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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. 8278 / September 4, 2003

Administrative Proceeding
File No. 3-11240


In the Matter of

Goldman, Sachs & Co.,

Respondent.


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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)

Goldman, Sachs & Co. ("Goldman Sachs") has submitted a letter, dated July 2, 2003, for a waiver of the disqualification from the exemption under Regulation E arising from its settlement of an administrative proceeding commenced by the Commission. On September 4, 2003, pursuant to Goldman Sachs' offer of settlement, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b)(4), 15C(c)(1)(A) and 21C of the Securities Exchange Act of 1934 (the "Order") against Goldman Sachs. Under the Order, the Commission found that Goldman Sachs willfully violated Sections 15(c)(1)(A), 15(c)(1)(C) and 15(f) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 15c1-2 thereunder.

The Order censures Goldman Sachs and requires: (1) it to cease and desist from committing or causing any violations and any future violations of Sections 15(c)(1)(A), 15(c)(1)(C) and 15(f) of the Exchange Act and Rule 15c1-2 promulgated thereunder; (2) it to pay disgorgement and prejudgment interest in the amount of $1,742,642; (3) it to pay a money penalty in the amount of $5,000,000; and (4) that within ninety (90) days of the entry of the Order i) Goldman Sachs' Legal Department shall complete a comprehensive review, including recommendations, of the policies, procedures and practices maintained and implemented by the Respondent pursuant to Section 15(f) of the Exchange Act that relate to the findings of the Order; ii) Goldman Sachs shall adopt, implement and maintain policies, procedures and practices pursuant to Section 15(f) of the Exchange Act that are consistent with the findings of the Order and the recommendations contained in the comprehensive review; and iii) Goldman Sachs shall submit a report, approved by and signed by Goldman Sachs' Legal Department, to the staff of the Commission detailing the results of the review by the Legal Department and the new policies, procedures and practices adopted pursuant to Section 15(f) of the Exchange Act. Goldman Sachs also undertakes to pay disgorgement and prejudgment interest in the amount of $2,562,740.

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 Goldman Sachs' 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/33-8278.htm


Modified: 09/04/2003