SEC Brings Action Against Adviser and Its Principal Related to Misleading Advertisements

April 4, 2013

The SEC brought an administrative action against ZPR Investment Management, Inc. (ZPR) and Max E. Zavanelli. The SEC alleges that ZPR and Zavanelli made false and misleading advertisements in several financial magazines and in monthly newsletters to clients and prospective clients between October 2008 and May 2011.

Specifically, ZPR, through Zavanelli, distributed advertisements to prospective clients that omitted material information which would have revealed that the firm’s historical performance results were underperforming its benchmark index rather than outperforming it. The SEC also alleges that these advertisements, and others that ZPR and Zavanelli distributed to clients and prospective clients, claimed compliance with the Global Investment Performance Standards (GIPS Standards), when in fact they did not comply with the GIPS Standards. The Division further alleges that ZPR and Zavanelli distributed advertisements to clients and prospective clients that falsely claimed ZPR’s performance results had been verified by a GIPS verification firm and that the firm was not under a pending SEC investigation.

Click here to access the administrative action.


Enforcement Actions, Investment Advisers, Investment Companies