What business has an estimated one million clients, operates on the fringe of securities law and can say just about anything without immediate consequences?

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It is the investing-newsletter industry. And the public should approach newsletters with caution, even when they come with a celebrity endorsement.

Just ask followers of Suze Orman, the personal-finance icon. In March 2011, she and Mark Grimaldi, an investment manager in Wappingers Falls, N.Y., launched a monthly newsletter called The Money Navigator. Ms. Orman has since given away more than 50,000 trial subscriptions to the newsletter, which costs $63 a year and now reaches 65,887 subscribers. She and Mr. Grimaldi are 50-50 owners, according to Mr. Grimaldi and Ms. Orman's spokeswoman.

Mr. Grimaldi also manages a mutual fund called Sector Rotation, which has about $25 million in assets. His firm, Navigator Money Management, oversees a total of about $120 million in the fund and other accounts, according to its financial filings. That makes it a minnow in the money-management business.

The cover story in the December issue of the Money Navigator, adapted from a November 2011 article in the newspaper Investor's Business Daily, said "Sector Rotation produced an average annual return of 10.25% from August 31, 2002, to October 31, 2011, vs. 5.47% for the S&P 500 Index, according to Morningstar."

Yet the Sector Rotation fund wasn't launched until Dec. 31, 2009. The earlier return, Mr. Grimaldi says, was produced by the model portfolio of one of his other newsletters, not the Sector Rotation fund itself. Mr. Grimaldi says the newspaper misinterpreted the numbers he provided.

This week, after inquiries from The Wall Street Journal, Money Navigator told readers: "We apologize for not catching this error prior to publication."

According to Alexa Auerbach, a spokeswoman for Morningstar, the firm didn't produce any of the data attributed to it. An Investor's Business Daily editor said the paper has corrected the error.

Mistakes can matter. Robert Plaze, deputy director of the division of investment management at the Securities and Exchange Commission, declined to comment on questions specifically related to the Money Navigator newsletter. However, he said, "Generally speaking, the SEC does not regulate the publishers of financial newsletters, but they are subject to the antifraud provisions of the [Securities Act of 1933]."

Under those provisions, securities lawyers say, newsletter publishers must not make statements they know or reasonably should know are false or potentially misleading.

Mr. Grimaldi didn't respond to emails seeking comment on whether his newsletters' statements conform to securities-law provisions. Ms. Orman declined to address specific questions about the newsletter or Mr. Grimaldi's background. "Mark Grimaldi is my trusted partner in The Money Navigator," she said in an emailed statement. "He is ethical, honest and achieves stellar results that consistently outperform the market. I'm proud to be able to provide our newsletter to people who are looking for solid financial advice."

A table in the December issue of Money Navigator compares the performance of two of Mr. Grimaldi's portfolios to the Standard & Poor's 500-stock index since 2001. In 2009, according to the newsletter, the S&P 500 returned 19.79%; Mr. Grimaldi's capital appreciation portfolio beat that, gaining 24.58%.

According to S&P, however, the index returned 26.46% in 2009 meaning Mr. Grimaldi's portfolio trailed rather than beat the index. In nine of the 10 years cited, the newsletter understated the performance of the S&P 500. "I'm not perfect," Mr. Grimaldi says. "We don't claim to be."

This week, after inquiries from the Journal, the Money Navigator newsletter informed readers that the 2009 return for the S&P 500 was a "typographical error."

In a news release issued in March 2007, Mr. Grimaldi said one of his newsletters had "been ranked #1 by Hulbert Financial Digest" for the five years through 2006. Hulbert, a tracker of newsletter performance, is owned by MarketWatch, a division of Dow Jones & Co., publisher of the Journal as are several other newsletters that compete with Money Navigator. Mr. Grimaldi's other newsletters, although not the Money Navigator, have featured the claim "Ranked #1 & Recommended by Hulbert Financial Digest!"

Mark Hulbert, editor of the digest, says his publication "doesn't make recommendations" and that "no matter how I slice and dice the data, I cannot support [Mr. Grimaldi's] claim of being No. 1 for that five-year period." According to Mr. Hulbert, Mr. Grimaldi's highest rank from the digest over that period was 25th out of 110.

Mr. Grimaldi says he ranked No. 1 over that period: "I'll say that to my grave."

The December issue of the Money Navigator recommended that readers with 20 or more years to retirement put 15% of their money into Mr. Grimaldi's Sector Rotation Fund. It also recommended that readers with five to 20 years to retirement put 15% of their money into the fund.

The fund invests mainly in exchange-traded funds, or ETFs, and has outperformed 80% of its peers since inception, according to Morningstar. It charges a 1% management fee, most of which Mr. Grimaldi is waiving, he says.

The Money Navigator discloses that Mr. Grimaldi and his firm are paid to manage any readers' assets that go into the fund. The newsletter's recommended portfolios include funds from several firms other than Mr. Grimaldi's.

"Our readers want ETFs," Mr. Grimaldi says, "and I couldn't find another fund that invests in them that I like as much, not even close. If people object, they don't have to invest in the fund or buy the newsletter."

Thanks to Ms. Orman, many people don't have to buy the $63-per-year newsletter; they get it for free.

"There's millions of people out there who would benefit from this newsletter," Mr. Grimaldi says. "Suze and I are just trying to get some good advice out to them."

—intelligentinvestor@wsj.com; twitter.com/jasonzweigwsj