The Securities and Exchange Commission announced the settlement yesterday with the investment firm. The SEC said F-Squared Investments Inc., based in Wellesley, Massachusetts, is the largest US marketer of index products using exchange-traded funds.
ETFs trade like stocks but mirror other assets such as stock indexes or commodities. They offer the ability to move in and out of markets and have become popular among retail investors in recent years.
The SEC said F-Squared falsely advertised a successful seven-year track record for its "AlphaSector" index product, which was its biggest revenue source and turned the firm from posting losses to being highly profitable.
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