UNITED STATES OF AMERICA
In the Matter of
GOLDMAN, SACHS & CO.,
|ORDER UNDER RULE 602(e) OF THE SECURITIES ACT OF 1933 GRANTING A WAIVER OF THE DISQUALIFICATION PROVISION OF RULES 602(b)(4) AND 602(c)(2)|
Goldman, Sachs & Co. (“Goldman”) has submitted a letter, dated January 25, 2005, requesting a waiver of the disqualification from the exemption from registration under Regulation E arising from the settlement with the Commission of a civil injunctive proceeding.
On January 25, 2005, the Commission filed a civil injunctive complaint against Goldman in the United States District Court for the Southern District of New York alleging that Goldman violated Rule 101 of Regulation M under the Securities Exchange Act of 1934 (“Exchange Act”).
Goldman filed a “Consent of Defendant Goldman, Sachs & Co.” in which it agreed, without admitting or denying the allegations of the Commission’s complaint, to the entry of a Final Judgment against it. Among other things, the Final Judgment permanently enjoins Goldman from violating Rule 101 of Regulation M under the Exchange Act and orders Goldman to pay a $40 million civil penalty. The Final Judgment was entered by the Court on February 8, 2005.
Rule 602(b)(4) makes the Regulation E exemption unavailable to an issuer if, among other things, such issuer or any of its affiliates is subject to any “order, judgment, or decree of any court of competent jurisdiction, entered within five years prior to the filing of such [Regulation E] notification, temporarily or permanently restraining or enjoining such person from engaging in or continuing any conduct or practice in connection with the purchase or sale of securities.” Rule 602(c)(2) also makes the exemption unavailable to an issuer if, among other things, any underwriter of the securities to be issued is “temporarily or permanently restrained or enjoined by any court from engaging in or continuing any conduct or practice in connection with the purchase or sale of any security or arising out of such person’s conduct as an underwriter, broker, dealer or investment adviser.” Rule 602(e) provides, however, that the disqualification “shall not apply . . . if the Commission determines, upon a showing of good cause, that it is not necessary under the circumstances that the exemption be denied.”
Based on the representations set forth in Goldman’s January 25, 2005 request, the Commission has determined that, pursuant to Rule 602(e), a showing of good cause has been made and that it is not necessary under the circumstances that the exemption be denied.
Accordingly, IT IS ORDERED, pursuant to Rule 602(e) under the Securities Act, that a waiver of the disqualification provision of Rules 602(b)(4) and 602(c)(2) under the Securities Act of 1933 resulting from the entry of the Final Judgment, effective as of February 8, 2005, the date of entry of the Final Judgment, is hereby granted.
By the Commission.
Jonathan G. Katz
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