claims about performance, though it may be less informative.