The fallout from the SEC's investigation of F-Squared
continues, this time hitting the giant ETF strategist's own staff.
Trevor Hunnicutt of InvestmentNews reports
that an unnamed source says that on Thursday Wellesley, Massachusetts-based F-Squared cut up to 25 percent of its 161-person workforce. F-Squared powers several mutual funds for Virtus
"A detailed analysis of our business revealed the need for a more streamlined organizational structure that positions F-Squared for a sustainable future of growth," the firm reportedly said in a statement cited by the trade publication. "We have created a more agile operating structure that better aligns our extraordinary people with the needs of our clients, including the elimination of redundancies in our operations. Regretfully, this includes an unavoidable and substantial reduction in headcount."
The layoff comes after F-Squared settled
with the SEC, acknowledging that it "violated federal securities laws" in its reporting around its flagship AlphaSector
indexes' performance from April 2001 through September 2008 (performance which the SEC says was both hypothetical and inflated, not actual) and agreeing to pay $35 million. Yet the settlement didn't include F-Squared's co-founder and former CEO, Howard Present
, who left
the firm in November. InvestmentNews
notes that Present is "due to answer the [SEC's] allegations by March 23," i.e. today.
Neil Anderson, Managing Editor
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