SEC Division of Corporation Finance no-action letter: U.S. Bancorp Piper Jaffray Inc. — SEC — US

UNITED STATES
SECLlRlTlES AN? EXCHANGE COMMISSION
WASHINGTON. D.C. 20549
October 31,2003
Joseph D. Edmondson, Jr., Esq.
Foley & Lardner
Washington Harbour
3000 K Street, N.W., Suite 500
Washington, D.C. 20007-5143
Re: . U.S. Bancorp Piper Jaffray Inc. -Waiver Request under Regulation A and Rule 505 of Regulation D Dear Mr. Edmondson:
This is in response to your letter dated October 31,2003, written on behalf of U.S. Bancorp Piper Jaffray Inc. (the "Firm") and constituting an application for relief under Rule 262 of Regulation A and Rule 505(b)(2)(iii)(C) of Regulation D under the Securities Act of 1933. You / requested relief from disqualifications fkom exemptions available. under Regulation A and Rule 505 of Regulation D that arise by virtue of the entry today of the injunction included in the Final Judgment in Securities and Exchange Commission
v. U.S. Bancorp Piper JafJi.uy Znc. (S.D.N.Y.) (the "Final Judgment"). You also
requested relief under those provisions from disqualifications that arise by virtue of the entry of an order, judgment or decree of a U.S. state or territorial court addressing the same conduct and based on the same facts as the conduct and facts addressed in the complaint that resulted in the entry of the Final Judgment. For purposes of this letter, we have assumed as facts the representations set forth in your letter. We also have assumed that the Firm will comply with the Final Judgment and any such state or territorial court order, judgment or decree. On the basis of your letter, the Commission, pursuant to delegated authority, has determined that you have made a showing of good cause under Rule 262 and Rule 505(b)(2)(iii)(C) that it is not necessary under the circumstances to deny the exemptions available under Regulation A and Rule 505 of Regulation D by reason of the entry of the Final Judgment or any state or territorial court injunction of the nature described above. Accordingly, the relief descriied above from the disqualifying provisions of Regulation A and Rule 505 of Regulation D is hereby granted. Sincerely, Mauri Osheroff Associate Director, Regulatory Policy

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
450 Fdth Street, N.W.
Washington, D.C. 20549
PLEASE DELIVER THE FOLL TO:
(via facsimile)
Name: Joseph D. Edmondson, Jr., Esq.
Organization: Foley & Lardner
Telecopier Number: (202) 672-5399
Total Number of Pages, Including Cover Sheet: 2 Date: November 10, 2003 Note: An original will be mailed within 5 business days. FROM:
Corey A. Jennings
~eledhoneNumber: (202) 942-1831
Telecopier Number: (202) 942-9516 lf you do not receive all pages, please telephone the above number for assistance. NOTE: THIS DOCUMENT MAY CONTAIN PRIVILEGED AND NONPUBLIC INFORMATION. IT IS INTENDEDONLY FOR THE USE OF-THE INDIVIDUAL OR ENTITY NAMED ABOVE, AND OTHERS WHO SPECIFICALLY HAVE BEEN AUTHORIZED TO RECEIVE IT. If you ers not the intended redpiant of this fecside. or the egent responsible for delivsrSng it to the intended recipient, you hareby are nobifid that any review, dmon. bstrikrtion. a copying of W communication strictly is wd. It you have received tth cornmunicstion in error,please notify us immediately by telephone and mhm the origlnd to the above address by regrlar postd service without making a copy. Thmk you tor your cooperstion.

FOLEY LARDNER
FOLEY & LARDNER
A T T O R N E Y S A T L A W WASHINGTON HARBOUR 3000 K STREET, N.W., SUITE 500 WASHINGTON, D.C. 20007.5143 202.672.5300TEL
202.672.5399 FAX
October 31,2003 www.foleylardner.com
WRITER'S DIRECT LINE
202.672.5354

