•, 

UNITED S'(ATES OF AMERICA 

Before the 

SECURITIES AND EXCHANGE COMMISSION 

ADMINISTRATIVE PROCEEDING 

File No. 3-15507 

RECEIVED 

FEB O 7 2018 

OFFICE OF THE SECRETARY 

In the Matter of 

JPMorgan Chase & Co., 

Respondent. 

MOTION TO AMEND 

PLAN OF DISTRIBUTION 

AllianceBernstein LP (together with affiliates, "AB"), through its undersigned counsel, 

hereby moves to amend the Plan of Distribution for the JPMorgan Chase & Co. ("JPM") NonDisclosure Fair Fund (the "Fund") established by the SEC in the above-referenced matter. This 

motion is made pursuant to Paragraph 7 4 of the Plan of Distribution. 

I. Summary of Relief Sought

On behalf of its clients, AB attempted to submit timely claims for participation in the 

distribution of the Fund. However, due to a technology error by a third-party service provider, 

over five thousand accounts were dropped from AB' s submission. AB discovered the error and 

then acted with diligence to correct the issue, but those claims were determined to be untimely 

by the Administrator. Given the equities of the situation, AB seeks to amend the Plan of 

Distribution in order to allow these clients to participate in any further distributions of monies 

from the Fund after the reissue and reconciliation provisions reflected in Paragraphs 61-76 of the 

Plan of Distribution. To the extent monies remain for further distribution after this reissue and 

reconciliation process, AB requests that its clients' claims be recognized and given priority over 
(1) further distributions to Eligible Claimants who have already received recoveries under the

. . . .

terms of the Plan of Distribution, or (2) the transfer of monies left in any residual fund to the 

U.S. Treasury pursuant to Paragraph 66 of the Plan of Distribution. These accounts would have 

been entitled to recover approximately $1.9 million had they participated in the original 

distribution from the Fund. 

II. St�nding to Make the Motion

This motion is made pursuant to Paragraph 74 of the Plan of Distribution, which states: 

"[t]he Distribution Plan may be amended upon motion by any party, the Administrator, or upon 

the Commission's own motion." (emphasis added). We understand from discussions with Staff 

that it is the SEC's position that the reference to "any party" within Paragraph 74 may not 

include persons impacted by the Plan of Distribution, such as AB. Any such interpretation is 

incorrect. 

"Party" is not a defined term in the Plan of Distribution, and thus should be given its 

plain meaning. If "any party" did not include potentially impacted investors, the primary 

beneficiaries of the Fair Fund, it is not clear what else those terms refer to. For example, "any 

party" cannot refer to the Commission or the Administrator, as both are separately conferred 

rights to make such a motion under the express terms of Paragraph 74. Nor would it make sense 

for "any party" to refer to the Respondent in the underlying enforcement action (JP Morgan), as 

the Respondent is not a party to the Plan of Distribution. Even if Respondent were a party to the 

Plan, it would make no sense: (1) to-refer to a single Respondent as "any party" rather than using 

the term "Respondent," or (2) to give the· Respondent greater rights under the Fair Fund than the· 

investors for whose benefit the Fund was created. Finally, "Paity" is defined in the Rules of 

Practice and Rules on Fair Fund and Disgorgement,Plans at Rule 101(a)(8) to include '.·'any 

2 
person seeking Commission.review of a decision." That is precisely what AB seeks in this 

motion. 

Therefore, "any party" in Paragraph 74 includes AB and its-clients as potential Eligible 

Claimants, and thus AB has standing �o bring this motion. 

ID. Relevant Facts and Background 

A. The Fund

The Fund was established by the SEC to distribute the $200 million in penalties paid by 

JPM to investors harmed by JPM' s failure to disclose the true amount of trading losses it 

suff�red during the first quarter of 2012, as well as failing to describe accurately the 

effectiveness of its disclosure controls and procedures. The Fund is intended to compensate 

investors who purchased JPM common stock through a U.S. securities exchange between April 

13, 2012 and May 20, 2012, and suffered harm pursuant to the Plan of Distribution approved by 

the SEC on February 4, 2015. Claim forms for potential inclusion in the distribution of the Fund 

were due on September 4, 2015. On August 11, 2011, the Commission issued an order 

approving distribution of the Fund. 

B. AB's Clients and-AB's Diligence

.AB clients had significant positions in JPM common stock during the relevant period. 

