California Securities Fraud Attorney Call Today 800-699-1881
California Securities Fraud Lawyer Firm Overview Attorney Profiles Recoveries Obtained Frequently Asked Questions Testimonials Contact Us
information center
Attorney Advertising Disclaimer
Securities
Broker Misrepresentation
Brokerage Firms Sued
FINRA
Structured Products
Hedge Fund Losses
Recognizing Investment Losses
Recovery of Investment Loss
Securities Arbitration
Reverse Convertible
Misconduct
Securities Fraud
Securities Mediation
Securities Litigation
Stock/ Investment Losses
Suitability/ Unsuitability
Unauthorized Trading
Common Claims
Products
Frequently Asked Questions
Attorney Referrals
Video Center
securities fraud blog
legal blog Click here for a free case evaluation. Read our Articles on Securities Related Issues here. have a question resources
contact us
Name:
Email:
Phone:
Are you a new client?
Message:
10 Avvo avvo badge
If you need help recovering your losses contact us today. View our complete list of brokerage firms and banks we've sued.

SEC Fines 13 Firm $2.2 Million for Repeating False ETF Claims by F-Squared Investments

The SEC ordered 13 advisory firms to pay a total of $2.2 million for spreading false claims initially made by F-Squared Investments related to exchange-traded fund (ETF) performance.

In its report, the SEC stated that the 13 firms "accepted and negligently relied" on F-Squared's claims, which would turn out to be false, that its "AlphaSector strategy" for ETF investments outperformed the S&P 500 Index over the past few years when, in fact, the claim was "substantially inflated."

In July 2015, F-Squared filed for bankruptcy following its agreement to pay $35 million to settle charges it falsely portrayed the performance of its Alpha Sector index, which itself led at least one elderly Wells Fargo investor to file a complaint alleging that Wells Fargo provided deficient due diligence in its purportedly unsuitable recommendation of the F-Squared product for a moderately conservative investor. The SEC similarly imposed a cease-and-desist order against Virtus Investment Advisers, Inc., for spreading the inflated F-Squared/AlphaSector claim to certain mutual fund clients and shareholders.

SEC Enforcement Director Andrew J. Ceresney summed up the discipline thusly: "When an investment adviser echoes another firm's performance claims in its own advertisements, it must verify the information first rather than merely accept it as fact...These advisers negligently passed many of F-Squared's claims onto their own clients, who were consequently relying upon false and misleading information when making investment decisions."

The following 13 firms were listed in the SEC order as firms that improperly spread the false claims, and were issued the corresponding fines:

> AssetMark - $500,000;

> BB&T Securities - $200,000;

> Banyan Partners - $200,000;

> Congress Wealth Management - $100,000;

> Constellation Wealth Advisors - $100,000;

> Executive Monetary Management - $100,000;

> HT Partners - $100,000;

> Hilliard Lyons - $200,000;

> Ladenburg Thalmann Asset Management - $200,000;

> Prospera Financial Services - $100,000;

> Risk Paradigm Group - $100,000;

> Schneider Downs Wealth Management Advisors - $100,000;

> Shamrock Asset Management - $200,000.

If you have invested with any of the aforementioned brokerages or advisory firms, or with any broker or financial adviser whose unsuitable and improper recommendations based on the negligently accepted and disseminated F-Squared claim regarding AlphaSector has proven harmful to your investments or interests, please call The Law Offices of Jonathan W. Evans & Associates at (800) 699-1881 for an investigation and consultation.

Press Release: Investment Advisers Paying Penalties for Advertising False Performance Claims (SEC)

Categories: Due Diligence, SEC, F-Squared
accolades
The Law Offices of Jonathan W. Evans & Associates - California Securities Fraud Attorney
Located at 12711 Ventura Boulevard, Suite #440 Studio City, CA 91604. View Map
Phone: (800) 699-1881 | Local Phone: (818) 760-9880.
Website: