performance-reporting scandal is now hitting Virtus
] more directly.
Today a pair of law firms unveiled
a lawsuit in federal court, attacking Hartford, Connecticut-based Virtus Investment Partners over marketing F-Squared subadvised mutual funds powered by the strategies that the performance-reporting scandal involves. The Briscoe Law Firm
and Powers Taylor
filed the class-action lawsuit in the U.S. District Court for the Southern District of New York.
could not immediately reach Willie Briscoe
of the Briscoe Law Firm or Patrick Powers
of Powers Taylor for comment on the suit. Spokespeople for the Securities and Exchange Commission (SEC
) declined to comment on the ongoing investigation or on the new lawsuit. And a spokesperson for Virtus declined to comment, citing company policy regarding pending litigation.
In August 2014 the SEC sent
F-Squared a Wells notice over the ETF strategist's performance reporting of its flagship AlphaSector
U.S. equity indexes. Shares of publicly-traded Virtus immediately took a hit.
In November F-Squared replaced
its founding CEO, Howard Present
In December F-Squared settled
with the SEC to the tune of $35 million. Yet the settlement did not include Present himself, and at the time SEC enforcement division director Andrew Ceresney
that the investigation into the scandal was ongoing. Fast-forward to earlier this month, and RIABiz published
a deep dive into what the F-Squared scandal might mean for Virtus, complete with discussions with unnamed former Virtus salespeople. Citing MarketCounsel CEO Brian Hamburger, the trade publication pondered whether or not Virtus could shield itself from the ongoing investigation.
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