Results 1 to 5 of 5
  1. #1

    SEC bars, fines advisory owner for misrepresenting GIPS compliance

    The Securities and Exchange Commission has barred an investment adviser’s president and owner from the advisory and brokerage industries for misrepresenting his firm’s performance and its compliance with GIPS, the global investment performance standards.

  2. #2

    SEC bars, fines advisory owner for misrepresenting GIPS compliance

    Tuesday’s ruling, by SEC administrative law judge Cameron Elliot, may be the first formal SEC sanction against an adviser or an associated person for misrepresenting its compliance with GIPS, which is voluntary, although the SEC has sanctioned a firm that also invented a client with large investments with the firm. The SEC has warned that its examiners will focus on disclosures over fees, expenses and performance.
    GIPS, which is published by the CFA Institute and is considered an advisory industry best practice, includes guidance for the calculation and reporting of investment performance results to prospective clients, as well as specific guidelines for performance advertisements that claim GIPS compliance, the judge said.

  3. #3

    SEC bars, fines advisory owner for misrepresenting GIPS compliance

    The SEC case against the owner, Max E. Zavanelli, and ZPR Investment Management, Inc., his firm, echoes allegations that Zavanelli settled in August 1987 without an admission or denial of liability. When the SEC filed similar charges last April, Zavanelli said he would vigorously defend himself and his firm. In addition to barring Zavanelli, who was also ZPR’s chief compliance officer during some of the relevant time, Elliot ordered him to pay $660,000 — the maximum first-tier fine for each of 11 misrepresentations in SmartMoney and Barron’s advertisements, ZPR newsletters or Morningstar reports.
    Judge Elliot also fined ZPR $250,000, finding that its failings included not telling Morningstar the SEC was investigating its disclosures, and ordered Zavanelli and ZPR to cease and desist from violating Sections 206(1), (2) and (4) of the Investment Advisers Act of 1940 and Rule 206(4)-1(a)(5).

  4. #4

    SEC bars, fines advisory owner for misrepresenting GIPS compliance

    Judge Elliot found that Zavanelli wanted more institutional investments and that GIPS compliance “has become almost mandatory” for obtaining these investors. Although third-party verification of GIPS compliance has become “almost mandatory” for firms making this claim, Zavanelli continued making this claim even after he stopped using the third-party service he had previously used.

  5. #5

    SEC bars, fines advisory owner for misrepresenting GIPS compliance

    Elliot found that several of the magazine ads did not include, among other things, period to date returns that would have revealed that the composite was increasingly underperforming its benchmark.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •