Overview

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

SECURITIES ACT OF 1933
Release No. 8535 / February 9, 2005

SECURITIES EXCHANGE ACT OF 1934
Release No. 51165 / February 9, 2005

ADMINISTRATIVE PROCEEDING
File No. 3-11814

In the Matter of 
Columbia Management Advisors, Inc. and Columbia Funds Distributor, Inc., 
Respondents.

ORDER UNDER SECTION 27A(b) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b) OF THE SECURITIES EXCHANGE ACT OF 1934, GRANTING WAIVERS OF THE DISQUALIFICATION PROVISIONS OF SECTION 27A(b)(1)(A)(ii) OF THE SECURITIES ACT OF 1933 AND SECTION 21E(b)(1)(A)(ii) OF THE SECURITIES EXCHANGE ACT OF 1934

Columbia Management Advisors, Inc. ("CMA") and Columbia Funds Distributor, Inc. ("CFD") (collectively, "Respondents") have submitted a letter, dated December 3, 2004, requesting a waiver of the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act of 1933 ("Securities Act") and Section 21E(b)(1)(A)(ii) of the Securities Exchange Act of 1934 ("Exchange Act") arising from its settlement of an administrative proceeding commenced by the Commission.

On February 9, 2005, pursuant to Respondents' Offers of Settlement, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b)and Section 21C of the Securities Exchange Act of 1934, Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940 ("Order") against Respondents. Under the Order, the Commission found that:

(1) CMA willfully violated Sections 204A, 206(1) and 206(2) of the Advisers Act, Sections 17(d) and 34(b) of the Investment Company Act and Rule 17d-1 thereunder;

(2) CFD willfully violated Section Section 17(a) of the Securities Act, Sections 10(b) and 15(c) of the Exchange Act and Rule 10b-5 thereunder, and Section 17(d) of the Investment Company Act and Rule 17d-1; and

(3) CFD willfully aided and abetted and caused CMA's violations of Sections 206(1) and 206(2) of the Advisers Act, and Section 34(b) of the Investment Company Act;

The Order censures Respondents and requires:

(1) CMA to cease and desist from committing or causing any violations and any future violations of Sections 204A, 206(1) and 206(2) of the Advisers Act, and Sections 17(d) and 34(b) of the Investment Company Act and Rule 17d-1 thereunder;

(2) CFD to cease and desist from committing or causing any violations and any future violations of Sections 206(1) and 206(2) of the Advisers Act, Sections 17(d) and 34(b) of the Investment Company Act and Rule 17d-1 thereunder, Section 17(a) of the Securities Act, and Sections 10(b) and 15(c) of the Exchange Act and Rule 10b-5 thereunder;

(3) Respondents to pay, on a joint and several basis, disgorgement in the total amount of $70,000,000 ("Disgorgement") and civil money penalties in the amount of $70,000,000 ("Penalties"), for a total payment of $140,000,000;

(4) Respondents to retain an Independent Distribution Consultant to develop a plan of distribution for the $140,000,000 in disgorgement and penalties;

(5) Respondents to undertake to maintain a compliance and ethics oversight infrastructure; and

(6) Respondents to retain independent consultants to review the Respondents' supervisory, compliance and other policies and procedures.

The safe harbor provisions of Section 27A(c) of the Securities Act and Section 21E(c) of the Exchange Act are not available for any forward looking statement that is "made with respect to the business or operations of an issuer, if the issuer . . . during the 3-year period preceding the date on which the statement was first made . . . has been made the subject of an . . . administrative decree or order arising our of a governmental action that (I) prohibits future violations of the antifraud provisions of the federal securities laws; (II) requires that the issuer cease and desist from violating the antifraud provisions of the securities laws; or (III) determines that the issuer violated the antifraud provisions of the securities laws[.]" Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act. The disqualifications may be waived "to the extent otherwise specifically provided by rule, regulation, or order of the Commission." Section 27A(b) of the Securities Act and Section 21E(b) of the Exchange Act.

Based on the representations set forth in Respondents' request, the Commission has determined that, under the circumstances, the request for a waiver of the disqualifications resulting from the entry of the Order is appropriate and should be granted.

Accordingly, IT IS ORDERED, pursuant to Section 27A(b) of the Securities Act and Section 27E(b) of the Exchange Act, that a waiver from the disqualification provisions of Section 27A(b)(1)(A)(ii) of the Securities Act and Section 21E(b)(1)(A)(ii) of the Exchange Act as to Respondents resulting from the entry of the Order is hereby granted.

By the Commission.

Jonathan G. Katz
Secretary

 

Details

Rule Type
Order Regarding Waiver
Feb. 9, 2005