Virtus Investment Advisers, Llc

Allegations: IN A DECEMBER 2014 SETTLEMENT WITH THE SEC, F-SQUARED INVESTMENTS ("F-SQUARED"), AN UNAFFILIATED FORMER SUBADVISER TO VIA, ADMITTED THAT IT HAD VIOLATED FEDERAL SECURITIES LAWS RELATED TO INACCURATE PERFORMANCE INFORMATION FOR THE PERIOD OF APRIL 2001 THROUGH SEPTEMBER 2008 THAT WAS PROVIDED TO CLIENTS AND INCLUDED IN INDICES TRACKED BY CERTAIN VIA-ADVISED MUTUAL FUNDS AND SEPARATE ACCOUNTS. ON NOVEMBER 16, 2015, WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, VIA CONSENTED TO THE ENTRY OF AN ORDER PROVIDING THAT IT CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF SECTIONS 204, 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940, AS AMENDED, AND RULES 204-2, 206(4)-1, 206(4)-7 AND 206(4)-8 THEREUNDER, AND SECTION 34(B) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED; AGREED TO A CENSURE; AND PAID $16.5 MILLION, WHICH INCLUDED A CIVIL MONEY PENALTY OF $2 MILLION, DISGORGEMENT OF $13.4 MILLION AND PREJUDGMENT INTEREST OF $1.1 MILLION. ACCORDING TO THE ORDER, VIA: WAS NEGLIGENT IN NOT KNOWING THAT F-SQUARED'S TRACK RECORD AND PERFORMANCE WERE INACCURATE; FALSELY PRESENTED F-SQUARED'S ALPHASECTOR STRATEGY'S HISTORY AND INACCURATE TRACK RECORD IN CERTAIN MATERIALS; FAILED TO ADOPT ADEQUATE POLICIES AND PROCEDURES REGARDING THE ACCURACY OF THIRD-PARTY PRODUCED PERFORMANCE INFORMATION AND THE REPORTING AND ASSESSMENT OF CONCERNS ABOUT THE ACCURACY OF SUCH STATEMENTS; AND, AS A RESULT, FAILED TO ADOPT AND IMPLEMENT REASONABLY DESIGNED POLICIES REGARDING THE RETENTION OF BOOKS AND RECORDS REASONABLY NECESSARY TO SUPPORT THE BASIS FOR SUCH PERFORMANCE INFORMATION IN ADVERTISEMENTS THAT IT DIRECTLY OR INDIRECTLY DISTRIBUTED. Status: Final Sanction Detail: DISGORGEMENT: $13,400,000 PREJUDGMENT INTEREST: $1,100,000 PAID NOVEMBER 16, 2015 Summary: ON NOVEMBER 16, 2015, WITHOUT ADMITTING OR DENYING THE SEC'S FINDINGS, VIA CONSENTED TO THE ENTRY OF AN ORDER PROVIDING THAT IT CEASE AND DESIST FROM COMMITTING OR CAUSING ANY VIOLATIONS AND FUTURE VIOLATIONS OF SECTIONS 204, 206(2) AND 206(4) OF THE INVESTMENT ADVISERS ACT OF 1940, AS AMENDED, AND RULES 204-2, 206(4)-1, 206(4)-7 AND 206(4)-8 THEREUNDER, AND SECTION 34(B) OF THE INVESTMENT COMPANY ACT OF 1940, AS AMENDED; AGREED TO A CENSURE; AND PAID $16.5 MILLION, WHICH INCLUDED A CIVIL MONEY PENALTY OF $2 MILLION, DISGORGEMENT OF $13.4 MILLION AND PREJUDGMENT INTEREST OF $1.1 MILLION.