The Securities Arbitration Law Firm of KlaymanToskes Announces Investigation into Virtus AlphaSector Funds Managed by F-Squared Investments

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Updated on: June 25, 2015

Boca Raton, Florida (GLOBE NEWSWIRE) June 25, 2015 — The securities arbitration law firm of KlaymanToskes, www.klaymantoskes.com, announced an investigation into sales practices related to investments in Virtus AlphaSector® Funds sold and marketed by brokerage firms and registered investment advisors (RIAs).  Virtus AlphaSector® Funds were managed by sub-advisor, F-Squared Investments.  F-Squared Investment has been the subject of Securities Exchange Commission (SEC) investigations into how F-Squared Investments’ historical performance had been calculated and misrepresented to investors.

According to the SEC, F-Squared Investments as part of a $35 million fraud settlement, admitted to the SEC fraud allegations.  The SEC charged co-founder Howard Present, and former chief executive, with making false and misleading statements to investors.  The SEC findings determined that investors were misled about historical performance and sales literature concerning mutual funds and separately managed accounts (SMA) by sub-adviser, F-Squared Investments recommended by Brokerage Firms and RIAs.

The Virtus Investment Partners Funds that offered investment strategies managed by sub-adviser, F-Squared Investments are as follows:

  • Virtus Dynamic AlphaSector®  (EMNAX),
  • Virtus Allocator Premium AlphaSector® (VAAAX),
  • Virtus AlphaSector® Rotation (PWBAX),
  • Global Premium AlphaSector®  (VGPAX), and
  • Premium AlphaSector® (VAPAX).  

Effective May 14, 2015, Virtus AlphaSector® Funds underwent a name change to Virtus Equity Trend. This change was due to the adviser, Virtus Investment Advisers, Inc., terminating the sub-advisory agreement with F-Squared Investments.

F-Squared Investments advised funds available to investors through mutual funds or SMA accounts were sold and marketed by brokerage firms and RIAs including, but not limited to, the following:

  • Ameriprise SPS Advantage
  • AssetMark, Inc.
  • Ausdal Financial Partners, Inc.
  • LPL Financial
  • RBC Wealth Management
  • Raymond James Financial, Inc.
  • Schwab Institutional
  • Stifel Nicolaus
  • UBS Financial Services
  • Wells Fargo Advisors

According to KlaymanToskes founding partner, Lawrence L. Klayman, “Investors were misled by sales materials which contained fraudulent information about historical performance to garner investor business.” Mr. Klayman explains brokerage firm and RIA obligations, “In order to make suitable investment recommendations you must have knowledge of the investment manager, if the historical performance numbers are fraudulent, someone needs to be held accountable to investors.”

About KlaymanToskes

KlaymanToskes is currently investigating Financial Industry Regulatory Authority (FINRA) sales practice violations of brokerage firms and RIAs concerning Virtus AlphaSector® Funds and SMA accounts advised by F-Squared Investments. If you have knowledge or experience related to sales practices of brokerage firms and RIAs that recommended investments managed by F-Squared Investments, please contact Steven D. Toskes, Esq. of KlaymanToskes, at 888-997-9956 or visit us on the web at https://klamantoskes.wpengine.com.