| Revision as of 19:22, 27 October 2021 edit96.231.39.34 (talk) Fixed bad dataTags: Reverted Visual edit Mobile edit Mobile web edit← Previous edit | Revision as of 19:26, 27 October 2021 edit undo96.231.39.34 (talk) Removed personal data and removed allegations quoted from one side of a lawsuit (someone is clearly editing this with a focus misleading accusations.Tags: Reverted references removed Visual edit Mobile edit Mobile web editNext edit → | ||
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| ==History== | ==History== | ||
| ⚫ | On October 31, 2008 ] purchased its 60% stake in AdvisorShares for an initial payment of $275,000.<ref>{{cite web|title=AdvisorShares Investments, LLC Purchase and Contribution Agreement|url=http://www.sec.gov/Archives/edgar/containers/fix230/1335795/000121390008002161/f8k110608ex10i_fund.htm}}</ref> | ||
| Three former ] employees, Noah Hamman, Jacob Griffith and Joseph Barrato founded Arrow Funds in February 2006. Less than 7 months after starting Arrow, in August 2006 Noah Hamman, while still acting as the CEO of Arrow Funds, established a separate company called AdvisorShares, allegedly without the knowledge of his two partners. The partners said this was a "violation to his fiduciary duty to Arrow Hamman then systematically diverted to the benefit of himself and AdvisorShares opportunities, assets, and contracts that rightfully belonged to Arrow. When Arrow began to learn of Hamman's competing activities and confronted him regarding those activities, Hamman engaged in further deceptive misconduct by affirmatively misrepresenting the nature and scope of his endeavors on behalf of AdvisorShares". Hamman was fired by Arrow on November 29, 2007, after Arrow Management Committee discovered more information about the nature of Hamman's competing activities.<ref name=Arrow>{{cite web|title=Request for Hearing on Application of AdvisorSharesInvestments,LLC and AdvisorSharesTrust,Investment Company Act Release No. 28568; 812-13488|url=http://www.sec.gov/comments/812-13488/812-13488-1.pdf}}</ref> | |||
| ⚫ | On October 31, 2008 ] purchased its 60% stake in AdvisorShares for an initial payment of $275,000.<ref>{{cite web|title=AdvisorShares Investments, LLC Purchase and Contribution Agreement|url=http://www.sec.gov/Archives/edgar/containers/fix230/1335795/000121390008002161/f8k110608ex10i_fund.htm |
||
| === Application for Exemptive Relief === | === Application for Exemptive Relief === | ||
| On November 7, 2008 Arrow commenced ] proceedings against Hamman and AdvisorShares for usurping Arrow's intellectual property including its business plan in establishing AdvisorShares. Asked when he expected to get SEC approval, Hamman told IndexUniverse, on November 11, 2008 "I do believe we're within a week or two of getting it, based on the feedback we're receiving from the SEC."<ref>{{cite web|title=AdvisorShares' Hamman: No Transparency Issues with Active ETFs|url=http://seekingalpha.com/article/105362-advisorshares-hamman-no-transparency-issues-with-active-etfs|publisher=IndexUniverse}}</ref> In January 2009, Arrow Funds requested a hearing with the SEC to challenge AdvisorShares' application for exemptive relief filed the previous month. Arrow and their counsel claimed that Hamman "To enable the Application to proceed, deliberately thwarted and delayed the selection of the Arbitration tribunal members." | On November 7, 2008 Arrow commenced ] proceedings against Hamman and AdvisorShares for usurping Arrow's intellectual property including its business plan in establishing AdvisorShares. Asked when he expected to get SEC approval, Hamman told IndexUniverse, on November 11, 2008 "I do believe we're within a week or two of getting it, based on the feedback we're receiving from the SEC."<ref>{{cite web|title=AdvisorShares' Hamman: No Transparency Issues with Active ETFs|url=http://seekingalpha.com/article/105362-advisorshares-hamman-no-transparency-issues-with-active-etfs|publisher=IndexUniverse}}</ref> In January 2009, Arrow Funds requested a hearing with the SEC to challenge AdvisorShares' application for exemptive relief filed the previous month. Arrow and their counsel claimed that Hamman "To enable the Application to proceed, deliberately thwarted and delayed the selection of the Arbitration tribunal members." | ||
