3258 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

(RMP) for the Grand Resource Area,

Grand and San Juan Counties, Utah. The

Proposed Amendment is for the purpose

of (1) livestock grazing use adjustments;

(2) flexibility to modify grazing season;

and (3) allowance to consider future

proposals for livestock use adjustments.

The Livestock Requirements under

current management actions are

proposed to be amended. The proposed

plan amendment would (1) allow for

Livestock Grazing Use Adjustments on

the following livestock grazing

allotments: Cisco, Bogart, Diamond,

Cottonwood, Main Canyon, Middle

Canyon, South Sand Flats, North Sand

Flats, Between The Creeks, and Arth’s

Pasture. A portion of the forage

previously reserved for livestock would

be reallocated to non-livestock purposes

(enhancement of wildlife, riparian

vegetation, watershed, and recreation

values). In total, over 6,000 Animal Unit

Months are proposed to be reallocated

from livestock to non-livestock

purposes; (2) allow additional flexibility

to modify the grazing season of use for

individual allotments; and (3) allow for

future proposals to make adjustments in

Livestock Grazing Use within the

resource area.

DATES: The protest period for this

proposed plan amendment will

commence with publication of this

notice. Comments must be submitted on

or before February 13, 1995.

FOR FURTHER INFORMATION CONTACT: Brad

Palmer, Grand Resource Area Manager,

82 East Dogwood, Suite G, Moab, Utah

84532, telephone (801) 259–8193.

Copies of the environmental assessment

and proposed amendment are available

for review at the Grand Resource Area

Office.

SUPPLEMENTARY INFORMATION: This

action is announced pursuant to section

202(a) of the Federal Land Policy and

Management Act of 1976 and 43 CFR

part 1610. The proposed plan

amendment is subject to protest from

any adversely affected party who

participated in the planning process.

Protest must be made in accordance

with the provisions of 43 CFR 1610.5–

2. Protests must be SPECIFIC and must

contain at a minimum the following

information:

—The name, mailing address, telephone

number, and interest of the person

filing the protest.

—A statement of the issue or issues

being protested.

—A statement of the part or parts being

protested and a citing of pages,

paragraphs, maps, etc., of the

proposed plan amendment, where

practical.

—A copy of all documents addressing

the issue(s) submitted by the protester

during the planning process or a

reference to the date when the

protester discussed the issue(s) for the

record.

—A concise statement as to why the

protestor believes the BLM State

Director’s decision is incorrect.

Protests must be received by the

Director of the Bureau of Land

Management (WO–760), MS 406 L St.,

1849 C Street NW, Washington, DC

20240, within 30 days after the date of

publication of this Notice of Availability

for the proposed plan amendment.

G. William Lamb,

Acting State Director.

[FR Doc. 95–881 Filed 1–12–95; 8:45 am]

BILLING CODE 4310–PQ–P

Minerals Management Service

Environmental Documents Prepared

for Proposed Oil and Gas Operations

on the Gulf of Mexico Outer

Continental Shelf (OCS)

AGENCY: Minerals Management Service,

Interior.

ACTION: Publication of revised Outer

Continental shelf protraction diagrams.

SUMMARY: Notice is hereby given that

effective with this publication, the

following Louisiana Leasing Maps, last

revised on the date indicated, are on file

and available for information only, in

the Gulf of Mexico OCS Regional Office,

New Orleans, Louisiana. In accordance

with Title 43, Code of Federal

Regulations, these Official Protraction

Diagrams are the basic record for the

description of mineral and oil and gas

lease sales in the geographic areas they

represent.

*REVISED MAPS

Description Latest revision date

South Timbalier Area,

LA–6.

December 30, 1994.

Bay Marchand Area,

LA–6C.

December 30, 1994.

*Changes include separation of Louisiana

Leading Map South Timbalier and Bay

Marchand Areas, LA–6, to form individual Louisiana Leasing Maps South Timbalier Area,

LA–6, and Bay Marchand Area, LA–6C.

FOR FURTHER INFORMATION CONTACT:

Copies of these Official Protraction

Diagrams may be purchased for $2.00

each from the Public Information Unit

(MS 5034), Minerals Management

Service, Gulf of Mexico OCS Region,

1201 Elmwood Park Boulevard, New

Orleans, Louisiana 70123–2394 or by

telephone at (504) 736–2519.

SUPPLEMENTARY INFORMATION: Technical

comments or questions pertaining to

these maps should be directed to the

Office of Leasing and Environment,

Supervisor, Sales and Support Unit at

(504) 736–2768.

Dated: January 4, 1995.

Chris C. Oynes,

Acting Regional Director, Gulf of Mexico OCS

Region.

[FR Doc. 95–853 Filed 1–12–95; 8:45 am]

BILLING CODE 4310–MR–M

INTERSTATE COMMERCE

COMMISSION

Availability of Environmental

Assessments

Pursuant to 42 U.S.C. 4332, the

Commission has prepared and made

available environmental assessments for

the proceedings listed below. Dates

environmental assessments are available

are listed below for each individual

proceeding.

To obtain copies of these

environmental assessments contact Ms.

Tawanna Glover-Sanders, Interstate

Commerce Commission, Section of

Environmental Analysis, Room 3219,

Washington, DC 20423, (202) 927–6203.

Comments on the following

assessment are due 15 days after the

date of availability:

AB–290 (Sub-No. 162X), Norfolk and

Western Railway Company—

Abandonment—Between Anawalt and

Jenkinjones, West Virginia. Comments

on the following assessment are due

30 days after the date of availability:

AB–55 (Sub-No. 496X), CSX

Transportation, Inc.—Abandonment—

In Hamilton County, Ohio.

Vernon A. Williams,

Secretary.

[FR Doc. 95–904 Filed 1–12–95; 8:45 am]

BILLING CODE 7035–01–P

DEPARTMENT OF JUSTICE

Antitrust Division

United States v. Steinhardt

Management Company, Inc.; and

Caxton Corporation; Proposed Final

Judgment and Competitive Impact

Statement

Notice is hereby given pursuant to the

Antitrust Procedures and Penalties Act,

15 U.S.C. 6 (b) through (h), that a

proposed Final Judgment, Stipulation,

and Competitive Impact Statement have
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3259

been filed with the United States

District Court for the Southern District

of New York in United States v.

Steinhardt Management Company, Inc.;

and Caxton Corporation, Civil Action

No. 94–9044 (RPP).

The Complaint in this case alleges

that the defendants conspired to restrain

competition in markets for specified

United States Treasury securities by

agreeing to coordinate their actions in

trading the specified Treasury

securities, in violation of Section 1 of

the Sherman Act, 15 U.S.C. 1.

The proposed Final Judgment enjoins

the defendants from agreeing with each

other or with any other person (A) to

restrain trade in the cash and/or

financing markets for Treasury

securities in violation of the antitrust

laws of the United States; (B) to

purchase, sell, or refrain from

purchasing or selling any Treasury

security issue to or through a particular

person; or (C) to withhold all or part of

a defendant’s or another person’s

position in a Treasury security issue

from the cash or financing markets.

Certain of these prohibitions are subject

to limitations or exceptions which are

discussed more fully in the

accompanying Competitive Impact

Statement. Each defendant is also

required to appoint an antitrust

compliance officer and establish an

antitrust compliance program with

specified requirements.

Public comment is invited within the

statutory 60-day comment period. Such

comments, and responses thereto, will

be published in the Federal Register

and filed with the Court. Comments

should be directed to John F. Greaney,

Chief, Computers & Finance Section,

Antitrust Division, Department of

Justice, Suite 9901, 555 4th Street NW.,

Washington, D.C. 2001, (telephone: 202/

307–6200).

Constance K. Robinson,

Director of Operations Antitrust Division.

United States District Court Southern

District of New York, United States of

America, Plaintiff, v Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 that is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management,

Company, Inc., Real Party in Interest and

$12,500,000 that is the property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest.

Complaint

The United States of America,

plaintiff, by its attorneys, acting under

the direction of the Attorney General of

the United States, brings this civil

action to obtain equitable and other

relief against the defendant entities and

to obtain forfeiture of the defendant

property and complains and alleges:

I. Jurisdiction and Venue

1. This action is brought under

Sections 4 and 6 of the Sherman Act, 15

U.S.C. §§ 4, 6, as amended, to restrain

violation of Section 1 of the Sherman

Act, 15 U.S.C. § 1, as amended, and to

obtain forfeiture of property owned

pursuant to a contract, combination or

conspiracy in violation of Section 1 of

the Sherman Act. The Court has

jurisdiction over this matter pursuant to

Section 4 of the Sherman Act and 28

U.S.C. §§ 1345, 1355.

2. Venue is proper in this district

under Section 12 of the Clayton Act, 15

U.S.C. § 22, as amended, and under 28

U.S.C. § 1391(c) because the defendant

entities transact business and are found

in the Southern District of New York.

3. This is an in rem proceeding

against the defendant property. That

property is in the defendant entities’

bank accounts in the Southern District

of New York.

II. Description of the Conspiracy

4. This action arises from an unlawful

combination and conspiracy among the

defendant entities, Steinhardt

Management Company (‘‘SMC’’) and

Caxton Corporation (‘‘Caxton’’), and

other persons, to restrain interstate trade

and foreign commerce in the 7.00%

United States Treasury notes auctioned

on April 24, 1991 (‘‘April notes’’) by

withholding the notes from the markets

for such securities in order to profit

from the artificial shortage, or

‘‘squeeze,’’ resulting from the

withholding of supply.

5. Beginning in mid-April 1991,

Caxton and SMC each bought large,

leveraged long positions in the April

notes. As of mid-May 1991, their

combined position in the issue was

almost $20 billion. This combined

position represented about 160% of the

approximately $12 billion of April notes

issued by the United States Treasury.

Between early May 1991 and midSeptember 1991, SMC and Caxton, in

combination, owned (‘‘held’’) from $12

billion to $19 billion April notes.

6. The purchases of April notes by

Caxton and SMC had the effect of

concentrating ownershp of the issue

and, simultaneously, creating a

substantial ‘‘short’’ position on it. Once

created, this short position could be

utilized only if the defendant entities

reduced the size of their positions in the

April notes.

