(HedgeCo.Net) A federal district court in Massachusetts has 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.