SEC Division of Corporation Finance no-action letter: Pritchard Capital Partners, LLC et al.

UHITEP STATES gECURITIEE ANb EXG}{AHGH COMMISBIOH lfYAgl{lHGTOH,i tr;f,. POE49 Dtvttlol{ oF SOiIORATIOH FITTAHG] Thomas K. Potter, IItr, Eq. Burr &FofinanLLP 700 Two AmeTicfln Center 3102 West End Avenue Nashville, Termes$€e 372OI Re: hr the lvlattEr of hitshard Capitsl Partrere, I-I& et al., Adfliniehative Pros€eding File No.,3-12753-Waiver Request under Regulation A and Rule 505 of Regulation D DearMr. Potter:
This is in response to your letter dsted today, vrfittcri on behalf of kitshflrd Cspitl Parfrler$, LLC ("Pritohard Capital') and Thoma,s Ward hitchard ('T.W. Pritshnrd') (togethcr, the Rerpmr entsl), md constituting an application for waiver rclief under Rule ?6? of Regulation A and Rule 505ftX2)(iiiXC) of Regulation D under the $ecurities Act of 1933 ("Securities Aof,'). You requested wair'ers. frorn any disqualification fronr exdmptions awilable under Regulation A and Rrile 505 of Regulation D that rnay have srisen by virtue of th sdcr Entered t@y by the Securitiefr and Exchnnge Conffiriesion und€r Swtion 15ft) of ttre $esurities Exchsnge Ast of 1934 f'Exchnnge Acf) in In tfu' Matter of Pritchard Capitfll Partnerg LLC et al., Secrrrities Exchange Act Rsledse No- 57704 (the *Ordcd). Order,s ntrmod uuder that provieion mny give rise to disqualifications ur-der Rules 262 and 505. The Order also was srrttrod rnier Section ZlC of the Exclwr-geAct and Scctions 9(b) and {f) of re Inrrcetfleilrt Company Act of 1940 fqlffrcstnpnt Corryany AotJ.i l.ileitrre,r Rule 262nw Rule 505 provides for disqualificatiom arising fimm mders erttsred rmder those provisions. Th.€- trder ccnflned nitchard Cepital, mderred Pritohf,rd Cryittl to cease snd d@ist ftom comrnilting or caueing my violations and fufire viiolations of $cctio,n l7(aXl) of the Excl-utrge Ac,t Rule 17a-3(a[6) andRule 22c-l under the trnvesfrnent Corrrynny Act, and ordered Pritshrd Capital to pay d,isgorgemt of $55,000, pre￾judgment interest of $17,011.94; and a civil rnoney penalty of:$$g,gg6. The Odqr srlryended T.W. Htshard from assoc.iation in a supeivisory capanity with any broker or dealqr for nine monrths mrd ordened T.W, Pritsl$rd to pay a civil money pe,nalty of $50,000. For pu-rposes of this letter, we hs\e assumed as facts thc reptserrtalions set forth rn your letter and the firdings zupporting erntry of the ftdsr. Ifi/e'fllss hsve aseumed thef ths Rpspond€nts hnve oon+tied nrd will continue to corrply with the Ofdsr. The sanctions iuposed onr Pritc-hard Cnpital by the Order me not the qryes of sanctionn describpd in RHle 262 or Rule 505 as resulting in a disqualification.. Acco,rdingly, absent firrtlter explanatior as to why uraiver ' Althoogh th'cemsurt of Pritchard Qlpitf,l in an adminisilative proceo{,iqg under $ectiaq l5(b} of flc Exchange Act w,y initially appear to be a Aisqtmlifyi+tg svclil nndel,Rsle 262 aod RuId 505, the Corrtmis$ion conrietenf,ly has taken ths porition that issuance of a cenewc in sn dminisFative proceeding is not a disquatifyirg event Wsr Rule 26i or Rulc 505. $ee $SC Rclease No. 33-6455, Qrrestion 66 (Mff. 3, 1983)i[48 IIR 10045, 10053 (Mar. 10, 1983)J (cemute hne no coflfiflriry force and ftus censured pqemr iE trot *srftject to as ordsr of the Comntgeion amured pursuam to sectioll 15(b)" within tbs meaning of Rule S05); Hovnar{ Pfim, Ricc, Nerratpvski" Caudy & Pollak, SEC No-Acti'on Lefter, 1975 WL I1300 (lan. 8, 1975, pubHcly availablp Feb" l l, 1975)
(Rulc 252 (Iredec€ssor,tsrR$le 262) does not cornprrehemd a eituatiou where an undermitet of a Regulatian A otrcri,ng has stipularsd to a cownt order in a Corffirission ndnrinisfraiive pfpcs€diDg providlrg only for a c€trsuro, with no ruspmsion or other sanction) ,Accord, Saunrel Beck, $EC No-Action l.cft€r; 1975 WI￾I l47l May 15, 1975, publicly available Jusp 24, 1975). See al,ro $EC Rcleaqp No. 33-6289 (Feb. 13, t98t) 146 FR 13505,