| <ref name=Arrow>{{cite web|title=Request for Hearing on Application of AdvisorSharesInvestments,LLC and AdvisorSharesTrust,Investment Company Act Release No. 28568; 812-13488|url=http://www.sec.gov/comments/812-13488/812-13488-1.pdf}}</ref> "On March 1, 2010, Mr. Hamman, Arrow and the Members agreed to settle the Arbitration"<ref>{{cite web|title=FORM 8-K Fund.com |url=http://www.sec.gov/Archives/edgar/containers/fix230/1335795/000121390010000804/f8k030110_fund.htm}}</ref> | <ref name=Arrow>{{cite web|title=Request for Hearing on Application of AdvisorSharesInvestments,LLC and AdvisorSharesTrust,Investment Company Act Release No. 28568; 812-13488|url=http://www.sec.gov/comments/812-13488/812-13488-1.pdf}}</ref> "On March 1, 2010, Mr. Hamman, Arrow and the Members agreed to settle the Arbitration"<ref>{{cite web|title=FORM 8-K Fund.com |url=http://www.sec.gov/Archives/edgar/containers/fix230/1335795/000121390010000804/f8k030110_fund.htm}}</ref>Unsuccessful Petition for Dissolution of Arrow Investment Advisors | ||
| === Unsuccessful Petition for Dissolution of Arrow Investment Advisors === | |||
| On October 10, 2008, Noah Hamman petitioned (under §18-802 of the Deleware LLC Act) a Court in Delaware to dissolve Arrow Investment Advisors, LLC. He claimed that Arrow's managers had mismanaged the company and could not achieve the goals set forth in the original business plan. He alleged that Arrow's managers had: 1) "exposed the Company to liability by violating the particular federal securities laws and regulations under which the Company is required to operate, and have failed to seek appropriate supervision from the broker-dealer for the Company’s specific obligations as a FINRA-licensed representative" 2) "operated the Company for their own financial benefit, and have spent Company funds for their own private use and enjoyment, while paying wages to various employees in an erratic and tardy fashion." 3)"failed to provide to all members an annual operating plan for 2008 as required by the LLC Agreement". On April 23, 2009, the judge in the case dismissed the Petition with ] (meaning that because of misconduct on the part of the claimant it can not be refiled), as Hamman failed to provide factual evidence to back his claims and "Hamman was required to press his fiduciary claims in binding arbitration under the Arrow LLC Agreement". "Hamman suggests that merely stating these allegations, virtually without any factual support, is enough to survive a motion to dismiss. Here, the Petition is devoid of any facts supporting Hamman’s first two allegations, such as which of the myriad federal securities laws Arrow must comply with were violated or for what improper personal purposes Barrato and Griffith used Arrow funds and approximately when and how much of Arrow’s funds they misused." <ref>{{cite book|last1=Lubaroff|last2=Altman|first1=Martin I.|first2=Paul M.|title=Lubaroff and Altman on Delaware Limited Partnerships|date=1995|publisher=Aspen Publishers Online|isbn=978-1-56706-288-5|page=13-175 through 13-177|edition=illustrated; 2013 Supplement|url=http://books.google.is/books?id=GcWwuJMn6IEC&pg=SA13-PA189&lpg=SA13-PA189&dq=noah+hamman+arrow+funds&source=bl&ots=19ROPuI5OE&sig=0ZIWS5yDS-LBROZF-RWaNmwkFmU&hl=en&sa=X&ei=gG_6U73XKJHoaJ-lgMgO&ved=0CBwQ6AEwATgK#v=onepage&q=noah%20hamman%20arrow%20funds&f=false|accessdate=24 August 2014}}</ref> The judge seems to suggest revenge as a possible motivation for filing the suit: "And, although Hamman might be disappointed that he has been ousted from the management of a company he helped establish," <ref>{{cite web|title=IN RE ARROW INVESTMENT ADVISORS, LLC,|url=https://www.casetext.com/case/in-re-arrow-investment-advisors-llc-ca-no-4091-vcs-del-ch-4232009|publisher=casetext}}</ref> | On