UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-15654

: 

In the Matter of :

: 

G-TRADE SERVICES LLC, : 

CONVERGEX GLOBAL MARKETS : 

LIMITED, and CONVERGEX : 

EXECUTION SOLUTIONS LLC, :

: 

Respondents. :

:

PLAN OF DISTRIBUTION

1. Background. This Plan of Distribution (the “Plan”) has been developed pursuant to the

Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and

21C of the Securities Exchange Act of 1934 (“Exchange Act”) and Section 203(e) of the

Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a 

Cease-and-Desist Order against G-Trade Services LLC (“G-Trade”), ConvergEx Global Markets 

Limited and ConvergEx Execution Solutions LLC (“CES”) (collectively, “Respondents”) (the 

“Order”) (Exchange Act Release No. 71128 (Dec. 18, 2013)). This Plan is subject to approval by 

the Commission, and the Commission retains jurisdiction over the implementation of the Plan.

In the Order, the Commission found that Respondents engaged in a fraudulent scheme to 

conceal their practice of unnecessarily routing certain global trading and transition management 

customer orders to an offshore affiliate in order to charge undisclosed mark-ups and mark-downs 

(“trading profits” or “TP”), in addition to disclosed commissions on those orders. The scheme 

involved the taking of TP on orders placed by customers that had a direct contractual account or 

trading relationship with one or more of the Respondents (the “Direct Customers”), including orders

in securities traded in U.S. markets (“U.S. securities”), as well as securities traded in non-U.S.

markets (“non-U.S. securities”). As a result of this conduct, the Commission found that the

Respondents willfully violated Section 10(b) of the Securities Exchange Act of 1934 (“Exchange 

Act”) and Rule 10b-5 thereunder, and that Respondents G-Trade and CES willfully violated

Section 15(c)(1) of the Exchange Act. The Commission ordered the Respondents to pay

disgorgement of $79,802,448, prejudgment interest of $7,621,981 and a civil monetary penalty of

$20,000,000. The Order created a Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley

Act of 2002, as amended. In accordance with the Order, ConvergEx Group, LLC on behalf of the
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Respondents, paid a total of $107,424,429 into an escrow account. This amount, plus the

$2,011,889 arising from three related actions against additional respondents,

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will constitute the

corpus of the Fair Fund from which funds may be withdrawn and distributed in accordance with

the Plan. The corpus may be increased prior to distribution by additional payments arising from

related actions against additional respondents that the Commission may order to be aggregated in

the Fair Fund.

2. Scope of Distribution; Eligible Fair Fund Recipients. The purpose of this

distribution is to refund a portion of the TP taken on orders placed by Respondents’ Direct 

Customers between October 2, 2006 and December 31, 2011 (the “Relevant Period”). The

proposed distribution methodology, described in Section 9, provides full refunds of TP for orders

placed during the Relevant Period in U.S. securities and pro rata refunds of TP for orders in nonU.S. securities. Pursuant to this Plan, harmed customers are eligible to recover 100% of TP on 

U.S. securities transactions and approximately 16% of TP on non-U.S. securities transactions.

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The Order provides that the Fund Administrator will develop a distribution plan with the

assistance and cooperation of Respondents. The Order also provides that the Plan will include a

methodology to identify and compensate affected current and former Direct Customers of

Respondents and underlying intermediaries and beneficial owners of securities traded by Direct 

Customers (“Indirect Customers”) from whom TP was taken during the Relevant Period. The

Order required Respondents to pay the amounts ordered no later than 10 days from the entry of the

Order. The Respondents tendered funds on December 17, 2013. This Plan sets forth the 

methodology to be used in paying refunds of TP and requires Respondents to make refunds of TP

to Respondents’ Direct and Indirect Customers.

3. Fund Administrator. On December 17, 2014, the Commission issued an order 

appointing The Garden City Group, Inc. as the Fund Administrator and setting the 

administrator’s bond at $108,653,021, in accordance with Rule 1105 of the Commission’s Rules 

on Fair Fund and Disgorgement Plans.

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The Fund Administrator will oversee efforts by the Respondents to assist in the 

administration of this Plan. The Fund Administrator will also prepare accountings as provided in 

Section 13, infra, and will cooperate with the Respondents in providing the information necessary 

to accomplish income tax compliance.

 1 The related actions to date are In the Matter of Jonathan Samuel Daspin, Administrative Proceeding File No. 3-

15652 (Exchange Act Rel. No. 71126 (Dec. 18, 2013)); In the Matter of Thomas Lekargeren, Administrative

Proceeding File No. 3-15653 (Exchange Act Rel. No. 71127 (Dec. 18, 2013)); and Securities and Exchange 

Commission v. Craig S. Lax, Civil Action No. 2:15-cv-01079-WHW-CLW (D.N.J.).

