Document ID: SEC-2009-0800-0001
Agency: sec
Document Type: Notice
Title: Applications and Temporary Orders: Banc of America Securities LLC, et al.
Posted Date: 2009-06-15T04:00Z

[Federal Register: June 15, 2009 (Volume 74, Number 113)]
[Notices]               
[Page 28291-28293]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr15jn09-137]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28764; File No. 812-13662]

 
Banc of America Securities LLC, et al.; Notice of Application and 
Temporary Order

June 9, 2009.
AGENCY: Securities and Exchange Commission.

ACTION: Temporary order and notice of application for a permanent order 
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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SUMMARY: Summary of Application: Applicants have received a temporary 
order exempting them from section 9(a) of the Act, with respect to an 
injunction entered against Banc of America Securities LLC (``BAS'') and 
Banc of America Investment Services, Inc. (``BAI'') on June 9, 2009 by 
the United States District Court for the Southern District of New York 
(``Injunction'') until the Commission takes final action on an 
application for a permanent order. Applicants also have applied for a 
permanent order.

Applicants: BAS, BAI, Columbia Management Advisors, LLC (``CMA''), 
Columbia Wanger Asset Management, LP (``CWAM''), Columbia Management 
Distributors, Inc. (``CMDI''), Banc of America Investment Advisors, 
Inc. (``BAIA''), Bank of America Capital Advisors LLC (``BACA''), U.S. 
Trust Hedge Fund Management, Inc. (``USTHFM''), Merrill Lynch, Pierce, 
Fenner & Smith, Incorporated (``MLPFS''), IQ Investment Advisors LLC 
(``IQ''), Roszel Advisors, LLC (``Roszel''), Nuveen Asset Management 
(``NAM''), Nuveen Investments Advisers Inc. (``NIA''), Nuveen 
Investments Institutional Services Group, LLC (``ISG''), Nuveen 
HydePark Group, LLC (``Nuveen HydePark''), NWQ Investment Management 
Company LLC (``NWQ''), Nuveen Investment Solutions, Inc. (``NIS''), 
Santa Barbara Asset Management, LLC (``Santa Barbara''), Symphony Asset 
Management LLC (``Symphony''), Tradewinds Global Investors, LLC 
(``Tradewinds'') and Winslow Capital Management, Inc. (``Winslow'', 
together with NAM, NIA, ISG, Nuveen HydePark, NWQ, NIS,

[[Page 28292]]

Santa Barbara, Symphony and Tradewinds, the ``Nuveen Advisers''), 
Nuveen Investments, LLC (``Nuveen Investments''), KECALP Inc. 
(``KECALP'') and Merrill Lynch Ventures, LLC (``Ventures'') 
(collectively, ``Applicants'').\1\
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    \1\ Applicants request that any relief granted pursuant to the 
application also apply to any other company of which BAS or BAI is 
or may become an affiliated person (together with the Applicants, 
the ``Covered Persons'').

DATES: Filing Date: The application was filed on June 3, 2009. 
Applicants have agreed to file an amendment during the notice period, 
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the substance of which is reflected in this notice.

Hearing or Notification of Hearing: An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests should be received by the Commission by 5:30 
p.m. on July 6, 2009, and should be accompanied by proof of service on 
applicants, 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 
who wish to be notified of a hearing may request notification by 
writing to the Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants: BAS, One Bryant 
Park, New York, NY 10036; BAI, CMA, BAIA, BACA, 100 Federal Street, 
Boston, MA 02110; CWAM, 227 West Monroe Street, Suite 3000, Chicago, IL 
60606; CMDI, One Financial Center, Boston, MA 02110; USTHFM, 225 High 
Ridge Road, West Building, Stamford, CT 06905; MLPFS, IQ, KECALP, 
Ventures, North Tower, 4 World Financial Center, New York, NY 10080; 
Roszel, 1700 Merrill Lynch Drive, Pennington, NJ 08534; and the Nuveen 
Advisers and Nuveen Investments, 333 West Wacker Drive, Chicago, IL 
60606.