October 10, 2008, Noah Hamman petitioned (under §18-802 of the Deleware LLC Act) a Court in Delaware to dissolve Arrow Investment Advisors, LLC. He claimed that Arrow's managers had mismanaged the company and could not achieve the goals set forth in the original business plan. He alleged that Arrow's managers had: 1) "exposed the Company to liability by violating the particular federal securities laws and regulations under which the Company is required to operate, and have failed to seek appropriate supervision from the broker-dealer for the Company’s specific obligations as a FINRA-licensed representative" 2) "operated the Company for their own financial benefit, and have spent Company funds for their own private use and enjoyment, while paying wages to various employees in an erratic and tardy fashion." 3)"failed to provide to all members an annual operating plan for 2008 as required by the LLC Agreement". On April 23, 2009, the judge in the case dismissed the Petition with ] (meaning that because of misconduct on the part of the claimant it can not be refiled), as Hamman failed to provide factual evidence to back his claims and "Hamman was required to press his fiduciary claims in binding arbitration under the Arrow LLC Agreement". "Hamman suggests that merely stating these allegations, virtually without any factual support, is enough to survive a motion to dismiss. Here, the Petition is devoid of any facts supporting Hamman’s first two allegations, such as which of the myriad federal securities laws Arrow must comply with were violated or for what improper personal purposes Barrato and Griffith used Arrow funds and approximately when and how much of Arrow’s funds they misused." <ref>{{cite book|last1=Lubaroff|last2=Altman|first1=Martin I.|first2=Paul M.|title=Lubaroff and Altman on Delaware Limited Partnerships|date=1995|publisher=Aspen Publishers Online|isbn=978-1-56706-288-5|page=13-175 through 13-177|edition=illustrated; 2013 Supplement|url=http://books.google.is/books?id=GcWwuJMn6IEC&pg=SA13-PA189&lpg=SA13-PA189&dq=noah+hamman+arrow+funds&source=bl&ots=19ROPuI5OE&sig=0ZIWS5yDS-LBROZF-RWaNmwkFmU&hl=en&sa=X&ei=gG_6U73XKJHoaJ-lgMgO&ved=0CBwQ6AEwATgK#v=onepage&q=noah%20hamman%20arrow%20funds&f=false|accessdate=24 August 2014}}</ref> The judge seems to suggest revenge as a possible motivation for filing the suit: "And, although Hamman might be disappointed that he has been ousted from the management of a company he helped establish," <ref>{{cite web|title=IN RE ARROW INVESTMENT ADVISORS, LLC,|url=https://www.casetext.com/case/in-re-arrow-investment-advisors-llc-ca-no-4091-vcs-del-ch-4232009|publisher=casetext}}</ref> | ||
| === Other === | === Other === | ||
| The firm launched its first active ETF fund in 2009.<ref>{{cite news|publisher=ETF Daily News.|title= AdvisorShares Investments, Initiates Public Offering Launching its Unique Exchange Traded Fund Platform for Investment Advisors and Lists on the New York Stock Exchange (NYSE Ticker: DENT).|url=http://etfdailynews.com/2009/09/10/advisorShares-investments-initiates-public-offering-launching-its-unique-exchange-traded-fund-platform-for-investment-advisors-and-lists-on-the-new-york-stock-exchange-nyse-ticker-dent/}}</ref> By 2014 it had 24 active ETFs and $1.83 billion under management.<ref>{{cite news|author=Jeff Benjamin|title=Are active ETFs finally growing in popularity?|publisher=Investment News|url=http://www.investmentnews.com/article/20140420/FREE/304209997}}</ref> By August 2018 it had 17 ETFs with an average expense ratio of 1.12% and only $817.6 million in assets under management.<ref>{{cite web |title=AdvisorShares ETF Overview |url=https://www.etf.com/channels/advisorshares-etfs |website=ETF.com |publisher=ETF.com |accessdate=21 August 2018}}</ref> | The firm launched its first active ETF fund in 2009.<ref>{{cite news|publisher=ETF Daily News.|title= AdvisorShares Investments, Initiates Public Offering Launching its Unique Exchange Traded Fund Platform for Investment Advisors and Lists on the New York Stock Exchange (NYSE Ticker: DENT).