2 The estimated percentage recovery with respect to non-US securities transactions does not include TP paid by 

Respondents to customers in other settlements.

3 Exchange Act Rel. No. 73865 (Dec. 17, 2014).
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In administering the Fair Fund, the Fund Administrator will, among other things: (a)

build and maintain a case-specific database for Direct and Indirect Customers and their related 

payment information; (b) establish and maintain a toll-free telephone call-in number by which 

customers can obtain information about the Fair Fund; (c) establish and monitor an email inbox 

for customers to contact the Fund Administrator; (d) design and maintain a website for the 

administration of the Fair Fund, which will post information and relevant documents; and (e)

establish a link to such website from its own website, www.gcginc.com/cases. The Fair Fund 

will be distributed pursuant to the distribution methodology outlined in Section 9 below.

4. No Notice or Claim Process. The identity of harmed Direct Customers and the amount

of TP taken from them during the Relevant Period will be determined from the books and records

of the Respondents. In connection therewith, the Fund Administrator will review the data

provided by Respondents and verify Respondents’ allocation of the Fair Fund in accordance with

the distribution methodology set forth in Section 9. Accordingly, the Fair Fund is not being 

distributed according to a claims-made process.

5. Qualified Settlement Fund. The Fair Fund constitutes a Qualified Settlement Fund

(“QSF”) under Section 468B(g) of the Internal Revenue Code, 26 U.S.C. § 468B(g), and related

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5.

6. Tax Compliance. Respondents will serve as the “administrator” of the QSF for tax 

reporting and compliance purposes and may retain any professional services necessary or 

appropriate. The costs and expenses of any such tax compliance responsibilities and professional 

services, including information reporting, and the payment of any taxes, penalties, and interest due

will be borne by Respondents and will not be paid out of the Fair Fund. Payments to Respondents’

Direct and Indirect Customers will be made from the assets of the Fair Fund plus income it may

earn from the date of deposit to a date agreed upon between the Fund Administrator and

Respondents. Respondents shall calculate or shall cause to be calculated an estimated distributable

amount (“EDA”) which will allow for the payment of the Fair Fund’s withholding tax obligations.

The EDA will be the balance from which the payments to Respondents’ Direct and Indirect 

Customers will be made. Any tax withholding required on any payment to a customer will be

deducted from the gross payment to be made to that customer and will not be separately funded by

Respondents. The Fund Administrator will provide such information and cooperation to

Respondents as may be reasonably necessary for the Respondents to accomplish their tax

reporting, withholding and compliance responsibilities.

7. Control of Distribution Fund. The Commission has jurisdiction and control of the Fair 

Fund and will retain control of the assets of the Fair Fund until distribution checks are cashed or 

distribution payments by wire are accepted. The assets of the Fair Fund have been deposited into

an escrow account at a bank and, consistent with the terms of the escrow agreement, may only be

disbursed in accordance with the written authorization of the Commission.

8. Expenses of Administration. All fees and expenses of administering the Plan will be

paid by the Respondents.
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9. Distribution Methodology.

(a) Overview; Intent. The methodology set forth in this Section (the “Methodology”)

provides Respondents’ customers full refunds of TP on U.S. securities and pro rata refunds

of TP on non-U.S. securities. Customers will receive a payment in an amount equal to (i)

the TP on U.S. securities, (ii) a pro rata portion of the TP on non-U.S. securities, or, where

applicable, both (i) and (ii).

(b) De Minimis. Direct Customers whose calculated payment is less than $1,000 U.S.

will not receive a payment in the distribution, provided that no de minimis threshold will

apply to TP taken on orders originating from Respondents’ Global Transition Management

division. For any payments made to Indirect Customers, as described below, the de 

minimis amount will be $50 US.

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(c) Prior Refunds. In the event that Respondents have previously refunded TP to a Direct 

Customer or Indirect Customer who would also be paid under the Plan, or have previously 

made an irrevocable deposit into a QSF approved by a court of competent jurisdiction for 

such purpose (including, but not limited to, payments made in United States of America v.

ConvergEx Global Markets Limited, 2:13-cr-00810-JLL (D.N.J.)), such payment will be

offset from whatever payment may otherwise have been made to the Direct Customer or 

Indirect Customer, pursuant to the Plan’s Methodology. Respondents have agreed to 

provide written evidence reasonably acceptable to the Fund Administrator of such previous

payment or deposit into a QSF.

