IG Holding, Inc.

Securities Exchange Act of 1934
Release No. 41759 / August 19, 1999

Administrative Proceeding
File No. 3-9980

I.

The Commission deems it appropriate that proceedings be, and hereby are, instituted pursuant to Section 21C of the Securities Exchange Act of 1934 ("Exchange Act") against IG Holdings, Inc. ("IG Holdings").

II.

In anticipation of the institution of these administrative proceedings, IG Holdings has submitted an Offer of Settle-ment that the Commission has determined to accept. Solely for the purposes of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and prior to a hearing and without admitting or denying the findings set forth herein, IG Holdings consents to the entry of this Order Instituting Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order ("Order"). The Commission has determined that it is appropriate to accept the Offer of Settlement from IG Holdings, and accordingly is issuing this Order.

III.

FACTS

Based on the foregoing, the Commission finds that:

A. Respondent

IG Holdings, Inc. is an Arizona corporation, with its principal offices located in Phoenix, Arizona. At all relevant times, IG Holdings has been engaged in the business of investing in securities, including equities, bonds and limited partnership interests, primarily by making tender offers for such securities.

B. Summary

This proceeding involves certain so-called mini-tender offers made by IG Holdings during 1998 and 1999. Mini-tender offers are tender offers for less than 5% of a class of securities. These offers are not subject to the filing, disclosure and procedural requirements of Section 14(d) of the Exchange Act and Regulation 14D. However, all tender offers, including mini-tender offers, are subject to the antifraud provisions of the federal securities laws, including Section 14(e) of the Exchange Act and Regulation 14E.

IG Holdings violated Section 14(e) of the Exchange Act because it did not sufficiently monitor the means used to disseminate its below market mini-tender offers, which failure, in certain instances, resulted in shareholders not receiving material information about the offers.

C. IG Holdings' Mini-Tender Offers

Beginning in approximately June 1998, IG Holdings began making mini-tender offers to purchase stock. To date, IG Holdings has made more than 200 mini-tender offers, all of which have had offering prices that were less than the prevailing market prices. While there is no requirement that tender offers be made at a premium to the market price, registered third-party "tender offers" are historically equated with an offering price that includes a premium.

IG Holdings initiated its mini-tender offers by contacting an information services firm and telling the firm the names of the target companies, the size of the offers,¹ the offering prices, and the dates for beginning and ending the offers. For each offer, the information services firm prepared a one or two page offering document containing the information from IG Holdings, as well as instructions for tendering shares, and forwarded it to The Depository Trust Company ("DTC").²

After DTC received the offering documents from the information services firm, DTC reviewed the documents to ascertain the basic terms of the offers, such as the target security, the identities of the offeror and its agent, the offering price, and any limitations on the quantity of the securities to be purchased. If it determined that an offer could be processed through its facilities, DTC announced the offer to its participants through an electronic announcement system. DTC and the information services firm then entered into an agreement to make the offer eligible for the processing of acceptances by participants at DTC through DTC's automated tender offer program.³

Certain of DTC's participants notified their customers (who were the beneficial owners of the shares) of IG Holdings' mini-tender offers after they received the announcement from DTC. While their practices varied, the participants usually mailed their customers a letter telling them that a tender offer had been made, the name of the offeror, the size of the offer, the offering price, the date on which the offer ended, and instructions on how to tender their shares. However, the participants did not always inform shareholders that they could not withdraw their tenders, nor were shareholders told that IG Holdings could revoke its offer at any time before completion of the offering.

IG Holdings did not adequately attempt to determine what information was sent to shareholders by the participants or whether the information that was sent by the participants was complete and accurate. In fact, in certain instances, shareholders did not receive material information from participants about IG Holdings' mini-tender offers, including the calculation of the final price to be paid by IG Holdings and the warning (contained in certain IG Holdings material) that the offering price might not reflect the market price.⁴

IV.

OPINION

IG Holdings violated Section 14(e) of the Exchange Act because the means used to disseminate its below market mini-tender offers resulted in some shareholders not receiving material information about the offers, including the calculation of the final price to be paid by IG Holdings and the warning (contained in certain IG Holdings material) that the offering price might not reflect the market price. That information was material because a reasonable investor would consider it to be important in determining whether to tender.

V.

FINDINGS

Based on the above, the Commission finds that IG Holdings violated Section 14(e) of the Exchange Act.

VI.

ORDER

Accordingly, IT IS HEREBY ORDERED that IG Holdings, pursuant to Section 21C of the Exchange Act, cease and desist from committing or causing any violation and any future violation of Section 14(e) of the Exchange Act.

By the Commission.

Jonathan G. Katz

Secretary

FOOTNOTES