UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-19716

In the Matter of

Sica Wealth Management, LLC 

and Jeffrey C. Sica,

Respondents.

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PLAN OF DISTRIBUTION

I. OVERVIEW

1. The Division of Enforcement has prepared this 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”) comprised of disgorgement, prejudgment interest, and civil money penalties paid by 

registered investment adviser, Sica Wealth Management, LLC (“SWM”) and, its principal,

Jeffrey C. Sica (“Sica”) (collectively, the “Respondents”) in the above-captioned matter.1 

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

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

Respondents’ failure to adequately disclose, to certain of their advisory clients, conflicts of 

interest regarding Sica’s recommendations that they invest in securities issued by Aequitas 

Commercial Finance, LLC (the “Aequitas Securities”). Based on information obtained by the 

Commission staff during its investigation and the review and analysis of applicable records, the 

Commission staff has reasonably concluded that it has all records necessary to calculate each 

investor’s harm. As a result, the Fair Fund is not being distributed according to a claims-made 

process, so procedures for making and approving claims in accordance with Rule 1101(b)(4) of 

the Commission’s Rules, 17 C.F.R. § 201.1101(b)(4), are not applicable.

3. As calculated using the methodology detailed in the Plan of Allocation (attached 

as Exhibit A), investors will be compensated for their advisory fees paid between October 1, 

2013 and November 30, 2015, inclusive (the “Relevant Period”) with interest, plus a pro rata

distribution of the remaining available funds for their related investment losses. 

 

1

 See Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 203(e), 203(f) and 

203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Ceaseand-Desist Order, Advisers Act Rel. No. 5453 (Feb. 27, 2020) (the “Order”).
2

4. In the view of the Commission staff, this methodology constitutes a fair and 

reasonable allocation of the Fair Fund. 

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

assets of the Fair Fund. The Plan is approved by the Commission, and the Commission retains 

jurisdiction over its implementation.

II. BACKGROUND

6. On February 27, 2020, the Commission issued an Order instituting and 

simultaneously settling administrative and cease-and-desist proceedings against the Respondents. 

In the Order, the Commission found that from October 2013 to March 2015, approximately 45 

SWM advisory clients invested a total of more than $30 million in the Aequitas Securities based 

on Sica’s recommendation.

2

 The Commission also found that between October 2013 and 

November 2015, the Respondents failed to disclose to their advisory clients material facts 

regarding compensation that Aequitas provided to SWM and another firm owned and controlled 

by Sica (the “Affiliated Adviser”). According to the Order, Aequitas paid Sica and the Affiliated 

Adviser approximately $2 million during the Relevant Period pursuant to consulting agreements 

and a loan agreement (the “Aequitas agreements”) but the Respondents did not disclose these 

payments to their advisory clients. The Commission found that, by their misconduct, SWM and 

Sica violated Section 206(2) of the Advisers Act and ordered the Respondents to pay a total of 

$408,693.42 consisting of $236,029.19 in disgorgement, $62,664.23 in prejudgment interest, and 

$110,000.00 in civil money penalties to the Commission. The Commission also created the Fair 

Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalties paid, along 

with the disgorgement and interest paid, can be distributed to harmed investors. 

7. The Respondents have paid in full. The Fair Fund has been deposited at the 

United States Department of the Treasury’s Bureau of the Fiscal Service (“BFS”) for investment, 

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

III. DEFINITIONS

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

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

including without limitation tax obligations, the fees and expenses of the Tax Administrator, and 

investment and banking costs. 

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

accordance with the terms of this Plan.

 

2

In March 2016, the Commission charged Aequitas Commercial Finance, LLC (“ACF”) and several other Aequitas 

companies and officers with defrauding the purchasers of more than $300 million in ACF promissory notes and 

other Aequitas securities. See SEC v. Aequitas Management, LLC, et al., No. 3:16-cv-00438-PK (D. Or. filed March 

10, 2016).
3

10. “Eligible Claimant” means a Preliminary Claimant, who is determined to have 

suffered a Recognized Loss, pursuant to the Plan of Allocation, and who is not an Excluded 

Party or an Unresponsive Preliminary Claimant.

11. “Excluded Party” shall mean: (a) the Respondents and the Respondents’ 

advisers, agents, nominees, assigns, creditors, heirs, distributees, spouses, parents, children, or 

controlled entities; (b) the Third-Party engaged to assist the Fund Administrator and its 

employees; and (c) 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.

