SEC no-action letter: Evergreen Investment Management Company, LLC waiver request

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
DIVISION OF
CORPORATION FINANCE
June 8,2009
David S. Huntington, Esq.
Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue ofthe Americas

New York, NY 10019-6064
Re: In the Matter of Evergreen Investment Management Company, LLC and Evergreen Investment Services, Inc. - Waiver Request under Regulation A and Rule 505 of Regulation D Dear Mr. Huntington:
This responds to your letter dated today, written on behalfofEvergreen Investment Management Company, LLC and Evergreen Investment Services, Inc. (together, "the Respondents"), and constituting an application for relief under Rule 262 ofRegulation A and Rule 505(b)(2)(iii)(C) ofRegulation D under the Securities Act of 1933. You requested relief from any disqualification from exemptions available under Regulation A and Rule 505 that may have arisen by reason ofthe administrative order entered today under sections 15(b)(4) and 2lC ofthe Securities Exchange Act of 1934 ("Exchange Act"), sections 203(e) and 203(k) ofthe Investment Advisers Act of 1940 ("Investment Advisers Act"), and sections 9(b) and 9(f) ofthe Investment Company Act of 1940 by the Securities and Exchange Commission in In the Matter ofEvergreen Investment Management Company, LLC and Evergreen Investment Services, Inc., Release No. 33-60059 (the "Order"). You also requested relieffrom disqualifications under Regulation A and Rule 505 ofRegulation D that arise as a result ofthe entry of any related state order, judgment, or decree arising from the same facts and circUmstances addressed in the Order. Certain orders entered under section 15(b) ofthe Exchange Act and section 203(e) of the Investment Advisers Act result in such disqualification. Paragraph N(G) ofthe Order, which orders the Respondents to comply with certain undertakings, insofar as it was entered under section 15(b) ofthe Exchange Act or section 203(e) ofthe Investment Advisers Act, may be such a provision. The Order also includes other remedial sanctions that do not result in disqualification under Rule 262 or Rule 505. I For purposes ofthis letter, we have assumed, as facts, the representations set forth in your letter and the findings supporting entry ofthe Order. We also have assumed that the Respondents will comply with the Order.

David S. Huntington, Esq.
Evergreen Investment Management Company, LLC
Evergreen Investment Services, Inc.
June 8, 2009
On the basis ofyour letter, I have determined that you have made showings of good cause under Rule 262 and Rule 505 that it is not necessary under the circumstances to deny the exemptions available under Regulation A and Rule 505 by reason of entry ofthe Order or any related state order, judgment, or decree arising from the same facts and circumstances as those addressed in the Order. Accordingly, pursuant to delegated authority, and without determining whether or not any such disqualification arose by virtue of entry ofthe Order, the Respondents and other persons subject to any disqualification from exemptions otherwise available under Regulation A and Rule 505 that arose by"reason of entry ofthe Order are granted relief from such disqualification. Very truly yours, CZ~Py~ Chief, Office ofSmall Business Policy

