SEC Charges Trust Company with Operating Unregistered Investment Companies and with Failing to Register Securities Offerings

ADMINISTRATIVE PROCEEDING
File No. 3-20113

September 30, 2020 - The Securities and Exchange Commission today announced settled charges against Great Plains Trust Company, Inc., a Kansas-based chartered trust company, for operating unregistered investment companies and for offering and selling unregistered securities.

According to the SEC's order, Great Plains began selling investment interests in its trust funds in 1994 and, by the end of 2018, held over $480 million in eighteen regular and retirement trust funds. As set forth in the order, Great Plains failed to register the trust funds as investment companies and failed to register the securities of the trust funds. The SEC's order found that the funds did not qualify for registration exemptions available under certain circumstances for funds held by banks, primarily because Great Plains did not exercise substantial investment authority over the funds and, with respect to the non-retirement funds, because the funds were advertised to the general public and were not used solely as an aid to the administration of trust accounts maintained for a fiduciary purpose.

The SEC's order finds that Great Plains violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act and caused the trust funds to violate the registration provisions of Section 7(a) of the Investment Company Act. Without admitting or denying the findings, Great Plains agreed to a cease-and-desist order and to pay a penalty of $300,000, which will be distributed to harmed investors.

The SEC's investigation was conducted by John H. Mulhern and Kimberly L. Frederick of the Asset Management Unit in the Denver Regional Office, with assistance from Susan Day, Stephanie Fischer Bennett, Tim Worthington, Lisa Byington, Craig Ellis, and Nick Madsen of the Denver Regional Office.

For inquiries concerning the exclusions in Section 3(c)(3) or 3(c)(11) of the Investment Company Act of 1940, please contact the Division of Investment Management's Chief Counsel's Office by telephone at (202) 551-6825 or by e-mail at IMOCC@sec.gov.