Waiting for CFA ruling against Trillium and Magaziner

 I have filed an official complaint with the CFA institute re: Seth Magaziner, Trillium Asset Management and CEO Matthew Patsky. It is now under review and I don’t know when I will hear a response. Generally it takes 5 business days.

 As I outlined in detail previously http://rishrugs.blogspot.com/2014/07/ri-treasury-candidate-seth-magaziners.html , Rhode Island candidate for Treasurer Seth Magaziner  has openly violated several tenets and aspects of the CFA code of Asset Management. Shortly thereafter Trillium Asset Management ,where Magaziner currently works and  who had already violated CFA supervision rules, piled on with CEO Matthew Patsky publicly endorsing Magaziners  misrepresentations.

July 2014 Seth Magaziner

.."at the same time I have made strong investment returns for my clients. I look forward to doing the same for the State when I am treasurer"

"My record as an investment professional is unmatched in this race .I have taken on the responsibility of managing funds for church groups and non profits and retirees. And I have delivered . I look forward to doing the same thing for this state"

”The most important thing we can do to bring “colas” back to the workers and strengthen the pension system  is to make strong investment returns and My track record as an investor is  second  to none in this race.”

Here is a summary what  Magaziner and Trillium violated.

 Summary

1) Seth is a research analyst not a money manager or portfolio manager nor has ever managed money professionally.

2) Seth has zero Investment professional accreditation or licenses (series 65,66.7,CFP,CFA,ChFC etc)

3) Seth has no track record. His firm does and his team might but he does not.

4) Seth mislead about the performance of his firm in addition to making up his own performance.

5) Seth repeatedly makes investment claims to the public for which he has no evidence. Almost all money managers and portfolio managers have specific track records. Seth is a research analyst perhaps that’s why there is no record. That being the case these statement are known as lies  and that’s not a good sign for Treasurer but probably a great sign for a long political career in Rhode Island.

 

The following is just one part of the code Trillium and Seth Magaziner are governed by and it could not be more clear.

Asset Manager Code

E.1 performance presentation

   Managers have a duty to present performance information that is a fair representation of their record and includesall relevant factors.

 In particular, Managers should be certain not to misrepresent their track records by taking credit for performance that is not their own (i.e., when they were not managing a particular portfolio or product) or by selectively presenting certain time periods or investments (i.e., cherry picking).

For those who care about integrity and investment performance standards I have provide the following links:

 http://www.cfainstitute.org/ethics/codes/assetmanager/Pages/index.aspx

http://www.cfapubs.org/doi/pdf/10.2469/ccb.v2009.n8.1

Ethics and Standards - Standard III-D: Performance Presentation

When communicating investment performance information, Members or Candidates must make reasonable efforts to ensure the information is fair, accurate and complete.

Reasoning behind Standard III-D
This Standard applies the guiding ethical principles of fair representation and full disclosure to the measurement and presentation of investment performance information. Much of the negative stigma associated with the money management business has to do with the marketing of performance returns in an effort to capture attention (e.g. "We returned 46% last year, and the market only did 11%! Sign up with us!"). Prospective clients and the investing public at large don't know what to think. Are these numbers a fair indication of what they can legitimately expect or a sleight-of-hand magic trick that may or may not be a total fabrication?

E. Performance and Valuation

1.   Managers must:  Present performance information that is fair, accurate, relevant, timely, and

complete. Managers must not misrepresent the performance of individual

portfolios or of their firm. Although past performance is not necessarily indicative of future performance, historical performance records are often used by prospective clients as part of the evaluation process when hiring asset managers. Managers have a duty to present performance information that is a fair representation of their record and includes

all relevant factors.

 In particular, Managers should be certain not to misrepresent their track records by taking credit for performance that is not their own (i.e., when they were not managing a particular portfolio or product) or by selectively presenting certain time periods or investments (i.e., cherry picking). Any hypothetical or backtested performance must be clearly identified as such. Managers should provide as much additional portfolio transparency as feasibly possible. Any forward-looking information provided to clients must also be fair, accurate, and complete.