7. Caxton and SMC effectively

controlled the supply of April notes

available to both the ‘‘cash market’’

(where purchases and sales occur) and

the ‘‘financing market’’ (where persons

with leveraged long positions, such as

the defendant entities, borrow money in

order to buy or to continue to hold an

issue. Short sellers in both markets were

required, in effect, to buy or borrow

April notes from Caxton or SMC.

8. After accumulating their position in

the April notes, the defendant entities

and their coconspirators acted to restrict

the supply of April notes to short

sellers. The consequences of this action

was to cause short sellers to bid up

prices for April notes in the cash and

financing markets. From the latter part

of May 1991 through mid-September

1991, Caxton and SMC and their

coconspirators withheld significant

quantities of April notes from the cash

and financing markets. Due to this

constriction in supply, the price of April

notes in the cash market was increased;

likewise, interest rates charged to

finance a position in the April notes

were depressed.

9. As a result of the actions taken by

the defendant entities and their

coconspirators, they and their

coconspirators earned substantial profits

from the low financing rates and high

cash prices of the April notes caused by

their actions.

III. Defendants

10. SMC is a New York corporation

with its principal place of business in

New York, New York. SMC manages

several investment funds. As manager of

those funds, SMC purchased and

financed April notes. SMC is the real

party in interest related to the

$12,500,000.00 of defendant property it

owns and controls.

11. Caxton is a Delaware corporation,

with its principal place of business in

New York, New York. Caxton manages

several investment funds. As manager of

those funds, Caxton purchased and

financed April notes. Caxton is the real

party in interest related to the

$12,500,000.00 of defendant property it

owns and controls.

12. The investment funds SMC and

Caxton manage compete with numerous

investors and traders in the sale,

purchase, financing, and lending of

specific issues of United States Treasury

securities.

13. Various persons not made

defendants in this action have

participated as co-conspirators in the

violations alleged in this Complaint and

have performed acts and made

statements in furtherance of the

conspiracy.

IV. The Markets for April Notes

14. When the owner of a specific

Treasury security holds a position in
3260 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

that issue that exceeds the amount of

the issue available for purchase by short

sellers in the cash or financing markets,

a ‘‘squeeze’’ can occur. A squeeze is

especially likely to succeed if the size of

the position held by the single owner,

or the combined position of the

coordinating holders, exceeds the

amount of the issue available to cover

short positions through repurchase or

‘‘repo’’ agreements in the financing

market. When a squeeze occurs, short

sellers are required to pay abnormally

high prices or to incur abnormally high

financing costs to buy or borrow the

specific security they are short.

15. Purchasers of Treasury securities

that wish to leverage their investments,

such as the defendant entities, usually

finance their positions in the financing

market. In a financing market

transaction, the owner of a security sells

the issue and simultaneously agrees to

repurchase it on a specified date for a

specified price. The repurchase price is

higher than the sale price, the difference

between the two prices representing an

interest rate, called the ‘‘repo rate’’. A

financing market transaction is the

functional equivalent of a loan in which

Treasury securities are used as

collateral.

16. Short sellers (traders who sell

securities they do not own in the

expectation that the price will fall) must

purchase or borrow the specific security

that they are obligated to deliver in

order to fulfill their obligations. An

investor who needs to borrow a specific

Treasury security issue can do so in the

financing market, through ‘‘special’’

repo transactions in which the investor

(short seller), in effect, lends cash in

exchange for collateral of a specific

issue.

17. There are separate product

markets within the meaning of the

antitrust laws for specific Treasury

issues within both the cash and

financing markets. Some traders

speculate in the financing market for

specific issues, lending cash and

accepting securities as collateral, in the

hope that they can re-lend the collateral

to someone else at a profit. Interest rates

for special repo transactions in the

financing markets fluctuate widely

because they reflect supply and demand

for a particular security. If a security is

in short supply, the repo rate for that

issue will generally be low because

owners will be able to negotiate lower

repo rates from short sellers competing

to borrow the scarce security.

18. Prices in the cash and financing

markets are related. When it is costly to

borrow a specific security, demand for

it in the cash market will increase if

some traders buy, rather than borrow, it.

As a result, the issue may cost more

than other securities of comparable

maturity. Similarly, a high price in the

cash market (compared to securities of

like maturity) may cause short sellers to

borrow a security through repurchase

agreements rather than buy it. That

increased demand may depress repo

rates. The holder of a specific issue can

earn a premium when lending or selling

that security when demand for it is great

in either the cash or financing market.

19. The owner of a large position in

a specific issue, or two or more holders

acting together, can limit the supply of

that issue available to the specials

market by financing all or part of their

positions ‘‘off the street,’’ that is, with

parties who will not re-lend the

securities. Such a restriction of supply

can precipitate a squeeze when demand

for the issue exceeds the supply made

available. In that situation, investors

who must borrow the issue must accept

very low interest rates in the repo

market (on the cash they lend to obtain

the issue), enabling the owner or owners

of the issue to earn a premium for

making the security available.

20. Sellers of Treasury securities

transmit securities to buyers in

interstate commerce through the Federal

Reserve System. The business activities

of the defendant entities and coconspirators that are the subject of this

complaint were within the flow of, and

substantially affected, interstate trade

and commerce.

V. The Conspiracy

21. Beginning in or about April 1991,

Caxton and SMC agreed to acquire

control of the supply of April notes and

to limit the supply of April notes to the

cash and financing markets in order to

cause a squeeze and to profit thereby.

To achieve the objectives of the

conspiracy, the defendant entities did

the things they agreed to do, including:

a. purchasing and holding extremely

large long positions in the April notes;

b. exchanging information about their

positions in the April notes;

c. discussing ways to finance their

positions in the April notes in a manner

that would restrict the supply of the

notes available to the cash and financing

markets;

d. restricting the supply of April notes

available for specials transactions,

beginning on May 23, 1991;

e. instructing a primary dealer at

which SMC concentrated the financing

of its April note position to make the

notes available for specials transactions

only if the repo rate was below a

specified level (and giving other

directions to constrict supply

availability);

f. placing a part of Caxton’s position

in the April notes with a primary dealer

that Caxton understood would place the

notes with investors who were not

likely to lend them;

g. concentrating the financing of their

positions with a single dealer; and

h. continuing to hold their positions

in the April notes at times when they

could have sold some or all of these

positions at a substantial premium.

22. As a result of the conspiracy, repo

rates for the April notes in the financing

market declined and cash market prices

for the notes increased. Repo rates for

April notes generally remained low and

cash market prices high until September

1991, when the joint position of SMC

and Caxton fell below the amount

necessary to continue the squeeze.

VI. Anticompetitive Effects of the

Conspiracy

23. The combination and conspiracy

to restrain interstate trade and

commerce in April notes had, among

other things, the following effects:

a. SCM and Canton obtained market

power over the April notes;

b. Persons who sold April notes short

were denied the benefits of free and

open competition in the cash and

financing markets for April notes,

resulting in higher costs to finance and

purchase April notes;

c. Price competition for April notes

was unreasonably restrained;

d. Liquidity in the markets for April

notes was reduced; and

e. The Treasury was denied the

benefits of a free and competitive

secondary market for April notes.

24. The combination and conspiracy

affected a substantial amount of

interstate commerce and is likely to

recur unless it is enjoined by this Court.

VII. Prayer for Relief

Wherefore, plaintiff prays for relief as

follows:

1. That the Court adjudge and decree

that SCM and Canton have combined

and conspired in unreasonable restraint

of interstate trade and commerce in

April notes, in violation of Section 1 of

the Sherman Act, 15 U.S.C. § 1.

2. That SCM and Canton and all

persons acting on behalf of either of

them or under their direction or control

be permanently enjoined from engaging

in, carrying out, renewing, or attempting

to engage in, carry out, or renew, any

contracts, agreements, practices, or

understandings in violation of the

Sherman Act.

3. That the defendant property be

forfeited to the United States.

4. That plaintiff have such other relief

as the Court may consider necessary or

appropriate.
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3261

5. That plaintiff recover the costs of

this action.

Dated:

Anne K. Bingaman,

Assistant Attorney General.

Robert Titan,

Assistant Attorney General.

Mark C. Schechter,

Deputy Director of Operations.

John F. Greaney,

Chief, Computers and Finance Section.

Jonathan M. Rich,

Assistant Chief, Computers and Finance

Section.

Hays Corey, Jr.,

HG1946.

Kenneth W. Gaul,

Attorneys, Antitrust Division, United States

Department of Justice, 555 4th St., N.W.,

Washington, DC 20001.

United States District Court Southern

District of New York, United States of

America, Plaintiff, v. Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 That is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management,

Company, Inc., Real Party in Interest and

$12,500,000 That is the Property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest. 94 Civ. 9044.

Stipulation

It is hereby stipulated and agreed, by

and between the undersigned parties, by

their respective attorneys, that:

1. The parties consent that a Final

Judgment in the form hereto attached

may be filed and entered by the Court,

upon the motion of any party or upon

the Court’s own motion, at any time

after compliance with the requirements

of the Antitrust Procedures and

Penalties Act (15 U.S.C. § 16), and

without further notice to any party or

other proceedings, provided that

plaintiff has not withdrawn its consent,

which it may do at any time before the

entry of the proposed Final Judgment by

serving notice thereof on defendants

and by filing that notice with the Court.

2. The parties shall abide by and

comply with the provisions of the Final

Judgment pending entry of the Final

Judgment.

3. In the event plaintiff withdraws its

consent or if the proposed Final

Judgment is not entered pursuant to this

Stipulation, this Stipulation will be of

no effect whatever, and the making of

this Stipulation shall be without

prejudice to any party in this or any

other proceeding.

December 14, 1994.

For Plaintiff United States of America.

John F. Greaney,

Chief, Computers and Finance Section,

Antitrust Division, Department of Justice.

December 15, 1994.

For Defendant Steinhardt Management

Company, Inc..

Frederick P. Schaffer,

December 15, 1994.

For Defendant Caxton Corporation.

Richard J. Wiener.

