UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-20310

In the Matter of

S&P Dow Jones Indices LLC,

Respondent.

:

:

:

:

:

:

:

PROPOSED PLAN OF 

DISTRIBUTION 

I. OVERVIEW

1. The Division of Enforcement submits this Proposed 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 civil money penalties paid by S&P Dow Jones Indices 

LLC (the “Respondent”) in the above-captioned matter. 

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

who were harmed by the Respondent’s conduct described in the Order. In the Order, the 

Commission found that prior to February 5, 2018, Respondent, which publishes an index that 

measures the return from a rolling long position for certain Chicago Board Options Exchange 

Volatility Index (“VIX”) futures contracts, failed to disclose the existence of a feature in this 

index that kept security prices static during a period of unprecedented volatility. As a result of 

this undisclosed feature, values being published and disseminated to the market were not based 

on the real-time prices of certain VIX futures contracts. This index was the primary input for the 

calculation of the indicative value of the VelocityShares Daily Inverse VIX Short Term 

Exchange Traded Note linked to the S&P 500 VIX Short-Term Futures Index due December 4, 

2030 (“XIV” or the “Security”). As calculated using the methodology detailed in the Plan of 

Allocation (attached as Exhibit A), investors will be compensated for their losses on shares in the 

Security that were held and/or purchased between 4:09:40 p.m. on February 5, 2018 and 5:09 

p.m. on the same date (the “Relevant Period”). In the view of the Commission staff and the 

Fund Administrator, this methodology constitutes a fair and reasonable allocation of the Fair 

Fund. 

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

assets of the Fair Fund. The Plan is subject to approval by the Commission, and the Commission 

retains jurisdiction over its implementation.
2

II. BACKGROUND

4. On May 17, 2021, the Commission issued an Order Instituting Cease-and-Desist 

Proceedings, Pursuant to Section 8A of the Securities Act of 1933, Making Findings, and Imposing 

a Cease-and-Desist Order (the “Order”)1against the Respondent. According to the Order, on 

Monday, February 5, 2018, despite notable market volatility, the index published by Respondent 

remained static during certain intervals between the 4:00 PM hour up until 5:08 PM, even though 

it was supposed to calculate values based on real-time prices of certain VIX futures contracts. 

This was due to the implementation of a heretofore unknown quality control feature called an 

“Auto Hold” used by Respondent.

5. An Auto Hold comes into effect if an index value breaches certain thresholds, at 

which point the immediately prior index value continues to be reported. The repetition of this 

index value continues until a current index value comes back within those thresholds or 

responsible Respondent personnel manually release the Auto Hold. On February 5, 2018, during 

the intervals described above, Respondent’s personnel did not release the Auto Hold for the 

index, resulting in the publication and dissemination of static index values, rather than values 

based on the real-time prices of certain VIX futures contracts. 

6. The index was the primary input for the calculation of the Security’s indicative 

value, so like the index’s values, the Security’s indicative values published to the market during 

the same intervals on February 5, 2018 were similarly static. As a result, during certain intervals 

between the 4:00 PM hour up until 5:08 PM, the Security’s indicative values being reported in 

real-time were higher than what would have been calculated and disseminated if the Auto Hold 

had not been triggered. As such, during the 4:00 PM hour and until 5:09 PM, when the closing 

indicative value of the Security XIV was published, investors did not know that they had been 

purchasing and/or holding a product that had an economic value that was substantially less than 

what had been publicly reported. In addition, unlike the XIV indicative values being published 

to the market, the XIV indicative values that would have been published if the Auto Hold had not 

been triggered would have breached a key metric that would have provided the issuer a right to 

accelerate, or call, all outstanding XIV notes. 

7. Without admitting or denying the allegations, Respondent consented to the entry of 

an order alleging violations of Section 17(a)(3) of the Securities Act of 1933. The Commission 

ordered the Respondent to pay a $9,000,000 civil money penalty to the Commission. The 

Commission also created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 

2002, so the penalty paid can be distributed to harmed investors. 

8. The Respondent has paid in full. The Fair Fund consists of the $9,000,000 paid by 

the Respondent, and has been deposited at the United States Department of the Treasury’s Bureau 

of the Fiscal Service (“BFS”) for investment. 

 

1 See Order Instituting Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933, Making 

Findings, and Imposing a Cease-and-Desist Order , Securities Act Rel. No. 10943 (May 17, 2021) (the “Order”).
3

III. DEFINITIONS

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

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

including without limitation the fees and expenses of the Tax Administrator and the Fund 

Administrator, tax obligations, bond premium expenses, and investment and banking costs. 

10. “Claim Form” means the form designed by the Fund Administrator, in 

consultation with the Commission staff, for the filing of claims in accordance with this Plan. 

The claim form will require, at a minimum, sufficient documentation reflecting any Preliminary 

Claimant’s purchases and dispositions of Securities during the Relevant Period such that 

eligibility under the Plan can be determined, tax identification and other related information from 

the Preliminary Claimant as determined necessary by the Fund Administrator in coordination 

with the Tax Administrator, and a certification that the Preliminary Claimant is not an Excluded 

Party. 

