The Securities and Exchange Commission today announced penalties against 13 investment advisory firms for violating securities laws by spreading false claims about F-Squared Investment’s AlphaSector strategy.
According to the SEC:
The firms repeated many of F-Squared’s claims while recommending the investment to their own clients without obtaining sufficient documentation to substantiate the information being advertised. F-Squared later admitted in an SEC enforcement case that what was purportedly its real, historical track record was only back-tested performance that turned out to be substantially inflated.
Penalties ranged from $100,000 to $500,000. More information is available on the SEC website.