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Ameriprise settles with SEC over alleged false statements in F-Squared ads

Ameriprise Financial Inc. will pay disgorgement of $6.3 million, prejudgment interest of $700,000 and a civil penalty in the amount of $1.8 million to the SEC to settle allegations that it advertised an F-Squared Investments Inc. strategy that had materially inflated performance track record.

Between December 2010 and January 2015, Ameriprise offered its clients in certain separately managed accounts to invest in certain AlphaSector strategies. From December 2010 to October 2013, the broker/dealer ran advertisements, relying on misrepresentations made by F-Squared, and falsely stated that these strategies had a history dating back to April 2001 and that the strategy's track record had significantly outperformed the S&P 500 Index from April 2001 to September 2008. F-Squared also miscalculated the strategy's historical performance during this time period.

The regulator noted that Ameriprise did not take enough steps to verify the accuracy of F-Squared's historical data and other related information. It also did not gather sufficient documentation that substantiated F-Squared's advertising claims.

Ameriprise did not admit nor deny the findings but it consented to the entry of the cease-and-desist proceedings that the SEC instituted against it.