September 23, 1992
TO: INVESTMENT ADVISER MEMBERS NO. 42-92
INVESTMENT ADVISER ASSOCIATE MEMBERS NO. 34-92
COMPLIANCE COMMITTEE NO. 13-92
SEC RULES MEMBERS NO. 40-92
RE: SEC SANCTIONS INVESTMENT ADVISER HOLDING COMPANY FOR
SECTION 13 (d) VIOLATIONS
__________________________________________________________
The Securities and Exchange Commission recently sanctioned
an investment adviser holding company in connection with its
failure to make timely filings of statements on Schedule 13D.
The SEC found that the holding company had beneficial ownership,
for reporting purposes under Section 13(d) of the Securities
Exchange Act, of the securities over which its investment adviser
subsidiaries had voting or dispositive power.
In 1983, the SEC had ordered a predecessor of one of the
advisory subsidiaries to comply (and cause its subsidiaries and
clients to comply) with Section 13(d) and to adopt procedures
reasonably designed to ensure that its clients and subsidiaries
would comply with Section 13(d). The SEC found that since the
entry of the 1983 order, the holding company and the subsidiary
subject to the order had filed approximately 120 statements on
Schedule 13D, approximately half of which had not been timely
filed. The SEC found that the holding company had violated
Section 13(d) and Rules 13d-1 and 13d-2 thereunder, and had
failed to cause its subsidiary to comply with the 1983 order.
The holding company, without admitting or denying the
allegations, consented to (1) a cease-and-desist order, (2) an
order that it adopt procedures reasonably designed to ensure that
it and its subsidiaries comply with Section 13(d) and Rules
13d-1 and 13d-2, and (3) a penalty of $175,000 with respect to
those violations deemed to have occurred after the effective date
of the Securities Enforcement Remedies and Penny Stock Reform Act
of 1990.
A copy of the SEC’s order is attached.
Thomas M. Selman
Assistant Counsel
Attachment