Opinion ID: 4182911
Heading Depth: 4
Heading Rank: 2

Heading: Scienter as to the Spring 2011 Ads

Text: Substantial evidence also supported the Commission’s finding of scienter for ZPRIM’s false claims of GIPS compliance in the ads published in spring 2011. After the 2008 ads were published, the SEC notified ZPRIM that its ads falsely claimed compliance with GIPS and might violate the Advisers Act. With this 22 Case: 16-15322 Date Filed: 06/30/2017 Page: 23 of 32 letter, the SEC expressly put Mr. Zavanelli on notice that he needed to change the information on ZPRIM’s ads to meet the GIPS advertising guidelines. In response, ZPRIM made clear it understood what was required of it. The firm told the SEC it would take “[c]orrective action[]” by “chang[ing] our ads” to include the investment returns required by GIPS. Yet despite ZPRIM’s assurances, the firm published its 2011 ads without the GIPS-required information. Mr. Zavanelli concedes this omission made the claim of GIPS compliance “untrue,” and also concedes he conceived of and approved the spring 2011 round of “untrue” ads. This establishes that he acted with scienter. See Carriba Air, 681 F.2d at 1324.