12. “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 Order. 

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

less Administrative Costs. 

14. “Payee” means an Eligible Claimant whose distribution amount is equal to or 

greater than $10.00, as calculated in accordance with the Plan of Allocation, who is determined 

to receive a Distribution Payment.

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

partnerships, or limited liability companies.

16. “Plan Notice” means a written notice from the Fund Administrator to each 

Preliminary Claimant regarding the Commission’s approval of the Plan, including, as 

appropriate: a statement characterizing the distribution; a link to the approved Plan posted on the 

Commission’s website and instructions for requesting a copy of the Plan; specification of any 

information needed from the Preliminary Claimant to prevent him, her, or it from being deemed 

an Unresponsive Preliminary Claimant; a description of the tax information reporting and other 

related tax matters; the procedure for the distribution as set forth in the Plan; and the name and 

contact information for the Fund Administrator as a resource for additional information or to 

contact with questions regarding the distribution. 

17. “Plan of Allocation” means the methodology by which a Preliminary Claimant’s 

Recognized Loss is calculated. The Plan of Allocation is attached as Exhibit A. 

18. “Preliminary Claimant” means an investor, or their lawful successors, identified 

by the Fund Administrator based on its review and analysis of applicable records obtained by the 

Commission staff during its investigation, who paid advisory fees to the Respondents in 

connection with Respondents’ recommendation to invest in the Aequitas Securities during the 

Relevant Period. 
4

19. “Recognized Loss” means the total advisory fees paid plus interest and the 

related net investment loss suffered by each Preliminary Claimant as calculated in accordance 

with the Plan of Allocation.

20. “Relevant Period” means the period between October 1, 2013 and November 30, 

2015, inclusive.

21. “Unresponsive Preliminary Claimant” means a Preliminary Claimant whose 

address the Third-Party or Fund Administrator has not been able to verify and/or who does not 

timely respond to the Third-Party’s or Fund Administrator’s attempts to obtain information, 

including any information sought in the Plan Notice. Unresponsive Preliminary Claimants will 

not be eligible for a distribution under the Plan.

IV. TAX COMPLIANCE

22. On April 8, 2020, the Commission appointed Miller Kaplan Arase LLP as the tax 

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

Fair Fund.

3

 The Tax Administrator will be compensated for reasonable fees and expenses from 

the Fair Fund in accordance with its 2019-2021 Engagement Letter Agreement with the 

Commission.4

23. 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:

(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 imposed 

on distributions from the Fair Fund.

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

approval of Commission staff.

 

3

 See Order Appointing Tax Administrator, Exchange Act Rel. No. 88598 (Apr. 8, 2020).

4

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

Distribution Funds, Exchange Act Rel. No. 85174 (Feb. 22, 2019).
5

V. FUND ADMINISTRATOR

25. Noel Gittens is the fund administrator for the Fair Fund (“Fund Administrator”). 

As a Commission employee, the Fund Administrator shall receive no compensation, other than 

his regular salary as a Commission employee, for his services in administering the Fair Fund. In 

accordance with Rule 1105(c) of the Commission’s Rules,5no bond is required since the Fund 

Administrator is a Commission employee.

26. 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 

obtain accurate mailing information for Preliminary Claimants; 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); disbursing the Fair Fund in 

accordance with this Plan, as ordered by the Commission; and researching and reconciling errors 

and reissuing payments, when possible. The Fund Administrator will engage a third-party, 

Analytics Consulting, LLC (the “Third-Party”) for an estimated fixed fee of $6,689.00, to 

perform some of the administrative tasks associated with implementing the Plan, such as 

obtaining accurate mailing information and tax compliance information for Preliminary 

Claimants and processing Distribution Payments. The Third-Party’s fees and expenses will be 

paid from the Fair Fund as an Administrative Cost, pursuant to a cost proposal submitted to, and 

approved by, the Commission staff.

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

make and implement immaterial changes to the Plan. If a change is deemed to be material by the 

Commission staff, Commission approval is required prior to implementation by amending the 

Plan.

