SEC Announces $26 Million Fair Fund Distribution in Banc of America Securities LLC Settlement
FOR IMMEDIATE RELEASE
Washington, D.C., June 23, 2008 — The Securities and Exchange Commission today announced the distribution of approximately $26.6 million to more than 250 investors in the Banc of America Securities LLC (BAS) settlement. In March 2007, BAS paid $26 million in disgorgement and penalties to settle SEC charges that the firm published false research on three companies and failed to safeguard its nonpublic research information.
"We are happy to say that through the Fair Fund, we are able to pay BAS customers who purchased Intel, TelCom or E-Stamp stock during the relevant period 100 percent of their actual losses," said Antonia Chion, Associate Director of the SEC's Division of Enforcement. "We also are pleased that, as the plan provided, we were able to recompense some additional losses suffered by BAS customers."
The Fair Fund provisions of the Sarbanes-Oxley Act of 2002 provided the SEC with new authority to distribute financial penalties paid by securities law violators directly to injured investors. Using this authority, the SEC already has distributed more than $3.9 billion in Fair Funds. Earlier this year, the SEC created a new office to further expedite Fair Fund distributions to harmed investors.
"The fact that the Commission was able to distribute more than $26 million to injured investors a little more than a year from the date that the BAS Fair Fund was created demonstrates the staff's commitment to assisting injured investors as quickly as possible," said Dick D'Anna, Director of the SEC's Office of Collections and Distributions. "We look forward to distributing more Fair Funds in the future as we continue enhancing our commitment to recovering ill-gotten gains from wrongdoers and returning the money to investors."
In March 2007, the SEC brought settled administrative and cease-and-desist proceedings against BAS, charging that BAS published false research on three companies and failed to safeguard its nonpublic research information. BAS consented to the Commission's Order without admitting or denying the SEC's findings. In addition to paying $26 million in disgorgement and civil penalties, BAS agreed to retain an independent consultant to review the firm's internal controls; and agreed to certify that it had implemented structural and other reforms of its banking and research departments.
The Fair Fund Administrator responsible for the BAS distribution is Rust Consulting, Inc. Investor questions regarding the distribution may be directed to Rust at (800) 760-5467. Information regarding the distribution also can be obtained at http://www.secbassettlement.com.
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Distribution Plan: http://www.secbassettlement.com/docs/PlanofDistribution.pdf
Order Approving the Distribution Plan:
March 14, 2007 Order Instituting Administrative and Cease-and-Desist Proceedings:
Order Appointing Fund Administrator and Directing Submission of Proposed Distribution Plan:
For more information, contact:
Kara N. Brockmeyer
Assistant Director, SEC's Division of Enforcement