UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934 

Release No. 68683 / January 17, 2013

_____________________________________________________________________

Omnibus Order Directing the Appointment of Tax Administrator in 

Administrative Proceedings that Establish Distribution Funds

The Commission’s orders in administrative proceedings may lead to the payment 

of disgorgement and/or penalties for distribution. Such distribution funds may create

qualified settlement funds (“QSFs”) under Treasury Regulation 1.468B-1(c), 26 CFR §

1.468B-1(c), and have a variety of tax-related obligations. The Division of 

Enforcement (“Division”) has evaluated the proposals received from potential tax 

administrators for the QSFs and, of those proposals, has determined that Damasco &

Associates LLP (“Damasco”), a certified public accounting firm located in Half Moon 

Bay, California, is best suited to act as tax administrator for the QSFs for calendar years 

2013 through 2015 in such administrative proceedings.

Accordingly,

IT IS ORDERED that:

A. Pursuant to the Commission’s Rules on Fair Fund and Disgorgement Plans

(17 CFR §§ 201.1101, et seq.), Damasco is appointed as the tax administrator 

(the “Tax Administrator”) when requested by staff in calendar years 2013 

through 2015 in those administrative proceedings where distribution funds

have been established. For the life of the distribution funds to which 

Damasco is appointed in 2013, 2014 and 2015, Damasco will have the

limited authority and power to: (1) act as the administrator for tax purposes 

for each QSF; (2) prepare, sign, and file the necessary tax returns and taxrelated documents for the QSFs; (3) make the tax payments on behalf of the 

QSFs; (4) obtain the necessary tax-related documents and identifiers, such as 

an employer identification number, on behalf of the QSFs; (5) perform other 

tax-related and reporting duties on behalf of the QSFs as required by 

Department of the Treasury regulations relating to QSF administrators; (6) 

prepare a final accounting when a QSF distribution has been completed, 

on a form provided by the Commission; (7) prepare distribution checks 

and mail to injured investors for small QSFs, when requested to do so by 

a fund administrator pursuant to a Commission approved distribution 

plan; and (8) communicate on behalf of the QSFs on matters set forth in this 

paragraph.
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B. The Tax Administrator will, from time to time, have custody or control of 

monies transferred to the Tax Administrator to make tax payments. 

Therefore, the Tax Administrator, before taking possession of those 

monies, will obtain a bond, pursuant to the 2013-2015 Letter Agreement 

executed between the Commission and the Tax Administrator.

C. The Tax Administrator will submit, at least 30 days prior to any date on which 

a tax payment is required on behalf of any QSF or as soon as is practicable, 

documentation showing the amount necessary to satisfy the tax liability of each 

QSF as well as all other documents supporting such amount, to the 

following: 

1. Where the Respondent has agreed to pay the taxes of the QSF, 

the Tax Administrator will submit the documentation to the Respondent, with 

a copy to the Commission staff member assigned to the proceeding and to the 

Distributions Program Analysis mailbox. 

The Respondent will pay the amount of the documented taxes to the 

Tax Administrator by check or wire transfer. The Tax Administrator, in turn, 

will be responsible for paying the taxes to the Internal Revenue Service (“IRS”)

and the relevant state and local taxing authority, if any, on behalf of the QSF. 

The Tax Administrator will provide written confirmation of the payment of 

the taxes to the Commission staff member assigned to the proceeding and to 

the Distributions Program Analysis mailbox. 

 

2. Where the money in the QSF is held by an escrow agent, the 

Tax Administrator will submit the documentation to the escrow agent, with a 

copy to the Commission staff member assigned to the proceeding and to the 

Distributions Program Analysis mailbox. 

Upon approval to disburse by the staff to whom authority is 

delegated by paragraph F., below, the escrow agent will disburse to the Tax 

Administrator, by check or wire transfer from the QSF, the amount of taxes 

as calculated by the Tax Administrator. Such tax payments will come first 

from any earnings or interest in the QSF, and second, if necessary, from the 

principal of the QSF. The Tax Administrator, in turn, will be responsible for 

paying the taxes to the IRS and the relevant state and local taxing 

authority, if any, on behalf of the QSF. The Tax Administrator will

provide written confirmation of the payment of the taxes to the Commission 
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staff member assigned to the proceeding and to the Distributions Program 

Analysis mailbox. 

