Anthea Penrose, a spokeswoman at Raymond James, declined to comment on the issue, as did Nicole Garrison, a spokeswoman at RBC, and Rachelle Rowe, a spokeswoman for Wells Fargo Advisors. F-Squared said in its statement it intends to respond to the SEC and that it will continue to cooperate.
“It is the first big ETF strategist that has gotten into hot water,” said Dave Nadig, chief investment officer of ETF.com. The Wells notice “will hinder their business because asset management is based on trust. It’s hard to trust someone when the SEC is knocking on their door,” Nadig said.
ETFs are bundles of securities that trade like a stock on an exchange and typically track an index. In the actively managed accounts niche, there were 145 firms tracking 667 strategies with $102 billion in assets as of June 30, according to research firm Morningstar Inc.
The SEC sends a Wells notice to a company or an individual after its staff has determined that sufficient wrongdoing has occurred to warrant civil claims being filed.