11. “Claim Status Notice” means the notice sent by the Fund Administrator within 

ninety (90) days of the Claims Bar Date to all Preliminary Claimants that submitted a Claim 

Form. The Claim Status Notice will set forth the Fund Administrator’s determination of the 

eligibility of the claim (eligible, partially or wholly deficient, or ineligible). The Claim Status 

Notice will provide to each Preliminary Claimant whose claim is deficient, in whole or in part, 

the reason(s) for the deficiency and in the event the claim is denied, the Claim Status Notice will 

state the reason(s) for such denial. The Claim Status Notice will also notify the Preliminary 

Claimant of the opportunity to cure any deficiency, request reconsideration, or dispute the 

determination made by the Fund Administrator and provide instructions regarding what is 

required to do so.

12. “Claims Bar Date” means the date established in accordance with this Plan by 

which a Preliminary Claimant’s Claim Form must be postmarked or submitted electronically in 

order to receive consideration under the Plan. The Claims Bar Date shall be one hundred twenty 

(120) days after the initial mailing of the Plan Notice. Claim Forms submitted by Preliminary 

Claimants postmarked or received after the Claims Bar Date will not be accepted unless the Fund 

Administrator is directed to do so by the Commission staff.

13. “Claims Packet” means the materials relevant to submitting a claim that will be 

provided to Preliminary Claimants who request such materials through a website or otherwise 

prior to the Claims Bar Date. The Claims Packet will include, at a minimum, a copy of the Plan 

Notice and a Claim Form (together with instructions for completion of the Claim Form).

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

accordance with the terms of this Plan.

15. “Eligible Claimant” means a Preliminary Claimant who submitted a valid claim, 

who may have suffered a loss as a result of transactions in the Security during the Relevant 

Period, pursuant to the Plan of Allocation, and who is not an Excluded Party.
4

16. “Excluded Party” shall mean:

(a) The Respondent;

(b) Present or former officers or directors of Respondent or any assigns, 

creditors, heirs, distributees, spouses, parents, dependent children or 

controlled entities of any of the foregoing Persons or entities;

(c) Any employee or former employee of the Respondent or any of its 

affiliates who has been terminated for cause or has otherwise resigned, in 

connection with the conduct described in the Order; 

(d) Any Person who, as of the Claims Bar Date, has been the subject of 

criminal charges related to the conduct described in the Order or any 

related Commission action;

(e) Any firm, trust, corporation, officer, or other entity in which Respondent 

has or had a controlling interest;

(f) The Fund Administrator, its employees, and those Persons assisting the 

Fund Administrator in its role as the Fund Administrator; or

(g) 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.

The Claim Form will require claimants to certify that they are not an Excluded Party.

17. “Fair Fund” means the $9,000,000 fund created by the Commission pursuant to 

Section 308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by 

Respondent’s violations described in the Order. 

18. “Final Determination Notice” shall mean the written notice sent by the Fund 

Administrator to any Preliminary Claimant who timely responded to the Claim Status Notice in 

an effort to cure a deficiency, seek reconsideration of a denied claim, or otherwise dispute the 

determination made by the Fund Administrator, notifying the Preliminary Claimant of its 

determination. The Final Determination Notice will constitute the Fund Administrator’s final 

ruling regarding the status of the claim.

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

less Administrative Costs. 

20. “Payee” means an Eligible Claimant who is determined to receive a Distribution 

Payment, as calculated in accordance with the Plan of Allocation. 
5

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

partnerships, or limited liability companies.

22. “Plan Notice” means a written notice from the Fund Administrator to Preliminary 

Claimants informing them of the Fair Fund; the Plan and its eligibility requirements; explaining 

how to submit a claim, including directions for any online claims process; and how to obtain a 

copy of the approved Plan and Claim Form by request or from the Fair Fund’s website. The Plan 

Notice will also be available on the Fair Fund’s website that is maintained by the Fund 

Administrator. 

23. “Plan of Allocation” means the methodology by which an Eligible Claimant’s 

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

24. “Preliminary Claimant” shall mean a Person, or their lawful successors, 

identified by the Fund Administrator as having possible claim to recover from the Fair Fund 

under this Plan, or a Person asserting prior to the Claims Bar Date that he, she, or it has a 

possible claim to recover from the Fair Fund under this Plan. 

25. “Recognized Loss” means the amount of loss calculated for an Eligible Claimant 

in accordance with the Plan of Allocation.

26. “Relevant Period” means the period of time between 4:09:40 p.m. on 

February 5, 2018 and 5:09 p.m. on the same date. 

27. “Security” refers to shares of VelocityShares Daily Inverse VIX Short Term 

Exchange Traded Notes linked to the S&P 500 VIX Short-Term Futures Index due December 4, 

2030 listed on a U.S. exchange and registered with the Commission and traded under the symbol 

XIV during the Relevant Period.

28. “Summary Notice” means the notice published in print or internet media that 

shall include, at a minimum, a statement of the purpose of the Fair Fund and the Plan, the means 

of obtaining a Claims Packet, and the Claims Bar Date. The Summary Notice will be published 

once per week for three consecutive weeks and will first appear within ten (10) days of the initial 

mailing of the Plan Notice.

29. “Third-Party Filer” means a third-party, including without limitation a nominee, 

custodian, or an intermediary holding in street name, who is authorized to submit and submits a 

claim(s) on behalf of one or more Preliminary Claimants. Third-Party Filer does not include 

assignees or purchasers of claims, which are excluded from receiving Distribution Payments.

IV. TAX COMPLIANCE

30. On July 16, 2021, 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 
6

Fair Fund.

2

 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.3

31. 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 required 

for distributions from the Fair Fund.

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

approval of Commission staff.