Thomas K. Potter, III, Esq. relief would be approrpriate, I am deslining to grant your rsque$t f,or * waiver with reqpect o Pritchmd Capitnl as unnecessary. Orr the oths hand, on the basis of yotr letter, I have determined that you have mede'showings of good cause rmder Rule 262 and Rule 5O5(bXzXiiiXC) that it is not neaeesary wder the eircumstances to deny the exe,rnptions anailable under Regulation A and Rule 505 of Regulation D by reflsolr o{entry of the Order agatrst T.W. Pritshffid. Accordingly, pursuant to delegated authority, T.W. hitehard iu granted relief from any disqualifications from exerrrptions otherwise arnailable rmder Regulation A and Rule 505 of Regulation D that may have arisen as a result of eirty of the Order. nV-r t /,Frt Chief, Office of Smqll Busines$ Policy 13506(Feb.23,1981)l(Cormissionhacconcietentlytakenpp+$mthatpcrsonis"subjectto"odermlysol-ongf,ssome act is bcing perforrned pursrranto o'rder).

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TboH$ K. Fofilr, Itr
Dhc Dinft (6lf)724-9131
DLt F; (615) 72&3331
EmiI Fotbr&rr.oom
Affid tD T@6EEGc, Toxq nd Lorisirrm
700 Tluo Amcrican Center
SI02 Werr End Avcnue
Nashville, TN 37fl0$ f#tu (615) ??qtt00
,Fhr (615) ??+$g$0 irb{i/rar (8S6) 4S9-8541
BU RR, GOM
VIA EII,IAIL. ORIGINAL TO FOLLOW BY U-S. hdAIL Gerflld J. Iapo'rte, Esq.
Chief, Office of Smf,Il Bueiness Policy
Division of Co'rporerirn Finance
U.$, Securities and Exchange Commission
100 F SteetN.E.
Washi4ton, D.C.20549
Admin Proc. File No, 3-l?753 (SEC Aprit Zl,2{}08) OurFile: I8|K30-O4 DEarMr. Laporte:
I zub'mithie leuer on hhalf of orr slieqt$r kitshffid Cryital Partnes, LtC fprilshf,sd 9ryitutt and Thomas,Ward Pritchrd ffT.W. Prita'hf,rd" qd togethcrwith Pritchsrd Capital, tlre i[ettlittg Reqpondsmts!), tw-o. arnong the S4tling Rgryondents in the caprisaed prfo-sdi"g qProcgs+ns? !y,_tn $eorlrities nmd Errohfinge Comlceion (tre 'tomsnisiio1. $r"rt qt tI Commission Rule 26? of tg8rrliou A arid Rrde s05(bX4fiiixC) of Regulation D promrrlgated undrr the Securities Act of lg33 (ths "S€ourities Ast'1, ee Setrling Rerpgn{qilt$ hUy requ*rt waive'ts of any dtsryslifications from e:remptions rmdtr S6gulation A and Rule f05 of Regulation D thflt may arise with respecr to offerings by issuers who herea,fter engqse pritcgard Cf,pitat (or other undenariter fls to $ftich T.W. kitahsrd is,m may Ue a partn#, director or 9fficer) as an underqrriter, as a result of the entryrof the fficrte) OeslriUed bebw. The Settlisg {espondents that tbeu€ waiverre be grffitsd effective upon the date of enty of thI Order(s), or April ?3, ?008. It is our rmderstanding t$at the Divlsion of Hnf,orqsflest does not object to the grant ofthe requested waivers.

