Document ID: SEC-2005-0387-0001
Agency: sec
Document Type: Notice
Title: Riverton Management, Inc.; Notice of Application
Posted Date: 2005-12-15T05:00Z

[Federal Register: December 15, 2005 (Volume 70, Number 240)]
[Notices]               
[Page 74381-74382]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15de05-99]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IA-2459 / 803-182]

 
Riverton Management, Inc.; Notice of Application

December 9, 2005.
AGENCY: Securities and Exchange Commission (``SEC'').

ACTION: Notice of Application for Exemption under the Investment 
Advisers Act of 1940 (``Advisers Act'').

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Applicant: Riverton Management, Inc. (``Applicant'').

Relevant Advisers Act Sections: Exemption requested under section 
202(a)(11)(F) from section 202(a)(11).

Summary of Application: Applicant requests that the SEC issue an order 
declaring it and its employees acting within the scope of their 
employment to be persons not within the intent of section 202(a)(11), 
which defines the term ``investment adviser.''

Filing Dates: The application was filed on March 23, 2005, and amended 
on November 14, 2005.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the SEC orders a hearing. Interested persons may 
request a hearing by writing to the SEC's Secretary and serving 
Applicant with a copy of the request, personally or by mail. Hearing 
requests should be received by the SEC by 5:30 p.m. on January 5, 2006 
and should be accompanied by proof of service on Applicant, in the form 
of an affidavit or, for lawyers, a certificate of service. Hearing 
requests should state the nature of the writer's interest, the reason 
for the request, and the issues contested. Persons may request 
notification of a hearing by writing to the SEC's Secretary.

ADDRESSES: Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-9303. Applicant, Riverton Management, Inc., 
c/o Steven R. Kruger, Esq. or Charles C. Berquist, Esq., Best & 
Flanagan LLP, 225 South Sixth Street, Suite 4000, Minneapolis, 
Minnesota 55402.

FOR FURTHER INFORMATION CONTACT: Catherine E. Marshall, Senior Counsel, 
or Jennifer Sawin, Assistant Director, at (202) 551-6787 (Division of 
Investment Management, Office of Investment Adviser Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
SEC's Public Reference Branch.

Applicant's Representations

    1. Applicant was incorporated in 2001 to serve as a ``family 
office'' for the members of the Jerome family and their investments and 
businesses.
    2. Applicant provides investment advisory services to: (i) Wallace 
Jerome, the lineal descendants of Wallace and Marion Jerome and spouses 
of those lineal descendants (the ``Jerome Family''); and (ii) trusts 
all of the primary beneficiaries of which are members of the Jerome 
Family, charitable trusts and foundations created by members of the 
Jerome Family, and for-profit organizations (including family 
investment partnerships) that are wholly-owned directly and indirectly 
by members of the Jerome Family and/or by the trusts, charitable trusts 
and foundations described above (each of which is a ``Jerome Family 
Entity'').
    3. Applicant's investment advisory services include: discretionary 
hiring, supervising and terminating of third-party registered 
investment advisers; reviewing performance data and preparing reports; 
monitoring and adjusting asset allocations; and advising on the 
purchase and sale of mutual funds (the ``Advisory Services''). 
Applicant will provide Advisory Services only to members of the Jerome 
Family and to Jerome Family Entities (``Advisory Clients''). Applicant 
represents that the Advisory Services currently are performed primarily 
for three family investment partnerships and that sometimes it provides 
Advisory

[[Page 74382]]

Services to individual members of the Jerome Family.\1\
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    \1\ Applicant states that each of the family investment 
partnerships that is a Jerome Family Entity is and will be owned by 
not more than 100 persons, will not make a public offering of its 
securities, and will come within the exception to the definition of 
``investment company'' provided in section 3(c)(1) of the Investment 
Company Act of 1940.
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    4. Applicant states that only 16 percent of the total estimated 
hours worked by all of its employees are spent providing Advisory 
Services to Advisory Clients. Applicant also provides non-advisory 
services to members of the Jerome Family, Jerome Family Entities, and 
other controlled Jerome Family businesses. Applicant's non-advisory 
services include: direct management of real estate parcels owned by the 
Jerome Family's real estate limited partnerships; direct management of 
auto dealerships owned by the Jerome Family and two key employees; tax 
planning; trust administration; cash flow planning; estate planning; 
coordination of banking and other financial accounts; and miscellaneous 
bookkeeping and administrative services.
    5. Applicant represents that the fees received for Advisory 
Services are not designed to generate a profit.
    6. Applicant is owned exclusively by members of the Jerome Family, 
and its Board of Directors is composed exclusively of members of the 
Jerome Family.
    7. Applicant represents that it will not hold itself out to the 
public as an investment adviser. Applicant represents that it is not 
listed in any phone book or any other directory as an investment 
adviser. Applicant further represents that it does not engage in 
advertising or marketing activities, and that it will not solicit or 
accept as an advisory client any person who is not a member of the 
Jerome Family or a Jerome Family Entity.

Applicant's Legal Analysis

    1. Section 202(a)(11) of the Advisers Act defines the term 
``investment adviser'' to mean ``any person who, for compensation, 
engages in the business of advising others, either directly or through 
publications or writings, as to the value of securities or as to the 
advisability of investing in, purchasing, or selling securities, or 
who, for compensation and as part of a regular business, issues or 
promulgates analyses or reports concerning securities * * *.'' Section 
202(a)(11)(F) of the Advisers Act authorizes the SEC to exclude from 
the definition of ``investment adviser'' persons not within the intent 
of section 202(a)(11).
    2. Section 203(b) of the Advisers Act provides exemptions from 
registration under section 203(a). Applicant represents that it does 
not qualify for any of the exemptions from registration provided by 
section 203(b) and that it is not prohibited from registering with the 
SEC under section 203A.
    3. Applicant requests that the SEC issue an order pursuant to 
section 202(a)(11)(F) declaring it, and its employees acting within the 
scope of their employment, to be persons not within the intent of 
section 202(a)(11).
    4. Applicant asserts that there is no public interest in requiring 
Applicant to be registered under the Advisers Act because there is 
substantial overlap between the persons who control Applicant and the 
persons who receive Advisory Services from Applicant and because there 
are no members of the general public who will be receiving Advisory 
Services and whose interests need protection. Applicant states that it 
is a private organization that was formed to provide ``family office'' 
services for clients, consisting exclusively of members of the Jerome 
Family and Jerome Family controlled entities. Applicant further states 
that all of its outstanding stock is owned by members of the Jerome 
Family and that its Board of Directors consists of five persons who are 
members of the Jerome Family. Applicant also states that: it does not 
hold itself out to the public as an investment adviser; does not engage 
in any advertising; will not offer or provide Advisory Services to 
persons other than Advisory Clients, all of whom are either members of 
the Jerome Family or Jerome Family Entities; and its services as a 
``family office'' will remain its exclusive function.

    For the SEC, by the Division of Investment Management, under 
delegated authority.
Jonathan G. Katz,
Secretary.
 [FR Doc. E5-7363 Filed 12-14-05; 8:45 am]

BILLING CODE 8010-01-P