Court Dismisses Appeal Filed by Former F-Squared CEO, Affirms SEC's Judgment

Litigation Release No. 24384 / January 28, 2019

Securities and Exchange Commission v. Howard B. Present, No. 18-cv-1477 (1st Cir. January 15, 2019)

The Securities and Exchange Commission announced today that on January 15, 2019 the United States Court of Appeals for the First Circuit dismissed the appeal filed in May 2018 by Howard B. Present, co-founder and former CEO of investment management firm F-Squared Investments. In March 2018, a federal judge ordered Present to pay over $13 million after a federal jury returned a verdict against him for making false and misleading statements to investors as the public face of F-Squared.

The SEC charged Present and F-Squared in 2014 with misleading investors about the AlphaSector strategy, the flagship product of F-Squared which Present launched in the wake of the financial crisis. F-Squared agreed to pay $35 million and admit wrongdoing to settle the agency's charges, but Present opted to contest the SEC's charges. After a three-and-a-half week trial, the jury deliberated for less than one day before finding Present liable on all of the agency's charges against him.

The SEC's case was handled by Frank C. Huntington, Rachel E. Hershfang, Jennifer A. Cardello and Alfred A. Day. The investigation that led to the charges was conducted by Rory Alex, Robert Baker, Ms. Cardello, Bill Donahue, John Farinacci, Mayeti Gametchu, Kevin Kelcourse, and Jose Santillan. The examination that led to the investigation was conducted by Michael McGrath, Jamie Pickles, Risa King, Joe Downing, and Nitish Bahadur of the Boston office.