Gerald J. Laporte, Eqq.
BACKGROUHD
The Staff of the Divisian of Enforcement €ngflgfid in settlflnent discussioss with the Settling Respondents inconnection with the Proceeding. Pritchard Capital and T.W. Pritchard each submitted an exesrrted Offer of Settlement, solely for the Furpose of proceedings by or on behalf of the Commiesion or in ufhich the Csffimi$sioil i$ a pryty, and coagEnted to the entry of Order(s) by the Comnission (the "Ordem) without dmitring or donying'the nafiers set forth therein (othr than those relating to the jurisdictior of,thp Commissiot gnd ths subject rnatter of the proceeding). Tl$ Conmiseion e,ntened the Ordcr(e) on Aprrl 23, 2008. As to Pritclrard Capital, the Proceeding wE$ brorylrt pur-srrmt to Sections lS(b) and ?tC of the Hxchangs Act and $estions 9(b) and 9(D of the Invesfincrrt Comparry Act of 1940 (the "Inveshnent Company Acf) and asserted that F,ritshprd Cryital wiltfully violared $ection t7(aXl) of the Exchange Act and Rule l7a-3(a)(6) thereundcr, willftlly sided emd abetted and saused violations of Rule 22c-l of Section 2?(c) oJ th Inwgffient Company Act and violated $ections t5(bx4) strd ls(bxd) of the Exchange Act The Pnoccoding asecrtsd thoee vislatioms' based npon alleged lat+ Eading in m$ual fiuds by formsricli6nB, f,ssilitated by the activities of two former assooiated persotts (McM-ahou and alr Coofr) drffittg the period Norrenrber ?001 thtoush July 2003. The Conrmiseior's Order providnw kilqhafd Capital is (a) c€nswed; (b) rcquircd to ceasp and desist from committing or caqeius any viol#ion^s and qny firnne vioftntions of the $fercnced provisions; (s) requircd to corypJy with the un@'ttnking$ (of contimed cooperatton) in the Order; (d) requir.,Ed to pay disggrgqnseat of $55P00 along witlr pre-judgm€ot intemest of $17,011.9.4; and (e) tequircd to pal a sivil tngnsy n+notty of $5Q000. As to T.W. Pritchgrq fte Proceeding was bsought fntrrnt to $acfion l5(b) of the Secwities Exchanse Act of 1934 (the Txchan-g+ $qtT esd as$Erted Pritesd violetsd Soction l5(bx6) of the Exchaage Act. The Proceeding a$serts ths violatiwr bsmd upon alleged failrne to zupervise the astivities ofthe former ae$ociated persons (e,g. Von Cook) in connection with thir alleged fecilitstion of rnu$al fimd late tading. ThF Coffiissisn's order provides T.W. Ptitshnrd is (f; ccnsured; G) sltspended from a,ssoc.ietion in * strp€qvisory capqcity with any broker or dealer for a period of nine months; ft) required to:ootnply with the undutaftings (of continrrsd cooperadon) in the Order; nnd (i) requitsd to pay a Eivit morny penatty of $50,000, No other ganctions or remedial rncasurts are proposed. DISCUS$ION The S*tling understand *rat the omtry of the trc{s) rnny prcclude them from acting as underwriteto flthird-party is$r$r winbing to r,ely upon certain exemptions under Regulation A and Rule 505 of Regulation D, promutrgats Wrmm $ecurities Aqt, insofar as the Order(s) rnfly be deerned to cause the Settling n nte, to be nsubject to an order of the Commission pusua$t,to
Section l5(b) of the Exchmge Acn Sestion 203(e) of,the Inveetment

