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U.S. Securities and Exchange Commission

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 7984 / June 11, 2001


In the Matter of

Legg Mason Wood Walker, Incorporated
Thomas M. Daly, Jr., and
Joseph A. Sullivan,

Respondents


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ORDER UNDER RULE 602(e) UNDER THE
SECURITIES ACT OF 1933, GRANTING
A WAIVER OF THE DISQUALIFICATION
PROVISION OF RULE 602(c)(3)

Legg Mason Wood Walker, Inc. ("Legg Mason"), Thomas M. Daly, Jr. and Joseph A. Sullivan have submitted a letter, dated November 9, 2000, for a waiver of the disqualification from the exemption under Regulation E arising from Legg Mason, Daly and Sullivan's settlement of an administrative proceeding commenced by the Commission. On June 11 , 2001, pursuant to Legg Mason's, Daly's and Sullivan's offers of settlement, the Commission issued an Order Making Findings, Imposing Remedial Sanctions, and Cease-and-Desist Order ("Order"). The Order censures Legg Mason; orders it to cease and desist from committing or causing any violations and any future violations of MSRB Rules G-27(b), (c)(i), (c)(iv), (c)(v), (e) and G-36(b)(i) and (ii), as well as of Rule G-27(a) as it relates to Rule G-36; and requires Legg Mason: (a) to pay a civil money penalty in the amount of $50,000 to the United States Treasury and (b) to comply with its undertaking to retain, at Legg Mason's expense, an independent consultant, not unacceptable to the Commission's staff who shall, among other things, conduct a comprehensive review of Legg Mason's policies, procedures and practices relating to the prevention or detection of the types of improper conduct as set forth in the Order. The Order censures Daly and Sullivan; orders Daly and Sullivan to cease and desist from committing or causing violations and any future violations of MSRB Rules G-36(b)(i) and (ii), as well as of Rule G-27(a) as it relates to Rule G-36; and requires Daly and Sullivan to each pay a civil money penalty of $10,000 to the United States Treasury.

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 Legg Mason, Daly and Sullivan'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
Secretary

http://www.sec.gov/litigation/admin/33-7984.htm


Modified: 06/12/2001