Quantcast
The MFWire
Manage Email Alerts | Sponsorships | About MFWire | Who We Are

Subscribe to MFWire.com's News Alerts [click]

Rating:F-Squared Settles; Present Doesn't Not Rated 0.0 Email Routing List Email & Route  Print Print
Monday, December 22, 2014

F-Squared Settles; Present Doesn't

Reported by Neil Anderson, Managing Editor

The SEC's case against F-Squared Investments has closed. The case against F-Squared's ex-chief has not.

Today the regulatory agency unveiled a $35-million settlement with the mutual fund subadvisor (F-Squared supports some Virtus [profile] mutual funds) and self-described "manufacturer of next-generation investment indexes". Yet the settlement does not include F-Squared's co-founder and former CEO, Howard Present, who left the firm and its board last month, three months after the SEC sent F-Squared a Wells Notice. The SEC filed charges today, against Present, in the United States District Court for the District of Massachusetts.

MFWire could not immediately reach Samuel Winer, a partner at Foley & Lardner who represents Present, for comment on the charges or settlement.

F-Squared's new CEO, Laura Dagan, made the following statement:

We are pleased to put this matter behind us so that we can focus on our clients and continue to invest to ensure that our compliance, research, analytics and operational teams are best-in-class.


The case involves what the SEC describes as "false performance advertising" about F-Squared's flagship offering, the AlphaSector indexes. The accusations involve advertising and representations made between October 2008 and September 2013, about AlphaSector's performance between April 2001 and September 2008; the SEC says the strategy was actually hypothetical during that period, so the performance was backtested, not actual, and inflated to boot.

Unlike many settlements where the accused neither affirms nor denies the accusations, under this one F-Squared, in the SEC's words, "acknowledged that its conduct violated federal securities laws." The settlement includes disgorgement of $30 million, a penalty of $5 million, and the requirement for F-Squared to hire an "independent compliance consultant."

On a conference call with reporters, Andrew Ceresney, director of the SEC's enforcement division, confirmed that the settlement concludes the SEC's investigation of F-Squared itself. Yet he declined to comment on whether or not any other parties, besides Present himself, are targeted in the investigation and confirmed that the overall investigation continues.

"We were able to reach terms with the firm that were acceptable to the firm and the SEC," Ceresney told reporters, adding that the SEC was not able to reach such an agreement with Present.

Ceresney described F-Squared as "the market's largest active ETF strategist." 

Stay ahead of the news ... Sign up for our email alerts now
CLICK HERE

0.0
 Do You Recommend This Story?



GO TO: MFWire
Return to Top
 News Archives
2021: Q1
2020: Q4Q3Q2Q1
2019: Q4Q3Q2Q1
2018: Q4Q3Q2Q1
2017: Q4Q3Q2Q1
2016: Q4Q3Q2Q1
2015: Q4Q3Q2Q1
2014: Q4Q3Q2Q1
2013: Q4Q3Q2Q1
2012: Q4Q3Q2Q1
2011: Q4Q3Q2Q1
2010: Q4Q3Q2Q1
2009: Q4Q3Q2Q1
2008: Q4Q3Q2Q1
2007: Q4Q3Q2Q1
2006: Q4Q3Q2Q1
2005: Q4Q3Q2Q1
2004: Q4Q3Q2Q1
2003: Q4Q3Q2Q1
2002: Q4Q3Q2Q1
 Subscribe via RSS:
Raw XML
Add to My Yahoo!
follow us in feedly


  1. Women in ETFs Global 2021 Virtual Conference, Jan 26-27
  2. Nicsa webinar - Investment Data Science: A World Outside of Spreadsheets, January 27
  3. MFDF Director Discussion Series - Open Forum via Zoom, January 27
  4. MFDF webinar - Post-Election Insights on Regulations and Issues That Affect Mutual Funds, January 28
  5. MMI Executive IQ Webinar: The 2021 Leadership Imperative, January 28
  6. ICI webinar - DOL's Stance on ESG Investments: A Look Ahead to 2021 and Beyond, January 29
  7. MFDF webinar - A New Fair Valuation Framework for Fund Directors, February 3
  8. MFDF Director Discussion Series - Open Forum via Zoom, February 10
  9. ICI webinar - ESG Fund Investing: The 2021 Landscape, February 16
  10. MFDF Director Discussion Series - Open Forum via Zoom (West Coast), February 24
  11. NICSA 2021 Strategic Leadership Forum, Feb 24-26
  12. IDC Foundations for Fund Directors, Mar 1-2
  13. MFDF Director Discussion Series - Open Forum via Zoom (Midwest), March 10
  14. 2021 Virtual Mutual Funds and Investment Management Conference, Mar 15-19
  15. ETFGI Global ETFs Insights Summit - ESG & Active ETF Trends, Mar 24-25
  16. MFDF Director Discussion Series - Open Forum via Zoom, March 24
  17. MFDF Director Discussion Series - Open Forum via Zoom, April 7
  18. ETF.com Awards 2020, April 20
  19. MFDF Director Discussion Series - Open Forum via Zoom (Northeast), April 21
  20. 44th Annual AIMSE Marketing & Sales Conference, May 2-4
  21. MFDF Director Discussion Series - Open Forum via Zoom (Southeast), May 5
  22. ICI 2021 General Membership Meeting - Day 1, May 6
  23. ICI 2021 General Membership Meeting - Day 2, May 13
  24. 2nd annual ETFGI Global ETFs Insights Summit - USA, May 19-20
  25. MFDF Director Discussion Series - Open Forum via Zoom, May 19
  26. ICI 2021 Operations and Technology Conference, May 20




©All rights reserved to InvestmentWires, Inc. 1997-2021
14 Wall Street | 20th Floor | New York, NY 10005 | P: 212-331-8968 | F: 212-331-8998
Privacy Policy :: Terms of Use