V. FUND ADMINISTRATOR

33. On November 2, 2021, the Commission appointed Epiq Class Actions and Claims 

Solutions, Inc., as the fund administrator for the Fair Fund (the “Fund Administrator”), and the 

Fund Administrator has obtained a bond in the amount of $9,000,000, as ordered.4 Pursuant to 

Rule 1105(a) of the Commission’s Rules, 17 C.F.R. § 201.1105(a), the Fund Administrator may 

be removed at any time by order of the Commission or hearing officer. 

34. 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 

identify and contact Preliminary Claimants; obtaining mailing information for Preliminary 

Claimants; establishing a website and staffing a call center to address inquiries during the claims 

process; developing a claims database; 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); advising Preliminary Claimants of deficiencies in 

claims and providing an opportunity to cure any documentary defects; taking antifraud measures, 

such as identifying false, ineligible and overstated claims; making determinations under the 

 

2

 See Order Appointing Tax Administrator, Exchange Rel. No. 92424 (July 16, 2021).

3

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

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

4

 See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 93509 (Nov. 2, 

2021).
7

criteria established herein as to Preliminary Claimant eligibility; advising Preliminary Claimants 

of final claim determinations; disbursing the Fair Fund in accordance with this Plan, as ordered 

by the Commission; and researching and reconciling errors and reissuing payments, when 

possible.

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

make and implement immaterial changes to the Plan upon agreement of the Commission staff. If 

a change is deemed to be material by the Commission staff, Commission approval is required 

prior to implementation by amending the Plan.

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

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

37. The Fund Administrator is authorized to enter into agreements with third-parties 

as may be appropriate or necessary in the administration of the Fair Fund, provided such thirdparties are not excluded pursuant to other provisions of this Plan. In connection with such 

agreements, the third-parties shall be deemed to be agents of the Fund Administrator under this 

Plan. 

38. The Fund Administrator will be entitled to payment from the Fair Fund of 

reasonable fees and expenses, including the bond premium, incurred in the performance of its 

duties (including any such fees and expenses incurred by agents, consultants or third-parties 

retained by the Fund Administrator in furtherance of its duties).

VI. ADMINISTRATION OF THE FAIR FUND

Identification of and Notification to Preliminary Claimants

39. The Fund Administrator will, insofar as practicable, use its best efforts to 

identify Preliminary Claimants from a review of trading records, obtaining records from 

registered broker-dealers and investment advisors, and seeking information from any other 

source available to it. The Fund Administrator may also engage a third-party firm, after 

consultation with and approval of the Commission staff, to assist in identifying Preliminary 

Claimants to maximize the participation rate of VelocityShares Daily Inverse VIX Short Term 

ETNs linked to the S&P 500 VIX Short-Term Futures Index due December 4, 2030 investors 

in the Fair Fund.

40. Within sixty (60) days after Commission approval of the Plan, the Fund 

Administrator shall:

(a) design and submit a Claims Packet, including the Plan Notice and the 

Claim Form, to the Commission staff for review and approval; 

(b) create a mailing and claim database of all Preliminary Claimants based 

upon information identified by the Fund Administrator;
8

(c) run a National Change of Address search to retrieve updated addresses for 

all records in the database, thereby ensuring the mailing information for 

Preliminary Claimants is up-to-date;

(d) mail a Plan Notice to each Preliminary Claimant identified by the Fund 

Administrator and to the Fund Administrator’s list of banks, brokers, and 

other nominees in accordance with paragraph 45 below;

(e) establish and maintain a website devoted solely to the Fair Fund. The Fair 

Fund’s website, located at SPDowJonesIndicesFairFund.com, will make 

available a copy of the approved Plan; provide information regarding the 

claims process and eligibility requirements for participation in the Fair 

Fund in the form of frequently asked questions; include in downloadable 

form, the Claim Form and other related materials; and such other 

information the Fund Administrator believes will be beneficial to 

Preliminary Claimants;

(f) establish and maintain a toll-free telephone number, 855-604-1705, for 

Preliminary Claimants to call to speak to a live representative of the Fund 

Administrator during its regular business hours or, outside of such hours, 

to hear prerecorded information about the Fair Fund. The toll-free number 

will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website; and

(g) establish and maintain a traditional mailing address and an email address 

which will be listed on all correspondence from the Fund Administrator to 

Preliminary Claimants as well as on the Fair Fund’s website.

41. The Fund Administrator will publish the Summary Notice on the internet and/or 

in print media acceptable to Commission staff once per week for three consecutive weeks and 

will first appear within ten (10) days of the initial mailing of the Plan Notice.

42. The Commission staff retains the right to review and approve any material posted 

on the Fair Fund’s website, any material mailed, and any scripts used in connection with any 

communication with Preliminary Claimants. 

43. In all materials that refer to the Claims Bar Date, the filing deadline will be 

clearly identified with the calendar date, which is one hundred twenty (120) days from the date 

of the initial mailing of the Plan Notice.

44. The Fund Administrator will promptly provide a Claims Packet to any 

Preliminary Claimant upon request made via mail, phone, or email prior to the Claims Bar Date.