3. In all other proceedings, the Tax Administrator willsubmit 

documentation to the Commission staff member assigned to the proceeding

and to the Distributions Program Analysis mailbox. 

Upon approval to disburse by staff to whom authority is delegated 

by paragraph F., below, the Commission staff will disburse to the Tax 

Administrator, by check or wire transfer from the QSF, the amount of the 

taxes as calculated and documented by the Tax Administrator. Such tax 

payments will come first from any earnings or interest in the QSF and 

second, if necessary, from the principal of the QSF. The Tax Administrator,

in turn, will be responsible for paying the taxes to the IRS and the relevant 

state and local taxing authority, if any, on behalf of the QSF. The Tax 

Administrator will provide written confirmation of the payment of the taxes to 

the Commission staff member assigned to the proceeding and to the 

Distributions Program Analysis mailbox. 

D. The Tax Administrator will comply with all reporting requirements 

applicable to a QSF as defined in Treasury Regulation 1.468B-1(a), as 

amended, and will file on a timely basis all required federal, state, and 

local tax returns and will contemporaneously provide copies of such filings to 

the assigned Commission staff member and to the Distributions Program 

Analysis mailbox. 

E. The Tax Administrator will keep records and bill each QSF for the services 

provided to it pursuant to the 2013-2015 Letter Agreement executed between 

the Commission and the Tax Administrator. 

1. In the proceedings in which the Respondent has agreed to pay for 

the expenses of the QSF, the Tax Administrator will submit the bill to the 

Respondent for payment by check or wire transfer. 

2. Where the money in the QSF is held by an escrow agent, the Tax 

Administrator will submit the bill to the assigned Commission staff member

and to the Distributions Program Analysis mailbox for approval. Where 

services have been billed according to the terms of the Tax Administrator’s 

2013-2015 Letter Agreement with the Commission, and are for an amount 

less than or equal to $10,000 per case per tax filing per quarter, payment may
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be approved by staff to whom authority is delegated by paragraph F., below. 

For bills totaling an amount greater than $10,000 per case per tax filing per 

quarter, the Commission staff assigned to the proceeding must seek 

Commission approval for payment. After payment of the Tax 

Administrator’s bill has been approved, the escrow agent is authorized to pay 

the bill of the Tax Administrator by check or wire transfer from the QSF. 

Payment will come first from any earnings or interest in the QSF and second, 

if necessary, from the principal of the QSF. 

3. In all other proceedings, the Tax Administrator will submit the bill 

to the assigned Commission staff member and to the Distributions Program 

Analysis mailbox for approval. After payment of the Tax Administrator’s bill

has been approved, which approval will be as described in paragraph E.2., 

above, the Commission staff will pay the bill of the Tax Administrator by 

check or wire transfer from the QSF. Payment will come first from any 

earnings or interest in the QSF and second, if necessary, from the principal of 

the QSF. 

In all proceedings, the fees billed will be as agreed upon in the Tax 

Administrator’s 2013-2015 Letter Agreement with the Commission, as 

executed by the Secretary of the Commission on behalf of the Commission.

 F. Pursuant to Section 4A of the Securities Exchange Act of 1934 (15 U.S.C. §

78d-1), the authority as set forth in paragraphs C.2., C.3., E.2. and E.3., above,

to approve the payment of the Tax Administrator’s fees and expenses and to 

approve the disbursement of QSF tax payments based on the calculations of 

the Tax Administrator is delegated to the Division’s Deputy Managing 

Executive (“DME”) in his/her capacity as the Assistant Director of the 

Office of Distributions (“OD”) and to the Supervisory Assistant Chief 

Litigation Counsel (“SACLC”) in the OD or the equivalent level 

manager as designated by the DME. 

 G. The Secretary of the Commission will, upon request by the Division staff

during calendar years 2013, 2014, and 2015, issue orders that appoint

Damasco as the Tax Administrator in administrative proceedings.

By the Commission.

Elizabeth M. Murphy

 Secretary