RegAlert2006-03-16
Added · Updated
SEC no-action letter: Bear Stearns & Co. Inc. waiver of ineligible issuer status under Rule 405
The Division of Corporation Finance determines that Bear Stearns Companies, Inc. will not be considered an ineligible issuer under Rule 405 of the Securities Act of 1933, despite a Commission order finding its subsidiaries Bear Stearns & Co. Inc. and Bear Stearns Securities Corp. violated Section 17(a) of the Securities Act. This determination is granted because the terms of the settlement order were agreed to prior to December 1, 2005, satisfying the exception for settlements agreed to before that date. The relief allows the parent company to maintain its status as a well-known seasoned issuer and continue using automatic shelf registration and free writing prospectuses, contingent upon the subsidiaries' compliance with the order's cease and desist provisions and financial penalties totaling $250 million.
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
March 16,2006
Mr. Dennis J. Block
Cadwalader, Wickersham & Taft LLP
One World Financial Center
New York, NY 10281
Re: In the Matter of Bear, Stearns & Co. Inc. and Bear, Stearns Securities Corp, NY7292 -- Waiver Request of Ineligible Issuer Status under Rule 405 of the Securities Act Dear Mr. Block:
This is in response to your letter dated March 10,2006, written on behalf of Bear Stearns Companies, Inc. (Company), and constituting an application for relief from the Company being considered an "ineligible issuer" under Rule 405(l)(vi) of the Securities Act of 1933 (Securities Act). The Company requests relief fiom being considered an "ineligible issuer" under Rule 405(l)(vi), due to the entry on March 16,2006, of a .Commission order (Order), naming Bear Steams & Co:, Inc (BS&Co.) and Bear Steams Securities Corp. (BSSC), subsidiaries of the Company, as respondents. The Order, among other things, finds that BS&Co. and BSSC willfully violated, and orders BS&Co. and BSSC to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act. Based on the facts and representations in your letter, and assuming the Company, BS&Co. and BSSC will comply with the Order, the Commission, pursuant to delegated authority has determined that the Company has made a showing of good cause under Rule 405(2) and that the Company will not be considered an ineligible issuer by reason of the entry of the Order. Specifically, we determined under these facts and representations that the Company has shown that the terms of the Order were agreed to in a settlement prior to December 1,2005. Accordingly, the relief described above fiom the Company being an ineligible issuer under Rule 405 of the Securities Act is hereby granted. Any different facts from those represented or noncompliance with the Order might require us to reach a different conclusion. Sincerely, Mary Kosterlitz Chief, Office of Enforcement Liaison Division of Corporation Finance
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