F-Squared and Former CEO Howard Present Made False Performance Claims, SEC Alleges; Firm Settles Case, Paying Out $35 Million and Admitting Wrongdoing

stockbroker fraud attorneyOn December 22, 2014, F-Squared Investments agreed to shell out $35 million, and also admitted its wrongdoing, in order to settle SEC charges that it allegedly defrauded investors through a false and misleading advertising campaign regarding the performance of its flagship product, according to SEC documents currently being analyzed by attorneys Joe Peiffer and Alan Rosca.

The Peiffer Rosca Wolf investment recovery lawyers are currently in the process of investigating F-Squared, which is the largest marketer of index products using exchange-traded funds (ETFs).

The SEC reports that it has separately charged the firm’s co-founder and former CEO Howard Present with making false and misleading statements to investors as the public face of F-Squared.

F-Squared and Howard Present Allegedly Received Signals from Third-party Data

F-Squared allegedly began receiving signals from a third-party data provider in September 2008 which tipped them off when to buy or sell an investment, according to the SEC’s order against F-Squared, which is currently under review by attorneys Joe Peiffer and Alan Rosca.

Said order further alleges that the aforementioned signals were based on an algorithm, and that F-Squared and Howard Present fused these signals to invent a model portfolio of sector ETFs that could be reshaped periodically as the signals oscillated.

Present and F-Squared named the new product “AlphaSector” and launched the first index a month later. Soon enough, AlphaSector’s indexes quickly became the firm’s bread and butter, and F-Squared went from trading in the red to becoming a highly lucrative investment manager.

Investment Recovery Lawyers Investigating

The Peiffer Rosca Wolf investment rights attorneys often represent investors who lose money as a result of investment misconduct. They are currently investigating F-Squared and Howard Present, and are actively preparing to assist any investors with the recovery of any losses they may have suffered. They take most cases of this type on a contingency fee basis and advance the case costs, and only get paid for their fees and costs out of money they recover for their clients.

Investors who believe that they lost money as a result of F-Squared and Howard Present, may contact the investment rights attorneys at Peiffer Rosca Wolf, Alan Rosca or Joe Peiffer, for a free, no-obligation evaluation of their recovery options, at 888-998-0520.

Broker: Howard Present

Status: INVESTIGATED by Peiffer Rosca.

For brokercheck report and additional info click here!

Alan Rosca (1163 Posts)

Alan is a securities lawyer. He also teaches Securities Regulation at the Cleveland-Marshall College of Law. He focuses his legal practice on complex commercial and financial litigation and arbitration, particularly in the areas of securities and investment fraud. His office is in Cleveland, Ohio.


In our legal system, every person is innocent until and unless found guilty by a court of law or a tribunal. Whenever we reference “allegations” or charges that are “alleged,” such allegations or charges have not been proven, and are merely accusations, not findings of fault, as of the date of the blog. We do not have, nor do we undertake, a duty to continue to monitor or follow cases about which we report, and/or to publish subsequent blogs regarding various developments that may occur in such cases. Readers are encouraged to conduct their own research regarding any such cases and any developments that may or may not have occurred in such cases.