An RR distributes a retail communication advertising a new equity mutual fund, stating: 'This fund has consistently outperformed the S&P 500 since inception and is likely to provide similar returns in the future.' Which statement best describes the FINRA violation, if any?

1. AThere is no violation because the statement is based on past performance.
2. BThe RR must include a disclosure stating past performance does not guarantee future results.
3. CIt is misleading because it implies future performance based on past results, which is prohibited.✓ Correct answer
4. DIt is permitted if the fund's prospectus supports the claim.

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