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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. 8546 / March 2, 2005

SECURITIES EXCHANGE ACT OF 1934
Release No. 51298 / March 2, 2005

ADMINISTRATIVE PROCEEDING
File No. 3-11839


In the Matter of

CIBC MELLON TRUST COMPANY,

Respondent.

 



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ORDER UNDER SECTION 27A(b) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b) OF THE SECURITIES EXCHANGE ACT OF 1934, GRANTING WAIVERS OF THE DISQUALIFICATION PROVISIONS OF SECTION 27A(b)(1)(A)(ii) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b)(1)(A)(ii) OF THE SECURITIES EXCHANGE ACT OF 1934

Mellon Financial Corporation ("MFC") has submitted a letter, dated January 18, 2005, for a waiver of the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 ("Securities Act") and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 ("Exchange Act") arising from the settlement by CIBC Mellon Trust Company ("CIBC Mellon Trust"), a joint venture of MFC and the Canadian Imperial Bank of Commerce, of an injunctive proceeding in federal court and an administrative proceeding commenced by Commission.

On February 24, 2005, pursuant to CIBC Mellon Trust's Consent to Final Judgment, the United States District Court for the District of Columbia entered a Final Judgment permanently enjoining CIBC Mellon Trust from violating Section 5 of the Securities Act and Sections 10(b), 15(a) and 17A of the Exchange Act and Rule 10b-5 thereunder. The Final Judgment orders CIBC Mellon Trust to disgorge $889,773 in ill-gotten gains, plus prejudgment interest thereon, and to pay a civil monetary penalty of $5,000,000 pursuant to Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act.

In addition, on March 2, 2005, pursuant to CIBC Mellon Trust's Offer of Settlement, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant To Sections 15(b) and 17A(c) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions against CIBC Mellon Trust. Under the Order, the Commission found that CIBC Mellon Trust had been enjoined from future violations of Sections 15(a) and 17A of the Exchange Act by (1) acting as a broker-dealer by engaging in the business of effecting securities transactions for U.S. resident investors in connection with its administration of dividend reinvestment and stock purchase plans, employee stock purchase plans, employee stock option plans and odd-lot programs without being registered as a broker-dealer pursuant to Section 15(a) of the Exchange Act from 1998 through the present; and (2) acting as a transfer agent for securities registered under Section 12 of the Exchange Act [15 U.S.C. 78l] or which would be required to be registered under Section 12 of the Exchange Act except for the exemption from registration provided by subsections (g)(2)(B) or (g)(2)(G) of that section, from 1998 through 2004, without first registering with the Commission as a transfer agent as require by United States securities law. The Order censures CIBC Mellon Trust and requires it to undertake remedial measures designed to help prevent the recurrence of the conduct that gave rise to the federal court and administrative proceedings. Such measures include the retention of an independent consultant to review CIBC Mellon Trust's transfer agent business for companies with Section 12 registered securities and its broker-dealer business and to make recommendations of policies, procedures and practices to help ensure CIBC Mellon Trust's compliance with Section 5 of the Securities Act and Sections 15(a) and 17A of the Exchange Act, which CIBC Mellon must adopt or implement.

The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of the Exchange Act are not available for any forward looking statement that is "made with respect to the business or operations of an issuer, if the issuer . . . during the 3-year period preceding the date on which the statement was first made . . . has been made the subject of an . . . administrative decree or order arising out of a governmental action that (I) prohibits future violations of the antifraud provisions of the federal securities laws; (II) requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or (III) determines that the issuer violated the antifraud provisions of the securities laws[.]" Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications may be waived "to the extent otherwise specifically provided by rule, regulation, or order of the Commission." Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act.

Based on the representations set forth in MFC's request, the Commission has determined that, under the circumstances, the request for a waiver of the disqualifications resulting from the entry of the Order is appropriate and should be granted.

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and Section 27E(b) of the Exchange Act, that a waiver from the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act as to MFC resulting from the entry of the Order is hereby granted.

By the Commission.

Jonathan G. Katz
Secretary


http://www.sec.gov/litigation/admin/33-8546.htm


Modified: 03/03/2005