Merrill Lynch & Co., Inc. (Order Granting Waiver Under Rule 602(e) of the Securities Act of 1933)
Overview
Securities Act of 1933
Release No. 8205 / March 17, 2003
Securities Exchange Act of 1934
Release No. 47513 / March 17, 2003
In the Matter of
MERRILL LYNCH & CO., INC.
Respondent.
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ORDER UNDER RULE 602(e) OF THE SECURITIES ACT OF 1933 GRANTING A WAIVER OF THE DISQUALIFICATION PROVISION OF RULE 602(b)(4)
Merrill Lynch & Co., Inc. has submitted a letter, dated March 6, 2003, requesting a waiver of the disqualification from the exemption under Regulation E of the Securities Act of 1933 arising from the settlement of a civil injunctive proceeding with the Commission. On March 17, 2003, the Commission filed a civil injunctive complaint against Merrill Lynch & Co., Inc. and four individual defendants in the United States District Court for the Southern District of Texas alleging that Merrill Lynch and four individual defendants aided and abetted Enron Corp.'s violations of Sections 10(b), 13(a), 13(b)(2), and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1.
Pursuant to an Offer of Settlement from Merrill Lynch, Merrill Lynch simultaneously filed a "Consent of Merrill Lynch & Co., Inc." in which it agreed, without admitting or denying the allegations of the Commission's complaint, to the entry of a Final Judgment against it. Among other things, the Final Judgment permanently enjoins Merrill Lynch from violating Sections 10(b), 13(a), 13(b)(2), and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-13, and 13b2-1 and orders Merrill Lynch to pay $80 million in disgorgement, penalties and interest.
Rule 602(b)(4) makes the Regulation E exemption unavailable to an issuer if, among other things, such issuer or any of its affiliates is subject to any "order, judgment, or decree of any court of competent jurisdiction, entered within five years prior to the filing of such [Regulation E] notification, temporarily or permanently restraining or enjoining such person from engaging in or continuing any conduct or practice in connection with the purchase or sale of securities." However, the Commission may waive the disqualification upon a showing of good cause. See Rule 602(e).
Based upon the representations set forth in Merrill Lynch's March 6, 2003 request, the Commission has determined that a showing of good cause has been made pursuant to Rule 602(e) and that the request for a waiver of the disqualification should be granted.
Accordingly, IT IS ORDERED, pursuant to Rule 602(e) under the Securities Act, that a waiver from the application of the disqualification provision of Rule 602(b)(4) under the Securities Act resulting from the entry of the Order is hereby granted.
By the Commission.
Jonathan G. Katz
Secretary