Upon learning of the creation of the Fund, AB took steps to analyze how many accounts were 

potentially implicated, and determined that approximately 36,351 accounts were eligible to 

participate.in the Fund., On June-29, 2015, two months before claims were due,AB .sent the 

relevant transaction data-for all of these impacted .accounts to Institutional Shareholder Services 

("ISS"), a third party with. which AB has _contracted to submit claims in Fair Funds and.class 

actions r�coveries. That transmission included transaetion data for .all 36,35.1 AB-advised 

3 .. 
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accounts potentially eligible to participate in the Fund. However, dμe to what we understand to 

. . . . . 

be a technology error on ISS's part, ISS timely filed claim forms with the Administrator for only 

11,583 of these accounts. In other words, ISS failed to submit the data for over 24,()00 ABadvised accounts. We understand that 5,592 of these missing accounts would h�ve been eligible 

to participate in a distribution from the Fund had ISS timely submitted them to the 

Administrator .

1

In May 2017, ISS provided AB with documentation relating to tl�osea�counts for "'{hich., 

a claim form had been timely submitted. AB' s review of this documentation uncov�red that 

certain AB accounts were not included and AB immediately foll�w�d up with �SS to dete�e 

the status of these other accounts. At that point, the technology error was admitted by ISS, and, 

AB was informed that the 5,592 accounts were not included in the previous claim form 

submission. AB immediately instructed ISS to submit claim forms for these accounts. Those 

claims were submitted after the initial deadline established by the Plan of Distribution, but still 

before any distributions were made from the Fund. On June 6, 2017, AB learned from ISS that 

the claims related to those accounts had been rejected as untimely. 

AB and ISS have had several conversations with the Staff in an attempt to explore 

potential ways to allow these 5,592 accounts to participate in the Fair Fund. During the last 

conversation in December of 2017, the Staff instructed AB to follow up in early 2018 to see if. 

there were any monies left for further disttjbution following the i�tial distribution from the 

Fund. 

. ' 

The remaining accounts may not have been entitled to a distribution because of the timing of the buys/sells 

in the accounts, or the losses did not exceed the $10 minimum. (See Paragraph 52 of the Plan of Distribution). 

4.
'."'. • !' ' 

. ·, 

.. �-

According to AB's calculations, the 5,592 accounts in question wo·uld have been able to 

. . . . 

recover approximately $1.9 million from the Fund but for ISS's error. Most of these losses were 

in mutual funds· managed by AB. 

IV. Amendment of the-Plan of Distribution is Required on Equitable Grounds

The basis for relief sought in this motion is principles of equity and fairness. The 

primary purpose of the Fund was to compensate defrauded inves_tors in JPM stock. AB's-clients 

were collectively one of the largest such investors. We understand that the Administrator 

reviewed 127,000 claims for eligibility to participate in the Fund- and thus AB's 5,592 clients 

made up a substantial portion of the total population of impacted investors. To exclude these 

· 5,592 accounts from any distribution would be contrary to the purposes of the Fund.

AB took appropriate steps to ensure that all of its clients could participate in the Fund. 

The only reason claim forms were not timely submitted for 5,592 of its clients is because of a 

technology glitch at a third-party vendor. AB could not have discovered the error earlier, and 

once the error was discovered, it acted with the utmost diligence. AB took immediate steps in an 

attempt to correct the error, resubmitting those claims. 

Under the circumstances, the fair and equitable approach would be to allow AB's clients 

to participate in any further distributions or to pay its claims (in whole or in part) out of any 

residual monies. Precedent exists for the Commission to amend a Plan of Distribution for a Fair 

Fund when substantial claims are identified after the.initial.distribution. For example, in In re 

Invesco Funds Group, Inc., SEC Release No. 64472, 2011 WL 1790485 (May 11, 2011),. the 

Commission amended a Plan of Distribution to allow impacted investors to participate in the Fair 

Fund after the initial distribution had been made. There, impacted investors were not able to 

participate in an initial distribution because a third-party intermediary that was responsible for 

1, • • • , 

5 
handling the omnibus account of those investors could not identify the underlying beneficial 

account holders at the time - a technical failing not unlike the one at issue here. After the initial 

distribution, the intermediary performed a different search of its records that potentially would 

yield the necessary information and allow the impacted investors to participate. The 

Commission ordered the Distribution Plan amended to allow these investors to participate in the 

Fair Fund's residual monies. The Commission specifically noted that the amendment of the Plan 

was "[c]onsistent with the Plan's primary object to distribute funds to affected investors." See 

also In re Smith Barney Fund Management LLC and Citigroup Global Markets Inc., SEC 

Release No. 65460, 2011 WL 4526127 (Sept. 30, 2011) (amending a Plan of Distribution to 

allow for a disbursement of over $600,000 after it was discovered that mutual funds missed out 

on payments in an initial distribution due to an oversight on the part of fund advisers). 

