The SEC ordered thirteen firms to pay a total of $2.2 million for spreading false claims made by F-Squared Investments regarding performance of a strategy it used in exchange-traded funds. The SEC found the firms “accepted and negligently relied” on F-Squared’s claims that its “AlphaSector strategy” for investing in ETFs had outperformed the S&P 500 Index for several years, according to a statement made by the agency. The penalties ranged from $100,000 to $500,000 depending on the fees they earned from recommending the strategy to clients.

AssetMark was the only firm ordered to pay $500,000, while BB&T Securities, Banyan Partners, Hilliard Lyons, Ladenburg Thalmann Asset Management and Shamrock Asset Management will each pay the next largest penalty of $200,000, according to the statement.

AssetMark released a statement on the fine. “A number of companies were provided with inaccurate and incomplete information by F-Squared regarding their products and made that information available to advisers and clients. 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 advisers and their clients, which has remained our priority throughout.”

The SEC found that the firms did not obtain sufficient documentation to substantiate the inflated track record of AlphaSector, which F-Squared admitted in an SEC enforcement case was only “back-tested.”

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