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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2008-81
April 25, 2008


SEC Announces $30 Million Fair Fund Distribution to Investors Affected by Undisclosed Market Timing in RS Investments Mutual Funds

The Securities and Exchange Commission today announced the distribution of approximately $30.6 million to more than 250,000 investors who were affected by undisclosed market timing in certain RS Investments mutual funds.

The Fair Fund distribution includes $25 million in disgorgement and penalties paid by RS Investment Management, Inc. and RS Investment Management, L.P. (RS Investments) in an SEC enforcement action, approximately $3.3 million in disgorgement and penalties from Banc of America Capital Management LLC, BACAP Distributors LLC, and Banc of America Securities LLC related to a separate unlawful market timing matter that affected RS Investments investors, and accumulated interest.

"This distribution demonstrates the SEC's continued commitment to returning funds to investors affected by market timing misconduct," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement.

The Sarbanes-Oxley Act of 2002 gave the SEC authority to increase the amount of money returned to injured investors by allowing civil penalties to be included in Fair Fund distributions. Prior to SOX, only disgorgement could be returned to investors. Since 2002, SEC enforcement actions have resulted in more than $3.7 billion in distributions to investors.

In 2004, the SEC brought settled administrative and cease-and-desist proceedings against RS Investments, G. Randall Hecht, and Steven M. Cohen, who consented to a Commission Order without admitting or denying the SEC's findings. The SEC charged that RS Investments improperly allowed market timing in certain mutual funds from at least 2000 to mid-2003. In addition to disgorgement and civil penalties, RS Investments also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms.

The Fair Fund Administrator responsible for distribution is Boston Financial Data Services, Inc. (BFDS). Investor questions regarding the distribution may be directed to BFDS at (866) 700-0119. Information regarding the distribution can also be obtained at http://rssettlement.com/start.asp.

Additional materials:

Distribution Plan: http://sec.gov/litigation/admin/2007/34-56222-mdp.pdf

Order Approving the Distribution Plan and Appointing an Administrator: http://sec.gov/litigation/admin/2007/34-56222.pdf

Oct. 6, 2004 Order Instituting Administrative and Cease-and-Desist Proceedings: http://sec.gov/litigation/admin/ia-2310.htm

For further information, contact: Marc J. Fagel, Associate Regional Director, SEC's San Francisco Regional Office, at (415) 705-2449. (Press Rel. 2008-65)


Regulations Implementing Sudan Accountability and Divestment Act of 2007

On April 24, the Commission adopted form amendments that require disclosure by a registered investment company that divests, in accordance with the Sudan Accountability and Divestment Act of 2007, from securities of issuers that the investment company determines conduct or have direct investments in certain business operations in Sudan. The Act was signed by the President on Dec. 31, 2007, and requires the Commission to prescribe implementing regulations not later than 120 days after enactment. (Rels. 34-57711; IC-28254)


Orders of Deregistration Under the Investment Company Act

Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:

  • Skyline Funds [File No. 811-5022]
    [Rel No. IC-28240]
  • Excelsior Private Equity Fund II, Inc. [File No. 811-8149]
    [Rel No. IC-28241]
  • The Munder @Vantage Fund [File No. 811-9937]
    [Rel No. IC-28242]
  • Dreyfus Balanced Fund, Inc. [File No. 811-7068]
    [Rel No. IC-28243]
  • SEI Index Funds [File No. 811-4283]
    [Rel No. IC-28244)]
  • HBI Equity Trust, Series 1 [File No. 811-8184]
    [Rel No. IC-28245]
  • Private Asset Management Fund [File No. 811-21049]
    [Rel No. IC-28246]
  • Alliance All-Market Advantage Fund, Inc. [File No. 811-8702]
    [Rel No. IC-28247)]
  • Oppenheimer Emerging Technologies Fund [File No. 811-9845]
    [Rel No. IC-28248]
  • Fortress Pinnacle Investment Fund LLC [File No. 811-21232]
    [Rel No. IC-28249]


Immediate Effectiveness of Proposed Rule Change

A proposed rule change, as modified by Amendment No. 1 thereto, filed by NYSE Arca (SR-NYSEArca-2008-42), through its wholly owned subsidiary, NYSE Arca Equities, Inc., to list and trade shares of three exchange-traded funds of the NETS Trust has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 28. (Rel. 34-57700)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-CHX-2008-02) submitted by the Chicago Stock Exchange to amend its Bylaws relating to the definition of a public director. Publication is expected in the Federal Register during the week of April 28. (Rel. 34-57699)

The Commission approved a proposed rule change (SR-NYSEArca-2008-20), as modified by Amendment No. 1 thereto, submitted by NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., to adopt listing rules relating to Fixed Income Index-Linked Securities, Futures-Linked Securities, and Multifactor Index-Linked Securities. Publication is expected in the Federal Register during the week of April 28. (Rel. 34-57701)

Proposed Rule Change

The Commission issued a notice of filing of a proposed rule change (SR-Phlx-2008-31) filed by the Philadelphia Stock Exchange relating to changes to Phlx's governing documents in connection with the acquisition of Phlx by The Nasdaq Stock Market, Inc. Publication is expected in the Federal Register during the week of April 28. (Rel. 34-57703)





Modified: 04/25/2008