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Zamansky LLC Investigates The Common Stock of Virtus Investment Partners Inc. (VRTS) For Potential Securities Fraud Violations

October 6, 2013 Investigations

The law firm is investigating the common stock of Virtus Investment Partners
Inc. (“Virtus”) which trades on the NASDAQ stock market under symbol “VRTS” for potential securities fraud violations.  Virtus is a financial services company based in Hartford, Connecticut which offers a wide range of mutual funds, exchange-traded funds (ETFs), managed accounts and variable insurance products.  Virtus is best known for its “AlphaSector Rotation” and “Premium AlphaSector” Funds which purport to use proprietary quantitative models to allocate and re-allocate funds among ETFs across market sectors.

The investigation of Virtus’ stock concerns its sales of “AlphaSector” funds which were launched in the fall of 2009, and drove the growth of Virtus’ stock price to over $220 per share.  On September 3, 2014, the Wall Street Journal reported that F-Squared Investments Inc. (“F-Squared”), a co-investment adviser responsible for the AlphaSector Funds, had received a Wells Notice from the United States Securities & Exchange Commission (“SEC”) for alleged falsifications about its performance and track record in its sales/marketing materials and required regulatory filings.

The SEC investigation called into question the legitimacy of the Virtus AlphaSector funds which led to the incredible growth in Virtus’ stock price.  As a result of the news, over the next few days, Virtus’ stock price fell by $37 per share, or 16%, from $223 per share to $186 per share.  Virtus has since been hurt by huge outflows of investor funds from its AlphaSector funds.

On December 22, 2014, the SEC announced that it formally settled charges against for fraud and various violations of the Investment Advisors Act of 1940.  F-Squared agreed to pay fines and penalties of $35 million, cease and desist prior conduct and have an independent compliance consultant appointed.  According to stock fraud attorney Jake Zamansky, the SEC investigation against F-Squared raises questions over what Virtus knew when it sold the AlphaSector funds.  If Virtus had material knowledge of flaws or problems with the AlphaSector funds, it should have disclosed what it knew to investors, Zamansky states.
What Investors Can Do If you purchased Virtus’ common stock between July 1, 2010 and September 5, 2014, please contact our firm for an evaluation of your rights.  You can contact Jake Zamansky by telephone at (212) 742-1414 or by email at jake@zamansky.com.