Odd, the third result returned on my search for Champion Oppenheimer turned up this SEC summary of the settlement and what the issues were:
https://www.sec.gov/news/press-release/2012-2012-110htm
Just skimming, it sounds like Oppenheimer made material, misleading statements (aka "lies") about what it was doing. That's not the impression I get about ARKK. Woods is saying she expects annualized yields averaging 40% over the next five years and has explained why. That would seem to be considered "puffing", rather than, um, "misleading".
We have at least one poster here who appears to feel this is reasonably possible even it it doesn't pan out: "I guess we'll know in 5 years." There may be a fine line between good salesmanship and illegal deception, but so long as Woods invests according to her statements and the ETFs' prospectuses, I don't think she's crossed that line.
From the SEC release:

"Mutual fund providers have an obligation to clearly and accurately convey the strategies and risks of the products they sell,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Candor, not wishful thinking, should drive communications with investors, particularly during times of market stress.”

https://www.nationandstate.com/2022/01/10/arkks-investors-have-in-aggregate-lost-money/
Excerpt from above: “Morningstar doesn’t help. Even now, with a lifetime negative P&L, ARKK has four stars and is the #1 ranked fund over five years. Morningstar’s rankings are all based on quantitative data, presumably to eliminate any analyst judgment. But you might think that the trajectory of ARKK’s cumulative profits would be worth considering. It’s hard to identify much useful for investors here, although Morningstar rankings do drive fund flows which generally benefits managers.”
What I’m wondering about is litigation? This is beginning to approach or exceed the disaster of Oppenheimer’s Champion Income Fund in 2008. There was successful litigation against Oppenheimer Funds following that fiasco. An internet search turned up nothing. If Wood has made positive public pronouncements unwittingly, however, it could strengthen a case.

David has two reviews of BIVRX:
https://www.mutualfundobserver.com/2019/05/balter-invenomic-bivrx-bivix-bivsx/
https://www.mutualfundobserver.com/2019/10/invenomic-fund-bivrx-bivix-bivsx/
I own BIVRX.

Here is the Zweig article: https://google.com/amp/s/www.wsj.com/amp/articles/cathie-wood-ark-innovation-performance-11642175833
Even if such big gains are possible, many investors may not be able to stomach this kind of volatility and could time their purchases and sales as poorly in the future as they already did in the past.

+1
I bailed from DKNG in November at above $40. So that one has fallen over 50% in 2 months.
(Currently $19.46 (the year of my birth - spooky)!

Ouch. There oughta be a law … False advertising …
Not exactly defensive holdings. Top 10 include: Amazon, Apple, Microsoft, Twitter. And Lipper gives it a low beta of .34 - Go figure.
In terms of hedging / defense, at some point I’ll probably move from TAIL (which I reduced yesterday) into less risky DRSK. Tough year for hedging. As I noted in one post, my equity & balanced funds outperformed my alternatives during the first week - highly unusual. One of the alts, TMSRX, has turned around the past two or three days (not a very long period I realize). I’d be slow to give up on any fund at this point. Strange year.
Thanks for sharing.

I agree with @wxman123 to the extent than the early investors in ARKK did very well. Wonder how many piled in a year ago, however?

I believe WSJ’s Zweig did a story on this and as is often the case most people get into speculative funds after the initial surge and then lose money. Surely, this is not the first speculative investment fund to lose a lot so it doesn’t deserve that criticism. However, one difference here is the manager publicly boasting the portfolio is set to deliver 40% annualized over the next five years even as investors were already hurting this December 9. Since that date, I believe the fund is down another 25%. So anyone who listened just lost a quarter of their investment in a few weeks. It is those shareholders I feel for and the reason for the initial link. Performance chasing should be discouraged and encouraging unrealistic future performance expectations—40% a year for five years is unrealistic—deserves some response.

I have fiddled around with L?S funds off and on for years, but never had much success. I usually sell them if they loose 10 to 15%
LSOFX did pretty well last year and is more consistent
David reviewed LSOFX a couple of years ago
https://www.mutualfundobserver.com/2018/07/ls-opportunity-fund-lsofx/#more-11890

Note that the puts protection ( in SPD) would be minimal until there's a selloff of at least 30 or 40%"
Note that it appears there would have been 6 such triggers since 1956. I don't think that's particularly valuable protection unless somehow the convexity makes it such that after the rare, massive decline you end up in the green, which I doubt, but even if it were so wouldn't it be possible to front run and dilute such a strategy, e.g. dump money into the ETF before the puts are triggered?

noteSimplify could do a much better job of detailing how their various ETFs are designed to work.
The article I quoted above is here
https://www.barrons.com/articles/option-etfs-51630661401?mod=md_funds_news
But weirdly, the current online version differs from the paper copy I have in that the following is not in online version
" Note that the puts protection ( in SPD) would be minimal until there's a selloff of at least 30 or 40%"
Article also discusses Buffered ETFs of which there are dozens, but it gets complicated.