WHEREFORE, AB respectfully requests that the Commission amend the Plan of 

Distribution in a form that would allow AB's clients to participate in any further distributions 

from the Fund, or grant such other relief as is just and proper under the circumstances. 

DATED: January 24, 2018 

6 

ztfull;�rru� 

Sean M. Murphy 

Milbank Tweed Hadley & McCloy LLP 

28 Liberty Street 

New York, NY 10005 

(212) 530-5688

Counsel to AllianceBernstein LP 
UNITED STATES OF AMERICA 

Before the 

SECUlUTIES AND EXCHANGE COMMISSION 

ADMINISTRATIVE PROCEEDING 

File No. 3-15507 

ln the Matter of 

JPMorgan Chase & Co., 

Respondent. 

CERTIFICATE OF SERVICE 

I, Sean M. Murphy, hereby certify that on January 24, 2018, I caused to be sent, by 

certified mail, copies of the Notice of Appearance or Scan M. Murphy as counsel to 

AllianceBernstein LP and the Motion by AllianceBernstein LP to Amend the Plan of 

Distribution to the following: 

DATED: January 24, 2018 

RCB fund Services, LLC 

JPM Fair Fund 

P.O. Box 6976 

Syracuse, NY 13217-6976 

Susan Pecaro 

Division of Enforcement, Office of Distributions 

I 00 F Street NE 

Washington, D.C. 20549 

Respectfully submitted, 

b 1th.� 

Scan M. Murphy 

Milbank Tweed Hadley & McCloy LLP 

28 Liberty Street 

New York, NY 10005 

(212) 530-5688

Counsel to AllianceBernstein LP 
LOS ANGELES 

213-892-4000 

FAX: 213-629-5063 

MILBANK, TWEED, HADLEY & M<;CLOY LLP 

---R-=E:-:::C::-::E:::-;l�V;;::E:-;::D�� 28 LIBERTY STREET

WASIIINGTON, D.C. 

202-835-7500 

F/\X: 202-835-7586 

LO 'DON 

44-20-7615-3000

FAX: 44-20-7615-3100 

FRANKFURT 

49-69-71914-3400

FAX: 49-69-71914-3500 

MUNICH 

49-89-25559-3600 

FAX: 49-89-25559-3700 

FEB O 7 t:018 

OFFICE OF THE SECRETARY

VIA CERTIFIED MAIL 

Brent Fields, Secretary 

Securities and Exchange Commission 

I 00 F Street NE 

Washington, D.C. 20549 

NEW YORK, NY 10005 

212-530-5000

FAX: 212-530-5219 

Scan M. Murphy 

Partner 

DIRECT D1/\L NUMl3ER 

212-530-SGSS 

Fax 212-822-5688 

E-M/\IL smurph)@milbank com 

January 24, 2018 

Re: JPMorgan Chase & Co., File No. 3-15507 - f-air Fund Distribution 

Dear Mr. Fields, 

BEIJING 

8610-5969-2700 

F /\X: 8610-5969-2707 

MONG KONG 

852-2971-4888 

FAX: 852-28-10-0792 

SEOUL 

822-6137-2600 

FAX: 822-6137-2626 

SINGAPORE 

65-6428-2-100

FAX: 65-6-128-2500 

TOKYO 

813-5410-2801

FAX: 813-5410-2891 

SAO PAULO 

55-l l-3927-7700

FAX: 55-11-3927-7777 

Enclosed for Commission action please ltnd a notice of appearance and a Motion to 

Amend the Plan of Distribution in the above-rcl'erenced Fair Fund proceeding, together with a 

Certificate of Service. Please contact me if you have any questions. Thank you for your attention. 

Cc (via certified mail with enclosures): 

RCB Fund Services, LLC 

JPM Fair Fund 

P.O. Box 6976 

Syracuse, NY 13217-6976 

Susan Pecaro 

zcl� 

Sean M. Murphy 

Division of Enforcement, Office of Distributions 

100 F Street NE 

Washington, D.C. 20549