June 27, 2006

Suzanne E. Rothwell, Esq.
Skadden, Arps, Slate, Meagher & Flom LLP
1440 New York Avenue, NW
Washington, DC 20005-2111

Dear Ms. Rothwell:

In your letter of June 26, 2006, on behalf of Welton Street Investments, LLC ("WSI"), you request assurance that the staff of the Division of Market Regulation ("Staff") will not recommend enforcement action to the Commission under Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act") against real estate brokerage firms, with which certain associated persons of WSI are also licensed ("WSI dual-registered persons"), if the real estate brokerage firms do not register with the Commission as broker-dealers under Section 15(b) of the Exchange Act in the circumstances described in your letter.

Based on the facts and representations set forth in your letter, the Staff will not recommend enforcement action to the Commission under Section 15(a) of the Exchange Act if the real estate brokerage firms engage in the activities you describe in your letter without the real estate brokerage firms registering under Section 15(b) of the Exchange Act. In taking this position, we note in particular (1) the limitations on the activities of the WSI dual-registered persons and the real estate brokerage firms, which are designed to ensure an identifiable separation between securities and non-securities real estate activities, and (2) the conditions on the Desk Fee Arrangements and Real Estate Performance Fee Arrangements (each as defined in your letter), which are designed to ensure that the securities activities of WSI dual-registered persons do not affect the amount of compensation received by the real estate brokerage firms. We also note that WSI will comply with applicable requirements of the Exchange Act, and the rules thereunder and self-regulatory rules, including the requirements to make and keep current certain books and records pursuant to Section 17(a) of the Exchange Act and the rules thereunder.

This Staff position is based on the facts presented and the representations you have made, and any different facts might require a different response. Furthermore, this response only expresses the Staff's position on enforcement action and does not purport to express any legal conclusions on the question presented. The Staff expresses no view with respect to any other questions that the proposed activities may raise, including the applicability of any other federal or state laws.

Incoming Letter:

The Incoming Letter is in Acrobat format.

http://www.sec.gov/divisions/marketreg/mr-noaction/weltonst062706.htm