UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-16729

In the Matter of

Miller Energy Resources, Inc., Paul 

W. Boyd, CPA, David M. Hall, and 

Carlton W. Vogt, III, CPA, 

Respondents.

 

ADMINISTRATIVE PROCEEDING

File No. 3-18110

In the Matter of 

KPMG LLP and John Riordan, CPA,

Respondents.

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PROPOSED PLAN OF 

DISTRIBUTION 

I. OVERVIEW

1. The Division of Enforcement submits this Proposed Plan of Distribution (the 

“Plan”) to the United States Securities and Exchange Commission (the “Commission”) pursuant 

to Rule 1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the 

“Commission’s Rules”), 17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair 

Fund (the “Fair Fund”)1established for the disgorgement, prejudgment interest, and civil 

penalties collected in the KPMG AP2from KPMG LLP (“KPMG”) and John Riordan, CPA 

(“Riordan”) (collectively, the “KPMG Respondents”) and the civil penalties collected in the 

Miller Energy AP,3including any future funds collected in the Miller Energy AP, from Miller 

Energy Resources, Inc. (“Miller Energy”), Paul W. Boyd, CPA (“Boyd”), David M. Hall 

1

 See Order Establishing a Fair Fund, Exchange Act Rel. No. 94300 (Feb. 23, 2022).

2

 In the Matter of KPMG, LLP, et al., Admin. Proc. File No. 3-18110.

3

 In the Matter of Miller Energy Resources, Inc., et al., Admin. Proc. File No. 3-16729.
2

(“Hall”), and Carlton W. Vogt, III, CPA (“Vogt”) (collectively, the “Miller Energy 

Respondents”).4

2. As described more specifically below, the Plan seeks to compensate investors 

who were harmed, by the Respondents’ conduct described in the Orders, in connection with 

financial accounting and reporting fraud, as well as audit failures, related to the valuation of 

certain oil and gas assets acquired by Miller Energy. As calculated using the methodology 

detailed in the Plan of Allocation (attached as Exhibit A), investors will be compensated for their 

losses on shares of Miller Energy common stock (the “Securities”) purchased from March 22, 

2010 through April 29, 2015, inclusive (the “Relevant Period”) due to the misconduct of the 

Respondents described in the Orders. In the view of the Commission staff and the Fund 

Administrator, this methodology constitutes a fair and reasonable allocation of the Fair Fund. 

3. The Commission has custody of the Fair Fund and shall retain control of the 

assets of the Fair Fund. The Plan is subject to approval by the Commission, and the Commission 

retains jurisdiction over its implementation.

II. BACKGROUND

4. On August 6, 2015, the Commission instituted public administrative and ceaseand-desist proceedings against Miller Energy, its former officers Boyd and Hall, and Vogt, the 

engagement partner at a now defunct independent audit firm who audited Miller Energy’s 

financial statements for fiscal year 2010.5 The Commission later resolved these proceedings by 

separate settled orders as to Miller Energy6on January 12, 2016 and as to Boyd,7 Hall,8and 

Vogt9on June 7, 2016.

5. In the Orders, the Commission found that the Miller Energy Respondents engaged 

in financial accounting and reporting fraud, as well as audit failures, related to the valuation of 

certain oil and gas assets in Alaska (the “Alaska Assets”) acquired by Miller Energy. Miller 

Energy, an oil and gas company headquartered in Houston, Texas, purchased these assets for 

$2.25 million in cash – along with the assumption of certain liabilities it valued at approximately 

4 Hereinafter, the KPMG Respondents and Miller Energy Respondents are collectively referred to as the 

“Respondents” and their respective settled orders are collectively referred to as the “Orders”.

5

 See Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the 

Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934, and Rule 102(e) of the 

Commission’s Rules of Practice, Securities Act Rel. No. 9881 (Aug. 6, 2015).

6

 See Order Making Findings and Imposing a Cease-and-Desist Order and Penalties Pursuant to Section 8A of the 

Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 as to Miller Energy Resources, Inc., 

Securities Act Rel. No. 10002 (Jan. 12, 2016).

7

 See Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 8A of the Securities Act of 

1933, Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of 

Practice as to Paul Boyd, CPA, Securities Act Rel. No. 10089 (June 7, 2016).

8

 See Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 8A of the Securities Act of 

1933 and Section 21C of the Securities Exchange Act of 1934 as to David M. Hall, Securities Act Rel. No. 10090 

(June 7, 2016).

9

 See Order Making Findings and Imposing Remedial Sanctions Pursuant to Sections 4C and 21C of the Securities 

Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice as to Carlton W. Vogt, III, CPA, 

Securities Act Rel. No. 10091 (June 7, 2016).
3

$2 million – during a competitive bid in a bankruptcy proceeding in December 2009. According 

to the Orders, Miller Energy subsequently reported those assets at an overstated value of $480 

million and recognized a one-time “bargain purchase” gain of $277 million for its fiscal third 

quarter ended January 2010 and fiscal year ended April 2010.

6. The Commission found that Boyd, Miller Energy’s Chief Financial Officer, failed 

to account for the acquisition in accordance with generally accepted accounting principles 

(“GAAP”) which required Miller Energy to record the Alaska Assets at “fair value.” The 

Commission also found that Boyd used a report containing expense numbers that were 

knowingly understated by Hall, Miller Energy’s Chief Executive, and double counted $110 

million of certain fixed assets.

7. In addition, according to the Orders, Vogt, the lead engagement partner assigned 

to the audit of Miller Energy’s financial statements for fiscal year 2010, failed to comply with 

the Public Company Accounting Oversight Board rules and standards in auditing Miller 

Energy’s financial statements, including its accounting for the Alaska Assets. The Commission 

found that Vogt failed to exercise due professional care and skepticism by not adequately 

assessing whether Miller Energy’s accounting treatment for the acquisition of the Alaska Assets 

complied with GAAP. Further, the Commission Orders show that Vogt failed to obtain 

sufficient competent evidential matter for management’s assertions regarding the fair value of 

the Alaska Assets.

8. The Commission ordered Miller Energy to pay a civil penalty of $5,000,000 

which could be satisfied by the Commission having an allowed general unsecured claim in Class 

4 of the Miller Energy’s Joint Plan of Reorganization, Case No. 15-00236, pending in the United 

States Bankruptcy Court for the District of Alaska (the “Bankruptcy Case”), in the amount of 

$5,000,000 or by Miller Energy making payments as directed over the course of three years, 

starting within five days of the termination of the Bankruptcy Case. The Order against Miller 

Energy provided that the Commission may distribute civil money penalties collected in this 

proceeding, if, in its discretion, the Commission ordered the establishment of a Fair Fund, 

pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002. The Order further provided that 

the Commission would hold the funds collected in an account at the U.S. Treasury pending a 

decision whether the Commission, in its discretion, would seek to distribute the funds or transfer 

them to the general fund of the U.S. Treasury. In their respective Orders, the Commission 

ordered Hall and Boyd to each pay a $125,000 civil penalty to the Commission for transfer to the 

U.S. Treasury.10

9. On January 28, 2016, the Bankruptcy Court entered an order in the Bankruptcy 

Case granting the Commission’s allowed general unsecured claim in the amount of $5,000,000. 

The Commission collected $897,049.77 from the Miller Energy Bankruptcy. The Bankruptcy 

Trustee filed the final tax return for the Bankruptcy in September 2023.