45. The Fund Administrator will send by mail, email, or other means, the Plan Notice 

to the Fund Administrator’s list of banks, brokers, and other nominees, as well as any other 

institutions identified during the outreach process, that may have records of the Security during 
9

the Relevant Period (collectively, the “Nominees or Custodians”). The Fund Administrator will 

request that these entities, to the extent that they were record holders for beneficial owners of the 

Security:

(a) within fourteen (14) days of the Nominees’ or Custodians’ receipt of the 

Plan Notice, notify and send the Plan Notice to the respective beneficial 

owners, and, as requested, provide to the beneficial owners a Claims 

Packet, so that the beneficial owners may timely file a claim. The burden 

will be on the Nominees or Custodians to ensure the claims process

information, including, if requested, the Claim Packet and other relevant 

materials, is properly disseminated to the beneficial owners; and/or

(b) provide to the Fund Administrator, within fourteen (14) days of receipt of 

the Plan Notice, a list of last known names and addresses for all beneficial 

owners for whom/which they held and/or purchased, as the record holder, 

the Security during the Relevant Period, so that the Fund Administrator 

can communicate with the beneficial owners directly.

46. At the discretion of the Fund Administrator, in consultation with the Commission 

staff, a reasonable number of additional copies of the Claims Packet shall be made available to 

any Nominee or Custodian requesting it for the purpose of distribution to beneficial owners.

47. Requests to the Fund Administrator for additional copies of the Claims Packet in 

excess of 500 are subject to approval by the Fund Administrator, in consultation with the 

Commission staff.

48. Documented reasonable out-of-pocket expenses incurred by the Nominees or the 

Custodians, which would not have been incurred but for compliance with paragraph 46 above, 

shall be reimbursed from the Fair Fund. The amount of such expenses allowed will be at the 

discretion of the Fund Administrator, in consultation with the Commission staff. Unless 

otherwise determined by the Fund Administrator in consultation with the Commission staff, outof-pocket expenses based on the following rates will be considered reasonable: 

(a) a maximum of $0.08 per Claims Packet, plus postage at the pre-sort 

postage rate per Claim Packet actually mailed; 

(b) $0.05 per email of Summary Notice or Plan Notice and Claim Form link 

disseminated; or

(c) $0.20 per name, address, and email address provided to the Fund 

Administrator, up to a maximum of amount of $1,500.00.

49. The Fund Administrator will attempt to locate any Preliminary Claimant whose 

mailing is returned as “undeliverable” and will document all such efforts. The Fund 

Administrator shall use its best efforts to make use of commercially available resources and other 

reasonably appropriate means to obtain updated addresses in response to “undeliverable” notices, 
10

and forward any returned mail for which an updated address is provided or obtained. The Fund 

Administrator will make available, upon request by the Commission staff, a list of all 

Preliminary Claimants whose Plan Notice have been returned as “undeliverable” due to incorrect 

addresses and for which the Fund Administrator has been unable to locate current addresses.

Filing a Claim

50. To avoid being barred from asserting a claim, on or before the Claims Bar Date, 

each Preliminary Claimant must submit to the Fund Administrator a properly completed Claim 

Form reflecting such Preliminary Claimant’s claim, together with all required supporting 

documentation as the Fund Administrator, in its discretion, deems necessary or appropriate to 

substantiate the claim. Without limitation, this information may include third-party documentary 

evidence of purchases and dispositions of the Security during the Relevant Period, as well as 

holdings of the Security at pertinent dates. 

51. The burden will be upon the Preliminary Claimant to ensure that his, her or its 

Claim Form has been properly and timely received by the Fund Administrator. A Claim Form 

that is postmarked after the Claims Bar Date will not be accepted unless the deadline is extended 

by the Fund Administrator for good cause shown, after consultation with the Commission staff. 

52. All Claim Forms and supporting documentation necessary to determine a 

Preliminary Claimant’s eligibility to receive a distribution from the Fair Fund under the terms of 

the Plan must be verified by a declaration executed by the Preliminary Claimant under penalty of 

perjury under the laws of the United States. The declaration must be executed by the 

Preliminary Claimant, unless the Fund Administrator accepts such declaration from a Person 

authorized to act on the Preliminary Claimant’s behalf, whose authority is supported by such 

documentary evidence as the Fund Administrator deems necessary. 

53. Electronic claims submission is encouraged; the Plan Notice will include directions 

on how Preliminary Claimants can submit their claims electronically via the Fair Fund’s website. 

If using the web-based claim filing option, a Preliminary Claimant must submit his, her, or its 

claim to the Fund Administrator by 11:59 p.m. on the Claims Bar Date. The Plan Notice will also 

include directions for submission of claims if the Preliminary Claimant is unable to submit his, 

her, or its claim electronically. 

54. When submitting claims to the Fair Fund on behalf of its clients, all Third-Party 

Filers must use the electronic filing template provided by the Fund Administrator in this matter. 

Filers that do not comply with the template and format provided by the Fund Administrator may 

be rejected. Third-Party Filers must also submit a signed master proof of claim and release, as 

well as proof of authority to file on behalf of the claimant(s) at the time the electronic file of 

transactions is submitted. Failure to do so may result in rejection of the claim.

