Thirteen investment advisory firms will pay penalties up to $500,000 to settle charges that they “negligently” spread false claims to their clients.

The U.S. Securities and Exchange Commission ordered the firms to pay penalties in an administrative proceeding on Thursday.

While making recommendations to their clients, the firms allegedly repeated claims made by F-Squared Investments that its AlphaSector ETF strategy had outperformed the S&P 500 for several years.

F-Squared marketed AlphaSector as a sector rotation strategy using nine U.S. equity ETFs and an algorithm that signals when its time to sell or buy a fund.

According to the SEC complaint, the firms never obtained sufficient documentation to substantiate F-Squared claims.

In a prior SEC enforcement case, F-Squared admitted that what it purported to be a real, historical track record was actually substantially inflated back-tested performance. The firm agreed to pay $35 million in penalties to settle the charges. It announced last year it was filing for bankruptcy and selling its intellectual property. The SEC has targeted other firms for not telling investors they were using hypothetical data.

In the latest related SEC action, the agency said 13 investment advisory firms disseminated inaccurate F-Squared advertisements to their clients without substantiating their claims. The firms include AssetMark, Concord, Calif.; BB&T Securities, Richmond, Va.; Banyan Partners, Palm Beach Gardens, Fla.; Congress Wealth Management, Boston; Constellation Wealth Advisors, New York; Executive Money Management, New York; HT Partners, Centerbrook, Conn.; Hilliard Lyons, Louisville, Ky.; Ladenburg Thalmann Asset Management, New York; Prospera Financial Services, Dallas; Risk Paradigm Group, Austin, Texas; Schneider Downs Wealth Management, Pittsburgh; and Shamrock Asset Management, Dallas.

The largest fine, $500,000, was levied against AssetMark. F-Squared introduced AssetMark to its AlphaSector ETF strategies in 2011, claiming that the AlphaSector Premium strategy had already been used to manage client assets from April 2001 to April 2008 and describing it as a “live” track record. According to the SEC, no assets had tracked the strategy until 2008.

In its advertising, AssetMark reflected that AlphaSector’s reported performance was hypothetical, back-tested and did not reflect the performance of actual client assets. AssetMark staff members, however, disseminated to clients F-Squared’s advertisements concerning the strategy, including inaccurate claims concerning the strategy’s outperformance and the live nature of its reported track record, the SEC says.

When AssetMark attempted to vet the AlphaSector strategy, it reviewed performance returns calculated by NASDAQ OMX, but NASDAQ OMX used data provided by F-Squared in its calculations -- thus AssetMark lacked a reasonable basis to believe F-Squared’s claims, according to the SEC.

The SEC also alleges that AssetMark failed to keep records and documentations to form the basis for claims in the advertising it disseminated.

“A number of companies were provided with inaccurate and incomplete information by F-Squared regarding their products and made that information available to Advisors and clients," said AssetMark in a company statement released on Friday. "As soon as we were made aware of these discrepancies, we immediately discontinued the availability of the information and put the only product we offered with a connection to F-Squared under review. Ultimately, we made the decision to remove F-Squared from our platform. We’re glad to put this issue to rest and to continue to focus on serving advisors and their clients, which has remained our priority throughout.”

The 12 other firms fined in the SEC’s administrative process settled similar charges in violation of the Advisers Act.

BB&T Securities, Banyan Partners, Hilliard Lyons, Ladenburg Thalmann Asset Management and Shamrock Asset Management each agreed to pay civil penalties of $200,000 to settle the charges.

Congress Wealth Management, Constellation Wealth Management, Executive Monetary Management, HT Partners, Prospera Financial Services, Risk Paradigm Group and Schneider Downs Wealth Management Advisors each agreed to pay civil penalties of $100,000 to settle the charges.

All 13 of the investment advisors neither admitted nor denied the SEC’s findings in settling the charges.