United States District Court Southern

District of New York, United States of

America, Plaintiff, v. Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 That is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management,

Company, Inc., Real Party in Interest and

$12,500,000 That is the Property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest. 94 Civ. 9044.

Final Judgment

Whereas Plaintiff, United States of

America, having filed its Complaint in

this action on December 16, 1994, and

plaintiff and defendant entities, by their

respective attorneys, having consented

to the entry of this Final Judgment

without trial or adjudication of any

issue of fact or law; and without this

Final Judgment constituting any

evidence or admission by any party

with respect to an issue of fact or law;

And Whereas defendant entities have

agreed to be bound by Section IV of this

Final Judgment pending its approval by

the Court;

Now Therefore, before any testimony

is taken, and without trial or

adjudication of any issue of fact or law,

and upon consent of the parties, it is

hereby

Ordered, Adjudged and Decreed:

I

Jurisdiction

This Court has jurisdiction of the

subject matter of this action and of the

person of the defendant entities and of

the defendant property by virtue of 28

U.S.C. §§ 1345, 1355. Venue exists in

this Court pursuant to 28 U.S.C.

§ 1395(b). The Complaint states a claim

upon which relief may be granted under

Sections 1 and 6 of the Sherman Act, 15

U.S.C. §§ 1, 6.

II

Definitions

As used in this Final Judgment:

1. ‘‘Agree’’ means to enter into any

contract, combination, conspiracy,

concert of action, or mutual

understanding, formal or informal,

express or implied, with any other

person.

‘‘Any’’ means one or more.

3. ‘‘Cash market’’ means the market in

which Treasury securities are bought

and sold, and includes the when-issued

market and the secondary market.

4. ‘‘CUSIP number’’ means the

alphanumeric description of a Treasury

security established by the American

Bankers Association’s Committee on

Uniform Securities Identification

Procedures.

5. ‘‘Defendant entities’’ means

Steinhardt Management Company, Inc.

and Caxton Corporation.

6. ‘‘Finance’’ or ‘‘financing

transaction’’ means any transaction

whereby a person who has a position in

an issue obtains cash or credit from

another person by using such position

as collateral, including any transaction

pursuant to which possession or

ownership of a position in an issue is

transferred by one party to another with

a simultaneous agreement that the

second party will later return such

position to the first party, such as a

repurchase agreement, a reverse

repurchase agreement, or a borrow

versus pledge agreement.

7. ‘‘Financing market’’ means the

market for financing positions in

Treasury securities through which an

issue may be made available to holders

of short positions in that issue.

8. ‘‘Includes’’ or ‘‘including’’ means

includes, but is not limited to.

9. ‘‘Issue’’ means a particular

marketable United States Treasury

security, as distinguished from all

others by its CUSIP number.

10. ‘‘Or’’ means either or both, and is

used as a word of inclusion rather than

exclusion.

11. ‘‘Other person’’ means a person

other than: a defendant entity; any

subsidiary, officer, director, employee,

agent, successor, or assign of a

defendant entity; any person who

makes, or has authority to make, trading

or investment decisions on behalf of a

defendant entity in the cash or financing

markets; any person in which any

shareholder in a defendant entity as of

the date of entry of this Final Judgment

makes, or has authority to make, trading

or investment decisions in the cash or

financing markets; any account or assets

managed on a discretionary basis by a

defendant entity or, while acting in

respect to such account or assets, by a

defendant entity’s designee.

12. ‘‘Person’’ means any individual,

partnership, firm, corporation,

association, sole proprietorship, joint

venture, or other business or legal

entity, whether or not organized for

profit.

13. ‘‘Position’’ means the quantity of

an issue held, whether outright or as the
3262 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

consequence of any financing

transaction, except that a person shall

not be deemed to have obtained a

position in an issue as the result of

having engaged in a financing

transaction with a defendant entity.

14. ‘‘Treasury auction’’ means any

auction of Treasury securities

conducted by or on behalf of the United

States Department of the Treasury.

15. ‘‘Treasury security’’ means any

marketable United States Treasury bill,

note, or bond.

16. ‘‘Withhold’’ means to decline to

sell or finance for any period of time

part or all of a position in any issue.

Use of either the singular or plural

should not be deemed a limitation and

the use of the singular should be

construed to include, where applicable,

the plural and vice versa.

III

Applicability

This Final Judgment shall apply to the

defendant entities and each of their

subsidiaries, officers, directors,

employees, agents, successors, and

assigns; to any entity for or in which

any person who is a shareholder in a

defendant entity as of the date of entry

of this Final Judgment, whether directly

or indirectly, conducts or directs asset

management or investment advisory

activities that involve transactions in

the cash market or in the financing

market (hereinafter ‘‘related entity’’);

and to all persons acting in concert with

any defendant entity and having actual

notice of this Final Judgment; provided,

however, that this Final Judgment shall

not apply to any fund or other entity

whose assets are managed or invested in

whole or in part by a defendant entity

or by a related entity.

IV

Prohibited Conduct

A. The defendant entities are enjoined

and restrained from agreeing with each

other or with any other person to

restrain trade in the cash or financing

markets in violation of the antitrust laws

of the United States.

B. The defendant entities are enjoined

and restrained from agreeing with each

other or with any other person:

1. to purchase or refrain from

purchasing any issue from a particular

person; or

2. to sell or refrain from selling any

issue to or through a particular person.

C. The defendant entities are enjoined

and restrained from agreeing with any

other person:

1. to withhold, directly or indirectly,

all or any part of such other person’s

position from the cash market; or

2. to withhold, directly or indirectly,

all or any part of such other person’s

position from the financing market.

D. The defendant entities are enjoined

and restrained from agreeing with any

other person:

1. to withhold, directly or indirectly,

all or part of a defendant entity’s

position from the cash market for the

purpose of (a) maintaining the value of

such other person’s position or (b)

causing the value of such other person’s

position to increase, for any period of

time; or

2. to withhold, directly or indirectly,

all or part of a defendant entity’s

position from the financing market for

the purpose of (a) maintaining the value

of such other person’s position or (b)

causing the value of such other person’s

position to increase, for any period of

time.

E. Notwithstanding any provision of

Section IV.B to the contrary, nothing in

this Final Judgment shall prohibit a

defendant entity:

1. from agreeing with its counterparty

to enter into a transaction to purchase

or sell an issue; or

2. from agreeing with another person

that such other person tender a bid on

behalf of such defendant entity at a

Treasury action.

F. Notwithstanding any provision of

either Section IV.B or Section IV.C to

the contrary, nothing in this Final

Judgment shall prohibit any defendant

entity from agreeing with another

person that such other person not

increase or decrease its position in an

issue while such other person is

endeavoring to transact the purchase,

sale or financing of a position in such

issue with or on behalf of a defendant

entity.

V

Compliance provisions

Each defendant entity is ordered to

initiate and maintain an antitrust

compliance program which shall

include designating, within thirty (30)

days of the entry of this Final Judgment,

an Antitrust Compliance Officer, who

shall monitor the activities of all

persons responsible for trading or

financing Treasury securities on behalf

of the defendant entity and shall be

responsible for establishing an antitrust

compliance program designed to

provide reasonable assurance of

compliance with this Final Judgment

and with the federal antitrust laws by

the defendant entity. The Antitrust

Compliance Officer shall also:

1. Distribute, within thirty (30) days

from the entry of this Final Judgment, a

copy of this Final Judgment to: (a) all

members of the Board of Directors and

Officers of the defendant entity; (b) all

traders or other employees of the

defendant entity whose duties include

the trading or financing of Treasury

securities; and (c) all agents of the

defendant entity whose responsibilities

include the trading or financing

Treasury securities on behalf of such

defendant entity (not including brokers

or dealers who may occasionally act as

agents of a defendant entity on a

transaction-specific basis).

2. Distribute within thirty (30) days a

copy of this Final Judgment to (a) any

person who becomes a member of the

Board of Directors or officers of the

defendant entity and (b) to any

employee of the defendant entity who

is, in the future, given any duties which

include the trading or financing of

Treasury securities.

3. Brief annually those persons

designated in Paragraphs 1 and 2 of this

Section on the meaning and

requirements of the federal antitrust

laws and this Final Judgment and

inform them that the Antitrust

Compliance Officer or a designee of the

Antitrust Compliance Officer is

available to confer with them regarding

compliance with such laws and with

this Final Judgment.

4. Obtain from each person designated

in Paragraphs 1 and 2 of this Section an

annual written certification that he or

she: (a) has read, understands, and

agrees to abide by the terms of this Final

Judgment; (b) has been advised and

understands that noncompliance with

this Final Judgment may result in his or

her being found in civil or criminal

contempt of court; and (c) is not aware

of any violation of the federal antitrust

laws or of this Final Judgment that he

or she has not reported to the Antitrust

Compliance Officer.

5. Maintain a record of persons to

whom this Final Judgment has been

distributed and from whom the

certification required by Paragraph 4 of

this Section has been obtained.

6. Certify to the Court and to the

Assistant Attorney General in charge of

the Antitrust Division, within forty-five

(45) days after entry of this Final

Judgment, that the defendant entity: (a)

has designated an Antitrust Compliance

Officer, specifying his or her name,

business address, and telephone

number; and (b) has distributed this

Final Judgment, briefed the appropriate

persons, and obtained certifications, as

required by this Section V.
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3263

VI

Plaintiff access

A. For the purpose of determining or

securing compliance with this Final

Judgment, duly authorized

representatives of the plaintiff shall,

upon written request of the Assistant

Attorney General in charge of the

Antitrust Division, and on reasonable

notice to the relevant defendant entity,

subject to any lawful privilege, be

permitted:

1. access during such defendant

entity’s regular office hours to inspect

and copy all records and documents in

its possession or custody, or subject to

its control, relating to any matters

contained in this Final Judgment; and

2. to depose or interview such

defendant entity’s officers, employees,

trustees, or agents, who may have

counsel present, regarding any matters

contained in this Final Judgment; such

depositions or interviews to be subject

to the reasonable convenience of and

without restraint or interference from

the defendant entity.

