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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19458 / November 4, 2005

SECURITIES AND EXCHANGE COMMISSION V. NATIONAL PRESTO INDUSTRIES, INC., Civil Action No. 02 C 5027 (N.D. Ill. July 26, 2002)

The Securities and Exchange Commission (the "Commission") announced that on October 31, 2005, the Honorable Charles R. Norgle of the United States District Court for the Northern District of Illinois granted the Commission's motion for summary judgment against National Presto Industries, Inc. ("National Presto") located in Eau Claire, Wisconsin. The Commission's first amended complaint (the "complaint") alleged that since at least 1994, Presto has been operating as an unregistered investment company in violation of Section 7(a) of the Investment Company Act of 1940 (the "Investment Company Act"). The complaint sought an order requiring National Presto to either register with the Commission as an investment company or in the alternative, to restructure its securities holdings or take such other steps such that National Presto shall come into compliance with the Investment Company Act. The complaint also sought an order of permanent injunction enjoining National Presto from offering, selling or purchasing securities or engaging in any business in interstate commerce while in violation of Section 7 of the Investment Company Act.

Judge Norgle granted the Commission's motion for summary judgment and denied National Presto's cross motion for summary judgment. Judge Norgle ruled that National Presto was an investment company within the meaning of Section 3(a)(1)(C) of the Investment Company Act and that no statutory exemption applied to National Presto. Judge Norgle found that investment securities as a percentage of National Presto's total assets ranged from approximately 61% to 92% during the relevant time period and that National Presto was not primarily engaged in a business other than investing. Accordingly, National Presto was an investment company during the relevant time period and should have been registered with the Commission as an investment company and complied with the provisions of the Investment Company Act. Judge Norgle directed the Commission to submit a proposed Order requiring National Presto to comply with Section 7 of the Investment Company Act and a proposed Order of Permanent Injunction by November 30, 2005.


http://www.sec.gov/litigation/litreleases/lr19458.htm


Modified: 11/4/2005