FOR FURTHER INFORMATION CONTACT: Emerson S. Davis, Senior Counsel, at 
202-551-6868, or Julia Kim Gilmer, Branch Chief, at 202-551-6821 
(Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a temporary order and a 
summary of the application. The complete application may be obtained 
via the Commission's Web site by searching for the file number, or an 
applicant using the Company name box, at http://www.sec.gov/search/
search.htm or by calling (202) 551-8090.

Applicants' Representations

    1. BAS, an indirect wholly owned subsidiary of Bank of America 
Corporation (``BAC''), is a full service U.S. investment bank and 
brokerage firm that provides a wide range of investment banking, and 
financial advisory services to corporate, institutional and individual 
clients. BAS is registered as an investment adviser under the 
Investment Advisers Act of 1940 (``Advisers Act'') and is registered as 
a broker-dealer under the Securities Exchange Act of 1934 (``Exchange 
Act''). BAI is a wholly owned subsidiary of Bank of America, N.A. and 
also an indirect subsidiary of BAC. BAI is registered as an investment 
adviser under the Advisers Act and is registered as a broker-dealer 
under the Exchange Act. While BAS and BAI do not currently serve, and 
no existing company of which BAS or BAI is an affiliated person (other 
than the Applicants) currently serves, as investment adviser, depositor 
or principal underwriter for a registered investment company (``RIC''), 
or principal underwriter for any registered open-end investment 
company, registered investment trust (``UIT'') or face amount 
certificate company or employees' securities companies (``ESC'', and 
together with RICs, the ``Funds,'' and such services, the ``Fund 
Servicing Activities''), each may do so in the future. CMA, CWAM, BAIA, 
BACA, USTHFM, IQ, Roszel, the Nuveen Advisers and KECALP are registered 
as investment advisers under the Advisers Act and provide investment 
advisory or subadvisory services to Funds. Ventures provides investment 
advisory services to an ESC. CMDI, MLPFS and Nuveen Investments are 
registered as broker-dealers under the Exchange Act and serve as 
principal underwriters for certain Funds. Nuveen Investments also 
serves as depositor to certain UITs.
    2. On June 9, 2009, the United States District Court for the 
Southern District of New York entered a judgment, which included the 
Injunction, against BAS and BAI (``Judgment'') in a matter brought by 
the Commission.\2\ The Commission alleged in the complaint 
(``Complaint'') that BAS and BAI violated section 15(c) of the Exchange 
Act in connection with the marketing and sale of auction rate 
securities (``ARS''). The Complaint alleged that BAS and BAI misled 
customers regarding the fundamental nature and increasing risk 
associated with ARS that they underwrote, marketed and sold. Without 
admitting or denying any of the allegations in the Complaint, except as 
to jurisdiction, BAS and BAI consented to the entry of the Judgment 
that included, among other things, the entry of the Injunction and 
certain undertakings to take various remedial actions for the benefit 
of purchasers of certain ARS.
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    \2\ Securities and Exchange Commission v. Banc of America 
Securities LLC and Banc of America Investment Services, Inc., 
Judgment against Banc of America Securities LLC and Banc of America 
Investment Services, Inc., 09 CIV 5170 (S.D.N.Y., entered June 9, 
2009).
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Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act, in relevant part, prohibits a person 
who has been enjoined from engaging in or continuing any conduct or 
practice in connection with the purchase or sale of a security, or in 
connection with activities as an underwriter, broker or dealer, from 
acting, among other things, as an investment adviser or depositor of 
any registered investment company or a principal underwriter for any 
registered open-end investment company, registered unit investment 
trust, or registered face-amount certificate company. Section 9(a)(3) 
of the Act makes the prohibition in section 9(a)(2) applicable to a 
company, any affiliated person of which has been disqualified under the 
provisions of section 9(a)(2). Section 2(a)(3) of the Act defines 
``affiliated person'' to include, among others, any person directly or 
indirectly controlling, controlled by, or under common control, with 
the other person. Applicants state that BAS and BAI are or may be 
considered affiliated persons of each of the other Applicants within 
the meaning of section 2(a)(3). Applicants state that, as a result of 
the Injunction, they would be subject to the prohibitions of section 
9(a).
    2. Section 9(c) of the Act provides that the Commission shall grant 
an application for exemption from the disqualification provisions of 
section 9(a) of the Act if it is established that these provisions, as 
applied to Applicants, are unduly or disproportionately severe or that 
the conduct of the Applicants has been such as not to make it against 
the public interest or the protection of investors to grant the 
exemption. Applicants have filed an application pursuant to section 
9(c) seeking a temporary and permanent order exempting the Applicants 
and the other Covered Persons from the disqualification provisions of 
section 9(a).