Gefiald J. laporte, Esq.
Advisers Act of 1940." See 17 C.F.R. $$230;262(bX3) and 230.505(bXZXiir). l}s Cornm,is$ion hns the authority to waive these Regulation A eid Rule 505 of Regxrlation D erremption disqualifications qpon a showi4g of good cause thflt qrch disqualifications are not necc$qsry under the circumstances. ,Sea l7 C.F.R. $$ 230.26? and 230.505(bX2XiiiXC). For the following rea$ons, tlrc $ettling Rqspsnd,qtq rt{1rwst h* the Commis$ion rrrnaive any disquali$ing effects that the Ord€r($) ney have wiftr refipest o offerings by iss,uers having cngaged or participated with the $ettling Respondentr in under-rrritings rclyrng rrpon exeurptions underRegulationA and Rule 505 of Regulation Dl
l. Thc- $ettliug R.espondents' conduct addreesd{t iil tbo OrderG) doee not relate to
underwriting s a,U" much lene to offerings under Regulations A or D.
2. The "imput+d diqqwlifiofltionn of ths $ettling Respgndents furn pnrticiprting in
undenaruiting activities in connection rvith offerings relytng upon ere,ruptiorrs available under Regulations A snd D worrld unnecessarilyimit isgupf clroico and could hnve an adveme impt on third partiet that mny mtain the $ettling Rrupondents md tbsir affilietes in conrrcetion with tansdionf that rely on thEse exemp-tions. Suph'imflrtgd dis{ualificationn also would place the S€ttting Respondents at a cornpetitive disadvantage rn'ith mgmd to lhird-party i$suers ttrat rcIy on these oremptions.
3. The "imputed disquslifioationn would be rdrly and dipropoltionntely $everp
Fvem the natrre of the violations adfusssd in Se Ofddrs qmd the lsok of any rolationip betslesn the violations and auy Regulution A or D related astivity condustcd by the Settting R.espondcnts ortheit affrliatcs. Morcover, it vrorild tesult in en anti+om@tive ponatty not contempleted by the Order(s) and at odds with the rernedinl prrrposes of the Act"
4. The Commission'$ Enforcement $tsff has rcsched a mufuatrly uatief,actory settlem€nrt with the Settling Respondemts in the Proceedlng as reflected in the Commission's
Order(s), rvtich iuclrrdes ceasc.anddesist orders (fsnan Cfipital), oen$utrqs, a nrpemrisory nxpension G.W. Pritshflrd), the poyment of disgorgement along with inteilest (Pritslnrd Cflpitat) ad civil money pcnnlties, as well a* underhkinp of co,ntinrmdcooperation
5. The $Ettling Respondents hflve an olhgririne strory record of compliance with the
secwities laws and have cooperated fully with the Cornmission in its investigation of this matter and in its re$olution. The Settling Respondents hnve,hken ffie-asurcs topusv€nt rwr$rence of the activities at iszue, including disaffiliation with the uwq$tstdp fro f,o oonduct wfls flt issjre (McMalron aild Vfin Cook), discqrrtinuflnos of zuch rnutuai furd trading flrd sush further lneasure$ as ars detailed in the Ordcr(s). t6374jt 14

Gerald J. I.aporte, Esq.
In light of the grounds for relief described above, we believe ef,t dtsluslification is not lecessa{y, either in tb# public intere$t sr for tlre protestioo of investore" gnd that the Settlirlg Respondene hsve owr good cause thap relief slrould be grsnt€d. Accordingly, we respecffirtly requssthqt the Commission waive the disqualification provisiolrs in Rcgutation A and Rule 505 of Regulation D to the exte,lrt they mey be .applicable to off-eripgs,seeking to rely upon exe'urptions under Regulation A or Regulation D' md in q{h.ich ttre Settting Rspondents rnay be engnged or partioipde as underwriter or othenvise. If you have qny queoilions regarding this request" phaap oontnct me d (615) ?24-3?31. With kini rcgiards, I remain, TKSIIY RobertlL Gordon Yolmdal. Ross Thsmfis W. Pritohtrd Pritchad Cryitfll Parhers, LLC

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t_W"_1ot" in rym$ ofthis reguost that the C,ommissim ho$ gmned rclief under Rule 262 of Rsgulstion A and Rule s0sGX?XtiiXC) of Regultion D for similf,r rcssffiE $oe e.g." hdtnJinl Equity Orsup, LLC" S.n.C" l.te Astion Ler (pub. avail. Aug. 28, 2006); Deu$chs Invostnent Mnmagemcnt Arnerica6 lne., et aI.,S.E.C. No. Action Lcner (pub. avait. Sopt. 28, 2006). Verytnrlyyo 163?4tg v3