B. Upon the written request of the

Assistant Attorney General in charge of

the Antitrust Division, each of the

defendant entities shall submit such

written reports, under oath if requested,

relating to any of the matters contained

in this Final Judgment as may be

reasonably requested.

C. No information or documents

obtained by the means provided in this

Section shall be divulged by the

plaintiff to any person other than a duly

authorized representative of the

executive branch of the United States,

except in the course of legal proceedings

to which the United States is a party, or

for the purpose of security compliance

with this Final Judgment, or as

otherwise required by law.

D. If at the time information or

documents are furnished by a defendant

entity to plaintiff, such defendant entity

represents and identifies in writing the

material in any such information or

documents to which a claim of

protection may be asserted under Rule

26(c)(7) of the Federal Rules of Civil

Procedure, and said defendant marks

each pertinent page of such materials,

‘‘Confidential: Subject to claim of

protection under Rule 26(c)(7) of the

Federal Rules of Civil Procedure,’’ then

ten (10) days’ notice shall be given by

plaintiff to such defendant entity prior

to divulging such material in any legal

proceeding to which the defendant

entity is not a party; provided, however,

that nothing herein shall apply to any

use of such information or documents in

any grand jury proceeding.

VII

Further Elements of Decree

A. Jurisdiction is retained by this

Court for the purpose of enabling any of

the parties to this Final Judgment to

apply to this Court at any time for

further orders and directions as may be

necessary or appropriate to carry out or

construe this Final Judgment, to modify

or terminate any of its provisions, to

enforce compliance, and to punish

violations of its provisions.

B. This Final Judgment shall

terminate ten (10) years from the date of

entry.

C. The defendant property that is the

property of Steinhardt Management

Company, Inc. is hereby forfeited to the

United States. Steinhardt Management

Company, Inc. shall pay $12,500,000,

plus the Additional Amount defined in

the Civil Settlement Agreement between

Steinhardt Management Company, Inc.

and the United States Department of

Justice dated December 16, 1994, within

five (5) business days after receipt of

notice of this Final Judgment. Such

amount represents that portion of the

settlement amount forfeited to the

Department of Justice pursuant to 15

U.S.C. § 6, and which is payable to the

Department of Justice Asset Forfeiture

Fund.

D. The defendant property that is the

property of Caxton Corporation is

hereby forfeited to the United States.

Caxton Corporation shall pay

$12,500,000 plus the Additional

Amount defined in the Civil Settlement

Agreement between Caxton Corporation

and the United States Department of

Justice dated December 16, 1994, within

five (5) business days after receipt of

notice of this Final Judgment. Such

amount represents that portion of the

settlement amount forfeited to the

Department of Justice pursuant to 15

U.S.C. § 6, and which is payable to the

Department of Justice Asset Forfeiture

Fund.

E. Entry of this Final Judgment is in

the public interest.

United States District Court Southern

District of New York, United States of

America, Plaintiff, v. Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 That is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management,

Company, Inc., Real Party in Interest and

$12,500,000 That is the Property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest. 94 Civ. 9044.

Competitive Impact Statement

Pursuant to Section 2(b) of the

Antitrust Procedures and Penalties Act,

15 U.S.C. § 16(b)–(h), the United States

submits this Competitive Impact

Statement relating to the proposed Final

Judgment submitted for entry in this

civil antitrust proceeding.

I

Nature and Purpose of the Proceeding

On December 16, the United States

filed a civil antitrust complaint alleging

that Steinhardt Management Company,

Inc. (‘‘SMC’’), Caxton Corporation

(‘‘Caxton’’) and others conspired to

restrain competition in markets for

specified United States Treasury

securities, in violation of Section 1 of

the Sherman Act, 15 U.S.C. § 1. The

complaint seeks injunctive relief and

forfeiture of property owned by SMC

and Caxton pursuant to the alleged

conspiracy under Section 6 of the

Sherman Act, 15 U.S.C. § 6.

The complaint alleges that, beginning

in April 1991 and continuing into

September 1991, the defendant entities

and others (collectively, the

‘‘conspirators’’) violated Section 1 of the

Sherman Act by agreeing to coordinate

their actions in trading the two-year

Treasury notes auctioned by the United

States Treasury on April 24, 1991

(‘‘April Notes’’). During that period, the

conspirators coordinated trading in the

secondary markets for the April Notes,

including both the cash market (where

purchases and sales occur) and the

financing market (where, in effect,

persons with leveraged long positions,

such as the defendant entities, borrow

money in order to buy or to continue to

hold an issue). The alleged conspiracy

affected the price of the April Notes in

both the cash market and the financing

market.

The United States and the defendant

entities have stipulated to the entry of

a proposed Final Judgment, which will

grant the relief sought in the complaint

and terminate this action.

II

Description of the Practices Involved in

the Alleged Violation

A. The Treasury Securities Markets

The Treasury finances the debt of the

United States by issuing Treasury

securities in the form of bonds, notes

and bills. Treasury bonds, notes and

bills are sold by the Treasury through

periodic auctions conducted by the

Federal Reserve System. At each such

auction, the Treasury awards securities

to the bidders willing to accept the

lowest yield levels (effectively, interest

rates) on their cash.

A week before an auction of a

particular issue, the Treasury announces

the size of the issue to be auctioned.

‘‘When-issued’’ trading for that issue
3264 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

1Each Treasury security of a particular issue is

unique and bears an identification number (known

as a ‘‘CUSIP number’’) which distinguishes it from

all other securities. Thus, all April Notes (all of

which were issued on the same date) bore the same

CUSIP number.

2A Treasury security may trade ‘‘on special’’ in

the collateral markets for various reasons. Special

rates could be the result of ordinary market supply

and demand, but could also be induced by persons

acting together to distort normal market forces.

Potentially, if the holders of an issue withhold

enough of it from the ‘‘specials’’ market, unmet

demand may cause come percentage of the issue to

be financed at interest rates approaching zero.

3 Due to the manner in which the financing

market works, the increased cost of borrowing the

security occurs when short sellers earn lower

interest rates on money they lend to holders in

order to borrow the security overnight or for a short

term. The cost of borrowing the securities increases

when short sellers—who must borrow the security

to avoid a default (failure to deliver or ‘‘fail’’) on

their contractual obligations—receive say, only

4.25% on the money they land when, if the issue

were not ‘‘on special,’’ they would have been able

to borrow the securities in the repo market and earn

a higher interest rate, say, 5.75%.

4The conspirators waited until May 23 to

implement the squeeze because the subsequent

issue of two-year notes was auctioned on the

previous day. By waiting until the Treasury

auctioned a succeeding issue, the conspirators

minimized the risk that the Treasury would reopen

begins immediately thereafter. In a

when-issued trade, no money changes

hands; rather, sellers agree to deliver the

securities on the date the Treasury

settles with successful bidders,

generally one week after the auction

(‘‘settlement’’). At settlement, the

Treasury transmits the new issue to the

successful bidders in exchange for

payment. On settlement day, whenissued buyers must pay for their

purchases and when-issued sellers must

deliver the securities they sold. Persons

who sell short an issue in the whenissued market must deliver that issue to

the purchaser at settlement; they cannot

substitute another Treasury issue.1

After settlement, trading to buy and

sell the issue continues in the secondary

or ‘‘cash’’ market until the maturity

date, when the issue is redeemed. In

every when-issued or cash market trade,

a seller who does not already own the

issue is said to be ‘‘short,’’ and the buyer

‘‘long.’’ The ‘‘short’’ seller may obtain

the securities it is required to deliver by

purchasing them at the Treasury auction

or in a when-issued or cash market

trade. Alternatively, the short may

borrow them in the ‘‘financing market,’’

generally through a repurchase or

‘‘repo’’ transaction, and delivering the

borrowed securities to the buyer.

Traders of Treasury securities

frequently use repurchase agreements

not only to effectuate delivery when

they have ‘‘short’’ positions, but also to

finance their ‘‘long’’ purchases. A

repurchase transaction is the functional

equivalent of a loan using Treasury

securities as collateral, in which the

owner of an issue sells it and

simultaneously agrees to repurchase it

on a specified date for a specified price.

The repurchase price is somewhat

higher than the sale price; the difference

between the two prices represents an

interest rate, and is often called the

‘‘repo’’ rate.

Treasury securities can be financed

either through ‘‘special’’ repo

agreements, in which the collateral is a

particular, identified issue, or through

‘‘general’’ repo agreements, in which no

particular issue need be specified for

delivery. When there is specific demand

for an issue because short sellers need

to borrow the issue in order to deliver

it to persons who have bought it, owners

can lend the issue in a special repomarket transaction at a ‘‘special rate.’’2

The issue generally is said to be ‘‘on

special’’ when the interest rate that

owners (such as SMC and Caxton in the

case of the April Notes) are required to

pay to borrow cast against the issue is

significantly lower than the ‘‘general’’

collateral rate.’’ The general collateral

rate is an overall rate for loans

collateralized by Treasury securities,

and usually fluctuates only in relation

to short-term, money-market rates.

Because the demand, as reflected by

price, for a particular issue is unique in

both the cash market and in the

financing market (while the issue is on

special), there are separate product

markets for each Treasury security issue

within the meaning of the antitrust

laws.

If the supply of an issue is artificially

constricted by agreement among the

holders of the issue, both the price of

the issue in the cash market and the cost

of borrowing the issue in the financing

market increase.3 When the cost of

purchasing an issue in the cash market

or the cost of borrowing it in the

financing market is significantly

different than the cost of buying or

borrowing securities of comparable

maturities, a ‘‘squeeze’’ is said to occur.

B. The Conspiracy

SMC and Caxton both manage

investment funds—sometimes known as

‘‘hedge funds’’—which generally make

large, ‘‘leveraged’’ investments with

borrowed capital. The hedge funds

managed by the defendant entities

compete with numerous other traders

and investors in the when-issued, cash

and financing markets to sell purchase

and finance various Treasury security

issues. Prior to their purchase of April

Notes, the defendant entities had a

history of interaction. Beginning in

January 1990, Caxton became comanaging general partner of two of

SMC’s funds, and Caxton’s chairman

became the president of SMC. The

formal affiliation of Caxton and its

chairman with SMC ended after one

year, but employees and agents of the

defendant entities continued to

communicate regularly with each other,

including during the period

encompassed by the conspiracy.