|url=http://etfdailynews.com/2009/09/10/advisorShares-investments-initiates-public-offering-launching-its-unique-exchange-traded-fund-platform-for-investment-advisors-and-lists-on-the-new-york-stock-exchange-nyse-ticker-dent/}}</ref> By 2014 it had 24 active ETFs and $1.83 billion under management.<ref>{{cite news|author=Jeff Benjamin|title=Are active ETFs finally growing in popularity?|publisher=Investment News|url=http://www.investmentnews.com/article/20140420/FREE/304209997}}</ref> By August 2018 it had 17 ETFs with an average expense ratio of 1.12% and only $817.6 million in assets under management.<ref>{{cite web |title=AdvisorShares ETF Overview |url=https://www.etf.com/channels/advisorshares-etfs |website=ETF.com |publisher=ETF.com |accessdate=21 August 2018}}</ref> | ||
| In October 2012 Esposito Securities LLC sued AdvisorShares, claiming that the parties signed a mutual nondisclosure agreement and that subsequently Dan Ahrens, an officer of AdvisorShares, began sharing confidential information with Esposito's clients and told them not to do business with Esposito.<ref name=CNS>{{cite web|title=Nasty Doings Alleged in Investment Business|url=http://www.courthousenews.com/2012/10/25/51647.htm|publisher=Courthouse News Service}}</ref> | |||
| ==Funds== | ==Funds== | ||
Revision as of 19:26, 27 October 2021
US-based investment management firm based in Bethesda, Maryland | |
| Company type | Private Limited Liability Company (LLC) |
|---|---|
| Industry | Investment Management |
| Founded | 2006 |
| Founder | Noah Hamman |
| Headquarters | Bethesda, Maryland |
| Key people | Noah Hamman Dan Ahrens James Carl Julio Lugo |
| Products | 23 Exchange-Traded Funds (ETFs): U.S. and International Equity, Fixed Income and Alternatives |
| AUM | US$2.1 Billion |
| Parent | Privately Held |
| Website | advisorshares |
AdvisorShares Investments is a US-based investment management firm based in Bethesda, Maryland which offers actively managed exchange-traded funds (ETFs) through the AdvisorShares Trust. AdvisorShares partners with third party financial advisers who already manage clients’ assets to package their investment strategy using exchange-traded funds. As part of promoting its funds it also provides educational support to help financial advisors and investors understand actively managed ETFs and their underlying investment strategies.
History
On October 31, 2008 Fund.com purchased its 60% stake in AdvisorShares for an initial payment of $275,000.
Application for Exemptive Relief
On November 7, 2008 Arrow commenced arbitration proceedings against Hamman and AdvisorShares for usurping Arrow's intellectual property including its business plan in establishing AdvisorShares. Asked when he expected to get SEC approval, Hamman told IndexUniverse, on November 11, 2008 "I do believe we're within a week or two of getting it, based on the feedback we're receiving from the SEC." In January 2009, Arrow Funds requested a hearing with the SEC to challenge AdvisorShares' application for exemptive relief filed the previous month. Arrow and their counsel claimed that Hamman "To enable the Application to proceed, deliberately thwarted and delayed the selection of the Arbitration tribunal members." "On March 1, 2010, Mr. Hamman, Arrow and the Members agreed to settle the Arbitration"Unsuccessful Petition for Dissolution of Arrow Investment Advisors
