UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 98426 / September 18, 2023

ADMINISTRATIVE PROCEEDING

File No. 3-21542

In the Matter of

EXCHANGE TRADED 

MANAGERS GROUP LLC, 

ETF MANAGERS GROUP LLC,

and 

SAMUEL R. MASUCCI,

Respondents.

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ORDER APPOINTING TAX 

ADMINISTRATOR AND DIRECTING 

PAYMENT OF CERTAIN FUNDS 

RECEIVED BY THE COMMISSION

AND TRANSFERRING OF 

REMAINING FUNDS TO THE U.S. 

TREASURY

On August 1, 2023, the Commission issued an Order Instituting Administrative and 

Cease-and-Desist Proceedings, Pursuant to Section 15(b) of the Securities Exchange Act of 

1934, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, Making 

Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (the “Order”)1against 

Exchange Traded Managers Group LLC (“Parent”), ETF Managers Group LLC (“Adviser”), and 

Samuel R. Masucci (“Masucci”) (collectively, the “Respondents”). In the Order, the 

Commission found that the Respondents entered into a prohibited joint transaction to the 

detriment of Adviser’s client ETFMG Alternative Harvest ETF (“MJ” or “Defrauded Client”). 

In connection with this prohibited transaction, Masucci and Adviser violated their duty of loyalty 

to MJ by misleading MJ’s Independent Trustees about the Respondents’ financial conflicts of 

interest. Masucci and Advisor also breached their duty of care by knowingly providing advice 

that favored their own interests over the best interest of their client MJ. 

The Commission ordered Masucci to pay a $400,000 civil money penalty; and the Parent

and Adviser to jointly and severally pay a $4,000,000 civil money penalty to the Commission, 

pursuant to a payment plan with the last payment due on or before March 31, 2024. In the Order, 

the Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act 

of 2002, so the civil penalties paid can be distributed to the Defrauded Client harmed by the 

Respondents’ conduct described in the Order (the “Fair Fund”). 

1

 Exchange Act Rel. No. 98034 (Aug. 1, 2023).
2

Masucci has paid in full, and the Parent and Adviser have paid the first payment of 

$200,000 as ordered, which currently comprises the Fair Fund, and any additional payments 

received pursuant to the Order will be added to the Fair Fund.

The Fair Fund constitutes a qualified settlement fund (“QSF”) under Section of 468B(g) 

of the Internal Revenue Code (IRC), 26 U.S.C. § 468B(g), and related regulations, 26 C.F.R. §§ 

1.468B-1 through 1.468B-5. The appointment of a tax administrator to fulfill the tax obligations 

of the Fair Fund is necessary. The selection and appointment of Miller Kaplan Arase LLP 

(“Miller Kaplan”) is in accordance with the Omnibus Order Directing the Engagement of Two 

Tax Administrators for Appointment on a Case-By-Case Basis in Administrative Proceedings 

that Establish Distribution Funds (the “Omnibus Order”).2

The Fair Fund currently has available for distribution, the $600,000 paid by the 

Respondents, less a reserve for taxes and administrative expenses (the “Reserve”).

Upon the Commission’s receipt of further payment made pursuant to the Order, the 

Commission staff will obtain additional order(s), within 60 days of payment, if distribution is 

feasible, to disburse any additional available funds collected to the Defrauded Client.

Accordingly, it is ORDERED that:

A. Miller Kaplan, in accordance with the Omnibus Order, is selected and appointed 

Tax Administrator for the QSF in the above-referenced proceeding and shall work 

with the Commission staff to establish the Reserve; 

B. After withholding the Reserve, the Commission staff shall disburse the remaining 

available funds to ETFMG Alternative Harvest ETF; and

C. Any amounts remaining in the Fair Fund after completion the final distribution 

detailed above, that are infeasible to return to the investor, and any amounts 

returned to the Fair Fund in the future that are infeasible to return to investor, 

shall be transferred to the general fund of the United States Treasury subject to 

Section 21F(g)(3) of the Exchange Act, and the Fair Fund shall be terminated

after which no further disbursements will be made. 

By the Commission.

Vanessa A. Countryman

Secretary

2

 Exchange Act Rel. No. 94845 (May 4, 2022).