U.S. Securities and Exchange Commission judge Cameron Elliot has banned Max E. Zavanelli, a separate-account money manager from the securities industry. Now, Zavanelli and his firm, ZPR Investment Management Inc., must pay $660,000 for misleading research firm Morningstar Inc. and the public.
ZPR Investment Management, in its filing with securities regulators, names over $200 million in assets from 119 accounts. Its clients include pension plans, high net worth individuals, and charitable organizations.
According to Judge Elliot, Zavanelli misrepresented and left out important information in newspaper ads, newsletters, and reports to Morningstar. Firm performance data is believed to have falsely implied compliance with the Global Investment Performance Standards. These are the standardized, voluntary ethical principals for investment advisers that call for fair representation and full disclosure. It also includes guidance for advertisements that maintain they are in compliance with GIPS.
Zavanelli and his firm are accused of making false claims that performance result presentations complied with GIPS in six ads when this was not the case. Judge Elliot said that Zavanelli purposely misled clients and prospective ones. Elliot also noted that Zavanelli refused to accept responsibility for not having honored his fiduciary obligation to customers.
If you are an institutional investor or a high-net worth individual investor who suspects that your investment losses are a result of a breach of fiduciary duty or some other action by your financial representative, you should speak with our securities law firm today. The SSEK Partners Group has helped thousands of investors get their money back.
SEC judge bans money manager for misleading Morningstar, investors, Investment News, May 28, 2014
Read the Initial Decision (PDF)
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