[[Page 28293]]

    3. Applicants believe they meet the standards for exemption 
specified in section 9(c). Applicants state that the prohibitions of 
section 9(a) as applied to them would be unduly and disproportionately 
severe and that the conduct of Applicants has been such as not to make 
it against the public interest or the protection of investors to grant 
the requested exemption from section 9(a).
    4. Applicants state that the conduct alleged in the Complaint did 
not involve any of the Applicants acting in their capacity as 
investment adviser, sub-adviser, depositor or principal underwriter for 
any of the Funds. Applicants also state that to the best of their 
knowledge, none of the current directors and officers of the Applicants 
(other than BAS and BAI) or their employees that engage in Fund 
Servicing Activities (or any other persons in such roles during the 
time period covered by the Complaint) participated in the conduct 
alleged in the Complaint to have constituted the violations that 
provide a basis for the Injunction. Applicants further state that any 
personnel at BAS and BAI who participated in the conduct alleged in the 
Complaint to have constituted the violations that provide a basis for 
the Injunction have had no, and will not have any future involvement in 
the Applicants' Fund Servicing Activities.
    5. Applicants state that the inability of the Applicants to engage 
in Fund Servicing Activities would result in potentially severe 
financial hardships for the Funds they serve and the Funds' 
shareholders or unitholders. Applicants state that they will distribute 
written materials, including an offer to meet in person to discuss the 
materials, to the boards of directors of the Funds (the ``Boards''), 
including the directors who are not ``interested persons,'' as defined 
in section 2(a)(19) of the Act, of the Funds and their independent 
legal counsel as defined in rule 0-1(a)(6) under the Act, if any, 
regarding the Injunction, any impact on the Funds, and the application. 
Applicants state that they will provide the Boards with all information 
concerning the Injunction and the application that is necessary for the 
Funds to fulfill their disclosure and other obligations under the 
Federal securities laws.
    6. Applicants also state that, if they were barred from providing 
Fund Servicing Activities to the Funds, the effect on their businesses 
and employees would be severe. Applicants state that they have 
committed substantial capital and resources to establishing an 
expertise in providing Fund Servicing Activities. Applicants further 
state that prohibiting them from providing Fund Servicing Activities 
would not only adversely affect their businesses (except for BAI and 
BAS) but would also adversely affect their employees who are involved 
in Fund Servicing Activities. Applicants also state that disqualifying 
KECALP and Ventures from continuing to provide investment advisory 
services to ESCs is not in the public interest or in furtherance of the 
protection of investors and would frustrate the expectations of 
eligible employees who invest in ESCs. Applicants state that it would 
not be consistent with the purposes of the ESC provisions of the Act to 
require another entity not affiliated with Merrill Lynch & Co., Inc., 
or BAC to manage the ESCs.
    7. Applicants state that several Applicants and certain of their 
affiliates have previously received orders under section 9(c), as 
described in greater detail in the application.

Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Any temporary exemption granted pursuant to the application shall 
be without prejudice to, and shall not limit the Commission's rights in 
any manner with respect to, any Commission investigation of, or 
administrative proceedings involving or against, Covered Persons, 
including without limitation, the consideration by the Commission of a 
permanent exemption from section 9(a) of the Act requested pursuant to 
the application or the revocation or removal of any temporary 
exemptions granted under the Act in connection with the application.

Temporary Order

    The Commission has considered the matter and finds that the 
Applicants have made the necessary showing to justify granting a 
temporary exemption.
    Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that 
Applicants and any other Covered Persons are granted a temporary 
exemption from the provisions of section 9(a), solely with respect to 
the Injunction, subject to the condition in the application, from June 
9, 2009, until the Commission takes final action on their application 
for a permanent order.

    By the Commission.
Florence E. Harmon,
Deputy Secretary.
[FR Doc. E9-14006 Filed 6-12-09; 8:45 am]

BILLING CODE 8010-01-P