On October 10, 2008, Noah Hamman petitioned (under §18-802 of the Deleware LLC Act) a Court in Delaware to dissolve Arrow Investment Advisors, LLC. He claimed that Arrow's managers had mismanaged the company and could not achieve the goals set forth in the original business plan. He alleged that Arrow's managers had: 1) "exposed the Company to liability by violating the particular federal securities laws and regulations under which the Company is required to operate, and have failed to seek appropriate supervision from the broker-dealer for the Company’s specific obligations as a FINRA-licensed representative" 2) "operated the Company for their own financial benefit, and have spent Company funds for their own private use and enjoyment, while paying wages to various employees in an erratic and tardy fashion." 3)"failed to provide to all members an annual operating plan for 2008 as required by the LLC Agreement". On April 23, 2009, the judge in the case dismissed the Petition with prejudice (meaning that because of misconduct on the part of the claimant it can not be refiled), as Hamman failed to provide factual evidence to back his claims and "Hamman was required to press his fiduciary claims in binding arbitration under the Arrow LLC Agreement". "Hamman suggests that merely stating these allegations, virtually without any factual support, is enough to survive a motion to dismiss. Here, the Petition is devoid of any facts supporting Hamman’s first two allegations, such as which of the myriad federal securities laws Arrow must comply with were violated or for what improper personal purposes Barrato and Griffith used Arrow funds and approximately when and how much of Arrow’s funds they misused." The judge seems to suggest revenge as a possible motivation for filing the suit: "And, although Hamman might be disappointed that he has been ousted from the management of a company he helped establish,"
Other
The firm launched its first active ETF fund in 2009. By 2014 it had 24 active ETFs and $1.83 billion under management. By August 2018 it had 17 ETFs with an average expense ratio of 1.12% and only $817.6 million in assets under management.
Funds
The DENT Tactical ETF
The Dent Tactical ETF commenced trading on the New York Stock Exchange on September 15, 2009 under the NYSE: DENT. The first product of AdvisorShares Investments, LLC, DENT was actively managed by HS Dent Investment Management, LLC, an independent economic research and forecasting company and publisher of The Dent Method.
HS Dent Investment Management was managed by financial author, Harry S. Dent Jr. Previously, HS Dent had raised and managed a $2.0 billion mutual fund, AIM Dent Demographic Trends, which was merged into another fund after it lost 80% of its assets. According to Morningstar, Inc., DENT had highest expense ratio among ETFs, 1.5% of assets, as of July 2011.
DENT closed in August 2012. Its last day of trading was August 8, 2012 and remaining investments were returned to shareholders on August 15, 2012.
The Mars Hill Global Relative Value ETF (NYSE symbol: GRV)
The Mars Hill Global Relative Value ETF commenced trading on the New York Stock Exchange on July 9, 2010 under the NYSE Ticker: GRV and was managed by Mars Hill Partners, LLC. GRV was the industry's first actively managed long/short ETF.
While GRV managed to raise $38 million a month after it launched, investors fled until the fund had only $3.2 million left. On December 1, 2011, Accuvest Global Advisors took over management of the fund and changed the name and ticker to AdvisorShares Accuvest Global Long Short ETF (AGLS). AGLS was closed on August 7, 2015.
The Global Echo ETF (NYSE Symbol: GIVE) and partnership with Philippe Cousteau Jr.
In May 2012, AdvisorShares launched the AdvisorShares Global Echo ETF NYSE: GIVE on the New York Stock Exchange focused on sustainable investing; the fund also said it would donate a portion of the fund expense fees to Global Echo Foundation, a nonprofit co-founded by Philippe Cousteau, Jr. focused on social issues impacting women and children to environmental conservation, as well as supporting social entrepreneurship. The fund's expense ratio was 1.7%, including 0.4% that was donated to the Global Echo Foundation. One potential concern investors may have had about investing in GIVE is that they didn't get a tax write-off for the portion of the management fee that was donated to the charitable foundation, whereas an individual donating the proceeds of a profitable investment to an eligible charity would be able to get a substantial tax write-off. GIVE finally closed on May 17, 2017.
