January 31, 1990
TO: SEC RULES MEMBERS NO. 9-90
INVESTMENT ADVISER MEMBERS NO. 6-90
RE: SEC CENSURES ADVISER IN CONNECTION WITH FUND REFERRALS
__________________________________________________________
In an administrative order issued January 22, the SEC
announced findings that a registered adviser willfully violated
Section 17(e)(l) of the Investment Company Act by receiving
compensation, in the form of client referrals, for the purchase
or sale of property to or for funds for which it served as
investment adviser. Specifically, the SEC charged that the
adviser established an allocation procedure that identified and
recommended that brokerage commissions be directed to certain
broker-dealers in recognition of client referrals.
Without admitting or denying the SEC's findings, the
adviser agreed to establish, maintain and monitor procedures
designed to prevent similar conflicts of interest.
A copy of the SEC order is attached.
Craig S. Tyle
Associate General Counsel
Attachment