UNITED STATES OF AMERICA
In the matter of
DONNA L. WOOD
ORDER INSTITUTING PROCEEDINGS,
The United States Securities and Exchange Commission (the "Commission") deems it appropriate and in the public interest that administrative proceedings be instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Advisers Act") against Donna L. Wood ("Wood").
In anticipation of the institution of these administrative proceedings, Wood has submitted an Offer of Settlement ("Offer") which the Commission has determined to accept. Solely for the purpose of this proceeding, and any other proceeding brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings contained herein, except as to the jurisdiction of the Commission over her and the subject matter of these proceedings and the entry of the permanent injunction as described in paragraph II.D, below, which she admits, Wood consents to the entry of this Order Instituting Administrative Proceedings, Making Findings and Imposing Remedial Sanctions Pursuant to Section 203(f) of the Investment Advisers Act of 1940 ("Order").
Accordingly, IT IS HEREBY ORDERED that public administrative proceedings be, and hereby are, instituted against Wood pursuant to Section 203(f) of the Advisers Act.
On the basis of this Order and Wood's Offer, the Commission finds that:
(A) Wood, age 61 and a resident of Tacoma, Washington, was, at all relevant times, an associated person of an investment adviser pursuant to Section 203(f) of the Advisers Act.
(B) On June 6, 2001, the Commission filed a complaint in the United States District Court for the District of Connecticut, SEC v. Renert et al. (Civil Action No. 301 CV 1027 (PCD)), alleging that Wood aided and abetted violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act.
(C) Specifically, the Commission alleged that Wood acted as fund administrator for a purported offshore mutual fund from September 1997 to July 1999. The Commission alleged that the investment adviser to the fund and the adviser's control person violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and that the adviser violated Sections 206(1) and 206(2) of the Advisers Act by making misrepresentations and omissions to investors regarding (1) use of fund assets; (2) fund performance; (3) performance fees; (4) fund management, accounting and compliance issues. The Commission alleged that Wood rendered substantial assistance because, among other things, she received investor deposits, maintained the investor roster, kept the books and records, and distributed account statements, distribution checks, and investor communications. The Commission alleged that she knew or was reckless in not knowing that her role was part of an overall activity that was improper because, among other things, she knew that the adviser was using investor funds in a manner that was inconsistent with the representations made to investors regarding the use of investor funds.
(D) On June 6, 2001, without admitting or denying any of the allegations contained in the complaint, except as to jurisdiction, which she admitted, Wood consented to the issuance of an order of permanent injunction and to the entry of a final judgment thereon. The order was entered by the United States District Court for the District of Connecticut on June 6, 2001. The Court's order permanently enjoins Wood from directly or indirectly violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and Sections 206(1) and 206(2) of the Advisers Act. Wood has submitted a sworn financial statement and other evidence to the Commission and has asserted her inability to pay a civil penalty. The Commission has received the sworn financial statement and other evidence provided by Wood and has determined that she does not have the ability to pay a civil penalty. Based on the sworn financial statements and the asserted inability to pay, the Court did not order Wood to pay any civil monetary penalties.
In view of the foregoing, the Commission deems it appropriate and in the public interest to accept Wood's Offer of Settlement and impose the sanction agreed to in the Offer.
Accordingly, IT IS HEREBY ORDERED that:
A. Effective immediately, Wood be, and hereby is, barred from association with any investment adviser, with the right to reapply for association after three years; and
B. The Division of Enforcement ("Division") may, at any time following the entry of the Order, petition the Commission to: (1) reopen this matter to consider whether Wood provided accurate and complete financial information at the time such representations were made; (2) determine the amount of the civil penalty to be imposed; and (3) seek any additional remedies that the Commission would be authorized to impose in this proceeding if Wood's Offer had not been accepted. No other issues shall be considered in connection with this petition other than whether the financial information provided by Wood was fraudulent, misleading, inaccurate or incomplete in any material respect, the amount of the civil penalty to be imposed and whether additional remedies should be imposed. Wood may not, by way of defense to any such petition, contest the findings in the Order or the Commission's authority to impose any additional remedies that were available in the original proceeding.
By the Commission.
Jonathan G. Katz
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