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U.S. Securities and Exchange Commission

SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 8318 / October 31, 2003

SECURITIES EXCHANGE ACT OF 1934
Release No. 48723 / October 31, 2003


In the Matter of

Merrill Lynch, Pierce,Fenner & Smith Incorporated

Respondent.



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CORRECTED 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 AND SECTION 21E(b)(1)(A)(ii) OF THE EXCHANGE ACT

Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch") has submitted a letter on behalf of itself and its affiliates, dated April 7, 2003, requesting 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 of a civil injunctive proceeding with the Commission. On April 28, 2003, the Commission filed a civil injunctive complaint against Merrill Lynch in the United States District Court for the Southern District of New York alleging that Merrill Lynch violated Section 15(c)(1) of the Exchange Act, Rule 15c1-2 thereunder, Section 15(c)(2) of the Exchange Act, NASD Inc. ("NASD") Conduct Rules 2110, 2210(d)(1), 2210(d)(2), and 3010, and New York Stock Exchange ("NYSE") Rules 342, 401, 472, and 476(a)(6).

Merrill Lynch filed a "Consent of Merrill Lynch, Pierce, Fenner & Smith Incorporated" in which it agreed, without admitting or denying the allegations of the Commission's complaint, to the entry of a Final Judgment against it. Among other things, the Final Judgment permanently enjoins Merrill Lynch from violating Section 15(c)(1) of the Exchange Act, Rule 15c1-2 thereunder, Section 15(c)(2) of the Exchange Act, NASD Conduct Rules 2110, 2210, and 3010, and NYSE Rules 342, 401, 472, and 476, orders Merrill Lynch to pay $100,000,000 in penalties and interest, and requires Merrill Lynch to comply with certain undertakings.

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 the 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 a judicial or administrative decree or order arising out of a governmental action that (I) prohibits future violations of the antifraud provisions of the 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; 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; Section 21E(b) of the Exchange Act.

Based on the representations set forth in Merrill Lynch's April 7, 2003 request, the Commission has determined that, under the circumstances, the request for a waiver of the disqualifications resulting from the entry of the Final Judgment is appropriate and should be granted.

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and Section 21E(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 Merrill Lynch and its affiliates resulting from the entry of the Final Judgment is hereby granted.

By the Commission.

Jonathan G. Katz
Secretary

 

http://www.sec.gov/rules/other/33-8318.htm


Modified: 09/03/2004