10

 No monetary sanctions were ordered against Vogt.
4

10. On August 15, 2017, in a related matter, the Commission instituted and 

simultaneously settled the KPMG AP11 against Miller Energy’s successor auditor, KPMG, and 

engagement partner, Riordan, in connection improper professional conduct and securities 

violations related to an audit of Miller Energy’s financial statements. In the KPMG Order, 

among other things, the Commission ordered KPMG to pay $4,675,680 in disgorgement, 

$558,319 in prejudgment interest, and a $1,000,000 civil penalty, and Riordan to pay at $25,000 

civil penalty. The KPMG Order provided that the Commission may distribute civil money 

penalties collected in this proceeding, if, in its discretion, the Commission orders the 

establishment of a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002. 

The KPMG Order further provided that the Commission will hold all funds collected pursuant to 

the KPMG Order in an account at the U.S. Treasury pending a decision whether the 

Commission, in its discretion, will seek to distribute the funds or transfer them to the general 

fund of the U.S. Treasury. KPMG and Riordan have paid in full, and the Commission holds a 

total of $6,258,999 in an interest-bearing account at the U.S. Treasury, pursuant to the KPMG 

Order.

11. On February 23, 2022, the Commission issued an order12 that created the Fair 

Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the funds collected in 

the KPMG AP and Miller Energy AP, including any future funds collected in the Miller Energy 

AP, for the purposes of distribution to harmed investors and recalled the $83,621.28 in penalties 

collected from Hall and Boyd from the U.S. Treasury for inclusion in the Fair Fund.

12. Currently, the Fair Fund is comprised of $7,239,670.05, and any additional funds 

collected from the Respondents, pursuant to the Orders will be added to the Fair Fund. The Fair 

Fund has been deposited in a Commission-designated account at the United States Department of 

the Treasury, and any accrued interest will be added to the Fair Fund. 

III. DEFINITIONS

As used in this Plan, the following definitions will apply:

13. “Administrative Costs” shall mean any administrative costs and expenses, 

including without limitation the fees and expenses of the Tax Administrator and the Fund 

Administrator, tax obligations, bond premium expenses, and investment and banking costs. 

14. “Claim Form” means the form designed by the Fund Administrator, in 

consultation with the Commission staff, for the filing of claims in accordance with this Plan. 

The claim form will require, at a minimum, sufficient documentation reflecting any Preliminary 

Claimant’s purchases and dispositions of Securities during the Relevant Period such that 

eligibility under the Plan can be determined, tax identification and other related information from 

the Preliminary Claimant as determined necessary by the Fund Administrator in coordination 

11

 See Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Sections 4C and 21C 

of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission’s Rules of Practice, Making Findings, 

and Imposing Remedial Sanctions and a Cease-and-Desist Order, Exchange Act Rel. No. 81396 (Aug. 15, 2017)

(the “KPMG Order”). 

12

 Order Establishing a Fair Fund, Exchange Act Rel. No. 94300 (Feb. 23, 2022).
5

with the Tax Administrator, and a certification that the Preliminary Claimant is not an Excluded 

Party. 

15. “Claim Status Notice” means the notice sent by the Fund Administrator within 

ninety (90) days of the Claims Bar Date to any Preliminary Claimant that submitted a deficient 

Claim Form. The Claim Status Notice will provide to each Preliminary Claimant whose claim is 

deficient, in whole or in part, the reason(s) for the deficiency and in the event the claim is denied, 

the Claim Status Notice will state the reason(s) for such denial. The Claim Status Notice will 

also notify the Preliminary Claimant of the opportunity to cure any deficiency, request 

reconsideration, or dispute the determination made by the Fund Administrator and provide 

instructions regarding what is required to do so.

16. “Claims Bar Date” means the date established in accordance with this Plan by 

which a Preliminary Claimant’s Claim Form must be postmarked or submitted electronically in 

order to receive consideration under the Plan. The Claims Bar Date shall be one hundred twenty 

(120) days after the initial mailing of the Plan Notice. Claim Forms submitted by Preliminary 

Claimants postmarked or received after the Claims Bar Date will not be accepted unless the Fund 

Administrator is directed to do so by the Commission staff.

17. “Claims Packet” means the materials relevant to submitting a claim that will be 

provided to Preliminary Claimants who request such materials through a website or otherwise 

prior to the Claims Bar Date. The Claims Packet will include, at a minimum, a copy of the Plan 

Notice and a Claim Form (together with instructions for completion of the Claim Form).

18. “Determination Notice” shall mean the written notice sent by the Fund 

Administrator to all Preliminary Claimants who timely submitted a Claim Form notifying the 

Preliminary Claimant of its eligibility determination. The Determination Notice will further 

provide each Preliminary Claimant that is determined to be an Eligible Claimant with his, her, or 

its calculated Recognized Loss. The Determination Notice will constitute the Fund 

Administrator’s final ruling regarding the eligible status of the claim.

19. “Distribution Payment” means a payment from the Fair Fund to a Payee in 

accordance with the terms of this Plan.

20. “Eligible Claimant” means a Preliminary Claimant, who is not an Excluded 

Party, who submitted a valid Claim Form and has suffered a Recognized Loss, as calculated in 

accordance with the Plan of Allocation.

21. “Excluded Party” shall mean:

(a) The Respondents;

(b) Present or former officers or directors of Respondents or any assigns, 

creditors, heirs, distributees, spouses, parents, dependent children or 

controlled entities of any of the foregoing Persons or entities;
6

(c) Any employee or former employee of the Respondents or any of its 

affiliates who has been terminated for cause or has otherwise resigned, in 

connection with the conduct described in the Orders; 

(d) Any Person who, as of the Claims Bar Date, has been the subject of 

criminal charges related to the conduct described in the Orders or any 

related Commission action;

(e) Any firm, trust, corporation, officer, or other entity in which Respondents 

has or had a controlling interest;

(f) The Fund Administrator, its employees, and those Persons assisting the 

Fund Administrator in its role as the Fund Administrator; or

(g) Any purchaser or assignee of another Person’s right to obtain a recovery 

from the Fair Fund for value; provided, however, that this provision shall 

not be construed to exclude those Persons who obtained such a right by 

gift, inheritance or devise.

The Claim Form will require claimants to certify that they are not an Excluded Party. All 

Excluded Parties will be deemed ineligible to participate in the distribution of the Fair Fund.

22. “Fair Fund” means the fund created by the Commission pursuant to Section 

308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by Respondents’ 

violations described in the Orders. Any additional funds collected from the Respondents, 

pursuant to the Orders will be added to the Fair Fund.

23. “Net Available Fair Fund” means the Fair Fund, plus any interest or earnings, 

less Administrative Costs. 

24. “Payee” means an Eligible Claimant whose Recognized Loss calculates, in 

accordance with the Plan of Allocation, to a distribution amount is equal to or greater than 

$10.00 who will receive a Distribution Payment. 

25. “Person” means natural individuals as well as legal entities such as corporations, 

partnerships, or limited liability companies.

26. “Plan Notice” means a written notice from the Fund Administrator to Preliminary 

Claimants informing them of the Fair Fund; the Plan and its eligibility requirements; explaining 

how to submit a claim, including instructions for any online claims process; and how to obtain a 

copy of the approved Plan and Claim Form by request or from the Fair Fund’s website. The Plan 

Notice will also be available on the Fair Fund’s website that is maintained by the Fund 

Administrator. 
7

27. “Plan of Allocation” means the methodology used by the Fund Administrator to 

calculate if a Preliminary Claimant has suffered a Recognized Loss. The Plan of Allocation is 

attached as Exhibit A.

