(Bloomberg) — F-Squared Investments Inc., a manager of investment products using exchange-traded funds that last year admitted to misleading investors about its performance, has eliminated about 25 percent of its staff, according to a person with knowledge of the matter.

The Wellesley, Massachusetts-based firm, which oversaw more than $24 billion at the end of last year, dismissed about 40 of its 161 employees, the person said, who asked not to be identified because the information is private. The firm has pared back as it adjusts to slower growth, said the person.

F-Squared in December agreed to pay $35 million to settle a lawsuit brought by the U.S. Securities and Exchange Commission, alleging that the firm falsely advertised the seven-year performance of its flagship offering. The firm made changes to its leadership last year by appointing Laura Dagan as chief executive officer to replace Howard Present, who was separately charged by the SEC for misleading investors.