MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication
an InvestmentWires' Publication
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MutualFundWire.com
The insiders' edge for 40 Act industry executives!
an InvestmentWires' Publication |
|
Thursday, March 22, 2018 Five Months Post-Verdict, a Judge Decides Present's Fate Five months after a jury found F-Squared founder Howard Present "liable on all counts" in a securities fraud case, a federal judge has weighed in on what that means for Present. On Tuesday in Boston, United States District Judge Leo Sorokin ordered Present to disgorge about $10.85 million, plus interest, and pay a civil penalty of $1.575 million. The judge also "enjoins Present from future violations" of the Investment Advisers Act of 1940. The case is 14-cv-14692-LTS in the U.S. District Court for the District of Massachusetts. "Even now, Present declines to take responsibility for years of misleading clients and potential clients," judge Sorokin writes. "He fails to understand the wrongfulness of having misrepresented the strategy." A lawyer for Present did not respond to Reuters' requests for comment on the judge's ruling this week. Back in October, days after the jury's verdict, a spokeswoman for the law firm representing Present, told MFWire that it was then "premature to determine" if Present would appeal the loss. The securities fraud case against Present, brought by the SEC, centers on F-Squared's performance reporting for its AlphaSector ETF strategies, strategies whose popularity led F-Squared to rise to be the biggest ETF strategist in the business before its fall. In 2014 the SEC settled (to the tune of $35 million) with F-Squared over claims that the company misrepresented back-tested performance as real performance and also inflated that back-tested performance. Yet Present himself, no longer chief of F-Squared, pushed back and demanded a jury trial, insisting that no investors were harmed and that any alleged misrepresentations were unintentional. Printed from: MFWire.com/story.asp?s=57795 Copyright 2018, InvestmentWires, Inc. All Rights Reserved |