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

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

VI. PLAN PROCEDURES

Specification of Preliminary Claimants

29. Using information obtained during its investigation, the Commission has 

identified the Preliminary Claimants. Preliminary Claimants are limited to only those Persons 

who paid advisory fees to SWM in connection with investments in the Aequitas Securities during 

the Relevant Period. 

Procedures for Locating and Notifying Preliminary Claimants

30. Within thirty (30) days of Commission approval of the Plan, the Third-Party or 

the Fund Administrator will send the Plan Notice to each Preliminary Claimant’s last known 

email address (if known) and/or mailing address.

 

5

 17 C.F.R. § 201.1105(c).
6

Undeliverable Mail

31. If any mailing is returned as undeliverable, the Third-Party or the Fund 

Administrator will make the best practicable efforts to ascertain a Preliminary Claimant’s correct 

address. If another address is obtained, the Fund Administrator or the Third-Party will then 

resend it to the Preliminary Claimant’s new address within thirty (30) days of receipt of the 

returned mail. If the mailing is returned again, and the Fund Administrator or the Third-Party, 

despite best practicable efforts, is unable to find a Preliminary Claimant’s correct address, the 

Fund Administrator, in its discretion, may deem such Preliminary Claimant an Unresponsive 

Preliminary Claimant. 

32. Any Preliminary Claimant who relocates or otherwise changes contact 

information after receipt of the Plan Notice must promptly communicate any change in address 

or contact information to the Fund Administrator or the Third-Party.

Procedures to Request Plan Notice

33. Any Person who does not receive a Plan Notice, as described in paragraph 30, but 

who is aware of this Plan (e.g., through other Preliminary Claimants or on www.sec.gov) and 

believes they should be included as a Preliminary Claimant should contact the Fund 

Administrator or the Third-Party within thirty (30) days of the approval of the Plan to establish 

that they should be considered a Preliminary Claimant. The Fund Administrator or the ThirdParty will send the Person a Plan Notice within thirty (30) days of receiving the Person’s 

documentation, if the Fund Administrator determines that the Person should have received a Plan 

Notice.

Failure to Respond to Plan Notice

34. If a Preliminary Claimant is requested to respond and fails to respond within

thirty (30) days from the initial mailing of the Plan Notice, the Third-Party or the Fund 

Administrator will make no fewer than two (2) attempts to contact the Preliminary Claimant by 

mail, telephone or email. The second attempt will in no event take place more than forty (45)

days from the initial mailing of the Plan Notice. If a Preliminary Claimant fails to respond to the 

Fund Administrator’s contact attempts as described in this paragraph, the Fund Administrator, in 

its discretion, may deem such Preliminary Claimant an Unresponsive Preliminary Claimant.

Dispute Process

35. Disputes will be limited to calculation of the advisory fees paid and the 

calculation of net investment losses. Within thirty (30) days of the initial mailing Plan Notice, 

the Fund Administrator must receive a written communication detailing any dispute along with 

any supporting documentation. The Fund Administrator will investigate the dispute, and such 

investigation will include a review of the written dispute as well as any supporting 

documentation. 
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Final Determination Notices

36. Within sixty (60) days of the initial mailing of the Plan Notices, the Fund 

Administrator will send a Final Determination Notice to (a) any Preliminary Claimant who 

timely submitted a written dispute as described in paragraph 35 above, notifying the Preliminary 

Claimant of the resolution of the dispute; and (b) those Preliminary Claimants who have not 

responded to the Plan Notice, as described in paragraph 34 above, except for those whose Plan 

Notice were returned as undeliverable, notifying the Preliminary Claimant that they are deemed 

an Unresponsive Preliminary Claimant.

Distribution Methodology

37. The Fund Administrator will calculate each Preliminary Claimant’s Recognized 

Loss in accordance with the Plan of Allocation. All Preliminary Claimants who are determined 

to have a Recognized Loss, and who are not deemed an Excluded Party or an Unresponsive 

Preliminary Claimant will be deemed an Eligible Claimant. All Eligible Claimants whose 

distribution amount is equal to or greater than $10.00, as calculated in accordance with the Plan 

of Allocation, will be deemed a Payee and receive a Distribution Payment.

Establishment of a Reserve

38. 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”).

39. After all Distribution Payments are made and Administrative Costs paid, any 

remaining amounts in the Reserve will become part of the Residual described in paragraph 56

below. 

