UNITED STATES OF AMERICA
SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934
Release No. 61209A / January 19, 2010
Administrative Proceeding File No. 3-11578
In the Matter of
CIHC, INC., CONSECO SERVICES, LLC, AND CONSECO EQUITY SALES, INC.
AMENDED NOTICE OF PROPOSED PLAN OF DISTRIBUTION AND OPPORTUNITY FOR COMMENT
Notice is hereby given, pursuant to Rule 1103 of the Securities and Exchange Commission's ("Commission") Rules of Fair Fund and Disgorgement Plans, 17 C.F.R. § 201.1103, that the Division of Enforcement has submitted to the Commission a proposed plan for the distribution of the Fair Fund in this matter ("Distribution Plan").
On August 9, 2004, the Commission entered an Order instituting settled administrative and cease-and-desist proceedings against subsidiaries of public insurance company Conseco, Inc.: CIHC, Inc. ("CIHC"), Conseco Services, LLC ("Conseco Services"), and Conseco Equity Sales, Inc. ("CES") (together, "Respondents") in this matter ("Order"). In the Matter of CIHC, Inc., Conseco Services, LLC, and Conseco Equity Sales, Inc., Admin. Proc. File No. 3-11578, Securities Act of 1933 Release No. 8455 (Aug. 9, 2004). In the Order, the Commission authorized the establishment of a Fair Fund, comprised of $15,000,000 in disgorgement and penalties paid by Respondents, for distribution to investors affected by certain market timing trading through Conseco variable annuity products. The Order provided that the Fair Fund was to be distributed pursuant to a distribution plan developed by an Independent Distribution Consultant.
OPPORTUNITY FOR COMMENT
Pursuant to this Notice, all interested parties are advised that they may print a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov. Interested parties may also obtain a written copy of the Distribution Plan by submitting a written request to George S. Canellos, Regional Director, United States Securities and Exchange Commission, 3 World Financial Center, Room 400, New York, NY 10281. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, within 30 days of the date of this Notice:
- by sending a letter to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090;
- by using the Commission's Internet comment form (http://www.sec.gov/litigation.admin.shtml); or
- by sending an e-mail to firstname.lastname@example.org.
Comments submitted by email or via the Commission's website should include "Administrative Proceeding File Number 3-11578" in the subject line. Comments received will be available to the public. Persons should only submit information that they wish to make publicly available.
The Fair Fund is comprised of the $15,000,000 paid by CIHC, Conseco Services, and CES, plus accumulated interest, less any federal, state, or local taxes on the interest. The Distribution Plan provides for distribution of the Fair Fund to provide restitution for losses caused by Respondents' permitting market timing in Conseco variable annuities despite prospectus disclosures from December 1999 through October 2002. If the Distribution Plan is approved, any parties that were invested in such variable annuities and are not "Identified Market Timers" as defined in the Distribution Plan may receive restitution. The restitution amounts will be calculated from information in Respondents' records, and records obtained from third-parties. The Fair Fund is not being distributed according to a claims-made process.
For the Commission, by its Secretary, pursuant to delegated authority.
Elizabeth M. Murphy
See Also: Proposed Distribution Plan