28. “Preliminary Claimant” shall mean a Person, or their lawful successors, 

identified by the Fund Administrator as having a possible claim to recover from the Fair Fund 

under this Plan, or asserting, prior to the Claims Bar Date, that he, she, or it has a possible claim 

to recover from the Fair Fund under this Plan, as a result of transactions in the Securities during 

the Relevant Period. 

29. “Recognized Loss” means the amount of loss calculated in accordance with the 

Plan of Allocation.

30. “Relevant Period” means the period of time between March 22, 2010 and 

April 29, 2015, inclusive. 

31. “Securities” refers to shares of Miller Energy Resources, Inc. common stock.

32. “Summary Notice” means the notice published in print or internet media that 

shall include, at a minimum, a statement of the purpose of the Fair Fund and the Plan, the means 

of obtaining a Claims Packet, and the Claims Bar Date. The Summary Notice will be published 

The Summary Notice will be published two (2) times within ten (10) days of the initial mailing 

of the Plan Notice.

33. “Third-Party Filer” means a third-party, including without limitation a nominee, 

custodian, or an intermediary holding in street name, who is authorized to submit and submits a 

claim(s) on behalf of one or more Preliminary Claimants. Third-Party Filer does not include 

assignees or purchasers of claims, which are excluded from receiving Distribution Payments.

IV. TAX COMPLIANCE

34. On August 31, 2022, the Commission appointed Heffler, Radetich, & Saitta LLP 

as the tax administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations 

of the Fair Fund.

13

 The Tax Administrator will be compensated for reasonable fees and expenses 

from the Fair Fund in accordance with its 2022-2024 Omnibus Letter Agreement with the 

Commission.14

35. The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section 

468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related 

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the 

administrator of such QSF, for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the 

tax-related administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not 

limited to:

13

 See Order Appointing Tax Administrator, Exchange Rel. No. 95642 (Aug. 31, 2022).

14

 See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that 

Establish Distribution Funds, Exchange Act Rel. No. 94845 (May 4, 2022).
8

(a) Obtaining a taxpayer identification number; 

(b) Requesting funds necessary for the timely payment of all applicable taxes, 

the payment of taxes for which the Tax Administrator has received funds, 

and the filing of applicable returns; and 

(c) Fulfilling any information reporting or withholding requirements required 

for distributions from the Fair Fund.

36. All tax obligations will be paid from the Fair Fund, subject to the review and 

approval of Commission staff.

V. FUND ADMINISTRATOR

37. On September 29, 2022, the Commission has appointed Guidehouse Inc., Baker 

& Hostetler LLP, and PACE Claims Services LLC, as the fund administrator for the Fair Fund 

(the “Fund Administrator”), and the Fund Administrator has obtained a bond in the amount of 

$7,241,124.92, as ordered.15 Pursuant to Rule 1105(a) of the Commission’s Rules, 17 C.F.R. § 

201.1105(a), the Fund Administrator may be removed at any time by order of the Commission or 

hearing officer. 

38. The Fund Administrator will be responsible for administering the Fair Fund in 

accordance with the Plan. This will include, among other things, taking reasonable steps to 

identify and contact Preliminary Claimants; obtaining mailing information for Preliminary 

Claimants; establishing a website and staffing a call center to address inquiries during the claims 

process; developing a claims database; preparing accountings; cooperating with the tax 

administrator appointed by the Commission to satisfy any tax liabilities and to ensure 

compliance with income tax reporting requirements, including but not limited to Foreign 

Account Tax Compliance Act (FATCA); advising Preliminary Claimants of deficiencies in 

claims and providing an opportunity to cure any documentary defects; taking antifraud measures, 

such as identifying false, ineligible and overstated claims; making determinations under the 

criteria established herein as to Preliminary Claimant eligibility; advising Preliminary Claimants 

of final claim determinations; disbursing the Fair Fund in accordance with this Plan, as ordered 

by the Commission; and researching and reconciling errors and reissuing payments, when 

possible.

39. To carry out the purposes of this Plan, the Fund Administrator is authorized to 

make and implement immaterial changes to the Plan upon agreement of the Commission staff. If 

a change is deemed to be material by the Commission staff, Commission approval is required 

prior to implementation by amending the Plan.

40. The Fund Administrator may extend any procedural deadline contained in the 

Plan for good cause shown, if agreed upon by the Commission staff.

15

 See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 95941 (Sept. 29, 

2022).
9

41. The Fund Administrator is authorized to enter into agreements with third parties 

as may be appropriate or necessary in the administration of the Fair Fund, provided such third 

parties are not excluded pursuant to other provisions of this Plan. In connection with such 

agreements, the third parties shall be deemed to be agents of the Fund Administrator under this 

Plan. 

42. The Fund Administrator will be entitled to payment from the Fair Fund of 

reasonable fees and expenses, including the bond premium, incurred in the performance of its 

duties (including any such fees and expenses incurred by agents, consultants or third parties 

retained by the Fund Administrator in furtherance of its duties).

VI. ADMINISTRATION OF THE FAIR FUND

Identification of and Notification to Preliminary Claimants

43. The Fund Administrator will, insofar as practicable, use its best efforts to 

identify Preliminary Claimants from a review of trading records, obtaining records from 

registered broker-dealers and investment advisors, and seeking information from any other 

source available to it. The Fund Administrator may also engage a third-party firm, after 

consultation with and approval of the Commission staff, to assist in identifying Preliminary 

Claimants to maximize the participation rate of Miller Energy investors in the Fair Fund.

44. Within sixty (60) days after Commission approval of the Plan, the Fund 

Administrator shall:

(a) design and submit a Claims Packet, including the Plan Notice and the 

Claim Form, to the Commission staff for review and approval; 

(b) create a mailing and claim database of all Preliminary Claimants based 

upon information identified by the Fund Administrator;

(c) run a National Change of Address search to retrieve updated addresses for 

all records in the database, thereby ensuring the mailing information for 

Preliminary Claimants is up-to-date;

(d) email and/or mail a Plan Notice to each Preliminary Claimant identified 

by the Fund Administrator and to the Fund Administrator’s list of banks, 

brokers, and other nominees in accordance with paragraph 49 below;

(e) establish and maintain a website devoted solely to the Fair Fund. The Fair 

Fund’s website, located at www.Miller.FundadministratorGBP.com, will 

make available a copy of the approved Plan; provide information 

regarding the claims process and eligibility requirements for participation 

in the Fair Fund in the form of frequently asked questions; include in 

downloadable form, the Claim Form and other related materials; and such 
10

other information the Fund Administrator believes will be beneficial to 

Preliminary Claimants;

(f) establish and maintain a toll-free telephone number, 833-410-9090, for 

Preliminary Claimants to call to speak to a live representative of the Fund 

Administrator during its regular business hours or, outside of such hours, 

to hear prerecorded information about the Fair Fund. The toll-free number 

will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website; and

(g) establish and maintain a traditional mailing address and an email address 

which will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website. 

45. The Fund Administrator will publish the Summary Notice on the internet and/or 

in print media acceptable to Commission staff two (2) times within ten (10) days of the initial 

mailing of the Plan Notice.

46. The Commission staff retains the right to review and approve any material posted 

on the Fair Fund’s website, any material mailed, and any scripts used in connection with any 

communication with Preliminary Claimants. 

47. In all materials that refer to the Claims Bar Date, the filing deadline will be 

clearly identified with the calendar date, which is one hundred twenty (120) days from the date 

of the initial mailing of the Plan Notice.

48. The Fund Administrator will promptly provide a Claims Packet to any 

Preliminary Claimant upon request made via mail, phone, or email prior to the Claims Bar Date.