55. Each Third-Party Filer must establish the validity and amount of each claim in its 

submission. Third-Party Filers must submit such supporting documentary evidence of 

purchases, dispositions, and holdings of the Security as the Fund Administrator deems necessary 

or appropriate to substantiate each individual claim. Without limitation, this includes the 
11

complete name of the Preliminary Claimant (beneficial account owner) and its TIN (for 

individuals) or EIN (for companies), sufficient contact information to confirm the identity of the 

beneficial owner, and documentation from the original bank, broker or other institution of 

purchases and dispositions of the Security (account statements, confirmations and other 

documentation of purchases and dispositions), as well as holdings of the Security on pertinent 

dates. Documentation generated by the Third-Party Filer as well as affidavits in lieu of 

supporting documentation will not be accepted unless, for good cause, the Fund Administrator 

determines it acceptable. The Fund Administrator will have the right to request, and the ThirdParty Filer will have the burden of providing to the Fund Administrator, any additional 

information and/or documentation deemed necessary by the Fund Administrator to substantiate 

the claim(s) contained in the submission. Documentation from a Third-Party Filer that is not 

acceptable to the Fund Administrator will result in rejection of the affected claim(s). The 

determination of the Fund Administrator to reject a claim for insufficient documentation, as 

reflected on the Final Determination Notice, is final and within the discretion of the Fund 

Administrator. 

56. The receipt of the Security by gift, inheritance, devise, or operation of law will 

not be deemed to be a purchase of the Security, nor will it be deemed an assignment of any claim 

relating to the purchase of the Security unless specifically so provided in the instrument of 

inheritance. However, the recipient of the Security as a gift, inheritance, devise or by operation 

of law will be eligible to file a Claim Form and participate in the distribution of the Fair Fund to 

the extent the original purchaser would have been eligible under the terms of the Plan. Only one 

claim may be submitted with regard to the same transactions in the Security, and in cases where 

multiple claims are filed by the donor and donee, the donee claim will be honored, assuming it is 

supported by proper documentation. 

57. Claims on behalf of a retirement plan covered by Section 3(3) of ERISA, 29 

U.S.C.§ 1002(3), which do not include Individual Retirement Accounts and such plan’s 

participants, are properly made by the administrator, custodian or fiduciary of the plan and not 

by the plan’s participants. The Fund Administrator will distribute any payments on such claims 

directly to the administrator, custodian or fiduciary of the retirement plan. The custodian or 

fiduciary of the retirement plan will distribute any payments received in a manner consistent with 

its fiduciary duties and the governing account or plan provisions.

Claims Eligibility Determination

58. The Fund Administrator will review all claim submissions and determine the 

eligibility of each Preliminary Claimant to participate in the Fair Fund by reviewing claim data 

and supporting documentation (or the lack thereof) and verifying the claim. Any Preliminary 

Claimant with a valid claim that held the Security during the Relevant and who is not an 

Excluded Party, will be deemed an Eligible Claimant. Each Preliminary Claimant will have the 

burden of proof to establish the validity and amount of his, her or its claim, and qualification as 

an Eligible Claimant. The Fund Administrator will have the right to request, and the Preliminary 

Claimant will have the burden of providing to the Fund Administrator, any additional 

information and/or documentation deemed relevant by the Fund Administrator. 
12

59. The Fund Administrator will provide a Claim Status Notice within ninety (90) 

days of the Claims Bar Date to each Preliminary Claimant who has filed a Claim Form with the 

Fund Administrator, setting forth the Fund Administrator's determination of the eligibility of the 

claim (eligible, partially or wholly deficient, or ineligible). The Claim Status Notice will provide 

to each Preliminary Claimant whose claim is deficient, in whole or in part, the reason(s) for the 

deficiency (e.g., failure to provide required information or documentation). In the event the 

claim is denied, in whole or in part, the Claim Status Notice will state the reason(s) for such 

denial. The Claim Status Notice will also notify the Preliminary Claimant of the opportunity to 

cure any deficiency, request reconsideration, or dispute the determination made by the Fund 

Administrator and provide instructions regarding what is required to do so.

60. Any Preliminary Claimant with a deficient claim will have thirty (30) days from 

the date of the Claim Status Notice to cure any deficiencies identified in theClaim Status Notice.

61. Any Preliminary Claimant seeking reconsideration of a denied claim must advise 

the Fund Administrator in writing within thirty (30) days of the date ofthe Claim Status Notice. 

All requests for reconsideration must include the necessary documentation to substantiate the 

basis upon which the Preliminary Claimant is requesting reconsideration of his, her, or its claim. 

62. The Fund Administrator may, in its sole discretion, consider disputes of any 

nature presented in writing within thirty (30) days of the Claim Status Notice by Preliminary 

Claimants, and will consult Commission staff as appropriate. 

63. The Fund Administrator will send, as appropriate, a Final Determination Notice to 

all Preliminary Claimants who responded to the Claim Status Notice in an effort to cure a 

deficiency, seek reconsideration of a rejected claim, or dispute the determination made by the 

Fund Administrator, notifying the Preliminary Claimant of its determination. The Fund 

Administrator will send such Final Determination Notices no later than thirty (30) days 

following receipt of documentation or information in response to the Claim Status Notice, or 

such longer time as the Fund Administrator determines is necessary for a proper determination 

concerning the claim.

64. The Fund Administrator will have the authority, in its sole discretion, to waive 

technical claim deficiencies and approve claims on a case-by-case basis, or in groups of claims. 

All determinations made by the Fund Administrator in accordance with the Plan in any dispute, 

request for reconsideration, or request to cure a deficient claim will be final and not subject to 

appeal.

65. The Preliminary Claimant has the burden of notifying the Fund Administrator of a 

change in his, her or its current address and other contact information, and of ensuring that such 

information is properly reflected on the Fund Administrator's records.
13

Distribution Methodology

66. The Fund Administrator will calculate each Eligible Claimant’s Recognized Loss 

in accordance with the Plan of Allocation. All Eligible Claimants who are determined to receive 

a Distribution Payment will be deemed a Payee.