The TrimTabs Float Shrink ETF (NYSE symbol: TTFS)
AdvisorShares teamed up with TrimTabs Investment Research to launch the AdvisorShares TrimTabs Float Shrink ETF NYSE: TTFS on October 4, 2011. TTFS was sub-advised by TrimTabs Asset Management ("Portfolio Manager"), a subsidiary of TrimTabs Investment Research (TrimTabs). The Fund sought to achieve this objective by investing in stocks with liquidity and fundamental characteristics that are historically associated with superior long-term performance. Charles Biderman was the CEO of TrimTabs and a Portfolio Manager for the ETF along with Minyi Chen. Subsequently, TrimTabs filed with the SEC to launch their own self-indexed ETFs without the aid of AdvisorShares. On May 26, 2016, AdvisorShares announced that it had removed TrimTabs Asset Management as manager of its TrimTabs Float Shrink ETF, which had about $178 million in assets at the time. AdvisorShares replaced TrimTabs with Wilshire Associates, of Santa Monica, Calif., but offered no explanation for the change. From inception through March 31, 2016, TTFS had annualized returns of 19.22% , and was named by On Wall Street as the number one performing actively managed ETF over the past three years. In light of this performance record, TrimTabs CEO Charles Biderman questioned the appropriateness of the decision by the AdvisorShares' Trust to replace the manager and thereby change the ETF's strategy.
References
- "AdvisorShares ETF Overview". ETF.com. etf.com. Retrieved 29 August 2017.
- "ETF League Table As Of Aug. 20, 2018". ETF.com. ETF.com. Retrieved 21 August 2018.
- "AdvisorShares Launches Four Gold ETFs". Financial Advisor Magazine.
- "AdvisorShares". Nasdaq.
- "AdvisorShares Investments, LLC Purchase and Contribution Agreement".
- "AdvisorShares' Hamman: No Transparency Issues with Active ETFs". IndexUniverse.
- "Request for Hearing on Application of AdvisorSharesInvestments,LLC and AdvisorSharesTrust,Investment Company Act Release No. 28568; 812-13488" (PDF).
- "FORM 8-K Fund.com".
- Lubaroff, Martin I.; Altman, Paul M. (1995). Lubaroff and Altman on Delaware Limited Partnerships (illustrated; 2013 Supplement ed.). Aspen Publishers Online. p. 13-175 through 13-177. ISBN 978-1-56706-288-5. Retrieved 24 August 2014.
- "IN RE ARROW INVESTMENT ADVISORS, LLC,". casetext.
- "AdvisorShares Investments, Initiates Public Offering Launching its Unique Exchange Traded Fund Platform for Investment Advisors and Lists on the New York Stock Exchange (NYSE Ticker: DENT)". ETF Daily News.
- Jeff Benjamin. "Are active ETFs finally growing in popularity?". Investment News.
- "AdvisorShares ETF Overview". ETF.com. ETF.com. Retrieved 21 August 2018.
- "AdvisorShares Investments, LLC Brings a Tailored ETF Investment Vehicle to the Marketplace". Reuters. September 17, 2009. Archived from the original on November 7, 2009.
- Roth, Allan. "Second Dent investment fund to disappear". CBS News.
- Burton, Jonathan. "His Forecasts of Booms and Busts Sell Lots of Books. But an ETF? Maybe Not". The Wall Street Journal.
- "Harry Dent Tactical ETF Gets The Ax".
- "AdvisorShares Announces the Closing of the Dent Tactical ETF (DENT)". Reuters. July 25, 2012. Archived from the original on December 17, 2013.
- ^ Murphy, Cinthia. "AdvisorShares' GRV To Get A Makeover". IndexUniverse.
- Graham, Ryan. "AdvisorShares Announces the Closing of Fund". Cision PR Newswire. Retrieved 7 August 2021.
- Johnston, Michael. "AdvisorShares Launches Global Echo ETF (GIVE)".
- Ferri, Rick. "This ETF is Bound to be Underwater". Archived from the original on 2013-12-17.
- Bell, Heather. "ETF Closures". ETF.com. etf.com. Retrieved 3 August 2017.
- Bell, Heather. "ETF Watch: WisdomTree Debuts Japan Sectors". etf.com.
- Zweig, Jason. "AdvisorShares Raises Eyebrows With Cuttting of TrimTabs". wsj.com. Wall Street Journal. Retrieved 7 August 2021.
- "TrimTabs Asset Management Response to AdvisorShares Announcement of TTFS Sub-Advisor Change". Cision PR Newswire. PR Newswire. Retrieved 7 August 2021.