49. The Fund Administrator will send by mail, email, or other means, the Plan Notice 

to the Fund Administrator’s list of banks, brokers, and other nominees, as well as any other 

institutions identified during the outreach process, that may have records of the Securities during 

the Relevant Period (collectively, the “Nominees or Custodians”). The Fund Administrator will 

request that these entities, to the extent that they were record holders for beneficial owners of the 

Securities:

(a) within fourteen (14) days of the Nominees’ or Custodians’ receipt of the 

Plan Notice, notify and send the Plan Notice to the respective beneficial 

owners, and, as requested, provide to the beneficial owners a Claim Form, 

so that the beneficial owners may timely file a claim. The burden will be 

on the Nominees or Custodians to ensure the claims process information, 

including, if requested, the Claims Packet and other relevant materials, is 

properly disseminated to the beneficial owners; and/or

(b) provide to the Fund Administrator, within fourteen (14) days of receipt of 

the Plan Notice, a list of last known names and addresses for all beneficial 
11

owners for whom/which they purchased, as the record holder, the 

Securities during the Relevant Period, so that the Fund Administrator can 

communicate with the beneficial owners directly.

50. An unlimited number of Plan Notices and Claim Forms may be downloaded by 

the Nominees or Custodians from the Fair Fund’s website. In the event paper copies are needed, 

the Fund Administrator may provide no more than fifty (50) additional copies of the materials 

relevant to submitting a claim to any Nominee or Custodian requesting it for the purpose of 

distribution to beneficial owners.

51. Documented reasonable out-of-pocket expenses incurred by the Nominees or the 

Custodians, which would not have been incurred but for compliance with paragraph 49 above, 

shall be reimbursed from the Fair Fund. The amount of such expenses allowed will be at the 

discretion of the Fund Administrator, in consultation with the Commission staff. Unless 

otherwise determined by the Fund Administrator in consultation with the Commission staff, outof-pocket expenses based on the following rates will be considered reasonable: 

(a) a maximum of $0.03 per Plan Notice and/or Claim Form, plus postage at 

the pre-sort postage rate per Plan Notice and/or Claim Form actually 

mailed; 

(b) a maximum of $0.05 per email of the Plan Notice with a link to the Claim 

Form; or

(c) $0.20 per name, address, and email address provided to the Fund 

Administrator, up to a maximum of amount of $1,500.00.

52. The Fund Administrator will attempt to locate any Preliminary Claimant whose 

mailing is returned as “undeliverable” and will document all such efforts. The Fund 

Administrator shall use its best efforts to make use of commercially available resources and other 

reasonably appropriate means to obtain updated addresses in response to “undeliverable” notices, 

and forward any returned mail for which an updated address is provided or obtained. The Fund 

Administrator will make available, upon request by the Commission staff, a list of all 

Preliminary Claimants whose Plan Notice have been returned as “undeliverable” due to incorrect 

addresses and for which the Fund Administrator has been unable to locate current addresses.

Filing a Claim

53. To avoid being barred from asserting a claim, on or before the Claims Bar Date, 

each Preliminary Claimant must submit to the Fund Administrator a properly completed Claim 

Form reflecting such Preliminary Claimant’s claim, together with all required supporting 

documentation as the Fund Administrator, in its discretion, deems necessary or appropriate to 

substantiate the claim. Without limitation, this information may include third-party documentary 

evidence of purchases and dispositions of Securities during the Relevant Period, as well as 

holdings of Securities at pertinent dates. 
12

54. Electronic claims submission is encouraged; the Plan Notice will include 

directions on how Preliminary Claimants can submit their claims electronically via the Fair 

Fund’s website. If using theweb-based claim filing option, a Preliminary Claimant must submit 

his, her, or its claim to the Fund Administrator by 11:59 p.m. on the Claims Bar Date. The Plan 

Notice will also include instructions for submission of claims if the Preliminary Claimant is 

unable to submit his, her, or its claim electronically. 

55. The burden will be upon the Preliminary Claimant to ensure that his, her or its 

Claim Form has been properly and timely received by the Fund Administrator. A Claim Form 

that is postmarked or otherwise received after the Claims Bar Date will not be accepted unless 

the deadline is extended by the Fund Administrator for good cause shown, after consultation 

with the Commission staff. 

56. All Claim Forms and supporting documentation necessary to determine a 

Preliminary Claimant’s eligibility to receive a distribution from the Fair Fund under the terms of 

the Plan must be verified by a declaration executed by the Preliminary Claimant under penalty of 

perjury under the laws of the United States. The declaration must be executed by the 

Preliminary Claimant, unless the Fund Administrator accepts such declaration from a Person 

authorized to act on the Preliminary Claimant’s behalf, whose authority is supported by such 

documentary evidence as the Fund Administrator deems necessary. 

57. When submitting claims to the Fair Fund on behalf of its clients, all Third-Party 

Filers must use the electronic filing template provided by the Fund Administrator in this matter. 

Third-Party Filers that do not comply with the template and format provided by the Fund 

Administrator may be rejected. Third-Party Filers must also submit a signed master proof of 

claim and release, as well as proof of authority to file on behalf of the claimant(s) at the time the 

electronic file of transactions is submitted. Failure to do so may result in rejection of the claim.

58. Each Third-Party Filer must establish the validity and amount of each claim in its 

submission. Third-Party Filers must submit such supporting documentary evidence of 

purchases, dispositions, and holdings of Securities as the Fund Administrator deems necessary or 

appropriate to substantiate each individual claim. Without limitation, this includes the complete 

name of the Preliminary Claimant (beneficial account owner) and its TIN (for individuals) or 

EIN (for companies), sufficient contact information to confirm the identity of the beneficial 

owner, and documentation from the original bank, broker or other institution of purchases and 

dispositions of Securities (account statements, confirmations and other documentation of 

purchases and dispositions), as well as holdings of the Securities on pertinent dates. The Fund 

Administrator will have the right to request, and the Third-Party Filer will have the burden of 

providing to the Fund Administrator, any additional information and/or documentation deemed 

necessary by the Fund Administrator to substantiate the claim(s) contained in the submission. 

Documentation from a Third-Party Filer that is not acceptable to the Fund Administrator will 

result in rejection of the affected claim(s). The determination of the Fund Administrator to reject 

a claim for insufficient documentation, as reflected on the Determination Notice, is final and 

within the discretion of the Fund Administrator. 
13

59. The receipt of Securities by gift, inheritance, devise, or operation of law will not 

be deemed to be a purchase of Securities, nor will it be deemed an assignment of any claim 

relating to the purchase of such Securities unless specifically so provided in the instrument of 

inheritance. The recipient of Securities as a gift, inheritance, devise or by operation of law will 

be eligible to file a Claim Form and participate in the distribution of the Fair Fund to the extent 

the original purchaser would have been eligible under the terms of the Plan. Only one claim may 

be submitted with regard to the same transactions in Securities, and in cases where duplicative 

claims are filed by the donor and donee, the donee claim will be honored, assuming it is 

supported by proper documentation. 

60. Claims on behalf of a retirement plan covered by Section 3(3) of ERISA, 29 

U.S.C.§ 1002(3), which do not include Individual Retirement Accounts and such plan’s 

participants, are properly made by the administrator, custodian or fiduciary of the plan and not

by the plan’s participants. The Fund Administrator will distribute any payments on such claims 

directly to the administrator, custodian or fiduciary of the retirement plan. The custodian or 

fiduciary of the retirement plan will distribute any payments received in a manner consistent with 

its fiduciary duties and the governing account or plan provisions. 

