A Reblog reiterating the importance of ensuring the representations you make in your SEC filings and financial projections are absolutely accurate. Never put a fact into a filing without having a piece of paper backing the representation up.
Originally posted on America's Markets:
Fast-growing money management firm F-Squared has agreed to pay $35 million and admit wrongdoing for defrauding investors with false ads about the firm’s flagship product, a federal regulator said Monday.
F-Squared co-founder and former CEO Howard Present was charged separately in a federal court complaint with making false and misleading statements to investors as the public face of the Massachusetts-based company, the Securities and Exchange Commission said.
The company, the largest marketer of index products using exchange-traded funds, in September 2008 began receiving third-party financial data that indicated when to buy or sell an investment, according to an SEC order. The data, based on a financial algorithm, enabled F-Squared and Present to create a model portfolio of sector exchange-traded funds that could be rebalanced periodically as the data changed.
The new product, dubbed “AlphaSector,” quickly became F-Squared’s largest revenue source and transformed the company from a money-losing venture to…
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