As charged in the complaint,

beginning in or about April 1991, the

defendant entities agreed on a scheme to

acquire control of the supply of April

Notes and to limit the supply of the

issue in the cash and financing markets

in order to cause a squeeze. This scheme

ensured that persons who had sold

notes short in the when-issued market

or the post-settlement cash market could

obtain such notes only by purchasing

them at artificially high and noncompetitive prices in the cash market or

by borrowing them at artificially low

and non-competitive special rates in the

financing market. This course of

conduct continued for a period of time

during which the defendant entities,

with the assistance of others, earned

supracompetitive rates on transactions

in the April Notes.

Through numerous purchases made

through various dealers, in the whenissued market, the cash market and at

auction, SMC and Caxton obtained

substantial positions in the April Notes.

Indeed, from May until mid-September

1991, the defendant entities controlled

more than the ‘‘floating supply’’ of the

issue, giving them the power to cause

short sellers of the April Notes to fail to

meet their security-specific delivery

obligations.

As part of the alleged scheme, SMC

and Caxton conferred on the subject of

their activities or planned activities

with respect to April Notes. They

exchanged information about the size of

their positions, the likely size of the

short positions in the markets and ways

to finance positions so as to keep their

notes from becoming available to meet

the demand for specials financing. The

defendant entities gave tacit assurances

to each other that they would continue

to hold their substantial long positions

in the April Notes, and would limit the

supply of April Notes they would make

available to the cash and financing

markets from the positions they

controlled.

The conspirators agreed to coordinate

SMC’s and Caxton’s financing efforts so

as to restrict the supply of April Notes

available in the financing and cash

markets. The conspirators began to

implement their squeeze on May 23,

1991.4 An essential part of the scheme
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3265

the April-Note issue, which would have reduced or

eliminated their ability to control the supply of the

issue. If the issue had been reopened, the Treasury

would have auctioned more notes with the April

Notes’ CUSIP number, rather than auctioning notes

with a new CUSIP. Reopening would have

effectively flooded the secondary markets with

increased supply of the issue, and would have

eroded the market power the conspirators had

obtained through their purchases of the April Notes.

5See Department of the Treasury, Securities and

Exchange Commission, Board of Governors of the

Federal Reserve System; Joint Report on the

Government Securities Market at 10 (Jan. 1992).

involved the defendant entities entering

into financing agreements with two

primary dealers to ensure that the

supply of April Notes available to shorts

in the secondary markets would be

reduced.

SMC concentrated the financing of its

position with one dealer, and actively

directed that dealer to withhold some or

all of SMC’s notes from the financing

and cash markets. For example, SMC

directed the dealer to refuse to make its

notes available for special repo

transactions unless the repo rate had

dropped below a certain level. At other

times, SMC ordered the dealer to refuse

to make the notes available at all for

special financing transactions for

periods of time ranging from hours to

days, with the intent and effect of

causing unmet demand that forced rates

lower. For its part, Caxton financed a

portion of its April Notes in a series of

transactions with another dealer in a

manner that largely caused a quantity of

the notes to be withheld from the cash

market. Beginning in early August,

1991, SMC moved the majority of its

position to the dealer already financing

the majority of the Caxton position. This

resulted in a renewed concentration of

the issue that enabled the dealer to drive

down repo rates.

The coordinated withholding of

supply allowed SMC and Caxton to

enrich themselves at the expense of

other market participants both as a

result of low rates at which they were

able to finance their securities and as a

result of cash sales at prices that were

inflated by the squeeze.

The conspiracy described above

injured numerous persons who traded

the April Notes, especially those with

short positions, by artificially inflating

prices for that issue in the cash market

and repo rates in the financing market.

Further, the conspiracy had a dangerous

probability of damaging the Treasury of

the United States. As noted in the Joint

Report on the Government Securities

Market issued by the Treasury, the SEC

and the Federal Reserve Board, an acute,

protracted squeeze resulting from illegal

coordinated conduct, such as the one

alleged here, ‘‘can cause lasting damage

to the marketplace, especially if market

participants attribute the shortage to

market manipulation. Dealers may be

more reluctant to establish short

positions in the future, which could

reduce liquidity and make it marginally

more difficult for the Treasury to

distribute its securities without

disruption.’’5

III

Explanation of the Proposed Final

Judgment

The United States and the defendant

entities have stipulated that the Court

may enter the proposed Final Judgment

after compliance with the Antitrust

Procedures and Penalties Act, 15 U.S.C.

§ 16(b)-(h). The proposed Final

Judgment provides that its entry does

not constitute any evidence or

admission by any party with respect to

any issue of fact or law. Under the

provisions of Section 2(e) of the

Antitrust Procedures and Penalties Act,

15 U.S.C. § 16(e), the proposed Final

Judgment may not be entered unless the

Court finds that entry is in the public

interest. Paragraph VIII.E. of the

proposed Final Judgment sets forth such

a finding.

The United States submits that the

proposed Final Judgment is in the

public interest. The proposed Final

Judgment contains injunctive provisions

that are remedial in nature and designed

to assure that the defendant entities will

not engage in the future in the same or

similar anticompetitive practices as

those employed in furtherance of their

conspiracy.

In addition, the proposed Final

Judgment provides for a substantial

asset forfeiture that will act as a

deterrent to future illegal conduct and

serve as a warning to others of the

possible consequences of similar illegal

behavior. Pursuant to the proposed

Final Judgment and the Settlement

Agreements attached hereto, SMC and

Caxton will each pay $12.5 million

(plus interest accruing at a rate of 5.75%

to the date of payment) to the United

States within five business days of the

entry of the Final Judgment. This

payment reflects a cash settlement in

lieu of forfeiture of the securities held

pursuant to the alleged conspiracy.

A. Global Settlement of Charges

On the same date that this action was

filed, the Department of Justice

(‘‘Department’’) and the Securities and

Exchange Commission (‘‘SEC‘‘)

announced a global settlement with

SMC and Caxton that resolves the

defendant entities’ liability under the

antitrust and securities laws with

respect to the conduct alleged in the

complaints filed by the Department and

the SEC. The terms of the settlement

provide that SMC pay a total of $40

million—$19 million in fines and

forfeitures and establish a $21 million

disgorgement fund to be used to

compensate victims of its misconduct.

The settlement also provides that

Caxton will pay a total of $36 million—

$22 million in fines and forfeitures and

establish a $14 million disgorgement

fund.

B. Specific Injunctive Provisions

The proposed Final Judgment

prohibits the defendant entities from

agreeing with each other or with other

persons to take certain actions affecting

the markets for Treasury securities. The

prohibited agreements are either

impermissible under the antitrust laws,

or were determined during the

Department’s three-year investigation of

the Treasury securities markets to be

significant mechanisms for facilitating

collusion. The proposed Final

Judgment, however, is not intended to

discourage or prohibit normal

communications between the defendant

entities and other participants in the

markets for Treasury securities. Traders

in these markets often, and

appropriately, exchange views about

events that may affect interest rates, and

consequently, the value of Treasury

securities. Such an exchange of views,

without more, is not ordinarily harmful

to competition.

1. Section III, Applicability

The proposed Final Judgment applies

to the defendant entities and each of

their subsidiaries, officers, directors,

employees, agents, successors and

assigns. It also applies to any entity for

or in which any person who is a

shareholder in a defendant entity as of

the date of entry of the Final Judgment

engages in or directs asset management

or investment advisory activities,

whether directly or indirectly, that

involve transactions in the cash or

financing markets (‘‘related entity’’); and

to all persons acting in concert with any

defendant entity that have actual notice

of the Final Judgment. But the proposed

Final Judgment does not apply to any

fund or other entity whose assets are

managed or invested in whole or in part

by a defendant entity or by a related

entity.

This applicability provision ensures

that the Final Judgment will apply not

only to the defendant entities, but also

to any related entity or any person
3266 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

6The complaint filed by the Department alleges

that various persons, not identified in the

complaint, were co-conspirators along with the

defendant entities. These ‘‘others,’’ defined as being

within the collective category of ‘‘conspirators’’ in

section I of this Competitive Impact Statement,

above, include certain persons who acted directly

as agents of one or the other of the defendant

entities in the trading and financing of the April

Notes.

7Because of the current structure of trading and

financing of Treasury securities, investment funds

such as the defendant entities must ordinarily enter

into agreements with counterparties to trade or

finance their positions, including perhaps

agreements restricting the timing or form of sales or

financing. Thus, if the defendant entities are to

retain control over the manner in which they trade

or finance their positions, they must remain free to

enter into agreements with others that literally

might involve ‘‘withholding’’ their positions for

some period of time.

8 ‘‘Front running’’ occurs when a person, such as

a dealer or broker who has advance knowledge of

another trader’s intended actions in the market,

uses that advance knowledge to trade on his own

behalf ahead of the other trader. Thus, for example,

if a dealer were to learn that a defendant entity

intended to make substantial purchases of an issue

through the dealer, so that the price of the issue in

the cash market would likely rise, the dealer could

use this advance knowledge to purchase the issue

before the price begins to rise, and then to sell the

issue at the inflated price. Defendant entities are not

prohibited from obtaining commitments that a

dealer will not trade against them in this fashion

before committing to trade through the dealer.

acting as an agent of a defendant entity.6

It also applies to any existing or newly

formed entity in which a shareholder of

one of the defendant entities has

decisionmaking or trading authority

involving Treasury securities. This

provision ensures that the defendant

entities will be unable to evade the

terms of the Final Judgment by

conducting Treasury security trading

through some other entity. The Final

Judgment, however, does not generally

bind other participants in the Treasury

security markets who merely engage in

ordinary principal-to-principal

counterparty trades with the defendant

entities.