(d) Calculation. Respondents shall submit to the Fund Administrator an electronic

spreadsheet identifying each Direct Customer that will receive a payment, and information

sufficient for the Fund Administrator to calculate, in accordance with Section 9.e. below, a 

payment amount for (i) the TP on U.S. securities, (ii) a pro rata portion of the TP on nonU.S. securities, or, where applicable, both (i) and (ii). Respondents shall prepare the

spreadsheet using information from their books and records and include the following

information for each customer: (i) the name of the customer; (ii) the order number

associated with each order; (iii) the total TP on U.S. securities; and (iv) the total TP on nonU.S. securities.

 4 After a preliminary calculation of all payments, if the Fund Administrator, in consultation with the Commission 

staff determines that the Indirect Customer de minimis threshold of $50 would, in the aggregate, exclude a 

significant portion of the Indirect Customers otherwise eligible to participate in the distribution from receiving any 

payment, the Commission staff may in its discretion direct the Fund Administrator to adjust the de minimis 

threshold downward. An adjustment of the de minimis amount, if any, will be posted on the Information for 

Harmed Investors page on the Commission’s website and the Fair Fund website for this Plan maintained by the 

Fund Administrator.
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(e) Pro Rata Methodology. Payments attributable to TP on non-U.S. securities will be 

calculated for each customer by multiplying the TP on non-U.S. securities for that 

customer by a pro rata percentage based on the funds remaining in the Fair Fund. 

Respondents will calculate the pro rata percentage by subtracting (x) the aggregate amount

of TP on U.S. securities to be paid to all customers in the distribution, from (y) the EDA,

and then dividing the resulting difference by (z) the total amount of TP on non-U.S.

securities taken from all customers eligible to receive a payment in the distribution.

10. Outreach to Direct Customers. The Fund Administrator will make reasonable efforts to 

obtain complete contact information for Direct Customers within 30 days of Plan approval. Within 

45 days of receipt of such contact information, the Fund Administrator will send correspondence to

the Direct Customers to advise them of the distribution payment that they are eligible to receive 

from the Fair Fund, pursuant to the Methodology outlined above in Section 9. This correspondence 

will be approved by Commission staff in writing prior to its dissemination. The Fund Administrator

will request that Direct Customers respond within 30 days of the correspondence date and to 

indicate where to send their payment, whether to the Direct Customer, or to the Indirect Customers; 

Direct Customers that elect to receive payment will be provided with all relevant transaction 

information about Indirect Customers and will be asked to provide the Fund Administrator with

instructions for electronic payment and any tax information that may be required for tax reporting. 

Direct Customers that elect to have payment sent to the Indirect Customers will be asked to provide 

contact information, and any other information deemed necessary by the Fund Administrator. 

Where Direct Customers provide the Fund Administrator with contact information for 

payment to their Indirect Customers, within 45 days of receipt of such contact information, the Fund 

Administrator will send correspondence to the specified Indirect Customers to advise them of the 

distribution payment that they are eligible to receive from the Fair Fund; the Fund Administrator

will provide the Indirect Customers with all relevant transaction information, and will request that 

each Indirect Customer respond within 30 days and provide instructions for electronic payment and 

any information that may be needed for tax reporting, and any other information deemed necessary 

by the Fund Administrator. 

In the event that a Direct Customer or Indirect Customer, as the case may be, does not 

provide the Fund Administrator with complete and accurate instructions for electronic payment, that 

Direct or Indirect Customer will be issued a check in the amount of the distribution payment, 

together with subaccount information for allocating such payment among Indirect Customers, as 

applicable. 

11. Validation and Approval of Disbursement of the Fair Fund. The Fund Administrator

will disburse the Fair Fund in accordance with the Methodology, by issuing electronic payments

or by mailing checks. Before disbursement of the Fair Fund, the Fund Administrator, after 

consultation with Commission staff, will validate the applicable calculations for the payments to 

Direct or Indirect Customers, verifying that such amounts have been calculated in accordance with

the Plan and the Methodology, and will obtain authorization from the Commission to disburse the

Fair Fund pursuant to Rule 1101(b)(6) of the Commission’s Rules on Fair Fund and Disgorgement
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Plans. Within 10 business days of the Commission issuing an Order to Disburse the Fair Fund, the 

Fund Administrator will cause the payments to be distributed from the Fair Fund. The Fund 

Administrator will notify Commission staff of any returned payments due to non-delivery,

insufficient addresses, and/or other deficiencies and will exercise reasonable efforts in good faith to

research and explain any errors that result in non-delivery. If requested by Commission staff, the 

Fund Administrator will submit a calculation for payment of the returned items.

The Fund Administrator is also responsible for accounting for all payments in a form 

acceptable to Commission staff. In the event that any distribution is in the form of a paper check

in lieu of an electronic transfer, each check will state on its face that it is valid for 90 days. After

90 days from the date on the distribution check, the Fund Administrator will notify Commission

staff of all uncashed checks. The Fund Administrator will cancel/void all outstanding payments

and, if applicable, return any tax withholding funds to the Fair Fund escrow account. The Fund 

Administrator will account for all uncashed checks, and at the direction of Commission staff,

will make best efforts to contact payees of distribution checks that were not cashed and to locate 

payees of checks returned as undeliverable to facilitate the acceptance of the payments, including 

reissuance of checks when applicable.