SFHYX looks interesting - but expenses are a whopping 2.9%
The cheaper share class (1.75% expenses) is HFSYX but (at least at Schwab, Fidelity and TDAmeritrade) the minimum investment is $1m., even in an IRA.

@wxman123, point taken, agreed, piling on is accurate and might be poor form on my part.
However, I believe I have been consistent in my views re this specific investment, ARKK etc.
We'll see how it works out, you might be right, who knows?
Best Regards,
Baseball Fan

1/21/22 Episode:

The madness of crowds …
I’m tip-toeing into DKNG (one of Wood’s gems) at below $20. Here’s one that was $75 10 months ago. Small amount. Long term hold at this price. Daily price swings of 5-8% in either direction are common. (I’ve traded in and out in the past.) Have used their app for a year. Like it. Cannot find any material change in the health or prospects of the company. Highly speculative of course.
It’s sad that many have lost their shirts on ARKK. Am not familiar with Wood’s other holdings except for the one I own. Tesla builds a fine car. Musk’s a genius. I get it. But companies exist on cash flow and have intrinsic value. That appears to have been lost in the minds of many. Something I don’t hear a lot about in the press is that most of these companies have piles of debt. With rates going up, that’s an added strain.
I agree with @wxman123 to the extent than the early investors in ARKK did very well. Wonder how many piled in a year ago, however?
PS - I wouldn’t rule out buying in myself at some future point. But, got too many irons in the fire right now as is … :)

SPD is 98% equity and 2% deep OTM puts. It is designed to protect against deep drawdowns which the current one is nowhere close to. From latest peak, SPY is down around 9% which is a garden variety type correction that based on the last several decades of data on average occurs around every 18 mos.
SPD may indeed fail in practice to do what it is designed for but thus far it has not failed. I encourage you to read about Mark Spitznagel and Universa because SPD is designed along the same principles.

I understand the concept but can't find how this would work in practice, say a 2008-2009 drawdown. If you know a good resource please share. Thanks.

SPD is 98% equity and 2% deep OTM puts. It is designed to protect against deep drawdowns which the current one is nowhere close to. From latest peak, SPY is down around 9% which is a garden variety type correction that based on the last several decades of data on average occurs around every 18 mos.
SPD may indeed fail in practice to do what it is designed for but thus far it has not failed. I encourage you to read about Mark Spitznagel and Universa because SPD is designed along the same principles.
SPD is not like SH or SDS which are straight daily inverses of SPY.

This piling on is so unfair. The market is just in liquidation mode for high flyers, was inevitable but that doesn't mean this is dot.com 2.0 (it isn't IMO). Those who held ARKK since inception have still averaged 25% CAGR versus 14% for VTI. What, did folks who gained 157% in 2020 think there would be no extreme volatility? Buy more, I am (but not with what I'm looking to retire on, one never knows........)

is it not comforting to have a position in
VWINX Wellsley Income
gain less in upturns which is an acceptable tradeoff to lose less in downturns
and SLEEP BETTER at night in the latter.

I could not agree more! While I like (and hold) JHEQX/JHQAX it is down 4% YTD versus 1.76% VWINX (and that's with a horrible bond market!) . As to the others, well, I hold a slice of SVARX and consider it and SFHYX the type of fund that could easily be good until it isn't (See REMIX). I could never put serious money into such funds, but I can and do with VWINX/VWIAX and sleep like a baby.

Comparing GBMFX with VTI since 2013 shows that 10K invested in VTI would now be worth over $40K and GBMFX just under $14K. A CD would have been a better choice. There is an opportunity cost to sitting out of a strong market even considering the inevitable corrections that will happen along the way. In the end, as has been said, you are what your record says you are. GMO stinks, and that will be true even if they guess right this time, finally.

There were two different issues:
1. Frequent trading - the funds, in violation of their prospectus, allowed only certain investors to trade frequently. That's different from your example, where everyone has the ability to trade the same way. You don't have any special advantage here, unlike the funds' privileged clients.
Some funds, like ProFunds, are explicitly promoted for use by market timers. Most claim to restrict frequent trading; several lied about that and committed fraud.
https://www.profunds.com/trading_information/trading_policies.html
2. Late trading - selling not at 3:59PM but at 6:00PM, based on after close information. Illegal generally. Several fund families nevertheless permitted certain clients to trade after market close. Again, this is different from the example you gave.
https://en-academic.com/dic.nsf/enwiki/11781657