2. Section IV, Prohibited Conduct

a. Subsection A generally prohibits

defendant entities from entering into

agreements to restrain trade, within the

meaning of the antitrust laws, in the

purchase, sale or financing of any issue

in the cash or financing markets. This

subsection is to be construed by

reference to the defined terms used

therein (e.g., ‘‘agreeing’’), and by the

general purpose of the antitrust laws as

set forth in Section 1 of the Sherman

Act, 15 U.S.C. § 1, and the Federal case

law construing and interpreting the

Sherman Act.

b. Subsection B prohibits defendant

entities from entering into agreements to

purchase or sell an issue, or to refrain

from purchasing or selling an issue,

through any particular person, subject to

limited exceptions, discussed below,

contained in Subsections E and F.

Subsection B prohibits, for example, a

defendant entity from agreeing with

another holder of an issue to coordinate

its purchases or sales of the issue by

acquiring the issue only through

particular primary dealers, or by

agreeing to spread out their coordinated

purchases among different dealers to

conceal the size of their purchases and

holdings. The defendant entities

acquired their positions in April Notes

largely from separate dealers, indicating

possible coordination of their

acquisition strategies.

c. Subsection C prohibits defendant

entities from agreeing with another

holder of an issue to withhold such

other holder’s position from the cash or

financing markets for any period of

time. This subsection, for example,

prohibits a defendant entity from

agreeing that another holder of an issue

will withhold the other holder’s

position from the cash or financing

markets. The Department has alleged

that a central component of the

conspiracy charged in this case were

agreements between SMC and Caxton to

withhold their positions from the cash

and financing markets in order to

effectuate the squeeze of the April

Notes. The Department has identified

only one circustance—prevention of

‘‘front-running’’—in which one holder

of an issue agrees with another,

competing holder, to withhold the other

holder’s position in the same issue from

the markets could possibly have a

procompetitive purpose. With the

exception of preventing front-running,

which is the subject of a limited

exception, discussed below, contained

in subsection F, this subsection contains

an outright prohibition on a defendant

entity agreeing that another holder will

restrict supply of an issue by

withholding the other holder’s position

from the cash or financing markets.

d. Subsection D similarly prohibits

the defendant entities from agreeing

with another holder of an issue to

withhold the defendant entity’s position

in the issue for the purpose of

maintaining or increasing the value of

the other holder’s position in the cash

or financing markets for any period of

time. The limited purpose contained

within this subsection makes clear that

a defendant entity may continue to

decide when and whether to trade or

finance its own position.7 If, however,

the purpose of a defendant entity’s

withholding of a position is to attempt

to maintain or increase the value of the

other holder’s position in the markets,

that is prohibited. The Department has

identified no legitimate pro-competitive

reason to agree to restrict supply by

withholding one’s own position in an

issue for the purpose of benefitting

another, ordinarily competing, holder of

the same issue.

e. Subsection E makes clear

subsection B is not intended to prohibit

customary practices in trading positions

in Treasury securities. Specifically, this

subsection makes clear that nothing in

the proposed Final Judgment is

intended to prohibit normal principalto-principal counterparty agreements to

purchase or sell a position in an issue.

f. Subsection F is an exception to

subsections B and C that permits a

defendant entity to request (and obtain

an agreement) that another holder, such

as a primary dealer, will not trade its

position while also endeavoring to

transact a trade with or on behalf of a

defendant entity. This exception is

intended to permit a defendant entity to

obtain commitments from primary

dealers or other counterparties that they

will not engage in ‘‘front running’’ 8 or

other self-dealing actions to the

detriment of the defendant entity while

the counterparty is effectuating the

purchase, sale or financing of a position

on behalf of the defendant entity. This

provision is necessary because, in the

ordinary course, non-dealer traders such

as the defendant entities must transact

trades through persons such as primary

dealers, who may also be competing

holders of the same issue. Merely

requesting that the counterparty to a

transaction not engage in self-dealing

while also acting on behalf of a

defendant entity should not, by itself, be

harmful to competition.

3. Section V, Compliance Provisions

Section V of the proposed Final

Judgment requires the defendant entities

to institute antitrust compliance

programs. Each defendant entity must

appoint an antitrust compliance officer,

who will be responsible for monitoring

the activities of all persons with

responsibility for trading or financing

Treasury securities. The antitrust

compliance officer will also establish an

antitrust compliance program, including

specific obligations described in this

section, designed to provide reasonable

assurance that the defendant entity will

comply with the Final Judgment and the

antitrust laws. The antitrust compliance

officer will certify to the Court and the

Assistant Attorney General in charge of

the Antitrust Division within forty-five

days after entry of the Final Judgment

that the defendant entity has taken

specified steps require by this section.
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3267

9The specific permitted grounds for successful

claims against the disgorgement fund and the

mechanics of fund operation under the auspices of

the SEC are set forth in the Final Judgment of

Permanent Injunction and Other Relief as to each

defendant entity, filed contemporaneously with the

SEC’s complaint against SMC and Caxton.

IV

Remedies Available to Potential Private

Litigants

Section 4 of the Clayton Act, 15

U.S.C. 15, provides that any person who

has been injured as a result of conduct

prohibited by the antitrust laws may

bring suit in federal court to recover

three times the damages suffered, as

well as costs and reasonable attorney’s

fees. Pursuant to separate agreements

reached by SMC and Caxton with the

SEC and the Department, the defendant

entities will pay $35 million into a fund

to be available for damages claims from

private parties that have been injured by

their conduct, including damages

incurred as a consequence of violations

of the antitrust laws.9 Entry of the

proposed Final Judgment itself will

neither impair not assist the bringing of

such actions. Under the provisions of

Section 5(a) of the Clayton Act, 15

U.S.C. 16(a), the Final Judgment has no

prima facie effect in any subsequent

lawsuits that may be brought against

SMC or Caxton in this matter.

V

Procedures Available for Modification of

the Proposed Final Judgment

As provided by the Antitrust

Procedures and Penalties Act, any

person believing that the proposed Final

Judgment should be modified may

submit written comments to John F.

Greaney, Chief, Computers and Finance

Section, U.S. Department of Justice,

Antitrust Division, 555 Fourth Street,

NW., Room 9901, Washington, DC

20001, within the 60-day period

provided by the Act. These comments,

and the Department’s responses, will be

filed with the Court and published in

the Federal Register. All comments will

be given due consideration by the

Department of Justice, which remains

free to withdraw its consent to the

proposed Judgment at any time prior to

entry. The proposed Final Judgment

provides that the Court retains

jurisdiction over this action, and the

parties may apply to the Court for any

order necessary or appropriate for the

modification interpretation or

enforcement of the Final Judgment.

VI

Alternatives to the Proposed Final

Judgment

The proposed Final Judgment

provides all the relief that the United

States sought in its complaint. The

Department believes that litigation on

the allegations in the compliant would

involve substantial cost to the United

States and is not warranted given the

relief to be obtained in the proposed

Final Judgment. In specifying the relief

set forth in the proposed Final

Judgment, the Department consulted

with and considered the views of

experts in the Treasury securities field,

including the United States Department

of the Treasury and the SEC. The

specific injunctive provisions are

tailored to ensure that the defendant

entities will not engage in the same

illegal conduct, and in the event of

violations, are enforceable through civil

and criminal contempt. Further, the

payment by defendant entities under

Section 6 represents the second-largest

forfeiture or other penalty ever paid to

the government by defendants in a

single antitrust case, and will provide a

substantial deterrent to future

anticompetitive conduct in the Treasury

securities markets.

Another alternative to the proposed

Final Judgment would be to prosecute

this conspiracy as a criminal violation

of Section 1 of the Sherman Act, 15

U.S.C. 1, rather than through a civil

complaint. The Department carefully

considered this alternative. The

Department determined, in the exercise

of its prosecutorial discretion, that

charging this matter as a civil violation

was most appropriate. The releases from

criminal prosecution set forth in the

Settlement Agreements attached hereto

merely confirm the Department’s

decision that the case is more

appropriately brought as a civil matter.

VII

Determinative Materials and Documents

No materials or documents of the type

described in Section 2(b) of the

Antitrust Procedures and Penalties Act,

15 U.S.C. 16(b), were considered in

formulating the proposed Final

Judgment.

Dated: December 16, 1994.

Anne K. Bingaman,

Assistant Attorney General, Antitrust

Division.

Respectfully submitted,

Hays Gorey, Jr., HG1946,

Kenneth W. Gaul, KG2858

Attorneys, U.S. Department of Justice,

Antitrust Division, Room 8104, 555 4th Street,

NW., Washington, DC 20001, (202) 514–9602.

Certificate of Service

I, Kenneth W. Gaul, an attorney in the

Department of Justice, Antitrust

Division, certify that on this date I have

caused to be served by hand the

attached COMPETITIVE IMPACT

STATEMENT upon the following

counsel for defendant entities in the

matter of United States v. Steinhardt

Management Company, Inc. and Caxton

Corporation, et al. (94 Civ. llll).

Frederick P. Schaffer,

Shulte, Roth & Zabel, 900 Third Avenue,

New York, NY 10022 (Counsel for Steinhardt

Management Company, Inc.)

Richard J. Wiener,

Caldwalader, Wickersham & Taft, 100 Maiden

Lane, New York, NY 10038 (Counsel for

Caxton Corporation).

Kenneth W. Gaul.

December 16, 1994.

United States District Court, Southern

District of New York, United States of

America, Plaintiff, v. Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 That is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management

Company, Inc., Real Party in Interest and

$12,500,000 That is the Property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest. 94 Civ. 9044.

Settlement Agreement

This Settlement Agreement

(‘‘Agreement’’) is made between the

United States of America (‘‘Plaintiff’’)

and Steinhardt Management Company,

Inc., (‘‘SMC’’).

1. This Agreement is made to resolve

and forever to settle SMC’s liability

under the antitrust laws for certain

conduct to be alleged in a Complaint to

be filed by the United States pursuant

to this Agreement. Upon the fulfillment

of the conditions set forth in this

Agreement, the releases described

herein shall be effective.

