By Chris Prentice and Hannah Lang

NEW YORK (Reuters) -Robo-adviser Betterment LLC has agreed to pay $9 million to settle U.S. Securities and Exchange Commission charges related to misstatements, as well as disclosure and record-keeping failures.

Betterment misstated or omitted facts when communicating with clients about its automated tax loss harvesting service from 2016 to 2019, the SEC found after its investigation. It also failed to give clients notice of contract changes and failed to maintain certain records, the regulator said.

The SEC said the issues impacted more than 25,000 accounts, resulting in those clients losing approximately $4 million in potential tax benefits.

Betterment, which did not admit or deny the SEC’s allegations, said in a statement that it has made significant investments to strengthen its compliance program since 2019.

“Betterment is committed, as always, to its mission of making people’s lives better and seeks every opportunity to improve its services and business to achieve that goal,” the company said.

A lawyer for Betterment also did not immediately respond to request for comment.

Automated tax-loss harvesting is a service offered by many robo-advisers that automatically sells securities at a loss with the aim of offsetting the tax impact of capital gains realized from the sale of other securities.

Betterment, which provides robo-advising and cash management services, has more than $34 billion assets under management and more than 770,000 customers, according to its website.

(Reporting by Chris Prentice in New York and Hannah Lang in Washington; Editing by Aurora Ellis)

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