PAUL. WEISS, RIFKIND, WHARTON & GARRISON LLP
1285 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019-6064
TELEPHONE (212) 373-3000
FACSiMILE (212) 757-3990
LLOYD K. GARRISON ('948-1991)
RANDOLPH E. PAUL (1948-19!16)
SIMON H. RIFKIND (1950-1995)
LOUIS S. WEISS (1927·1950)
JOHN F. WHARTON (1 St27-' 977)
WRITER'S DIRECT DIAL NUMBER
212-373-3124 WRITER'S DIRECT FACSIMILE
212-492-0124 WRITER'S DIRECT E-MAIL ADDRESS dhuntington@paulweiss.com 200 I K STItEET. NW WASHINGTON. DC 20008-10,47 TELEPHONE (202) 223-7300 FACSIMILE (202) 223-7420 FUKOKU SEIMEI BUILDING 2-2 UCHISAIWAtCHO 2-CHOME CHIVODA-KU. TOKYO '00-0011, JAPAN TEL.EPHONE (8'-3) 3597-8101 FACSIMIL.E (81-3) 3597-8120 UNIT 3601, FORTUNE PLAZA OFFICE TOWER A NO.7 DONG 5ANHUAN ZttONGLU CHAO YANG DISTRICT BEIJING (00020 PEOPLE'S REPUBLIC OF CHINA . TELEPHONE (88-'0) 5828-15300 FACSIMILE (86-tOI 8630-9070/9080 12TH FLOOR, HONG KONG CLUB BUILDING 3A CHATER ROAD, CENTRAL HONG KONG TELEPHONE (862) 2535-9933 FACSIMILE (852) 2S36-9~22 AL.DER CASTl..E to NOBLE STREET LONDON EC2V 7JU, U.K. TEL.EPHONE (44 20) 7367 1500 FACSIMIL.E (44 20) 73&7 1650 June 8, 2009 MATTHEW W. ABBOTT MARK H. AL.COTT ALLAN.J. ARFFA ROBERT A. ATKINS JOHN F. BAUGHMAN LYNN D o MI G M N B M H. BOEHNING A BONVINO H NDS • BROCHIN J. BRONSTEIN BftOWN AM. BUERGEL ICK S. CAMPBELL JEANETTE K. CHAN YVONNE Yo F. CHAN LEWIS R. CLAYTON JAY COHEN KELLEY A. CORNiSH CHARL.ES E. DAVIDOW DOUGLAS R. DAVIS THOMAS V. OE LA IlASTIOE III ARIEL J. OE IlAUM JAMES M. D ANDREW J. IeH LESLIE G FAGEN MA,RCFAL . PETER L. ER ROBERTO"I I PETER E. FI ROBERTc. MARTIN FL ANDREWJ. HARRIS a.,. MANUELS. KENNETH A. GAL.L.O MICHAEL E. GERTZMAN PAUL O. GINSBERG ERIC S. liOLOSTElN ERIC GOODISON CHARLES H. GOOGE. JR. ANDREW G. GORDON BRUCE A. GUTENPLAN GAINES GWATHMEY, III ALAN S. HALPERIN HAMMERMAN E.HARPER

• HERMANN
  M. HIRSH E HIRSHMAN JOYCE S. HUANG MEREDITH J. KANE ROBERTA A. KAPLAN BRAD s. KARP JOHN C. KENNEDY ALAN W. KORNBERG DANIEL J. KRAMER
• NOT ADMITTED TO THE NEW "ORK BAR
  DAVID K. LAKHDHIR JOHN E. LANGE DANIEL J. LEFFELL XJAOYU GREG LtV JEFFREY D. MARELL JULIA TARVER MASON MARCO V. MASOTTI EDWIN S. MAYNARD DAVID W. MAYO TOBY 5. MVERSON JOHN E. NATHAN CATHERINE NYARADY ALEX YOUNCi K. OH JOHN J. O'NEIL KELLEY O. PARKER ROBERT ER· MARC E. UTTER MARK F. NTZ VALERIE NER CAREY R. CARL L. REISNER WAl.TER G. RiCCiARDI WALTER RIEMAN RICHARD A. ROSEN ANDREW N. ROSENBERG PETERJ.ROTHENIlERG JACQUELINE Po RUSIN RAPHAEL M. RUSSO JEFFREY D. SAFERSTEIN JEFFREY B. SAMUELS OALE M. SARRO TERRY E. SCHIMEK KENNETH M. SCHNEIDER ROBERT SCHUMER JAMES HWAB STEPHE IMSHAK DAVIDR R SILVERMAN SIMKIN J J. SIMONS N SOBEL "" M. STEWART ERIC ALAN STONE A'OAN SYNNOTT ROBYN F. TARNOFSKY JUDITH R. THOYER DANIEL. J. TOAL MARK A. UNDERBERG LlZA M. VEl.AZQUEZ MARIA T. VULl.O LAWRENCE G. WEE ~~krfls?'~S'JR. J. WiLLIAMS CE I. WITDORCHtC JORDAN E. YARETT KAYE N. YOSHINO TONGYU TRACEY A. ZACCONE T. ROBERT ZOC"'OWSKI. JR. FIRST CLASS MAIL AND EMAIL Gerald J. Laporte, Esq. Chief, Office ofSmall Business Policy Division ofCorporation Finance Securities and Exchange Commission 100 F Street, N.E. Washington, DC 20549-3628 Re: In the Matter ofEvergreen Investment Management Company, LLC and Evergreen Investment Services. Inc. (File No. B-2389) - Waiver Request under Regulation A and Rule 505 ofRegulation D Dear Mr. Laporte:
  We submit this letter on behalfofour clients Evergreen Investment Management Company, LLC ("EIMCO") and Evergreen Investment Services, Inc. ("EIS," and, together with EIMCO, the "Settling Firms"), in connection with the settlement between the Settling Firms and the Securities and Exchange Commission (the "Commission") in the above referenced administrative proceedings. The Settling Firms are indirect subsidiaries ofWells Fargo & Company ("Wells Fargo"). Through its direct and indirect subsidiaries, Wells Fargo offers banking, brokerage, advisory and other financial services to institutional and individual customers worldwide. The Settling Firms request, pursuant to Rule 262 ofRegulation A and Rule 505(b)(2)(iii)(C) ofRegulation D promulgated under the Securities Act of 1933, as amended (the "Securities Act"), a waiver of any disqualification from exemptions under Regulation A and Rule 505 of Regulation D that may be applicable to the Settling Firms, Doc#: US1:S619757v4

