H. D. Vest Investment Securities, Inc. (Order Granting Waiver Under the Securities Act of 1933)

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

Securities Act of 1933
Release No. 8385 / February 12, 2004

Administrative Proceeding
File No. 3-11413

 
In the Matter of
 
H. D. VEST INVESTMENT
SECURITIES, INC.
 
     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)

H. D. Vest Investment Securities, Inc. ("Vest") has submitted a letter, dated January 16, 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 Vest'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 as to H. D. Vest Investment Securities, Inc. (the "Order"). In the Order, the Commission found that Vest willfully violated Section 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 also: (a) censured Vest; (b) required Vest to pay a civil penalty in the amount of $1,054,420 to the United States Treasury; (c) required Vest to pay disgorgement and prejudgment interest thereon, which obligation shall be satisfied by compliance with the customer refund program summarized in the Order; (d) required Vest to offer certain customers that bought Class B mutual fund shares in amounts of $100,000 or more, the opportunity to convert their B share investment to A shares; (e) required Vest to retain an Independent Consultant to conduct a review of, and make recommendations concerning Vest's Class B share policies and procedures; and (f) required Vest's chief executive officer to certify in writing to the Commission staff not later than 6 months after the date of the Order that Vest has: (1) implemented procedures, and a system for applying such procedures, that can reasonably be expected to prevent and detect failures by Vest to provide appropriate breakpoint discounts for which customers are eligible on purchases of front-end load mutual funds, based on information reasonably ascertainable by Vest, and (2) taken all necessary and appropriate steps to adopt and implement all recommendations and proposals of the Independent Consultant.

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 Vest'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