SEC Obtains Partial Summary Judgment Against Investment Adviser and Principal for False and Misleading Marketing of Investment Strategies

Litigation Release No. 24744 / February 20, 2020

Securities and Exchange Commission v. Navellier & Associates, Inc., and Louis Navellier, Civil Action No. 3:17-cv-11633 (District of Massachusetts, filed August 31, 2017)

On February 13, 2020, a federal district court in Massachusetts granted partial summary judgment in favor of the Securities and Exchange Commission in its pending action against Navellier & Associates, Inc., a Nevada-based investment advisory firm, and its founder and chief investment officer, Louis Navellier, of Florida. The SEC's complaint alleges that the defendants breached their fiduciary duties and defrauded their advisory clients and prospective clients through the use of marketing materials that included false and misleading statements regarding the performance of the firm's Vireo AlphaSector investment strategies.

The court's order holds that defendants defrauded their clients, and that the SEC is entitled to summary judgment on its claims that defendants violated the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The court's order further finds that the defendants knew there were misleading statements in their marketing materials and that there had been inadequate due diligence, yet they failed to inform their clients. Instead, as the court found, the defendants continued to sell the Vireo AlphaSector investment strategies despite their knowledge that representations about the strategies were false and misleading. The court also rejected the defendants' affirmative defense of selective enforcement and denied defendants' motion for summary judgment on all counts.

The SEC's ongoing litigation is being handled by Rory Alex, William Donahue, Jennifer Cardello and Marc Jones of the Boston Regional Office and Robert Baker of Asset Management Unit.