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Gerald J. Laporte, Esq. Page 2 any oftheir affiliates or any issuer, offering participant or other person as a result ofthe entry ofthe Order (as defined below) or any related state order, judgment or decree arising from the same facts and circumstances addressed in the Order. 1 We request that this waiver be made effective upon entry ofthe Order. BACKGROUND The Settling Firms have engaged in settlement discussions with the staff ofthe Division ofEnforcement in connection with the administrative proceedings referenced above, which were brought pursuant to Sections 15(b)(4) and 21C ofthe Securities Exchange Act of 1934, as amended (the "Exchange Act"), Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, as amended (the "Advisers Act"), and Sections 9(b) and 9(t) ofthe Investment Company Act of 1940, as amended (the "Investment Company Act"). As a result ofthese discussions, the Settling Firms submitted an offer of settlement, pursuant to which they consented to an Order ofthe Commission, which was entered on the date ofthis letter (the "Order"). Under the terms ofthe offer ofsettlement, the Settling Firms neither admitted nor denied any ofthe findings in the Order, except as to jurisdiction. The Order relates to violations ofthe federal securities laws by the Settling Firms as a result ofthe overstatement ofthe net asset value ofthe Evergreen Ultra Short Opportunities Fund (the "Ultra Fund"), the selective disclosure of certain information concerning the Ultra Fund to some but not all Ultra Fund shareholders, certain prohibited securities transactions involving the Ultra Fund and the failure to comply with certain record-keeping requirements. Under the terms ofthe Order, the Commission:
(i) Censured EIMCO under Section 203(e) ofthe Advisers Act and censured EIS under Section 15(b)(4) ofthe Exchange Act; (ii) Required EIMCO to cease and desist from committing or causing any violations or any future violations of Sections 204A and 206(2) ofthe Advisers Act and Sections 17(a)(I) and 34(b) ofthe Investment Company Act and Rule 22c-l(a) promulgated thereunder; (iii) Required EIS to cease and desist from committing or causing any violations or any future violations ofSection 206(2) ofthe Advisers Act and Sections 15(t) and Section 17(a) ofthe Exchange Act, Rule 17a￾4(b)(4) promulgated under the Exchange Act and Rule 22c-l(a) promulgated under the Investment Company Act; (iv) Required EIMCO to pay disgorgement of$2,860,000, prejudgment interest of$265,000 and a civil penalty of$2,000,000; The Settling Firms expect to enter into a settlement with the Massachusetts Securities Division arising from matters related to the activity described in the Order. To the extent that any such settlement may result in an order, judgment or decree that would cause an ineligibility under Regulation A or Regulation D, this request also covers any such resulting ineligibility.

