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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. 8382 / February 12, 2004

ADMINISTRATIVE PROCEEDING
File No. 3-11410


In the Matter of

WACHOVIA SECURITIES, LLC,

Respondent.


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

Wachovia Securities, LLC, f/k/a Wachovia Securities, Inc. ("Wachovia") has submitted a letter, dated January 8, 2004, 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 February 12, 2004, pursuant to Wachovia's 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 Section 8A of the Securities Act of 1933 and Sections 15(b)(4) and 21C of the Securities Exchange Act of 1934 (the "Order"). Under the Order, the Commission found that Wachovia willfully violated Sections 17(a)(2) of the Securities Act of 1933 (the "Securities Act") and Rule 10b-10 of the Securities Exchange Act of 1934 (the "Exchange Act").

The Order censures Wachovia and requires Wachovia (1) to cease and desist from committing or causing any violations and any future violations of Section 17(a)(2) of the Securities Act, and Rule 10b-10 under the Exchange Act; (2) within 10 days of the entry of this Order, to pay a civil money penalty in the amount of $2,422,232 to the United States Treasury; (3) to pay disgorgement and prejudgment interest, which obligation shall be satisfied by compliance with the customer refund program as set forth in the NASD's related order; and (4) not later than 6 months after the date of this order, unless otherwise extended by the staff of the Commission for good cause shown, have its chief executive officer certify in writing to the staff of the Commission that Wachovia has implemented procedures, and a system for applying such procedures, that can reasonably be expected to prevent and detect failures by Wachovia to provide appropriate breakpoint discounts for which customers are eligible on purchases of front-end load mutual funds, based on information reasonably ascertainable by Wachovia.

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 Wachovia'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/rules/final/33-8382.htm


Modified: 02/12/2004