Volatility gauge creator Harley Bassman challenges Simplify's playbook

What Bassman sent and why it landed

Harley Bassman, widely known as the "Convexity Maven," confirmed he wrote a shareholder letter focused on serving the best interests of both the company's owners and its ETF investors. In that note, he said he is the issuer's fourth-biggest common shareholder and that he is "deeply concerned" about the firm's management and oversight.

The letter was sent prior to Simplify's first-ever shareholder meeting in August, laid out a dozen questions for the board, and, as he emphasized, had "nothing to do with my contractual claims." In a follow-up email to other shareholders, Bassman said he was turned aside when trying to raise those questions at the meeting, adding, "Please be sure I ask these questions with all due respect as the fourth largest shareholder of SAMI with a vested interest in its success."

The issues Bassman raised

Bassman's list suggests he believes Simplify is inflating its growth, charging fees it shouldn't, and stepping in to make idiosyncratic trades. He wrote, "Many of these questions point to a disturbing lack of management and fiduciary oversight which, if left uncorrected, will continue to damage Simplify and our investment."

A big focus is what he dubbed "Russian doll stacking" - Simplify funds owning other Simplify funds, sometimes in ways that don't match the strategies. SVOL, the Simplify Volatility Premium ETF, saw assets drop to less than half their former size from a high of $1.26 billion and holds ten other Simplify products, among them a fund that purchases Chinese shares and another that invests in municipal bonds, even though SVOL's stated goal is crash protection by shorting futures on the VIX. Bassman also asked why these affiliated holdings did not receive fee waivers, a practice commonly seen in the industry.

Simplify's response and the bigger picture

Simplify launched in 2020, leaning into its namesake ambition to package institutional-grade trades for everyday investors, much as Bill Gross did with bond funds. The firm expanded quickly, yet competition is more intense as the $16 trillion US ETF market continues to spin out new products, with about 988 new ETFs having already launched in the US this year. Today, Simplify oversees around $13.6 billion across 42 strategies ranging from private credit to Chinese commodities, and roughly 38% of that headline figure comes from other Simplify ETFs. That total excludes instances in which certain funds maintain bank swaps linked to other Simplify products.

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SBIL, a money-market fund launched last year, amassed $4.8 billion sourced entirely from other Simplify funds. Fee tables for those feeder funds do not show waivers for affiliate investments. In a 2025 post, ETF.com president Dave Nadig said SBIL's debut "reaches a new level of greed-before-good," and told Bloomberg by phone that while internal fund usage is common, it's unusual not to rebate fees across the board to avoid even the appearance of double-counting.

Regulatory and operational shifts are also in the mix. In July, the SEC fined Simplify partly over two "prohibited affiliate transactions" tied to seeding the Simplify Propel Opportunities ETF (SURI) using assets supplied by a trust that also owned the largest equity stake in Simplify. Bloomberg previously reported the trust belongs to private equity billionaire Richard Kayne, who did the transaction for tax benefits. A representative for Kayne did not return a request for comment.

That same month, a filing showed the $1.6 billion Simplify Managed Futures Strategy ETF (CTA) - the firm's largest product by organic assets - parted ways with the external adviser behind its investment model, following earlier Bloomberg reporting that Simplify had started intervening in the portfolio. Kim said bringing CTA's strategy in-house would better align with its objectives.

Why this matters for your money

Head of Distribution T.J. Gardner has left as well, according to his LinkedIn profile. Meanwhile, former portfolio manager Powis Forjoe has sued Simplify for breach of contract. A message seeking comment to Gardner went unanswered; Forjoe, via his lawyer, declined to comment; and Kim offered no comment on the departures or on Forjoe's lawsuit.

For everyday investors, the thread running through all this is simple: what portion of reported assets comes from a loop of funds buying each other, how fees are treated in those loops, and whether strategies stick tightly to what they promise. That matters for liquidity sleeves, risk hedges like SVOL, and any fund-of-funds you might own. More competition, SEC scrutiny, and strategy changes are not inherently bad, but they do make it worth reading the holdings page and the fee table before you hit buy.

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