2. On the date of execution of this

Agreement,

(a) Plaintiff shall file a civil Complaint

alleging a violation of Section 1 of the

Sherman Act, 15 U.S.C. § 1, by SMC and

others in connection with the

acquisition and trading of certain

United States Treasury notes;

(b) Plaintiff shall file a Final Judgment

in the form attached as Exhibit A, that,

if entered by the Court, would resolve
3268 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

and settle the allegations of the

Complaint filed pursuant to

subparagraph (a), above;

(c) Plaintiff and SMC shall execute

and file a Stipulation and Order in the

form attached as Exhibit B, stipulating

to the entry of a Final Judgment in the

form attached as Exhibit A.

3. In consideration of the sum of

money to be forfeited by SMC pursuant

to the Final Judgment and other of the

agreements set forth therein, upon entry

of the Final Judgment in the form

attached as Exhibit A, or in such other

form as the Court may order requiring

payment of the civil forfeiture specified

in paragraph 6(a), Plaintiff releases SMC

and its present and former officers,

employees, directors and subsidiaries,

and any funds or accounts managed by

SMC, from any civil liability or claims

whatsoever or any criminal liability for

any federal offense (a) which was

committed prior to the date of this

Agreement and arose out of the

purchase, sale, financing or trading of

the two-year United States Treasury

notes issued in April 1991 or the twoyear United States Treasury notes issued

in May 1991 (together, ‘‘Specified

Notes’’) or (b) which arose out of any

conduct known to the Department of

Justice or the Securities and Exchange

Commission (‘‘SEC’’) related to any

investigation by the Department of

Justice or the SEC into the purchase,

sale, financing or trading of the

Specified Notes, or into any efforts to

interfere with, obstruct, mislead or

subvert any such investigation;

provided, however, that nothing in this

Agreement shall apply to violations of

the federal tax laws, Title 26, United

States Code.

4. Plaintiff and SMC recognize that

the Court may enter a Final Judgment

only after the parties have complied

with the provisions of the Tunney Act,

15 U.S.C. § 16 (b) through (g). The

parties shall use their best efforts to

comply with the procedures of the

Tunney Act to ensure that a Final

Judgment in the form attached as

Exhibit A is entered by the Court at the

earliest practicable date. If the Court

should require modification to the Final

Judgment before entering it, SMC shall

not unreasonably withhold its

agreement to such modification.

5. The parties recognize that this

Agreement is being made in conjunction

with the Consent and Undertakings of

Defendants Steinhardt Management

Company, Inc. that SMC has entered

into with the SEC (the ‘‘SEC Consent’’)

in the form attached as Exhibit C, and

that, upon execution of the SEC

Consent, the SEC will file against SMC

a civil complaint alleging violations of

the securities laws, under the caption

Securities and Exchange Commission v.

Steinhardt Management Company, Inc.

and Caxton Corporation (the ‘‘Securities

Case’’).

6. Pursuant to this Agreement, the

SEC Consent, and the Final Judgment of

Permanent Injunction and Other Relief

as to Defendants Steinhardt

Management Company, Inc. in the

Securities Case (the ‘‘Securities Case

Final Judgment’’) in the form attached

as Exhibit D, SMC shall, at the times

specified in paragraph 12 and as

provided in the Securities Case final

judgment, pay the sum of $40 million as

follows:

(a) $19 million shall be paid to the

United States of America. Of this

amount, $12.5 million shall constitute a

civil forfeiture pursuant to the Sherman

Antitrust Act, 15 U.S.C. § 6, and shall be

paid to the Department of Justice Asset

Forfeiture Fund; the remaining $6.5

million shall constitute a civil penalty

pursuant to Section 20(d) of the

Securities Act, 15 U.S.C. § 77t(d), and

Section 21(d)(3) of the Exchange Act, 15

U.S.C. § 78u(d)(3), and shall be paid to

the Treasurer of the United States;

(b) $21 million shall be paid into a

disgorgement fund established by court

order in the Securities Case, upon terms

established by the Securities Case Final

Judgment, as entered by the Court. This

disgorgement fund shall be

administered and used as set forth in

the Securities Case Final Judgment.

Under no circumstances shall SMC be

entitled to a refund of any monies paid

pursuant to this Agreement; provided

that the foregoing shall not preclude

reimbursement of SMC from the

disgorgement fund in accordance with

the procedures governing such fund, in

respect of certain third-party claims

paid directly by SMC.

7. Should the Court for any reason not

order all or any part of the amount

specified in paragraph 6(a) to be

forfeited to the United States, the

difference between the amount ordered

forfeited by the Court in the captioned

case and the amount specified to be

forfeited to the United States by

paragraph 6(a), shall be paid to the

Treasurer of the United States pursuant

to the Final Judgment in the Securities

Case under Section 20(d) of the

Securities Act, 15 U.S.C. § 77t(d), and

Section 21(d)(3) of the Exchange Act, 15

U.S.C. § 78u(d)(3) (‘‘Additional Civil

Penalty’’). Upon the payment of the

Additional Civil Penalty, the releases

described in paragraph 3 shall be

effective.

8. SMC understands that the United

States has not waived the right of any

federal agency, with respect to SMC or

any other person: (a) to revoke or

suspend any license, certificate,

registration of or other form of

permission issued by such agency; (b) to

impose any penalty or to take any form

of punitive or disciplinary action; or (c)

to debar, suspend, disqualify, or

otherwise restrict or prohibit certain

transactions or other dealings with the

United States or with any of its agencies

or departments.

9. SMC hereby waives any right it

might have as a result of this Agreement

or any settlement arrangements

contemplated hereby under the United

States Supreme Court’s decision in

United States v. Halper, 490 U.S. 435

(1989), or in respect of the subject

matter of that case or under any other

existing or future decision relating to

that subject matter.

10. SMC neither admits nor denies

any of the factual allegations pertaining

to the matters described in the

Complaint to be filed pursuant to

paragraph 2, nor does SMC either admit

or deny any legal liability arising

therefrom. Nothing in this Agreement or

in the Final Judgment or any Order

contemplated hereby shall constitute a

finding of fact or conclusion of law or

otherwise provide any basis for

establishing such liability.

11. SMC shall pay the civil penalty

imposed by the Court in the Securities

Case and contribute the funds to

establish the disgorgement fund as

specified in the Securities Case Final

Judgment (collectively, the ‘‘Initial

Payment’’). Pursuant to this Agreement

and the Tunney Act, 15 U.S.C. §§ 16(b)

through (g), the forfeiture provided for

in the Final Judgment shall not be paid

until five (5) business days after SMC

receives notice of entry of the Final

Judgment, or such other order as

represents a final disposition of the

captioned case. At that time, in addition

to the $12.5 million payment specified

in the Final Judgment (‘‘Deferred

Payment’’), SMC shall forfeit an

‘‘Additional Amount,’’ as defined

below. The term ‘‘Additional Amount’’

shall mean an amount representing

interest on the Deferred Payment,

computed on the basis of a 365 day year,

at a rate per annum of 53⁄4%, from and

including the date of the Initial

Payment, but excluding the date on

which the Deferred Payment is made.

To the extent the Court does not impose

any portion of the Deferred Payment or

the Additional Amount, such amounts

shall nonetheless be paid to the United

States pursuant to paragraph 7 at the

time specified herein.

12. This Agreement, and all the terms

and provisions hereof, shall be binding

on the parties hereto and their
Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices 3269

respective successors and assigns, and

shall inure only to the benefit of the

parties hereto, and other person

specifically released pursuant to

paragraph 3, and their respective

successors and assigns, and no other

person shall be entitled to any benefits

hereunder.

13. No additional understandings,

promises, agreements and/or conditions

have been entered into by the parties

hereto with respect to the matters set

forth in this Agreement other than those

set forth herein and none will be

entered into unless in writing and

signed by all parties.

14. This Agreement may be executed

in multiple counterparts, each of which

shall constitute an original, but all of

which when taken together shall

constitute but one agreement.

15. This Agreement shall be deemed

to have been fully executed and

delivered when both the United States,

on the one hand, and SMC, on the other,

have received counterparts hereof

executed on behalf of the other party by

each of the signatories for such other

party set forth on the signature pages

hereof.

Agreed to:

December 14, 1994.

United States of America

John F. Greaney,

Chief, Computers and Finance Section,

Antitrust Division, Department of Justice.

December 15, 1994

Steinhardt Management Company, Inc.

Michael Steinhardt,

Chairman, Steinhardt Management

Company, Inc.

United States District Court, Southern

District of New York, United States of

America, Plaintiff, v. Steinhardt Management

Company, Inc.; and Caxton Corporation,

Defendants, and $12,500,000 That is the

Property of Steinhardt Management

Company, Inc.; Steinhardt Management

Company, Inc., Real Party in Interest and

$12,500,000 That is the Property of Caxton

Corporation, Caxton Corporation, Real Party

in Interest. 94 Civ. 9044.

Settlement Agreement

This Settlement Agreement

(‘‘Agreement’’) is made between the

UNITED STATES OF AMERICA

(‘‘Plaintiff’’) and CAXTON

CORPORATION (‘‘Caxton’’).

1. This Agreement is made to resolve

and forever to settle Caxton’s liability

under the antitrust laws for certain

conduct to be alleged in a Complaint to

be filed by the United States pursuant

to this Agreement. Upon the fulfillment

of the conditions set forth in this

Agreement, the releases described

herein shall be effective.

2. On the date of execution of this

Agreement,

(a) Plaintiff shall file a civil Complaint

alleging a violation of Section 1 of the

Sherman Act, 15 U.S.C. § 1, by Caxton

and others in connection with the

acquisition and trading of certain

United States Treasury notes;

(b) Plaintiff shall file a Final Judgment

in the form attached as Exhibit A, that,

if entered by the Court, would resolve

and settle the allegations of the

Complaint filed pursuant to

subparagraph (a), above;

(c) Plaintiff and Caxton shall execute

and file a Stipulation and Order in the

form attached as Exhibit B, stipulating

to the entry of a Final Judgment in the

form attached as Exhibit A.

