SECURITIES AND EXCHANGE COMMISSION
SECURITIES ACT OF 1933
SECURITIES EXCHANGE ACT OF 1934
INVESTMENT ADVISERS ACT OF 1940
INVESTMENT COMPANY ACT OF 1940
Admin. Proc. File No. 3-9218
In their opening brief, World Money Managers ("WMM") and Terence Michael Coxon request that they be afforded an opportunity to submit a delayed claim of inability to pay disgorgement, prejudgment interest, and civil penalties. WMM and Coxon assert that their brief demonstrates that these amounts "should be significantly reduced or eliminated outright." They therefore ask that their submission of a claim of inability to pay under Rule of Practice 630(b) 1 be delayed until the Commission resolves the "foundational issues" with respect to these sanctions. The Division did not respond to WMM and Coxon´s request. 2
Rule of Practice 410(c) 3 requires that any "person who files a petition for review of an initial decision that asserts inability to pay either disgorgement, interest or a penalty shall file with its opening brief a sworn financial disclosure statement containing the information specified in Rule [of Practice] 630(b)." Rule 410(c) is mandatory. We have previously stated, "Where a respondent raises the issue of inability to pay but fails to adduce at the earliest available opportunity material evidence of his then-current financial position," the submission may be rejected, absent a showing that there were reasonable grounds for failure to adduce the evidence earlier and that the information is material. 4
The filing of the disclosure statement with the brief permits the Commission to consider all the issues raised at one time, rather than piecemeal. Parties often assert in administrative proceedings that the assessments of disgorgement, prejudgment interest, and civil penalties are improper. We do not believe that the pendency of those issues excuses compliance with Rule 410(c). We therefore conclude that WMM and Coxon should file any appropriate evidence of inability to pay within twenty days of the date of this order. Absent such a filing, we will deem Coxon´s and WMM´s arguments that they are unable to pay to be waived, unless they are subsequently able to demonstrate truly extraordinary circumstances for their delay.
On January 21, 2000, the United States Court of Appeals for the District of Columbia Circuit issued its opinion in Proffitt v. FDIC, No. 98-1534. In Proffitt, the Federal Deposit Insurance Corporation, in a proceeding initiated in 1996, barred Proffitt from the banking industry for misconduct occurring in 1989. The court concluded that the FDIC´s bar was a penalty within the meaning of 28 U.S.C. § 2462 and amplified the court´s discussion in Johnson v. SEC, 87 F.3d 484 (D.C. Cir. 1996). Because both parties discuss Johnson in their briefs to us, the parties are invited to file a brief, not to exceed ten pages, that discusses whether and, if so, how, the Proffitt decision is relevant to our consideration of this matter.
It is ORDERED that World Money Managers and Terence Michael Coxon shall have until March 22, 2000, in which to adduce, if they wish, evidence of their inability to pay disgorgement, prejudgment interest, and civil penalties; and it is further
ORDERED that any party to this proceeding may file a brief in accordance with this order no later than March 22, 2000.
By the Commission.
Jonathan G. Katz