UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 89588 / August 17, 2020 

ADMINISTRATIVE PROCEEDING

File No. 3-18527

In the Matter of

deVere USA, Inc.

Respondent.

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ORDER APPROVING MODIFIED PLAN 

OF DISTRIBUTION

I.

On June 4, 2018, the Commission issued an Order Instituting Administrative and Ceaseand-Desist Proceedings Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act 

of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order

(“Order”)1against deVere USA, Inc. (“Respondent”). The Order found that between at least 

June 2013 and March 2016, Respondent failed to make full and fair disclosure to clients and 

prospective clients, of material conflicts of interest regarding compensation obtained from thirdparty product and service providers, that Respondent’s investment adviser representatives made 

materially misleading or incomplete statements concerning the benefits of transferring U.K. 

pension assets to a Qualifying Recognised Overseas Pension Scheme (“QROPS”), that 

Respondent failed to satisfy disclosure requirements with respect to its Form ADV filings, and 

that Respondent failed to both tailor its compliance program to its actual business and to 

undertake many of the responsibilities laid out in its existing compliance manual.

The Order required Respondent to pay a civil money penalty of $8,000,000.00, which has 

been paid in full. The Order also created a Fair Fund, pursuant to Section 308(a) of the 

Sarbanes-Oxley Act of 2002 (the “Fair Fund”), so the civil money penalty could be distributed to 

harmed investors. The Fair Fund has been deposited in an interest-bearing account at the United 

States Treasury Department’s Bureau of the Fiscal Service.

 

1 Advisers Act Rel. No. 4933 (June 4, 2018).
2

On November 16, 2018, the Division of Enforcement, pursuant to delegated authority, 

issued an order appointing Analytics Consulting, LLC as the fund administrator (the “Fund 

Administrator”) of the Fair Fund and set the administrator’s bond amount at $8,000,000.

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On March 23, 2020, the Commission published a Notice of Proposed Plan of 

Distribution and Opportunity for Comment3and simultaneously posted the Proposed Plan of 

Distribution (“Proposed Plan”), pursuant to Rule 1103 of the Commission’s Rules on Fair Fund 

and Disgorgement Plans (the “Commission’s Rules”).4 The Notice advised all interested persons 

that they may obtain a copy of the Proposed Plan from the Commission’s public website at 

http://www.sec.gov/litigation/fairfundlist.htm or by submitting a written request to Susan S. 

Pecaro, Trial Counsel, United States Securities and Exchange Commission, 100 F St., NE, 

Washington, DC 20549-5876. All persons who desired to comment on the Proposed Plan could 

submit their comments, in writing, no later than April 22, 2020, 30 days from the date of the 

Notice. The Commission received five substantive comments on the Proposed Plan.5

After considering the comments on the Proposed Plan, the Commission staff, working 

with the Fund Administrator, has modified the Proposed Plan in response to some of the 

comments in order to clarify the application of the methodology (the “Modified Plan”). 

After careful consideration, the Commission concludes that the Modified Plan should be 

approved. 

II.

A. Public Comments Regarding the Relevant Period

Two commenters, John Wheadon and Michael D. Farley, questioned whether the 

Relevant Period6 of June 2013 to March 2016 was sufficient. The concerns expressed in the 

comments were that the Relevant Period failed to take into account the time between the sale of 

the policy and the completion of the transfer. Therefore, a sale could conceivably have taken 

place during the qualification period but the transfer of monies could have fallen outside of the 

Relevant Period, possibly precluding a distribution payment. 

In fact, the harm calculations already completed have allowed for such occurrences, but 

to clarify how the methodology will be applied and to address these concerns, the Modified Plan 

redefines the definition of “Eligible Investor” to include investors who “opened an account with 

Respondent that later resulted in the transfer of money to a QROPS, who signed a contract with 

Respondent resulting in the transfer of money to a QROPS, or who transferred money to a 

 

2 Exchange Act Rel. No. 84607 (Nov. 16, 2018).

3

 Exchange Act Rel. No. 88452 (Mar. 23, 2020).