61. The Preliminary Claimant has the burden of notifying the Fund Administrator of a 

change in his, her or its current address and other contact information, and of ensuring that such 

information is properly reflected on the Fund Administrator's records.

Review of Claims and Deficiency Process

62. The Fund Administrator will review all claim submissions and determine the 

eligibility of each Preliminary Claimant to participate in the Fair Fund by reviewing claim data 

and supporting documentation (or the lack thereof) and verifying the claim. Each Preliminary 

Claimant will have the burden of proof to establish the validity and amount of his, her or its 

claim. The Fund Administrator will have the right to request, and the Preliminary Claimant will 

have the burden of providing to the Fund Administrator, any additional information and/or 

documentation deemed relevant by the Fund Administrator. 

63. The Fund Administrator will provide a Claim Status Notice within ninety (90) 

days of the Claims Bar Date to each Preliminary Claimant who has filed a deficient Claim Form 

with the Fund Administrator. The Claim Status Notice will provide to each Preliminary 

Claimant whose claim is deficient, in whole or in part, the reason(s) for the deficiency (e.g., 

failure to provide required information or documentation). In the event the claim is denied, in 

whole or in part, the Claim Status Notice will state the reason(s) for such denial. The Claim 

Status Notice will also notify the Preliminary Claimant of the opportunity to cure any deficiency, 

request reconsideration, or dispute the determination made by the Fund Administrator and 

provide instructions regarding what is required to do so.

64. Any Preliminary Claimant with a deficient claim will have thirty (30) days from 

the date of the Claim Status Notice to cure any deficiencies identified in the Claim Status Notice.
14

65. Any Preliminary Claimant seeking reconsideration of a denied claim must advise 

the Fund Administrator in writing within thirty (30) days of the date ofthe Claim Status Notice. 

All requests for reconsideration must include the necessary documentation to substantiate the 

basis upon which the Preliminary Claimant is requesting reconsideration of his, her, or its claim. 

66. The Fund Administrator will have the authority, in its sole discretion, to waive 

technical claim deficiencies and approve claims on a case-by-case basis, or in groups of claims. 

Claims Eligibility Determination

67. Within one hundred fifty (150) days of the Claims Bar Date, the Fund 

Administrator will complete all claims determinations and send a Determination Notice to all 

Preliminary Claimants who timely submitted a Claim Form notifying the Preliminary Claimant 

of its eligibility determination. The Determination Notice will further provide to each 

Preliminary Claimant that is determined to be an Eligible Claimant with his, her, or its calculated 

Recognized Loss. The Determination Notice will constitute the Fund Administrator’s final 

ruling regarding the eligibility status of the claim.

68. The Fund Administrator may consider disputes of an Eligible Claimant’s 

Recognized Loss calculation, if presented in writing to the Fund Administrator within thirty (30) 

days of the date of the Determination Notice. The Fund Administrator will consult with 

Commission staff as appropriate. The Fund Administrator will notify the Eligible Claimant in 

writing with thirty (30) days of receiving a dispute of its determination, which will constitute the 

Fund Administrator’s final ruling regarding the loss calculations for the claim.

Distribution Methodology

69. Any Preliminary Claimant, who is not an Excluded Party, who submitted a valid 

Claim Form and has suffered a Recognized Loss, as calculated in accordance with the Plan of 

Allocation, will be deemed an Eligible Claimant. 

70. No Distribution Payments will be made for less than $10.00. If an Eligible 

Claimant’s Recognized Loss, in accordance with the Plan of Allocation, calculates to a 

distribution amount less than $10.00, that Eligible Claimant will be deemed ineligible to receive 

a Distribution Payment and his, her, or its distribution amount will be reallocated on a pro-rata

basis to Eligible Claimants whose distribution amounts are greater than or equal to $10.00. All 

Eligible Claimants whose Recognized Loss calculates to a distribution amount equal to or greater 

than $10.00 will be deemed a Payee and receive a Distribution Payment.

Establishment of a Reserve

71. Before determining the amount of funds available for distribution and calculating 

each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax 

Administrator, will establish a reserve to pay Administrative Costs and to accommodate any 

unexpected expenditures (the “Reserve”).
15

72. After all disbursements and Administrative Costs are paid, any remaining 

amounts in the Reserve will become part of the Residual described in paragraph 95 below.

Preparation of the Payment File

73. Within one hundred twenty (120) days following the date of the Determination 

Notices described above, in paragraph 67, the Fund Administrator will compile and send to the 

Commission staff the Payee information, including the name, address, calculated Recognized 

Loss, and the amount of the Distribution Payment for all Payees (the “Payee List”). The Fund 

Administrator will also provide a Reasonable Assurances Letter to the Commission staff, 

representing that the Payee List: (a) was compiled in accordance with the approved Plan; (b) is 

accurate as to Payees’ names, addresses, Recognized Losses and amounts of their Distribution 

Payment; (c) includes the number of Payees compensated; (d) the percentage of the Payee’s 

Recognized Loss being compensated by the disbursement from the Fair Fund, and if applicable, 

the total percentage to include all prior disbursements; (e) the total amount of funds to be 

disbursed; and (f) provides all information necessary to make a payment to each Payee.

The Escrow Account

74. Prior to the disbursement of funds from the Net Available Fair Fund, the Fund 

Administrator will establish an escrow account (the “Escrow Account”) with a United States 

commercial bank that is a well-capitalized financial institution as defined by the Federal Reserve 

Act, Subpart D, 12 C.F.R. § 208.43 and that is not unacceptable to the Commission staff (the 

“Bank”), pursuant to an escrow agreement (the “Escrow Agreement”) to be provided by 

Commission staff.

75. The Fund Administrator, pursuant to the Escrow Agreement, shall also establish 

with the Bank a separate deposit account (e.g., controlled distribution account, managed 

distribution account, linked checking and investment account) (the “Distribution Account”), 

insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass 

through limit. The Distribution Account shall be linked with the Escrow Account and shall be 

named, and records maintained, in accordance with the Escrow Agreement. 

76. During the term of the Escrow Agreement, the portions of the Fair Fund transferred 

to the Escrow Account (the “Escrow Property”), shall be invested and reinvested in short-term 

U.S. Treasury securities backed by the full faith and credit of the United States Government or 

an agency thereof. The investment shall be, of a type and term necessary to meet the cash 

liquidity requirements for payments to Payees, tax obligations, and/or fees of the Tax 

Administrator and/or Fund Administrator, including investment or reinvestment in a bank 

account insured by the FDIC up to the guaranteed FDIC limit, or in money market mutual funds 

registered under the Investment Company Act of 1940 that invest 100% of their assets in direct 

obligations of the United States Government. 
16

77. The Fund Administrator shall provide duplicate original bank and/or investment 

statements on any accounts established by the Fund Administrator to the Tax Administrator on a 

monthly basis and shall assist the Tax Administrator in obtaining mid-cycle statements, as 

necessary.

78. The Fund Administrator shall deposit or invest funds in the Escrow and 

Distribution Accounts so as to result in the maximum reasonable net return, taking into account 

the safety of such deposits or investments. In consultation with Commission staff, the Fund 

Administrator shall work with the Bank on an ongoing basis to determine an allocation of funds 

between the Escrow and Distribution Account.

79. All interest, dividends, and/or income earned by the Escrow Property will accrue 

for the benefit of the Escrow Property. All Administrative Costs associated with the Escrow and 

Distribution Accounts will be the responsibility of the Fund Administrator, who may be 

reimbursed for said costs as provided in this Plan. No such Administrative Costs may be paid to 

the Bank, its agents, and/or its affiliates from the Escrow Property.