Establishment of a Reserve

67. 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”).

68. After all disbursements and Administrative Costs are paid, any remaining 

amounts in the Reserve will become part of the Residual described in paragraph 91 below.

Preparation of the Payment File

69. Within thirty (30) days following the date of the Final Determination Notices 

described above, paragraph 63, 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 Fund Administrator 

will also provide a Reasonable Assurances Letter to the Commission staff, representing that the 

Payee List: (a) was compiled in accordance with the approved Plan; (b) is accurate as to Payees’ 

names, addresses, Recognized Losses and amounts of their Distribution Payment; (c) includes 

the number of Payees compensated; (d) the total amount being distributed; and (e) provides all 

information necessary to make a payment to each Payee.

The Escrow Account

70. Prior to the disbursement of the Net Available Fair Fund, the Fund Administrator 

will establish an escrow account (the “Escrow Account”) with a United States commercial bank 

that is a well-capitalized 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”) to be provided by Commission staff.

71. The Fund Administrator, pursuant to the Escrow Agreement, shall also establish 

with the Bank a separate deposit account (e.g. controlled distribution account, managed 

distribution account, linked checking and investment account) (the “Distribution Account”), 

insured by the Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass 

through limit. The Distribution Account shall be linked with the Escrow Account and shall be 

named, and records maintained, in accordance with the Escrow Agreement. 

72. 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 
14

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 and/or Fund 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. 

73. The Fund Administrator shall provide duplicate original bank and/or investment 

statements on any accounts established by the Fund Administrator to the Tax Administrator on a 

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

necessary.

74. The Fund Administrator shall deposit or invest funds in the Escrow and 

Distribution Accounts so as to result in the maximum reasonable net return, taking into account 

the safety of such deposits or investments. In consultation with Commission staff, the Fund 

Administrator shall work with the Bank on an ongoing basis to determine an allocation of funds 

between the Escrow and Distribution Account.

75. All interest, dividends, and/or income earned by the Escrow Property will accrue 

for the benefit of the Escrow Property. All Administrative Cost associated with the Escrow and 

Distribution Accounts will be the responsibility of the Fund Administrator, 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

76. The Fund Administrator will seek to distribute the Net Available Fair Fund to all 

Payees only after all Claim Forms have been processed and all Preliminary Claimants whose 

claims have been rejected or disallowed, in whole or in part, have been notified and provided the 

opportunity to contest or cure pursuant to the procedures set forth herein.

77. Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List 

and Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek 

an Order from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 

C.F.R. § 210.1101(b)(6), to disburse funds to the Bank in accordance with the Payee List for 

distribution by the Fund Administrator in accordance with the Plan. All disbursements will be 

made pursuant to a Commission Order. 

78. Upon issuance of an Order to disburse, the Commission staff will direct the transfer 

of funds in accordance with the Payee List to the Bank. The Fund Administrator will then use its 

best efforts to commence mailing Distribution Payment checks and/or effect wire transfers 

within ten (10) business days of the release of the funds into the Escrow Account. All efforts 

will be coordinated to limit the time between the Escrow Account’s receipt of the funds and the 

issuance of Distribution Payments.
15

79. All Distribution Payments will be issued by the Fund Administrator from the 

Distribution Account. All checks will bear a stale date of one hundred twenty (120) days 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 87. 

80. All 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 one hundred twenty (120) days 

from the date the original check was issued; and (d) contact information for the Fund 

Administrator 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. 

81. 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. 

82. Distribution Payments must be made by check or electronic payment payable to 

the Payee (the beneficial account owner). A Third-Party Filer shall not be the payee of any 

Distribution Payment check or electronic Distribution Payment. Any other payment arrangement 

must be discussed with the Fund Administrator in consultation with the Commission staff and 

must be authorized by the Payee. Compensation to a Third-Party Filer for its services may not 

be paid or deducted from the Distribution Payment. 

83. If, after discussion with the Fund Administrator in consultation with the 

Commission staff, and authorization by the Payee(s), a Distribution Payment is to be made to a 

Third-Party Filer to distribute to the Payee(s), the Third-Party Filer will be required to complete 

a certification, which will require them, at a minimum, to attest that any distribution to the 

custodian, trustee, or investment professional representing multiple potentially eligible beneficial 

owners, will be allocated for the benefit of current or former pooled investors and not for the 

benefit of management. The certification form will be available on the Fair Fund website and 

upon request from the Fund Administrator. All such Third-Party Filers must have an auditable 

mechanism available to the Fund Administrator and the Commission staff to confirm that each 

Payee received the Distribution Payment directed to them.

84. The submission of a Claim Form and the receipt and acceptance of a Distribution 

Payment by a Payee is not intended to be a release of a Payee’s rights and claims against any 

party.
16

85. Electronic or wire transfers may be utilized at the discretion of the Fund 

Administrator to transfer approved Distribution Payments to filers of claims on behalf of twenty 

(20) or more Payees. Wire transfers will be initiated by the Fund Administrator using a twoparty check and balance system, whereby completion of a wire transfer will require an 

authorization by two members of the Fund Administrator’s senior staff.

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

86. The Fund Administrator 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 Fund Administrator as “undeliverable.” If new address information becomes 

available, the Fund Administrator 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 Fund Administrator shall 

instruct the issuing financial institution to stop payment on such check. If the Fund 

Administrator is unable to find a Payee’s correct address, the Fund Administrator, 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.