12. Information Mailing to Accompany Payments. All payments will be accompanied by a 

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

(b) a description of the tax information reporting required of the QSF and related tax

consequences, if required; (c) a statement that checks will be void after 90 days; (d) contact 

information for customers with questions; (e) the amount of payment that represents TP on orders in

U.S. securities; (f) the amount of payment that represents TP on orders in non-U.S. securities; and 

(g) subaccount information for allocating such payment among Indirect Customers, as 

applicable. The Fund Administrator will provide each Direct or Indirect Customer receiving a

refund of TP taken in connection with an order in non-U.S. securities with a written

communication stating the total amount of TP taken on transactions in non-U.S. securities. Any

such written communication will be submitted to Commission staff for review and written

approval. The written communication will clearly indicate that the money is being distributed from

a Fair Fund established by the Commission.

All payments made by the Fund Administrator in accordance with this Plan will be final 

and not subject to appeal. 

13. Progress Reports and Final Accounting. Within 20 days after the end of each calendar

quarter, the Fund Administrator will provide to Commission staff a progress report and a 

quarterly account statement of all monies earned or received and all monies spent in connection

with the administration of the Plan, and the Fund Administrator will submit a final accounting to

Commission staff, both accountings in a format provided by the Commission staff. Commission 

staff will review the final accounting and submit it for approval by the Commission prior to

termination of the Fair Fund and discharge of the Fund Administrator.
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14. Amendments and Procedural Deadline Extensions. The Fund Administrator will take 

reasonable and appropriate steps to cause the Fair Fund to be distributed according to this Plan.

Where the Fund Administrator deems necessary, the Fund Administrator, after consultation with and

written agreement from Commission staff, may implement immaterial changes to the Plan. If a

proposed change is deemed material by Commission staff, Commission approval will be required

prior to implementation by amending the Plan, which may be done upon the motion of any party,

the Fund Administrator, or upon the Commission’s own motion. For good cause shown, the

Commission staff may extend any of the procedural deadlines set forth in this Plan.

15. Assistance by Respondents. Respondents will assist the Fund Administrator and the 

Commission staff by promptly providing requested information necessary for the administration 

and implementation of the Plan.

16. Disposition of Undistributed Funds. After payments have been accepted and cashed,

any amounts remaining in the Fair Fund will constitute the Fair Fund residual (“Residual”). The

Residual may include distributions from checks that have not been cashed or from checks that

were not delivered or from funds returned to the Fund Administrator. In the event there is a 

residual of undistributed Fair Fund funds that in the Commission staff’s view would warrant 

consideration of an additional disbursement from the Fair Fund, the Commission may exercise 

its discretion to enter an order for an additional distribution to investors who, after an initial 

disbursement of the Fair Fund, and in accordance with the methodology set forth in Section 9, 

remain eligible to receive additional funds. Otherwise, the Residual will be transferred to the U.S.

Treasury after the final accounting is approved by the Commission.

17. Termination of the Fair Fund. Upon completion of the distribution of the Fair Fund, the 

Respondents will make arrangements for the final payment of taxes and filing the final tax returns, 

and the Fund Administrator will provide a final accounting to Commission staff for submission to the 

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

discharged, after all of the following have occurred: (a) a final accounting, in the accounting format 

provided by the Commission staff, has been submitted by the Fund Administrator for approval of, 

and has been approved by, the Commission; (b) all income taxes and other fees due and owing by the 

Fair Fund have been paid by the Respondents; (c) all taxes withheld from distributions to customers 

have been tendered to the appropriate tax agencies; (d) all expenses associated with the 

administration of the Fair Fund have been paid by the Respondents; and (e) any amount remaining in 

the Fair Fund has been received by the Commission. When the Commission has approved the final 

accounting, the Commission staff will arrange for the transfer of any amount remaining in the Fair

Fund to the U.S. Treasury, and will seek an order from the Commission to approve the termination of 

the Fair Fund and discharge the Fund Administrator. Upon the transfer of the Residual, if any, to the 

U.S. Treasury, in accordance with Section 16, the Fund Administrator will shut down the website, 

toll-free number and email inbox, and destroy all paper documents that have electronic duplicates. 

The Fund Administrator will preserve all electronic and relevant paper copies of documents for six 

years after its discharge, at which time it will provide the electronic and preserved paper copies of the 

documents to Commission staff in accordance with the SEC’s Data Delivery Standards, which will 

be provided upon request.