The trustees overseeing two exchange-traded funds (ETFs) managed by startup asset management firm Azoria Capital LLC have voted to liquidate and terminate both funds, according to a filing with the U.S. Securities and Exchange Commission (SEC) late Wednesday.
The ETFs — the Azoria 500 Meritocracy ETF (SPXM.Z) and the Azoria Tesla Convexity ETF (TSLV.Z) — will be wound down following the trustees’ unanimous decision, which the board said was made after “considering all relevant information, including without limitation recent litigation involving a principal of Azoria.”
Market analysts have described the language in the SEC filing as “highly unusual,” suggesting that the decision may reflect deeper concerns about the company’s leadership or legal exposure.
Unprecedented Liquidation Decision Raises Industry Eyebrows
ETF liquidations typically occur for reasons such as low trading volume, insufficient assets, or lack of investor demand. However, this case stands out because of the explicit reference to ongoing litigation involving James Fishback, Azoria’s founder and managing principal.
“This almost never happens,” said Jeffrey Ptak, a senior analyst at Morningstar. “ETF liquidation notices are usually routine and formulaic. The language in this one clearly signals exceptional circumstances.”
The Azoria 500 Meritocracy ETF, which launched in June 2025, had accumulated approximately $35 million in assets, while the Tesla Convexity ETF, launched just weeks ago in late September, managed around $6 million. Both funds were small but had attracted media attention for their unconventional strategies and political positioning.
Founder James Fishback Responds: “This Comes Down to Politics”
Azoria Capital’s founder James Fishback has been vocal in defending his firm’s operations and disputing the trustees’ rationale. Fishback, who has been involved in multiple legal disputes — including with his former employer, Greenlight Capital LLC, and a lawsuit against the Federal Open Market Committee (FOMC) seeking transparency on interest rate policy meetings — insists that these issues should not impact his eligibility to manage ETFs.
“This comes down to an issue of politics,” Fishback said in an interview. He accused the trustees of being influenced by his political beliefs, particularly his opposition to diversity, equity, and inclusion (DEI) initiatives and his criticism of H-1B visa programs used by U.S. corporations.
Fishback maintains that none of his legal entanglements disqualify him from managing investor assets or fulfilling his fiduciary duties as an ETF sponsor.
Trustees Remain Silent as Industry Speculates on Motives
Reuters was unable to reach several trustees whose identities were confirmed for comment. Their silence has fueled speculation about whether the decision stemmed from legal risk management, reputational concerns, or political disagreement.
ETF governance experts note that trustees of pooled investment vehicles like the Tidal Trust III — under which the Azoria funds were launched — have broad discretion to liquidate funds they believe may pose regulatory or ethical risks. However, citing “litigation involving a principal” in an SEC filing remains virtually unprecedented.
Tidal Financial Group Distances Itself from the Decision
The two Azoria ETFs were launched through Tidal Financial Group, a white-label ETF platform that provides infrastructure, compliance, and trustee services for emerging fund managers. Tidal’s co-founder and Chief Investment Officer, Michael Venuto, said he was unaware of the precise reasons for the board’s decision.
“Tidal continues to support a number of other products with similar political or thematic positioning,” Venuto said, citing the God Bless America ETF (YALL.P) as an example.
Venuto added that while Tidal offers back-office and operational services to ETF issuers, it does not intervene in the independent trustees’ governance decisions.
What Led to the Liquidation: Legal and Political Context
The Azoria 500 Meritocracy ETF aimed to track companies based on principles of performance-driven management rather than DEI-related metrics, while the Tesla Convexity ETF sought to capture amplified returns from Tesla stock movements using a complex options-based structure.
Industry insiders suggest that both funds’ political branding and high-risk trading mechanisms drew regulatory scrutiny. Combined with Fishback’s legal disputes and the short time frame between fund launches and liquidation, the decision highlights how startup ETF managers face steep reputational hurdles in a competitive and compliance-driven industry.
Some analysts speculate that the litigation surrounding Fishback — particularly the lawsuit against the Federal Reserve — may have unnerved trustees concerned about potential conflicts or public perception.
ETF Industry Reaction: “A Cautionary Tale for New Issuers”
The swift shuttering of Azoria’s funds underscores the risks for new ETF sponsors in a market where regulatory transparency and trustee oversight are paramount.
“This case is a reminder that in the ETF space, governance matters as much as investment strategy,” said one fund attorney familiar with ETF board procedures. “Even a hint of controversy can lead trustees to act preemptively to protect investor interests and the trust’s reputation.”
Despite the setback, Azoria’s founder has expressed intentions to relaunch similar products through alternative channels, claiming he remains committed to “ideologically independent investing.”
Industry Implications and Investor Takeaways
The Azoria case comes at a time when the ETF industry is undergoing record expansion, with over 794 new ETFs launched in 2025 alone. The liquidation of such recently established funds raises broader questions about governance, due diligence, and political neutrality in fund management.
As the ETF marketplace becomes increasingly crowded and ideologically diverse, analysts expect regulators and trustees to tighten vetting processes for fund sponsors — especially those with controversial leadership backgrounds or legal complexities.
Key Facts:
- Two Azoria Capital ETFs — Meritocracy (SPXM.Z) and Tesla Convexity (TSLV.Z) — to be liquidated.
- Decision followed trustee review citing ongoing litigation involving founder James Fishback.
- Combined assets under management: $41 million.
- ETFs launched under Tidal Trust III, managed via Tidal Financial Group.
- Founder claims decision motivated by political bias, denies wrongdoing.
- Industry analysts call it a rare and cautionary precedent in ETF governance.
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