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Gerald J. Laporte, Esq. Page 3
(v) Required EIS to pay disgorgement of$1 and a civil penalty of $2,000,000; (vi) Required the Settling Finns to establish a Fair Fund pursuant to Section 308(a) ofthe Sarbanes-Oxley Act of2002; and (vii) Required the Settling Finns to comply with certain undertakings set forth in the Order, including making a payment of$33,000,000 to compensate Ultra Fund shareholders and appointing an Independent Compliance Consultant. DISCUSSION The Settling Finns understand that the Order could disqualify them, their affiliated entities and issuers, offering participants and other persons from participating in certain offerings otherwise exempt under Regulation A and Rule 505 ofRegulation D promulgated under the Securities Act insofar as the Settling Finns are subject to an order ofthe Commission entered pursuant to Section 15(b) ofthe Exchange Act or Section 203(e) ofthe Advisers Act. The Commission has the authority to waive the exemption disqualification under Regulation A and Rule 505 ofRegulation D upon a showing of good cause that such disqualifications are not necessary under the circumstances. See Rule 262 ofRegulation A and Rule 505(b)(2)(iii)(C) ofRegulation D.2 The Settling Finns request that the Commission waive any disqualifying effects that the Order or any related state order, judgment or decree arising from the same facts and circumstances addressed in the Order may have under Regulation A and Rule 505 ofRegulation D with respect to the Settling Firms, their affiliates or any issuer, offering participant or other person on the following grounds:

1. The conduct ofthe Settling Finns addressed in the Order does not relate to
   offerings under Regulation A or Rule 505 ofRegulation D.
2. The Settling Finns voluntarily cooperated with the Division of
   Enforcement in the investigation ofthis matter and agreed to pursue a comprehensive settlement at the request ofthe Division ofEnforcement. Under the tenns ofthe settlement, the Settling Firms agreed to undertake certain remedial and corrective measures related to compliance oversight.
3. The disqualification ofthe Settling Finns, their affiliates and other persons
   from the exemptions under Regulation A and Rule 505 ofRegulation D 2 We note in support ofthis request that the Commission has in other instances granted reliefunder Rule 262 ofRegulation A and Rule SOS(b)(2)(iii)(C) ofRegulation D. See.~, Gabelli Funds. LLC, SEC Letter (pub. avail. Apr. 24, 2008); Bank ofAmerica Securities LLC, SEC Letter (pub. avail. May 31,2006); Citigroup Global Markets. Inc., SEC Letter (pub. avail. May 31, 2006); J.P. Morgan Securities. Inc., SEC Letter (pub. avail. May 31, 2006); Wachovia Capital Markets. LLC, SEC Letter (pub. avail. May 31, 2006); American International Group. Inc., SEC Letter (pub. avail. Dec. 7,2004); Goldman. Sachs & Co., SEC Letter (pub. avail. Oct. 30, 2003); Credit Suisse First Boston COIporation, SEC Letter (pub. avail. Jan. 29, 2002); Dain Rauscher. Incorporated, SEC Letter (pub. avail. Sepl27, 2001); Legg Mason Wood Walker. Incorporated, SEC Letter (pub. avail. June 11,2001).

PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP
Gerald J. Laporte, Esq. Page 4 would have an adverse impact on third parties that retain or provide services to either ofthe Settling Finns or any oftheir affiliates in connection with transactions that may need to be made in reliance on these exemptions.
4. The disqualification ofthe Settling Firms, their affiliates and other persons
from the exemptions under Regulation A and Ru1e 505 ofRegulation D would be unduly and disproportionately severe, given that the Commission staffhas negotiated a settlement with the Settling Firms and reached a satisfactory conclusion to the matter addressed in the Order.
5. The Division ofEnforcement does not object to the granting ofthe
requested waiver.
In light ofthe foregoing, the Settling Firms believe that they have shown good cause that reliefshould be granted. Accordingly, we respectfully request the Commission, pursuant to Ru1e 262 ofRegulation A and Ru1e 505(b)(2)(iii)(C) of Regulation D, to waive, effective as ofthe entry ofthe Order, the disqualification provisions in Regulation A and Ru1e 505 ofRegulation D to the extent they may be applicable to the Settling Firms, any oftheir affiliates or any issuer, offering participant or other person as a result ofthe Order or any related state order, judgment or decree arising from the facts and circumstances addressed in the Order. Please do not hesitate to contact me at(212) 373-3124 regarding this request. Sincerely yours, David S. Huntington cc: Charles Neal, Wells Fargo & Company