BOSTON (Reuters) - The U.S. Securities and Exchange Commission sued Navellier & Associates and its founder on Thursday, accusing them of misleading clients about the track record of investment strategies the adviser offered.

The U.S. Securities and Exchange Commission logo adorns an office door at the SEC headquarters in Washington, June 24, 2011. REUTERS/Jonathan Ernst

The SEC filed the lawsuit in Boston federal court against the Nevada-based investment adviser and its principal, Louis Navellier, contending they defrauded existing and prospective clients from 2010 to 2013.

The lawsuit alleged that Navellier & Associates ignored red flags showing the investment strategies had not performed as advertised and instead re-branded the strategies as “Vireo AlphaSector” and continued to recommend them to clients.

The firm also distributed advertisements about Vireo AlphaSector that were materially false based on information originally obtained from the strategies’ model manager, the now-defunct F-Squared Investments Inc, the lawsuit said.

Navellier & Associates, which today has about $1 billion in assets under management, later came to understand the track record of F-Squared was fabricated, the lawsuit said.

Yet rather than informing its clients, the firm and Navellier arranged to sell the Vireo business line to F-Squared, “profiting handsomely while keeping the fraud hidden,” the lawsuit said.

Louis Navellier in an interview defended his disclosures. He said no investors were harmed and that he had significant defenses based on accounting methodologies and statute of limitations.

“We really look forward to our odds in district court,” he said.

F-Squared in 2014 agreed to pay $35 million to settle SEC charges that the Wellesley, Massachusetts-based investment adviser defrauded investors by making false performance advertising claims.

The SEC separately at that time charged Howard Present, F-Squared’s co-founder and former chief executive, with making false and misleading statements to investors. He has denied wrongdoing and is scheduled to face trial on Sept. 11.

The case is Securities and Exchange Commission v. Navellier & Associates, et al, U.S. District Court, District of Massachusetts, No. 17-cv-11633.