jedmondson@foleylaw.com Ernall
CLIENT'MATTER NUMBER
066210-0146

Via Hand Deliverv
Corey Jennings, Esq.
Office of Small Business Policy
Division of Corporation Finance
U.S. Securities and Exchange Commission
450 Fifth Street, N.W., Room 3501
Washington, D.C. 20549-0310
Re: In the Matter of Certain Analyst Conflicts of Interest, File No. HO-9479 (US.Bancorp Piper Jaffigy Inc,) . , , . , Dear Mr. Jennings:
On behalf of our client U.S. Bancorp Piper Jaffray Inc. ("Piper"), we are enclosing a second revised final executed letter requesting waivers of the certain disqualifications under Regulations A and D, respectively, that may be applicable to Piper and any of its affiliates as a result of the settlement of the above-referenced matter. By submitting this second revise&hal executed letter, Piper intends to withdraw all prior letters requesting the same relief that have been submitted in connection with this matter. If you have any questions regarding this request, please contact the undersigned at (202) 672- 5354. Enclosure cc: James Chosy, Esq. (w/encl.) Dean Jeske, Esq. (w/encl.) BRUSSELS DETROIT MILWAUKEE SAN DIEGO TAMPA CHICAGO JACKSONVILLE ORLANDO SAN DIEGO/DEL MAR WASHINGTON. D.C. DENVER LOS ANGELES SACRAMENTO SAN FRANCISCO WEST PALM BEACH MADISON TALLAHASSEE

FOLEY LARDNER
FOLEY & LARONER
A T T O R N E Y S A T LAW 3000 K STREET, N W.
SUITE 500
WASHINGTON. DC 20007
202.672.5300 TEL
202.672.5399 FAX
October 3 1,2003 www.foleylardner.com
WRITER'S DIRECT LINE
202.672.5354 jedmondson@foleylaw.com Email
CLIENT/MATTER NUMBER
066210.0146
Via Hand Delivery
Gerald J. Laporte, Esq.
Chief, Office of Small Business Policy
Division of Corporation Finance
US. Securities and Exchange Commission
450 Fifth Street, N.W., Room 3501
Washington, D.C. 20549-03 10
Re: In the Matter of Certain Analyst Conflicts of Interest, File No. HO-9479 (U.S. Bancorp Piper Jaffiay Inc. ) Dear Mr. Laporte:
We submit this letter on behalf of our client US. Bancorp Piper Jaffray Inc. ("Piper") in connection with a settlement agreement (the "Settlement") arising out of a joint investigation by the Securities and Exchange Commission (the "Commission"), the New York Stock Exchange, Inc. (the "NYSE"), NASD Regulation, Inc. ("NASDR) and various US. state and tedorial regulatory agencies (the "States") into research analyst conflicts of interest at Piper andseveral other large investment banking firms. Piper below requests, pursuant to Rule 262 of Regulation A and Rule 505(b)(Z)(iii)(C) of Regulation D of the Commission promulgated under the Securities Act of 1933 (the "Securities Act"), a waiver of any disqualification from exemptions under Regulation A and Rule 505 of Regulation D that may be applicable to Piper and any of its affiliates as a result of the entry of the Final Judgment (as defined below) and any related disqualifying order, judgment, or decree of a state or territorial court addressing the same conduct as is addressed in the Complaint (as defined below). Piper also requests that these waivers be granted effective upon entry of the Final Judgment or such state or territorial court order, judgment, or decree. It is our understanding that the Division of Enforcement does not object to the grant of the requested waivers by the Division of Corporate Finance. BACKGROUND The Commission, the NYSE, NASDR and the States have engaged in settlement discussions with Piper in connection with the joint investigation described above. As a result of these discussions, on April 28,2003 the Commission filed a complaint (the "Complaint") against Piper in the United States District Court for the Southern District of New York (the "District Court") in a 002.1001997.2 BRUSSELS DETROIT MILWAUKEE SAN DIEGO TAMPA CHICAGO DENVER JACKSONVILLE LOS ANGELES ORLANDO SACRAMENTO SAN DIEGO/DEL MAR SAN FRANCISCO WASHINGTON. D.C. WEST PALM BEACH MADISON TALLAHASSEE