 Distribution of the Fair Fund

80. The Fund Administrator will seek to distribute the Net Available Fair Fund to all 

Payees only after all Claim Forms have been processed and all Preliminary Claimants whose 

claims have been rejected or disallowed, in whole or in part, have been notified and provided the 

opportunity to contest or cure pursuant to the procedures set forth herein.

81. Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List 

and Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek 

an Order from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 

C.F.R. § 210.1101(b)(6), to disburse funds from the Net Available Fair Fund to the Bank in 

accordance with the Payee List for distribution by the Fund Administrator in accordance with the 

Plan. All disbursements will be made pursuant to a Commission Order. 

82. Upon issuance of an Order to disburse, the Commission staff will direct the transfer 

of funds in accordance with the Payee List to the Bank. The Fund Administrator will then use its 

best efforts to commence mailing Distribution Payment checks and/or effect wire transfers 

within ten (10) business days of the release of the funds into the Escrow Account. All efforts 

will be coordinated to limit the time between the Escrow Account’s receipt of the funds and the 

issuance of Distribution Payments.

83. All Distribution Payments will be issued by the Fund Administrator from the 

Distribution Account. All checks will bear a stale date of one hundred twenty (120) days from 

the date of issuance. Checks that are not negotiated by the stale date will be voided, and the 

Bank will be instructed to stop payment on those checks. A Payee’s claim will be extinguished 

if he, she, or it fails to negotiate his, her or its check by the stale date, and the funds will remain 

in the Fair Fund, except as provided in paragraph 91. 
17

84. All Distribution Payments will be preceded or accompanied by a communication 

that includes, as appropriate: (a) a statement characterizing the distribution; (b) a statement that 

the tax treatment of the distribution is the responsibility of each Payee and that the Payee should 

consult his, her or its tax advisor for advice regarding the tax treatment of the distribution; 

however, any backup withholding required under IRC § 3406(a) and the regulations promulgated 

thereunder, or withholding required with respect to nonresident aliens (“NRAs”) under Chapter 3 

of the IRC, or FATCA-subject Payees under Chapter 4 of the IRC, will be withheld as required 

from the Distribution Payment and remitted to the Internal Revenue Service on the Payee’s 

behalf; (c) a statement that checks will be void and cannot be reissued after one hundred twenty 

(120) days from the date the original check was issued; and (d) contact information for the Fund 

Administrator for questions regarding the Distribution Payment. The letter or other mailings to 

Payees characterizing a Distribution Payment will be prepared by the Tax Administrator and 

provided to the Commission staff for review and approval. 

85. All Distribution Payments, either on their face or in the accompanying mailing, 

will clearly indicate that the money is being distributed from the Fair Fund established by the 

Commission to compensate investors for harm as a result of securities law violations. 

86. Distribution Payments must be made by check or electronic payment payable to 

the Payee (the beneficial account owner). A Third-Party Filer shall not be the payee of any 

Distribution Payment check or electronic Distribution Payment. Compensation to a Third-Party 

Filer for its services may not be paid or deducted from the Distribution Payment. 

87. The submission of a Claim Form and the receipt and acceptance of a Distribution 

Payment by a Payee is not a release of a Payee’s rights and claims against any party.

88. Electronic or wire transfers may be utilized at the discretion of the Fund 

Administrator to make Distribution Payments. Wire transfers will be initiated by the Fund 

Administrator using a two-party check and balance system, whereby completion of a wire 

transfer will require an authorization by two members of the Fund Administrator’s senior staff.

89. At the discretion of the Fund Administrator, certain costs that were not factored 

into the Reserve, such as bank fees for the return of a payment, may reduce the Payee’s 

Distribution Payment. In such situations, the Fund Administrator will immediately notify the 

Tax Administrator of the reduction in the Distribution Payment.

Post Distribution; Handling of Returned or Uncashed Checks; and Reissues

90. The Fund Administrator shall use its best efforts to make use of commercially 

available resources and other reasonably appropriate means to locate all Payees whose checks 

are returned to the Fund Administrator as “undeliverable.” If new address information becomes 

available, the Fund Administrator will repackage the distribution check and send it to the new 

address. If new address information is not available after a diligent search (and in no event no 

later than one hundred twenty (120) days after the initial mailing of the original check) or if the 

distribution check is returned again, the check shall be voided, and the Fund Administrator shall 

instruct the issuing financial institution to stop payment on such check. If the Fund 
18

Administrator is unable to find a Payee’s correct address, the Fund Administrator, in its 

discretion, may remove such Payee from the distribution and the allocated Distribution Payment 

will remain in the Fair Fund for distribution, if feasible, to the remaining Payees.

91. The Fund Administrator will reissue checks to Payees upon the receipt of a valid, 

written request from the Payee prior to the initial stale date. In cases where a Payee is unable to 

endorse a Distribution Payment check as written (e.g., name changes, IRA custodian changes, or 

recipient is deceased) and the Payee or a lawful representative requests the reissuance of a 

Distribution Payment check in a different name, the Fund Administrator will request, and must 

receive, documentation to support the requested change. The Fund Administrator will review the 

documentation to determine the authenticity and propriety of the change request. If, in the 

discretion of the Fund Administrator, such change request is properly documented, the Fund 

Administrator will issue an appropriately redrawn Distribution Payment to the requesting party. 

Reissued checks will be void at the later of one hundred twenty (120) days from issuance of the 

original check or sixty (60) days from the reissuance, and in no event will a check be reissued 

after one hundred twenty (120) days from the date of the original issuance without the approval 

of Commission staff.

92. The Fund Administrator will make reasonable efforts to contact Payees who have 

failed to negotiate their Distribution Payment check and take appropriate action to follow up on 

the status of uncashed checks at the request of Commission staff. The Fund Administrator may 

reissue such checks subject to the time limits detailed herein. 

Administrative Costs

93. All Administrative Costs will be paid from the Fair Fund in accordance with the 

Commission’s Rules. 

Disposition of Undistributed Funds

94. If funds remain following the initial distribution, the Fund Administrator, in 

consultation with the Commission staff, may seek subsequent distribution(s) of any available 

remaining funds, pursuant to the Commission’s Rules. All subsequent distributions shall be 

made in a manner that is consistent with this Plan. 

95. A residual within the Fair Fund will be established for any amounts remaining 

after the final disbursement to Payees from the Fair Fund and the payment of all Administrative 

Costs (the “Residual”). The Residual may include funds from, among other things, amounts 

remaining the Reserve, distribution checks that have not been cashed, checks that were not 

delivered or returned to the Commission, tax refunds for the Fair Fund’s overpayment or for 

waiver of IRS penalties.

96. Once the Fund Administrator, in consultation with the Commission staff, deems 

further distribution of the Fair Fund to investors infeasible, the Fund Administrator will direct 

any uncashed Distribution Payments to be voided, and return any funds remaining in the Escrow 

and Deposit Accounts to the Commission to be added to the Residual.
19

97. All funds remaining in the Residual that are infeasible to distribute to investors 

will be transferred to the U.S. Treasury after the final accounting is approved by the 

Commission. Returning such money to Respondents would be inconsistent with the equitable 

principle that no Person should profit from their own wrongdoing. Therefore, in these 

circumstances, distributing disgorged funds to the U.S. Treasury is the most equitable alternative. 