3. In consideration of the sum of

money to be forfeited by Caxton

pursuant to the Final Judgment and

other of the agreements set forth herein,

upon entry of the Final Judgment in the

form attached as Exhibit A, or in such

other form as the Court may order

requiring payment of the civil forfeiture

specified in paragraph 6(a), Plaintiff

releases Caxton, Luttrell Capital

Management, Inc. (‘‘LCM’’), and their

present and former officers, employees,

directors and subsidiaries, and any

funds or accounts managed by Caxton or

LCM, from any civil liability or claims

whatsoever or any criminal liability for

any federal offense which was

committed prior to the date of this

Agreement and (a) which arose out of

the purchase, sale, financing or trading

of the two-year United States Treasury

notes issued in April 1991 or the twoyear United States Treasury notes issued

in May 1991 (together, ‘‘Specified

Notes’’) or (b) which arose out of any

conduct known to the Department of

Justice or the Securities and Exchange

Commission (‘‘SEC’’) related to any

investigation by the Department of

Justice or the SEC into the purchase,

sale, financing or trading of the

Specified Notes, or into any efforts to

interfere with, obstruct, mislead or

subvert any such investigation;

provided, however that nothing in this

Agreement shall apply to violations of

the federal tax laws, Title 26, United

States Code.

4. Plaintiff and Caxton recognize that

the Court may enter a Final Judgment

only after the parties have complied

with the provisions of the Tunney Act,

15 U.S.C. §§ 16 (b) through (g). The

parties shall use their best efforts to

comply with the procedures of the

Tunney Act to ensure that a Final

Judgment in the form attached as

Exhibit A is entered by the Court at the

earliest practicable date. If the Court

should require modification to the Final

Judgment before entering it, Caxton

shall not unreasonably withhold its

agreement to such modification.

5. The parties recognize that this

Agreement is being made in conjunction

with the Consent and Undertakings of

Defendant Caxton Corporation that

Caxton has entered into with the SEC

(the ‘‘SEC Consent’’) in the form

attached as Exhibit C, and that,

following execution of the SEC Consent,

the SEC will file against Caxton a civil

complaint alleging violations of the

securities laws, under the caption

Securities and Exchange Commission v.

Steinhardt Management Company, Inc.

and Caxton Corporation (the ‘‘Securities

Case’’).

6. Pursuant to this Agreement, the

SEC Consent, and the Final Judgment of

Permanent Injunction and Other Relief

as to Defendant Caxton Corporation in

the Securities Case (the ‘‘Securities Case

Final Judgment’’) in the form attached

as Exhibit D, Caxton shall, at the times

specified in paragraph 12 and as

provided in the Securities Case Final

Judgment, pay the sum of $36 million as

follows:

(a) $22 million shall be paid to the

United States of America. Of this

amount, $12.5 million shall constitute a

civil forfeiture pursuant to the Sherman

Antitrust Act, 15 U.S.C. § 6, and shall be

paid to the Department of Justice Asset

Forfeiture Fund; the remaining $9.5

million shall constitute a civil penalty

pursuant to Section 20(d) of the

Securities Act, 15 U.S.C. § 77t(d), and

Section 21(d)(3) of the Exchange Act, 15

U.S.C. § 78u(d)(3), and shall be paid to

the Treasurer of the United States;

(b) $14 million shall be paid into a

disgorgement fund established by Court

order in the Securities Case, upon terms

established by the Securities Case Final

Judgment, as entered by the Court. This

disgorgement fund shall be

administered and used as set forth in

the Securities Case Final Judgment.

Under no circumstances shall Caxton

be entitled to a refund of any monies

paid pursuant to this Agreement;

provided that the foregoing shall not

preclude reimbursement of Caxton from

the disgorgement fund in accordance

with the procedures governing such

fund, in respect of certain third-party

claims paid directly by Caxton.

7. Should the Court for any reason not

order all or any part of the amount

specified in paragraph 6(a) to be

forfeited to the United States, the

difference between the amount ordered

forfeited by the Court in the captioned

case and the amount specified to be

forfeited to the United States by

paragraph 6(a), shall be paid to the

Treasurer of the United States pursuant
3270 Federal Register / Vol. 60, No. 9 / Friday, January 13, 1995 / Notices

to the Final Judgment in the Securities

Case under Section 20(d) of the

Securities Act, 15 U.S.C. § 77t(d), and

Section 21(d)(3) of the Exchange Act, 15

U.S.C. § 78u(d)(3) (‘‘Additional Civil

Penalty’’). Upon the payment of the

Additional Civil Penalty, the releases

described in paragraph 3 shall be

effective.

8. Caxton understands that the United

States has not waived the right of any

federal agency, with respect to Caxton

or any other person: (a) to revoke or

suspend any license, certificate,

registration or other form of permission

issued by such agency; (b) to impose

any penalty or to take any form of

punitive or disciplinary action; or (c) to

debar, suspend, disqualify, or otherwise

restrict or prohibit certain transactions

or other dealings with the United States

or with any of its agencies or

departments.

9. Caxton hereby waives any right it

might have as a result of this Agreement

or any settlement arrangements

contemplated hereby under the United

States Supreme Court’s decision in

United States v. Halper, 490 U.S. 435

(1989), or in respect of the subject

matter of that case or under any other

existing or future decision relating to

that subject matter.

10. Caxton neither admits nor denies

any of the factual allegations pertaining

to the matters described in the

Complaint to be filed pursuant to

paragraph 2, nor does Caxton either

admit or deny any legal liability arising

therefrom. Nothing in this Agreement or

in the Final Judgment or any Order

contemplated hereby shall constitute a

finding of fact or conclusion of law or

otherwise provide any basis for

establishing such liability.

11. Caxton shall pay the civil penalty

imposed by the Court in the Securities

Case and contribute the funds to

establish the disgorgement fund as

specified in the Securities Case Final

Judgment (collectively, the ‘‘Initial

Payment’’). Pursuant to this Agreement

and the Tunney Act, 15 U.S.C. §§ 16 (b)

through (g), the forfeiture provided for

in the Final Judgment shall not be paid

until five (5) business days after Caxton

receives notice of entry of the Final

Judgment, or such other order as

represents a final disposition of the

captioned case. At that time, in addition

to the $12.5 million payment specified

in the Final Judgment (‘‘Deferred

Payment’’), Caxton shall forfeit an

‘‘Additional Amount,’’ as defined

below. The term ‘‘Additional Amount’’

shall mean an amount representing

interest on the Deferred Payment,

computed on the basis of a 365 day year,

at a rate per annum of 53⁄4%, from and

including the date of the Initial

Payment, but excluding the date on

which the Deferred Payment is made.

To the extent the Court does not impose

any portion of the Deferred Payment or

the Additional Amount, such amounts

shall nonetheless be paid to the United

States pursuant to paragraph 7 at the

time specified herein.

12. This Agreement, and all the terms

and provisions hereof, shall be binding

on the parties hereto and their

respective successors and assigns, and

shall inure only to the benefit of the

parties hereto, and other persons

specifically released pursuant to

paragraph 3, and their respective

successors and assigns, and no other

person shall be entitled to any benefits

hereunder.

13. No additional understandings,

promises, agreements and/or conditions

have been entered into by the parties

hereto with respect to the matters set

forth in this Agreement other than those

set forth herein and none will be

entered into unless in writing and

signed by all parties.

14. This Agreement may be executed

in multiple counterparts, each of which

shall constitute an original, but all of

which when taken together shall

constitute but one agreement.

15. This Agreement shall be deemed

to have been fully executed and

delivered when both the United States,

on the one hand, and Caxton, on the

other, have received counterparts hereof

executed on behalf of the other party by

each of the signatories for such other

party set forth on the signature pages

hereof.

Agreed to:

December 14, 1994.

United States of America

John F. Greaney,

Chief, Computers and Finance Section,

Antitrust Division, Department of Justice.

Caxton Corporation

December 15, 1994.

Peter P. D’Angelo,

President, Caxton Corporation.

[FR Doc. 95–781 Filed 1–12–95; 8:45 am]

BILLING CODE 4410–01–M

DEPARTMENT OF LABOR

Office of the Secretary

Glass Ceiling Commission;

Postponement of Commission

Meetings

SUMMARY: Due to the scheduling

difficulties of participants, the Glass

Ceiling Commission meetings have been

postponed. The meetings had been

announced previously in the Federal

Register of January 9, 1995, 60 FR 2403.

The Commission meetings were to take

place on Monday, January 23, 1995, 4:00

pm–7:00 pm and Tuesday, January 24,

1995, 9:00 am to 12 noon at the

Department of Labor. The Commission

meeting will be rescheduled at a later

date.

FOR FURTHER INFORMATION CONTACT: Ms.

Rene ́ A. Redwood, Executive Director,

Glass Ceiling Commission, U.S.

Department of Labor, 200 Constitution

Avenue NW., Room C–2313,

Washington, DC 20210, (202) 219–7342.

Signed at Washington, DC this 9th day of

January, 1995.

Rene ́ A. Redwood,

Executive Director.

[FR Doc. 95–910 Filed 1–12–95; 8:45 am]

BILLING CODE 4510–23–M

Employment Standards Administration

Wage and Hour Division

Minimum Wages for Federal and

Federally Assisted Construction;

General Wage Determination Decisions

General wage determination decisions

of the Secretary of Labor are issued in

accordance with applicable law and are

based on the information obtained by

the Department of Labor from its study

of local wage conditions and data made

available from other sources. They

specify the basic hourly wage rates and

fringe benefits which are determined to

be prevailing for the described classes of

laborers and mechanics employed on

construction projects of a similar

character and in the localities specified

therein.

The determinations in these decisions

of prevailing rates and fringe benefits

have been made in accordance with 29

CFR part 1, by authority of the Secretary

of Labor pursuant to the provisions of

the Davis-Bacon Act of March 3, 1931,

as amended (46 Stat. 1494, as amended,

40 U.S.C. 276a) and of other Federal

statutes referred to in 29 CFR part 1,

Appendix, as well as such additional

statutes as may from time to time be

enacted containing provisions for the

payment of wages determined to be

prevailing by the Secretary of Labor in

accordance with the Davis-Bacon Act.

The prevailing rates and fringe benefits

determined in these decisions shall, in

accordance with the provisions of the

foregoing statutes, constitute the

minimum wages payable on Federal and

federally assisted construction projects

to laborers and mechanics of the

specified classes engaged on contract

work of the character and in the

localities described therein.