FOLEY P LARDNER ATTORNEVS AT L A W
Gerald J. Laporte, Esq.
October 3 1,2003 civil action captioned Securities and Exchange Commission v. U.S. Bancom Piper Jafli-av Inc.. Piper has executed a consent and undertaking (the "Consent") in which Piper neither admits nor denies any of the allegations in the Complaint, except as to jurisdiction, but consents to the entry of a final judgment against Piper by the District Court (the "Final Judgment"). The Final Judgment, which was entered by the District Court on October 3 1,2003, among other things, enjoins Piper, directly or through its officers, directors, agents and employees, fkom violating Section 17(b) of the Securities Act of 1933, NASD Rules 21 10,2210 and 3010, and NYSE Rules 401,476,472, and 342. Additionally, the Final Judgment orders Piper to make payments totaling $32,500,000 in settlement of the matters addressed in the Final Judgment, and to comply with the undertakings set forth in the Final Judgment.' DISCUSSION Piper understands that the entry of the Final Judgment may disqualify it and its affiliated entities fkom participating in certain offerings otherwise exempt under Regulation A and Rule 505 of Regulation D promulgated under the Securities Act, insofar as the Final Judgment may be deemed to cause Piper to be subject to an order, judgment or decree of a court of competent jurisdiction enjoining Piper from engaging in or continuing to engage in any conduct or practice in connection with the purchase or sale of any security arising out of the conduct of the business of an underwriter, broker, or dealer. The Commission has the authority to waive the Regulation A and Rule 505 of Regulation D exemption disqualifications upon a showing of good cause that such disqualifications are not necessary under the circumstances. See 17 C.F.R. 5s 230.262 and 230A505(b)(2)(iii)(C). Piper requests that the Commission waive any disqualifying effects that the F,'inal Judgment may have under Regulation A and Rule 505 of Regulation D with respect to Piper or its affiliates on the following grounds:

Piper's conduct addressed in the Final Judgment and alleged in the Complaint does
not relate to offerings under Regulation A or D.
Piper will undertake or has undertaken to implement certain reforms in a manner
reasonably designed to ensure compliance with the provisions of the Final Judgment as outlined in the Term Sheet attached to the Final Judgment (the "Term Sheet").
The disqualification of Piper from the exemptions under Regulation A and Rule 505
of Regulation D would, we believe, have an adverse impact on third parties that have retained Piper and its affiliates in connection with transactions that rely on these exemptions.
The disqualification of Piper from the exemptions available under Regulation A and
Rule 505 of Regulation D would be unduly and disproportionately severe, given that (i) the Final I Piper will additionally enter into settlement agreements relating to the activities referred to in the Complaint with the relevant state and territory agencies (the "State Settlement Agreements"). To the extent that any such State Settlement Agreement may result in an injunction by a court of competent jurisdiction, Piper intends ths request to cover any resulting disqualifications under Regulation A and Rule 505 of Regulation D.

FOLEY3LARDNER
ATTOUNEVS AT LAW
Gerald J. Laporte, Esq.
October 3 1,2003
Judgment relates to activity which has already been addressed pursuant to recently adopted rules of the Commission, NYSE and NASDR and pursuant to the Term Sheet; and (ii) the Commission staff has negotiated a settlement with Piper and reached a satisfactory conclusion to this matter that will require Piper to make payments aggregating $32,500,000 in settlement of the matters addressed in the Final Judgment and will require Piper to make certain structural changes pursuant to the Term Sheet, as well as to make available to Piper's customers certain research prepared by third party research providers. In light of the foregoing, we believe that disqualification is not necessary, in the public interest or for the protection of investors, and that Piper has shown good cause that relief should be granted. Accordingly, we respectfully request the Commission, pursuant to Rule 262 of Regulation A and Rule 505(b)(2)(iii)(C) of Regulation D, to waive, effective upon entry of the Final Judgment or any related disqualifying order, judgment, or decree of a U.S. state or territorial court based on the same facts and addressing the same conduct as is addressed in the Complaint, the disqualification provisions in Regulation A and Rule 505 of Regulation D to the extent they may be applicable to Piper and any of its affiliates as a result of the entry of the Final Judgment and any such,order3 4- r judgment, or decree.' ... :i ., ., Please do not hesitate to contact the undersigned at 202-672-5354 or Dean Jeske at 312-832- 4564 regarding this request. cc: James Chosy, Esq. Dean Jeske, Esq. 2 We note in support of this request that the Commission has in other instances granted relief under Rule 262 of Regulation A and Rule 505(b)(2)(iii)(C) of Regulation D for similar reasons. See, e.g.,Credit Suisse First Boston Corporation, S.E.C. No-Action Letter (pub. avail. Jan. 29,2002); Dain Rauscher, Incorporated, S.E.C. No-Action Letter (pub. avail. Sept. 27,2001); Legg Mason Wood Walker, Incorporated, S.E.C. No-Action Letter (pub. avail. June 11, 2001); In the Matter of Certain Market-Malung Activities. S.E.C. No-Action Letter (pub. avail. Jan. 11, 1999); Stephens Incorporated, S.E.C. No-Action Letter (pub. avail. Nov. 23, 1998).