Filing of Reports and Accountings

98. In accordance with Rule 1105(f) of the Commission’s Rules, the Fund 

Administrator shall provide to the Commission staff a progress report and a quarterly account 

statement in a format to be provided by Commission staff, within forty-five (45) days of the 

Commission’s approval of the Plan, and shall provide to Commission staff additional reports and 

quarterly account statements within ten (10) days after the end of every calendar quarter. Such 

progress reports shall inform the Commission staff of the activities and status of the Fair Fund 

during the reporting period, and shall specify, at a minimum, the location of the account(s) 

comprising the Fair Fund, including among other things, an interim accounting of all monies in 

the Fair Fund.

99. When the final distribution is completed, the Fund Administrator shall provide to 

Commission staff a final report summarizing all tasks undertaken and the outcome of its 

administrative efforts. The Fund Administrator shall make arrangement for the final payment of 

all Administrative Costs, and submit a final accounting of all monies received, earned, spent, and 

distributed in connection with the administration of the Plan in a format provided by the 

Commission staff. The Fund Administrator will also submit a report to the Commission staff 

containing the final distribution statistics regarding distributions to individuals and entities, and 

such other information requested by the Commission staff.

Termination of the Fair Fund

100. The Fair Fund will be eligible for termination and the Fund Administrator will be 

eligible for discharge after all of the following have occurred (a) a final accounting, in a standard 

accounting format provided by the Commission staff, has been submitted by the Fund 

Administrator and approved by the Commission; (b) all Administrative Costs have been paid; 

and (c) any amount remaining in the Fair Fund has been returned to the Commission for transfer 

to U.S. Treasury. Once the Commission has approved the final accounting, the Commission 

staff will seek an order from the Commission authorizing: (a) the transfer of any amounts 

remaining in the Fair Fund that are infeasible to return to investors, and any amounts returned to 

the Fair Fund in the future that are infeasible to return to investors, to the U.S. Treasury, subject 

to Section 21F(g)(3) of the Exchange Act; (b) discharge of the Fund Administrator; (c) 

cancellation of the Fund Administrator’s bond; and (d) termination of the Fair Fund.

101. Once the Fair Fund has been terminated and funds, if any, are transferred to the 

U.S. Treasury, no further claims will be allowed and no additional payments will be made 

whatsoever.
20

Miscellaneous

102. When administering this Plan, the Fund Administrator, and/or each of its 

designees, agents and assigns, may rely on all applicable law; orders issued by the Commission, 

including orders issued by delegated authority; orders issued by an administrative law judge, if 

any, appointed in this proceeding; and any records, including records containing investor 

information, provided by Commission staff.

103. Should any additional funds be received pursuant to Commission or Court order, 

agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will 

be added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the 

Commission’s Rules. 

Wind-down and Document Retention

104. The Fund Administrator will shut down the website, P.O. Box and customer 

service telephone line(s) established specifically for the administration of the Fair Fund six (6) 

months after the transfer of any remaining funds to the Commission, or at such earlier time as the 

Fund Administrator determines with the concurrence of the Commission staff. 

105. The Fund Administrator will retain all materials submitted by Preliminary 

Claimants in either paper or electronic form for a period of six (6) years from the date of 

approval of a final fund accounting. Materials maintained in electronic form must be accessible 

and readable for the duration of retention. Pursuant to the Commission staff's direction, the Fund 

Administrator will either turn over to the Commission or destroy all materials, including 

documents in any media, upon expiration of this period.

VII. NOTICE AND COMMENT PERIOD

106. The Notice of Proposed Plan of Distribution and Opportunity to Comment (the 

“Notice”) will be published on the Commission’s website at 

http://www.sec.gov/litigation/fairfundlist.htm. Any Person wishing to comment on the Plan 

must do so in writing by submitting their comments to the Commission within thirty (30) days of 

the publication of the Notice: (a) to the Office of the Secretary, United States Securities and 

Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090; (b) by using the 

Commission’s Internet comment form (www.sec.gov/litigation/admin.shtml); or (c) by sending 

an email to rule-comments@sec.gov. Comments submitted by email or via the Commission’s 

website should include “Administrative Proceeding File Numbers 3-16729 and 3-18110” in the 

subject line. Comments received will be available to the public. Persons should only submit 

comments that they wish to make publicly available.
Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation1is designed to compensate investors based on their losses on 

shares of Miller Energy common stock purchased or acquired on March 22, 2010 through April 

29, 2015, inclusive (the “Relevant Period”), due to the misconduct of the Respondents as 

described in the Orders. An investor who did not purchase shares of the Securities during the 

Relevant Period or who is an Excluded Party is ineligible to recover under this Plan. Artificial 

inflation in the price of the Securities over various date ranges surrounding corrective disclosures 

and average closing prices of the Securities during the Lookback Period (defined below) have 

been calculated by the Commission’s staff and are reflected in Table A and Table B, 

respectively.

The Fund Administrator will calculate the amount of loss for each share of the Securities 

purchased or acquired during the Relevant Period (“Recognized Loss per Share”) as follows:

For each share of Securities purchased or acquired between March 22, 2010 and April 29, 

2015, inclusive, and

A. Sold prior to July 28, 2010, the Recognized Loss per Share is $0.00.

B. Sold on or after July 28, 2010, and prior to the close of trading on April 29, 2015, 

the Recognized Loss per Share is the lesser of: 

1. the amount of inflation per share on the purchase/acquisition date as set 

forth in Table A below minus the amount of inflation per share on the sale 

date as set forth in Table A below; or

2. the purchase/acquisition price minus the sale price.

C. Sold after the close of trading on April 30, 2015 and prior to the close of trading 

on July 28, 2015 (the “Lookback Period”) the Recognized Loss per Share is the 

least of:

1. the amount of inflation per share on the purchase/acquisition date as set 

forth in Table A below; or

2. the purchase/acquisition price minus the sale price; or

3. the purchase/acquisition price minus the moving average closing price of 

the Miller Energy common stock on the sale date as set forth in Table B 

below.

D. Held as of the close of trading on July 28, 2015, the last day of the Lookback 

1

 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.
2

Period, the Recognized Loss per Share is the lesser of:

1. the amount of inflation per share on the purchase/acquisition date as set 

forth in Table A below; or

2. the purchase/acquisition price minus [$0.45], the average closing price of 

Miller Energy common stock during the Lookback Period, as shown in the 

last row in Table B below.

If the Recognized Loss per Share calculates to a negative number, reflecting a gain, the 

Recognized Loss per Share on such shares will be $0.00. 

All prices mentioned in the calculations exclude all taxes, fees and commissions. 

Purchases/acquisitions and sales shall be deemed to have occurred on the “contract” or “trade” 

date as opposed to the “settlement” or “payment” date.

Additional Provisions

FIFO Methodology: Transactions for a Preliminary Claimant who made multiple 

purchases/acquisitions and sales of Securities during the Relevant Period, will be matched 

according to the first-in, first-out (“FIFO”) method. The earliest sales during the Relevant Period 

will be matched first against any holdings at the opening of the Relevant Period. Once the 

beginning holdings have all been matched, or in the event there are no beginning holdings, then 

any further sales will be matched against the earliest Relevant Period purchases/acquisitions and 

chronologically thereafter. 

Acquisitions: The receipt or grant of the Securities to the Preliminary Claimant by gift, 

devise, inheritance, or operation of law during the Relevant Period is not considered an eligible 

purchase if the original purchase did not occur during the Relevant Period. Shares acquired 

outside of the Relevant Period will be excluded from the calculation of the Recognized Loss. 

