UNITED STATES OF AMERICA
|In the Matter of
BT Alex. Brown Incorporated,
|ORDER UNDER RULE 602(e) UNDER THE
SECURITIES ACT OF 1933, GRANTING
A WAIVER OF THE DISQUALIFICATION
PROVISION OF RULE 602(C)(3)
BT Alex. Brown Incorporated ("BT Alex. Brown") has submitted a letter, dated September 10, 1999, for a waiver of the disqualification from the exemption under Regulation E arising from BT Alex. Brown's settlement of an administrative proceeding commenced by the Commission. On November 17, 1999, pursuant to BT Alex. Brown's offer of settlement, the Commission issued an Order Instituting Administrative Proceedings, Making Findings of Fact, Instituting a Cease-and-Desist Order, and Imposing Remedial Sanctions (the "Order"). The Order censures BT Alex. Brown and requires BT Alex. Brown: (a) to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder; (b) to pay disgorgement of $603,996; and (c) to comply with its undertaking to pay $14,701,250 as follows: (1) $14,573,576 to the United States, which, together with the $603,996 in disgorgement described above, will total $15,177,572, such total amount being the Settlement Amount under an agreement simultaneously entered into among BT Alex. Brown, the Internal Revenue Service and the United States Attorney for the Southern District of New York related to the March Refunding and other refundings; and (2) $127,674 to certain issuers related to other refundings, as set forth in BT Alex. Brown's offer of settlement.
The Regulation E exemption is not available for the securities of an issuer if a director, officer, principal security holder, investment adviser or underwriter of the securities to be offered, or any partner, director or officer of such investment adviser or underwriter, is subject to a Commission order pursuant to Section 15(b) of the Exchange Act. See Rule 602(c)(3) under the Securities Act. The Commission may waive the disqualification upon a showing of good cause. See Rule 602(e).
Based on the representations set forth in BT Alex. Brown's request, the Commission has determined that a showing of good cause has been made pursuant to Rule 602(e) and that the request for a waiver of the disqualification should be granted. Accordingly,
IT IS ORDERED, pursuant to Rule 602(e) under the Securities Act, that a waiver from the application of the disqualification provision of Rule 602(c)(3) under the Securities Act resulting from the entry of the Order is hereby granted.
By the Commission.
Jonathan G. Katz
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