Securities Fraud and Mismanagement

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If you lost money in an F-Squared AlphaSector investment please call 1-866-87-0201.  F-Squared Investments is part of a $35 million fraud settlement brought by the SEC concerning AlphaSector.  As part of the settlement, F-Squared admitted in the settlement that it falsely advertised the exchange traded fund (ETF), recklessly made misleading or incorrect statements about the track record of the investments that inflated results by as much as 350%.  Executives, including the co-founder, were charged with making false  statements to investors.

Advertising stated that the strategy behind AlphaSector had been in use since 2001 but in fact the algorithm was not completed until 2008.  According to the SEC complaint, an F-Squared analyst used the algorithm, which was built by a 20-year-old college intern at the wealth-advisory firm, along with internal portfolio construction rules to calculate the hypothetical performance of a model portfolio going back nearly eight years.

The relevant F-Squared AlphaSector investments are as follows:

-Virtus Allocator Premium AlphaSector (VAAAX),

-Virtus Dynamic AlphaSector (EMNAX),

-Premium AlphaSector (VAPAX).

-Virtus AlphaSector Rotation (PWBAX), and

– Global Premium AlphaSector (VGPAX),

F-Squared is the largest company among a group of money managers that build portfolios out of ETFs, overseeing $25 billion in such assets at the end of September, according to data reported to research firm Morningstar Inc. ETFs are mutual funds whose shares trade on an exchange and usually are designed to track an index or benchmark.

F-Squared Investments were sold and marketed by brokerage firms including, but not limited to, the following: Ameriprise, LPL Financial; RBC Wealth Management; Raymond James Financial, Inc.; Schwab Institutional; Stifel Nicolaus; UBS Financial Services; and Wells Fargo Advisors.