4

 17 C.F.R. § 201.1103.

5 A total of twenty-eight (28) comments were received in response to the Notice. Twenty-three (23) of the 

comments discussed only the commenter’s individual claim and harm and expressed a desire to be included in the 

distribution; these comments did not raise concerns regarding the Proposed Plan. All of the personal information 

relating to the commenters’ claims have been provided to the Fund Administrator. 

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 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Modified 

Plan. 
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QROPS during the Relevant Period. . . .” [Emphasis added]. This modification makes clear that 

the meaning of “transferred” permits anyone who was in the process of transferring money to a 

QROPS during the Relevant Period to be eligible to receive a distribution payment, whether or 

not the transaction was completed during the Relevant Period.

B. Public Comment Regarding Currency Conversion of Monies Transferred

Another commenter, Matt Hughes, inquired whether the distribution payment would take 

into account the exchange rate at the time of the transfer rather than the exchange rate at the time 

of distribution for investments made in currencies other than USD.

In harm calculations already completed by the Commission, the currency has indeed been 

converted to USD at the time of the transfer. To address that concern, the Modified Plan adds

language to the definition of Eligible Loss Amount: as follows: “If the Eligible Investor 

transferred money to a QROPS in a currency other than U.S. dollars (“USD”), the Fund 

Administrator will convert the amount to USDs, using the appropriate exchange rate on the date 

of transfer.” [Emphasis added].

C. Public Comments Regarding Whether Compensating Investors for the 7% 

Commission Paid is the Appropriate Methodology

Other public comments, by Peter Hare and Darren Hassey, challenged the Proposed Plan’s 

published methodology, saying that compensating investors for the undisclosed 7% commission 

did not go far enough to address the harm investors suffered as a consequence of Respondent’s 

violations. The commenters point out that several other incidents of misconduct by the 

Respondent harmed the investors, as outlined in the Order. The Commission believes that the 

published methodology is the most equitable plan of allocation, given the limited funds available 

for distribution and the fact that there will be insufficient funds to compensate investors fully for 

Respondent’s undisclosed commissions, and no funds available to compensate investors for other 

harm caused by Respondent’s misconduct outlined in the Order. Therefore, the Commission

believes that the Proposed Plan’s published methodology meets the legal standard of being fair 

and reasonable.

III.

Modification and Approval of the Modified Plan

For the reasons stated above, the Commission finds that the Modified Plan, as submitted 

herewith, should be approved. The described modifications do not change the Proposed Plan’s 

allocation methodology and, as a result, does not substantially modify the Proposed Plan; therefore, 

the Commission concludes that an additional notice and comment period is neither necessary nor 

required by the Commission’s Rules. Under Rule 1104 of the Commission’s Rules, 17 C.F.R. 

§ 201.1104, “[i]n the discretion of the Commission, a proposed plan that is substantially modified 

prior to adoption may be republished for an additional comment period ....” (Emphasis added). In 

determining whether a distribution plan is substantially modified, the Commission considers, 

among other things, whether modifications revise the plan’s methodology, in particular whether 

such modifications could have a negative effect on the proposed eligible recipients, and whether 
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the modifications affect the group of persons eligible to participate in a plan. In this case, the 

modification is intended to clarify the steps that must have been taken by an affected investor 

within the Relevant Period to be eligible to participate in the distribution and to clarify how 

investments made in foreign currencies will be converted into USD; there is no “substantial” 

modification because the Proposed Plan retains the proposed distribution methodology and both 

the distribution payment amounts and the ultimate recipients remain unaffected. As a result, the 

Commission exercises its discretion to not republish the Modified Plan for additional comment.

IV.

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s Rules,

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that the Modified Plan is approved, and it shall be posted simultaneously with this Order on the 

Commission’s website at www.sec.gov.

By the Commission.

Vanessa A. Countryman

Secretary 

 

7

 17 C.F.R. § 201.1104.