87. The Fund Administrator will reissue checks 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 Fund Administrator will request, and must 

receive, documentation to support the requested change. The Fund Administrator will review the 

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

discretion of the Fund Administrator, such change request is properly documented, the Fund 

Administrator 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.

88. The Fund Administrator will make reasonable efforts to contact Payees who have 

failed to negotiate their Distribution Payment check and take appropriate action to follow up on 

the status of uncashed checks at the request of Commission staff. The Fund Administrator may 

reissue such checks subject to the time limits detailed herein. 

Administrative Costs

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

Commission’s Rules. 
17

Disposition of Undistributed Funds

90. 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 of any available remaining funds, pursuant to the Commission’s 

Rules. 

91. A residual within the Fair Fund will be established for any amounts remaining 

after the final disbursement to Payees from the Fair Fund (the “Residual”). The Residual may 

include funds from, among other things, amounts remaining the Reserve, distribution checks that 

have not been cashed, checks or electronic payments that were not delivered or returned to the 

Commission, tax refunds for overpayment or for waiver of IRS penalties.

92. 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 after the final 

accounting is approved by the Commission. 

Accountings

93. Pursuant to Rule 1105(f) of the Commission’s Rules, during the first ten (10) days 

of each calendar quarter after funds have been transferred from the BFS to the Bank, the Fund 

Administrator will file with the Commission an accounting of all monies earned or received and 

all monies spent in connection with the administration of the Plan on a standardized accounting 

form provided by the Commission staff.

94. Upon completion of all distributions to Payees pursuant to the procedures 

described above, the Fund Administrator shall arrange for the payment of all Administrative 

Costs, transfer all remaining funds to the Commission, and submit a final accounting for 

approval by the Commission on a standardized form provided by the Commission staff. The 

Fund Administrator will also submit a report to the Commission staff containing the final 

distribution statistics regarding distributions to individuals and entities, and such other 

information requested by the Commission staff.

Termination of the Fair Fund

95. 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 are 

infeasible to return to investors, to the U.S. Treasury, subject to Section 21F(g)(3) of the 

Exchange Act; (b) discharge of the Fund Administrator; (c) cancellation of the Fund 

Administrator’s bond; and (d) termination of the Fair Fund.
18

96. Once the Fair Fund has been terminated and funds, if any, are transferred to the 

U.S. Treasury, no further claims will be allowed and no additional payments will be made 

whatsoever.

Miscellaneous

97. When administering this Plan, the Fund Administrator, and/or each of its 

designees, agents and assigns, may rely on: all applicable law; orders issued by the Commission, 

including orders issued by delegated authority; orders issued by an administrative law judge, if 

any, appointed in this proceeding; and any records, including records containing investor 

information, provided by Commission staff. 

98. 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. 

Wind-down and Document Retention

99. The Fund Administrator will shut down the website, P.O. Box and customer 

service telephone line(s) established specifically for the administration of the Fair Fund six (6) 

months after the transfer of any remaining funds to the Commission, or at such earlier time as the 

Fund Administrator determines with the concurrence of the Commission staff. 

100. The Fund Administrator will retain all materials submitted by Payees in either 

paper or electronic form for a period of six (6) years from the date of approval of a final fund 

accounting. Materials maintained in electronic form must be accessible and readable for the 

duration of retention. Pursuant to the Commission staff's direction, the Fund Administrator will 

either turn over to the Commission or destroy all materials, including documents in any media, 

upon expiration of this period.

VII. NOTICE AND COMMENT PERIOD

101. The Notice of Proposed Plan of Distribution and Opportunity to Comment (the 

“Notice”) will be published on the Commission’s website at 

http://www.sec.gov/litigation/fairfundlist.htm. Any Person wishing to comment on the Plan 

must do so in writing by submitting their comments to the Commission within thirty (30) days of 

the publication of the Notice: (a) to the Office of the Secretary, United States Securities and 

Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090; (b) by using the 

Commission’s Internet comment form (www.sec.gov/litigation/admin.shtml); or (c) by sending 

an email to rule-comments@sec.gov. Comments submitted by email or via the Commission’s 

website should include “Administrative Proceeding File Number 3-20310” in the subject line. 

Comments received will be available to the public. Persons should only submit comments that 

they wish to make publicly available.
Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate investors based on their losses on 

shares of VelocityShares Daily Inverse VIX Short Term Exchange Traded Notes linked to the 

S&P 500 VIX Short-Term Futures Index due December 4, 2030 (the “Security”) purchased or 

held on February 5, 2018 during after-hours trading between 4:09:40 PM, when the index 

experienced the first Auto Hold, and 5:09:00 PM, when the closing indicative value of the 

Security was published (the “Relevant Period”). During the Relevant Period, investors did not 

know that they had been purchasing and/or holding a product that had an economic value that 

was substantially less than what XIV’s calculation agent had publicly reported and that was at 

risk of being accelerated by the issuer. Investors who did not purchase and/or hold shares of the 

Security during the Relevant Period or who are an Excluded Party5are ineligible to recover 

under this Plan. 

For each share of the Security purchased and/or held during the Relevant Period, the 

Fund Administrator will calculate the amount of loss for each share of the Securities 

(“Recognized Loss per Share”) as follows:

A. Determine Purchase Price for Each Share of the Security (the “Purchase 

Price”)

1. For shares purchased or acquired prior to 4:09:40 PM on February 5, 

2018, the Purchase Price is $92.50, the trade price of the Security at 

4:09:40 PM on February 5, 2018. 