Preparation of the Payment File

40. Within sixty (60) days of Commission approval of the Plan, 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 Escrow Account

41. Prior to the disbursement of funds from the Net Available Fair Fund, the ThirdParty will establish an escrow account at a United States commercial bank that is a wellcapitalized 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”) provided by the Commission staff.
8

42. 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, 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.

43. The Third Party shall provide duplicate original bank and/or investment 

statements on any accounts established by the Third Party to the Tax Administrator on a monthly 

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

44. 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 

Account will be the responsibility of the Third-Party, 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

45. Pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 C.F.R. 

§ 201.1101(b)(6), the Commission staff will obtain an order from the Commission to disburse 

funds from the Net Available Fair Fund to the Bank in accordance with the Payee List for 

distribution by the Third-Party in accordance with the Plan. Pursuant to the order, the funds will 

be transferred to the Bank, and the Third-Party will be responsible for issuing Distribution 

Payments to Payees in accordance with the Payee List. For any electronic payment, the exact 

amount necessary to make a payment shall be transferred directly to the Payee’s bank account in 

accordance with written instructions provided to the Bank by the Third-Party.

46. All checks will bear a stale date of ninety (90) 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 50.

47. 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; (c) a 

statement that checks will be void and cannot be reissued after ninety (90) days from the date the 

original check was issued; and (d) contact information for the Third-Party for questions 

regarding the Distribution Payment. The letter or other mailings to Payees characterizing a 

Distribution Payment will be submitted to the Tax Administrator and Commission staff for 

review and approval. 
9

48. 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.

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

49. The Third-Party 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 Third-Party as “undeliverable.” If new address information becomes available, the ThirdParty 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 Third-Party shall instruct the issuing financial 

institution to stop payment on such check. If the Third-Party is unable to find a Payee’s correct 

address, the Third-Party, 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.

50. The Third-Party will reissue checks or electronic payments 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 Third-Party will request, and 

must receive, documentation to support the requested change. The Third-Party will review the 

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

discretion of the Third-Party, such change request is properly documented, the Third-Party 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 

thirty (30) 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.

51. The Third-Party will work with the Bank and maintain information about 

uncashed checks and any returned items due to non-delivery, insufficient addresses, and/or other 

deficiencies. The Third-Party is responsible for researching and reconciling errors and reissuing 

payments when possible. The Third-Party is also responsible for accounting for all payments. 

The amount of all uncashed and undelivered payments will continue to be held in the Fair Fund. 

52. The Third-Party will make and document its best efforts to contact Payees to 

follow-up on the status of uncashed distribution checks over $100 (other than those returned as 

“undeliverable”) and take appropriate action to follow-up on the status of uncashed checks at the 

request of Commission staff. The Third-Party may reissue such checks, subject to the time limits 

detailed herein.
10

53. 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.

Receipt of Additional Funds

54. 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.

Disposition of Undistributed Funds

55. If funds remain following the initial distribution and payment of all 

Administrative Costs, 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. 

56. 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 in the Reserve, distribution checks that have not been cashed, checks or electronic 

payments that were not delivered or were returned to the Commission, and tax refunds for 

overpayment of taxes or for waiver of IRS penalties.

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

will be returned to the Commission and transferred to the U.S. Treasury, subject to Section 

21F(g)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), after the final 

accounting is approved by the Commission. Returning such money to the Respondents would be 

inconsistent with the equitable principle that no Person should profit from his wrongdoing. 

Therefore, in these circumstances distributing disgorged funds to the U.S. Treasury is the most 

equitable alternative.

Administrative Costs

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

Commission’s Rules. 

Accountings

59. When all funds have been disbursed, except for the Residual described in 

paragraph 56 of the Plan, the Fund Administrator will submit a final accounting pursuant to Rule 

1105(f) of the Commission’s Rules, 17 C.F.R. § 201.1105(f), for the Commission’s approval 

prior to termination of the Fair Fund and discharge of the Fund Administrator. Since the Fund 

Administrator is a Commission employee, no interim accountings will be made.
11

Termination of the Fair Fund

60. 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 the Residual that is 

infeasible to return to investors, and any amounts returned to the Fair Fund in the future that is 

infeasible to return to investors, to the general fund of the U.S. Treasury, subject to Section 

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

the Fair Fund.
Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate investors who were harmed by the 

