Former Investment Firm CEO Ordered to Pay Over $13 Million for Misleading Investors

A federal court ordered a former CEO and co-founder of investment firm F-Squared Investments, Inc. ("F-Squared") to pay over $13 million in relation to allegations that he misled investors about the performance of an investment strategy. In October 2017, a jury found Howard Present liable for the misconduct, which involved violations of the Investment Advisers Act.

In a 2014 Complaint filed in the U.S. District Court for the District of Massachusetts, the SEC charged Mr. Present with material representations about the performance of F-Squared's flagship "AlphaSector" product. Specifically, the SEC alleged that Mr. Present touted AlphaSector as having a track record based on actual performance of "real investments for real clients," when in fact, he "knew or was reckless in not knowing" that the claims were false. The Court ordered Mr. Present to pay disgorgement of $10,849,604 plus interest of $1,377,003, and a $1,575,000 penalty.