Options and Derivatives: Miller Energy common stock is the only security eligible for 

recovery under this Plan. Option contracts to purchase or sell the Security are not securities 

eligible for recovery under the Plan. With respect to the Securities purchased or sold through the 

exercise of an option, the purchase/sale date is the exercise date of the call and the assignment 

date of the put, and the purchase/sale price is the strike price of the call at the time of exercise 

and the strike price of the put at the time of assignment. Transactions in the Securities during the 

Relevant Period that are pursuant to, or in connection with, a swap or another derivative will not 

be eligible for a recovery and will be excluded from the Recognized Loss calculation. 

Short Sales: If the sale date for a share falls before the purchase date, then the share has a 

Recognized Loss per Share of $0.00. The date of covering a short sale is deemed to be the date 

of purchase of the Securities and the date of a short sale is deemed to be the date of sale of the 

Securities. The earliest Relevant Period purchases will be matched against any short position 
3

existing on the date prior to the start of the Relevant Period, and not be entitled to a recovery, 

until that short position is fully covered. 

Recognized Loss: Recognized Loss will be the sum of the Recognized Loss per Share, as 

calculated above, on all shares of the Securities purchased or acquired during the Relevant 

Period. If the Recognized Loss calculates to a gain, then the Recognized Loss will be $0.00.

Market Loss Limitation: If a Preliminary Claimant’s actual market loss on shares of the 

Securities purchased/acquired during the Relevant Period is less than his, her or its Recognized 

Loss, then his, her, or its Recognized Loss shall be limited to the actual market loss amount. If 

the actual market loss calculates to a gain, then the Preliminary Claimant’s Recognized Loss will 

be $0.00. The actual market loss will be calculated as (a) the total purchase amount for shares of 

the Security purchased/acquired during the Relevant Period2less the sum of (b) the sales 

proceeds from shares of the Securities purchased/acquired during the Relevant Period or during 

the Lookback Period,3and (c) the holding value on the remaining of those shares, which will be 

$0.45 per share, the moving average price as of the last day of the Lookback Period.

4

Eligible Claimant: A Preliminary Claimant, who is not an Excluded Party, who submitted 

a valid Claim Form and has suffered a Recognized Loss, as calculated above, will be deemed an 

Eligible Claimant.

Allocation of Funds: If the Net Available Fair Fund is equal to or exceeds the sum of 

Recognized Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will 

equal his, her or its Recognized Loss, plus “Reasonable Interest” if applicable. If the Net 

Available Fair Fund is less than the sum of the Recognized Losses of all Eligible Claimants, each 

Eligible Claimant’s distribution amount will equal his, her or its “Pro Rata Share” of the Net 

Available Fair Fund (and no Reasonable Interest). In either case, the distribution amount will be 

subject to the “Minimum Distribution Amount.”

Reasonable Interest: If the Net Available Fair Fund exceeds that necessary to pay all Eligible 

Claimants their Recognized Losses in full, the Fund Administrator, in consultation with the 

Commission staff, may include reasonable interest in the distribution amount to compensate for the 

time value of money on Recognized Losses. Reasonable Interest will be calculated using the Shortterm Applicable Federal Rate plus three percent (3%), compounded quarterly from the end of the 

Relevant Period through the approximate date of the disbursement of the funds. If there are insufficient 

funds to pay Reasonable Interest in full to all Eligible Claimants, each Eligible Claimant’s Reasonable 

Interest amount will be his, her or its Pro Rata Share of the excess funds. 

2 Purchases during the Relevant Period to cover short positions will be included in the calculation of actual market 

loss if the purchase is matched to a short sale during the Relevant Period. Purchases/acquisitions that are not eligible 

for recovery will not be considered for purposes of calculating the actual market loss.

3 Sales of the Securities during the Relevant Period will be matched first against the opening position and the 

proceeds of such sales will not be considered for purposes of calculating the actual market loss. Short sales will be 

considered for purposes of calculating the actual market loss.

4

 Any open short positions at the end of the Lookback Period will be ignored for purposes of calculating the actual 

market loss.
4

Pro Rata Share: A Pro Rata Share computation is intended to measure Eligible Claimants’ 

Recognized Losses against one another. The Fund Administrator shall determine each Eligible 

Claimant’s Pro Rata Share as the ratio of his, her, or its Recognized Loss to the sum of Recognized 

Losses of all Eligible Claimants.

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00 

(inclusive of Reasonable Interest, if any). An Eligible Claimant whose distribution amount is 

less than the Minimum Distribution Amount will be deemed ineligible to receive a Distribution 

Payment and his, her, or its distribution amount will be reallocated on a pro-rata basis to Eligible 

Claimants whose distribution amounts are greater than or equal to the Minimum Distribution 

Amount. 

Payee: An Eligible Claimant whose distribution amount (inclusive of Reasonable 

Interest, if any) equals or exceeds the Minimum Distribution Amount will be deemed a Payee.

Distribution Payment: All Payees will receive a Distribution Payment for their 

distribution amount. 
5

Table A: Miller Energy Resources, Inc. Common Stock Inflation Schedule

Date Range

Inflation 

per Share

March 22, 2010 — July 27, 2011 $3.67

July 28, 2011 $2.04

July 29, 2011 $1.09

August 1, 2011 $0.63

August 2, 2011 — April 29, 2015 $0.18

On or after April 30, 2015 $0.00

Table B: Miller Energy Resources, Inc. Common Stock Closing Price and Average Closing 

Price, April 30, 2015 – July 28, 2015

Date

Moving 

Average 

Closing Price 

from April 30, 

2015 to Date 

Shown Date

Moving 

Average 

Closing Price 

from April 30, 

2015 to Date 

Shown Date

Moving 

Average 

Closing Price 

from April 30, 

2015 to Date 

Shown

4/30/2015 $0.73 6/1/2015 $0.60 6/30/2015 $0.52

5/1/2015 $0.72 6/2/2015 $0.60 7/1/2015 $0.51

5/4/2015 $0.71 6/3/2015 $0.59 7/2/2015 $0.51

5/5/2015 $0.69 6/4/2015 $0.59 7/6/2015 $0.51

5/6/2015 $0.67 6/5/2015 $0.58 7/7/2015 $0.50

5/7/2015 $0.65 6/8/2015 $0.58 7/8/2015 $0.50

5/8/2015 $0.64 6/9/2015 $0.58 7/9/2015 $0.50

5/11/2015 $0.64 6/10/2015 $0.57 7/10/2015 $0.49

5/12/2015 $0.63 6/11/2015 $0.57 7/13/2015 $0.49

5/13/2015 $0.62 6/12/2015 $0.56 7/14/2015 $0.49

5/14/2015 $0.62 6/15/2015 $0.56 7/15/2015 $0.48

5/15/2015 $0.62 6/16/2015 $0.56 7/16/2015 $0.48

5/18/2015 $0.61 6/17/2015 $0.55 7/17/2015 $0.47

5/19/2015 $0.61 6/18/2015 $0.55 7/20/2015 $0.47

5/20/2015 $0.61 6/19/2015 $0.54 7/21/2015 $0.47

5/21/2015 $0.61 6/22/2015 $0.54 7/22/2015 $0.46

5/22/2015 $0.60 6/23/2015 $0.53 7/23/2015 $0.46

5/26/2015 $0.60 6/24/2015 $0.53 7/24/2015 $0.45

5/27/2015 $0.60 6/25/2015 $0.53 7/27/2015 $0.45

5/28/2015 $0.60 6/26/2015 $0.52 7/28/2015 $0.45

5/29/2015 $0.60 6/29/2015 $0.52