Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more
Download
Standard view
Full view
of .
Save to My Library
Look up keyword
Like this
6Activity
0 of .
Results for:
No results containing your search query
P. 1
Twitter Bust

Twitter Bust

Ratings: (0)|Views: 9,655 |Likes:
Published by zerohedge
Twitter Bust
Twitter Bust

More info:

Categories:Types, Brochures
Published by: zerohedge on Jan 30, 2014
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See more
See less

02/25/2014

pdf

text

original

 
 
UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES ACT OF 1933 Release No. 9521 / January 30, 2014 INVESTMENT ADVISERS ACT OF 1940 Release No. 3767 / January 30, 2014 INVESTMENT COMPANY ACT OF 1940 Release No. 30897 / January 30, 2014 ADMINISTRATIVE PROCEEDING File No. 3-15707 In the Matter of Navigator Money Management, Inc. and Mark A. Grimaldi Respondents. ORDER INSTITUTING ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS, PURSUANT TO SECTION 8A OF THE SECURITIES ACT OF 1933, SECTIONS 203(e), 203(f) AND 203(k) OF THE INVESTMENT ADVISERS ACT OF 1940, AND SECTIONS 9(b) and 9(f) OF THE INVESTMENT COMPANY ACT OF 1940, MAKING FINDINGS, AND IMPOSING REMEDIAL SANCTIONS AND A CEASE-AND-DESIST ORDER 
 
I.
 
The Securities and Exchange Commission (“Commission”) deems it appropriate and in
the public interest that public administrative and cease-and-desist proceedings be, and hereby
are, instituted pursuant to Section 8A of the Securities Act of 1933 (“Securities Act”), Sections
203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940
(“Advisers Act”), and Section
s 9(b) and
9(f) of the Investment Company Act of 1940 (“Investment Company Act”) against
 Navigator Money Management, Inc. and Mark A.
Grimaldi (“Respondents”)
.
II.
 In anticipation of the institution of these proceedings, Respondents have submitted Offers
of Settlement (the “Offer 
s
”)
, which the Commission has determined to accept. Solely for the  purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the
findings herein, except as to the Commission’s jurisdiction over
them and the subject matter of these proceedings, which are admitted, Respondents consent to the entry of this Order Instituting
 
 2 Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, and Sections 9(b) and 9(f) of the Investment Company Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-
Desist Order (“Order”), as set forth below.
III.
 On the basis of this Order and Respondents
 Offers, the Commission finds
1
 that:
 
A.
 
Summary
 1.
 
This matter concerns advertising by registered investment adviser Navigator
Money Management, Inc. (“NMM”) and its president
, majority owner, and chief compliance
officer, Mark A. Grimaldi (“Grimaldi”).
From 2008 through at least January 2012, NMM and Grimaldi, directly and indirectly through an affiliated Grimaldi-owned entity, issued false and misleading advertisements concerning (a)
 NMM’s investment advice,
(b) the performance of a mutual fund managed by NMM, Sector Rotation Fund (ticker: NAVFX)
(“Se
ctor Rotation
(NAVFX)”)
, and (c) the performance of model portfolios recommended by Grimaldi. Among their misleading statements, Respondents selectively touted the past performance of Sector Rotation (NAVFX) and specific securities recommendations to clients, cherry-picking the best recommendations and ignoring less favorable recommendations. 2.
 
These misrepresentations and omissions were made possible, in part, by NMM’s
failure to adopt and implement written policies and procedures reasonably designed to prevent violations of the Advisers Act and Investment Company Act and rules thereunder.
B.
 
Respondents
3.
 
NMM
 is a New York corporation with its principal place of business in Wappingers Falls, New York. NMM and its predecessor Prestige Asset Management Services,
Inc. (“PAMS”)
have been registered as investment advisers with the Commission since 1996.  NMM reported in its most recent filing with the Commission that it had $115 million in regulatory assets under management. NMM advises private client accounts on a discretionary  basis and also is the investment adviser to Sector Rotation (NAVFX), a series of a registered investment company with approximately $21 million in assets. NMM has also reported in its most recent filing with the Commission that it is actively engaged in the business of publishing investment newsletters. These newsletters include
The Money Navigator,
 
 Fidelity Navigator 
,
Sector Navigator 
, and
 No-Load Navigator 
 
(collectively, the “Navigator Newsletters”)
, which are  published through an affiliated entity,
The Prestige Organization, Inc. (“Prestige”)
. 4.
 
Grimaldi
, age 51, resides in Poughkeepsie, New York. Grimaldi is the president, chief compliance officer, and majority owner of NMM. In addition, Grimaldi is responsible for
1
 The findings herein are made pursuant to
Respondents’
 Offers of Settlement and are not binding on any other person or entity in this or any other proceeding.
 
 
 3
managing the investments in both NMM’s individual client accounts and in Sector Rotation
(NAVFX). Grimaldi is also the majority owner of Prestige, the entity that acts as the publisher of the Navigator Newsletters. Grimaldi serves as the chief economist for each of the Navigator  Newsletters and is responsible for authoring the main article in each newsletter as well as all model portfolio recommendations. As such, Grimaldi controls the content of the Navigator  Newsletters.
C.
 
Other Relevant Entities
5.
 
Prestige
, formerly known as Prestige Financial, Inc., is a New York corporation organized in April 1996 by Grimaldi. Prestige has published the Navigator Newsletters since 2005. Grimaldi is the majority owner of Prestige. 6.
 
Starboard Investment Trust
 was organized on May 13, 2009 as a Delaware statutory trust with headquarters in Rocky Mount, North Carolina, and registered with the Commission as an open-end management investment company. Since June 28, 2011, Sector Rotation (NAVFX) has been a non-diversified series of Starboard Investment Trust. NMM has served as the investment adviser to Sector Rotation (NAVFX) since December 2009. 7.
 
World Funds Trust
 was organized on January 17, 2008 as a Delaware statutory trust with headquarters in Richmond, Virginia, and registered with the Commission as an open-end management investment company. From December 30, 2009 through June 27, 2011, Sector Rotation (NAVFX) was a non-diversified series of World Funds Trust. NMM served as the investment adviser to Sector Rotation (NAVFX) during that same time period. 8.
 
ETF Opportunity Fund
, formerly called Navigator Fund
 
(“Navigator Fund”
), is registered with the Commission as an open-end investment company established under the laws of Ohio on January 2, 2004. From January 2008 through January 2009, NMM served as the co-manager of the Navigator Fund.
D.
 
Background
9.
 
In June 2004, Grimaldi arranged for his entity, Prestige, to purchase a 50% interest in the publisher of three monthly newsletters, called
 Fidelity Navigator 
,
Sector  Navigator 
, and
 No-Load Navigator 
. Prestige purchased the remaining 50% in 2005 and Prestige continues to publish the three newsletters today. In February 2011, Grimaldi and Person A, an author and host of a show on the television network CNBC, co-founded a new monthly investment newsletter, called
The Money Navigator 
, which is also published through Prestige. By the end of 2011,
The Money Navigator 
 newsletter had more than 60,000 subscribers. 10.
 
Grimaldi used
the Navigator Newsletters to promote NMM’s investment adviser
 business, to bring clients to NMM, and to solicit people to invest in Sector Rotation (NAVFX). Grimaldi was responsible for all investment advice described in the Navigator Newsletters and applied
that same advice to his and NMM’s
clients. The model portfolios that Grimaldi recommends in the newsletters are the exact same models NMM uses to manage the investments of its approximately 600 private advisory clients. Indeed, the Navigator Newsletters promote

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->