RegAlert2010-07-30
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SEC Division of Investment Management staff letter: General Electric Company
General Electric Company requests assurance that the Staff of the Division of Investment Management will not recommend enforcement action under Section 206(4) of the Investment Advisers Act of 1940 or Rule 206(4)-3 if an investment adviser pays GE cash fees for soliciting advisory clients, despite GE's entry into a Final Judgment in SEC v. General Electric Company. The Staff grants no-action relief from the disqualification provisions of Rule 206(4)-3, which would otherwise prohibit payment to a solicitor enjoined from engaging in conduct connected with the purchase or sale of securities. In exchange, GE undertakes to comply with the Final Judgment, including the payment of a $1 million civil monetary penalty, and to disclose the Final Judgment in writing to each solicited person for ten years from the date of the Judgment's entry.
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WILMERHALE
Paul R. Eckert
+1 202 663 6537 (t)
+1 202 663 6363 (f) paul.eckert@wilmerhale.com Investment Advisers Act of 1940
Section 206(4) and Rule 206(4)-3
July 30, 2010
By E-MAIL AND MESSENGER
Douglas J. Scheidt, Esq.
Associate Director and Chief Counsel
100 F Street N.E.
Washington, D.C. 20549
Re: SEC v. General Electric Company, Ionics, Inc., and Amersham pic, 1:10-cv-01258 (RWR) (D.D.C. July 30,2010) Dear Mr. Scheidt:
This letter is submitted on behalf of our client General Electric Company, a New York corporation ("GE"), in connection with a settlement agreement (the "Settlement") arising out of the above-captioned investigation by the Securities and Exchange Commission (the "Commission"). The complaint filed by the Commission (the "Complaint") concerned conduct in connection with payments made by GE and some of its affiliates to Iraqi government ministries under the United Nations Oil for Food Program. GE currently has an agreement to engage in cash solicitation activities that are subject to Rule 206(4)-3 (the "Rule") under the Investment Advisers Act of 1940 ("Advisers Act"). GE seeks the assurance of the Staff of the Division of Investment Management ("Staff') that it would not recommend any enforcement action to the Commission under Section 206(4) of the Advisers Act, or the Rule, if an investment adviser, including an affiliated adviser of GE, pays GE, as a solicitor (as defined in Rule 206(4)-3(d)(1) under the Advisers Act), a cash payment, directly or indirectly, for the solicitation of advisory clients, notwithstanding the contemplated entry of the Final Judgment as to Defendant GE, Ionics, Inc. and Amersham pic (the "Final Judgment"), which is described below. While the Final Judgment does not operate to prohibit or suspend GE from acting as, or being associated with, an investment adviser and does not relate to solicitation activities on Wilmer Cutler Pickering Hale and Dorr HP, 1875 Pennsylvania Avenue NW; Washington, DC 20006 Beijing Berlin Boston Brussels Frankfurt London Los Angeles New York Oxford Palo Alto Waltham Washington
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