2. For shares purchased or acquired between 4:09:40 PM and 5:09:00 PM on 

February 5, 2018,6the Purchase Price is the actual purchase price. 

B. Determine Sale Price for Each Share of the Security (the “Sale Price”)

1. For shares sold prior to the close of trading on February 15, 2018, the 

Security’s accelerated valuation date, the Sale Price is the actual sale 

price. 

2. For shares sold after the close of trading on February 15, 2018 or 

redeemed, the Sale Price, for the purposes of this Plan, is $5.99, the 

closing indicative value of the Security on February 15, 2018. 

The Recognized Loss per Share is the difference between the Purchase Price and the Sale 

Price. 

 

5

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

6

In the absence of a timestamp on the transaction record, a transaction on February 5, 2018 will be deemed to have 

occurred between 4:09:40 PM and 5:09:00 PM if the transaction price is greater than or equal to $35.00 and less 

than or equal to $92.50, based on the Commission staff’s analysis of intra-day trading data.
2

If the Recognized Loss per Share calculates to a negative number, reflecting a gain, the 

Recognized Loss per Share on such shares will be $0.00. 

All prices mentioned in the calculations exclude all taxes, fees and commissions. 

Purchases and sales shall be deemed to have occurred on the “contract” or “trade” date as 

opposed to the “settlement” or “payment” date.

Additional Provisions

FIFO Methodology: For each Eligible Claimant who made multiple purchases and sales 

of Security during the Relevant Period, the transactions will be matched according to the first-in, 

first-out (“FIFO”) method. The earliest sales during the Relevant Period will be matched first 

against any holdings at the opening of the Relevant Period. Once the beginning holdings have 

all been matched, or in the event that the Eligible Claimant had no beginning holdings, then any 

further sales will be matched against the earliest Relevant Period purchases and chronologically 

thereafter. 

Options and Derivatives: XIV exchange-traded note is the only security eligible for 

recovery under this Plan. Option contracts to purchase or sell the Securities are not securities 

eligible for recovery under the Plan. With respect to the Securities purchased or sold through the 

exercise of an option, the purchase/sale date is the exercise date of the call and the assignment 

date of the put, and the purchase/sale price is the strike price of the call at the time of exercise 

and the strike price of the put at the time of assignment. Transactions in the Securities during the 

Relevant Period that are pursuant to, or in connection with, a swap or another derivative will not 

be eligible for a recovery. 

Short Sales: If the sale date for a share falls before the purchase date, then the share has a 

Recognized Loss per Share of $0.00. The date of covering a short sale is deemed to be the date 

of purchase of the Securities and the date of a short sale is deemed to be the date of sale of the 

Securities. The earliest Relevant Period purchases will be matched against any short position 

existing on the date prior to the start of the Relevant Period, and not be entitled to a recovery, 

until that short position is fully covered. 

Recognized Loss: An Eligible Claimant’s Recognized Loss will be the sum of the 

Recognized Loss per Share, as calculated above, on all shares of the Securities held or purchased 

during the Relevant Period. If the Recognized Loss calculates to a gain, then the Recognized 

Loss will be $0.00.

Allocation of Funds: If the Net Available Fair Fund is equal to or exceeds the sum of 

Recognized Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will 

equal his, her or its Recognized Loss, plus “Reasonable Interest” if applicable. If the Net 

Available Fair Fund is less than the sum of the Recognized Losses of all Eligible Claimants, each 

Eligible Claimant’s distribution amount will equal his, her or its “Pro Rata Share” of the Net 

Available Fair Fund (and no Reasonable Interest). In either case, the distribution amount will be 

subject to the “Minimum Distribution Amount.”
3

Reasonable Interest: If the Net Available Fair Fund exceeds that necessary to pay all Eligible 

Claimants their Recognized Losses in full, the Fund Administrator, in consultation with the 

Commission staff, may include interest in the distribution amount to compensate Eligible Claimants for 

the time value of their respective Recognized Losses. Reasonable interest will be calculated using the 

Short-term Applicable Federal Rate plus three percent (3%), compounded quarterly from the end of the 

Relevant Period through the approximate date of the disbursement of the funds. If there are insufficient 

funds to pay Reasonable Interest in full to all Eligible Claimants, each Eligible Claimant will receive 

his, her or its Pro Rata Share of the excess funds as the Reasonable Interest amount. 

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

Recognized Losses against one another. The Fund Administrator shall determine each Eligible 

Claimant’s Pro Rata Share as the ratio of his, her or its Recognized Loss to the sum of Recognized 

Losses 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 the Minimum Distribution Amount, that 

Eligible Claimant will be deemed ineligible to receive a Distribution Payment and his, her or its 

distribution amount will be reallocated on a pro-rata basis to Eligible Claimants whose 

distribution amounts are greater than or equal to the Minimum Distribution Amount. 

Payee: An Eligible Claimant whose distribution amount (inclusive of Reasonable 

Interest, if any) equals or exceeds the Minimum Distribution Amount will be deemed a Payee 

and receive a Distribution Payment equal to his, her or its distribution amount. 

Prior Recovery: To avoid payment of a windfall, the Distribution Payment will be no 

larger than the Payee’s Recognized Loss minus the amount of any compensation for the loss that 

resulted from the conduct described in the Order that was received from another source (e.g., 

class action settlement), to the extent known by the Fund Administrator, Reasonable Interest, if 

awarded, may be added to such Distribution Payment.