Respondents’ failure to adequately disclose, to certain of their advisory clients, conflicts of 

interest regarding Sica’s recommendations to invest in the Aequitas Securities between October 

1, 2013 and November 30, 2015, inclusive (the “Relevant Period”). Specifically, Aequitas paid 

Sica and an affiliated adviser approximately $2 million during the Relevant Period pursuant to 

consulting agreements and a loan agreement. The Respondents did not disclose the Aequitas 

agreements and the resulting compensation to their advisory clients. Investors who did not pay 

advisory fees to the Respondents in connection with Respondents’ recommendation to invest in 

the Aequitas Securities are not eligible to recover under this Plan. Based upon records obtained 

by the Commission during its investigation, the Fund Administrator has identified those 

investors, or their lawful successors, who paid advisory fees to the Respondents in connection 

with Respondents’ recommendation to invest in the Aequitas Securities during the Relevant 

Period (the “Preliminary Claimants”). 

The Fund Administrator will calculate each Preliminary Claimant’s loss (“Recognized 

Loss”) by adding the advisory fees paid plus Reasonable Interest (“Loss from Fees”) and the 

related net investment loss suffered by each Preliminary Claimant (“Loss Recovery”) as follows:

A. Compute the Loss from Fees for each Preliminary Claimant: 

1. Determine the amount of advisory fees paid to the Respondents in 

connection with Respondents’ recommendation to invest in the Aequitas 

Securities (“Fees Paid”); 

2. Calculate the applicable Reasonable Interest on the Fees Paid; and

3. Combine the Fees Paid and Reasonable Interest to determine the Loss 

from Fees. 

B. Compute the Loss Recovery for each Preliminary Claimant:

1. Calculate the number of shares of Aequitas Securities purchased during 

the Relevant Period multiplied by the corresponding purchase price (the 

“Purchase Value”);

2. Calculate the number of shares of Aequitas Securities sold during the 

Relevant Period multiplied by the corresponding sale price (the “Sale 

Value”).
2

3. Determine the net investment loss on Aequitas Securities during the 

Relevant Period by subtracting the Purchase Value from the Sale Value 

(“Net Investment Loss”);

4. Calculate the “Total Net Investment Losses” as the sum of the Net 

Investment Losses of all Preliminary Claimants; 

5. Calculate each Preliminary Claimant’s “Pro-Rata Share” by dividing the 

Preliminary Claimant’s Net Investment Loss by the Total Net Investment 

Losses; 

6. Subtract the sum of the Losses from Fees from the Net Available Fair 

Fund and multiply this amount by each Preliminary Claimant’s Pro Rata 

Share.

Any Preliminary Claimant who suffered a Recognized Loss pursuant to this Plan of 

Allocation and who is not an Excluded Party or an Unresponsive Preliminary Claimant, as 

defined in the Plan, will be deemed an Eligible Claimant.

An Eligible Claimant’s Recognized Loss will be his, her, or its distribution amount, 

subject to the “Minimum Distribution Amount.”

1

Additional Provisions

Reasonable Interest: Reasonable Interest will be calculated using the Short-term 

Applicable Federal Rate plus three percent (3%), compounded quarterly from October 1, 2013 

through November 1, 2020. 

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

Claimants’ Loss Recovery against one another. The Fund Administrator shall determine each 

Eligible Claimant’s Pro Rata Share as the ratio of their Loss Recovery to the sum of Loss 

Recovery of all Eligible Claimants.

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

an Eligible Claimant’s distribution amount is less than $10.00, that Eligible Claimant will be 

deemed ineligible to receive a Distribution Payment and their distribution amount will be 

reallocated on a pro-rata basis to Eligible Claimants whose distribution amounts are greater than 

or equal to $10.00. 

Payee: An Eligible Claimant whose distribution amount equals or exceeds the Minimum 

Distribution Amount will be deemed a Payee and receive a Distribution Payment equal to their

distribution amount. 

 

1

Investors will also receive a recovery based on their investment losses in the receivership distribution in SEC v. Aequitas Management, LLC et. 

al, Civ. Action No. 3:16-cv-00438-JR (D. Or.) (the “Aequitas Recovery”). However, an Eligible Claimants’ Loss Recovery under the Plan, when 

combined with their Aequitas Recovery, will not fully compensate them for their Net Investment Loss, and will not result in a windfall.