Free Order on Motion for Disbursement of Funds - District Court of Arizona - Arizona

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 v. SECURITY TRUST COMPANY, N.A., et al., Defendants. SECURITIES AND EXCHANGE COMMISSION, Plaintiff, Case No. CV-03-2323-PHX-JWS ORDER GRANTING PLAINTIFF SECURITIES AND EXCHANGE COMMISSION'S MOTION FOR (1) PERMISSION TO DEPOSIT FUNDS INTO THE COURT'S REGISTRY ACCOUNT; (2) APPROVAL OF A DISTRIBUTION PLAN; (3) APPOINTMENT OF A TAX ADMINISTRATOR; AND (4) PAYMENT OF FEES TO THE TAX ADMINISTRATOR UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA

Having considered Plaintiff Securities and Exchange Commission's ("Commission") Motion for (1) Permission to Deposit Funds into the Court's Registry Account; (2) Approval of a Distribution Plan; (3) Appointment of a Tax Administrator; and (4) Payment of Fees to the Tax Administrator (the "Motion"), IT IS HEREBY ORDERED THAT: 1. 2. The Motion is granted. The $50,000 paid by defendant Grant D. Seeger (paid by

check dated October 27, 2005, bearing check number 1022, and issued from the account named HAFETZ & NECHELES ATTORNEY AT
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LAW, Escrow Bookkeeper Services) and the $50,000 paid by defendant William A. Kenyon (paid by check dated October 27, 2005, bearing check number 1004, and issued from the account named GERALD L. SHARGEL - IOLA) as restitution in connection with their pleas of guilty in the criminal action brought by the New York Attorney General may be deposited into the registry of this Court, where $1 million has previously been deposited for purposes of distribution subject to the Court's approval (the "Distribution Fund"). 3. The Commission's distribution plan as set forth in the

Motion (the "Distribution Plan"), being fair, reasonable and equitable, is approved. 4. Damasco and Associates ("Damasco") is appointed Tax

Administrator for the Distribution Fund. The Tax Administrator shall have the following powers and duties: a. To execute all income tax reporting requirements,

including the preparation and filing of tax returns, with respect to the Distribution Fund; b. Damasco shall be designated the administrator of the

Distribution Fund, pursuant to Section 468B(g) of the Internal Revenue Code, 26 U.S.C. § 468B(g), and related regulations, and shall satisfy the administrative requirements imposed by those regulations, including but not limited to: (I) obtaining a taxpayer identification number; (ii) filing applicable federal, state, and local tax returns and paying taxes reported thereon out of the Distribution Fund, and (iii) satisfying any information, reporting, or withholding requirements imposed on distributions from the Distribution Fund. c. The Tax Administrator shall contemporaneously

provide copies of all tax filings to the Commission's counsel of record.
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In exchange for performing the services described herein, the Tax Administrator shall be entitled to fees of $1,500 for preparation of each annual income tax return, in accordance with the agreement between Damasco and the Commission. The Tax Administrator's fee of $3,000 (or $4,500, if tax returns are required for 2006) shall be paid out of the Distribution Fund. 5. After deposit into the registry of this Court of the $100,000

in restitution funds obtained by the New York Attorney General, and after the taxes and Tax Administrator's fee have been paid out of the Distribution Fund, the Clerk shall mail checks to each of the following mutual funds. The amount of each check shall be calculated based on the percentage pro rata share of the remainder of the Distribution Fund as set forth below.

Name and Address of Mutual Fund AIM Dynamics Inv 11 Greenway Plaza, Suite 100 Houston, TX 77046

Percentage Pro Rata Share 36.9%

MFS Emerging Growth A 500 Boylston Street, 15th Floor Boston, MA 02116

9.1%

AIM Technology Inv 11 Greenway Plaza, Suite 100 Houston, TX 77046

4.9%

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Legg Mason Value Prim 100 Light Street Baltimore, MD 21203

3.8%

AIM Dynamics C 11 Greenway Plaza, Suite 100 Houston, TX 77046

3.1%

SEI International Trust Equity A SEI Investments, Attn: Caren Rosch 1 Freedom Circle Drive Oaks, PA 19456

2.7%

2.6% Artisan International Fund 875 East Wisconsin Avenue Suite 800 Milwaukee, WI 53202

Alger MidCap Growth A 111 Fifth Avenue New York, NY 10003

2.4%

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SEI International Emerging Markets A SEI Investments, Attn: Caren Rosch 1 Freedom Circle Drive Oaks, PA 19456

2.2%

AXP Threadneedle International Y 50606 Ameriprise Financial Center, H27/52 Minneapolis, MN 55474

2.1%

Northeast Investors 150 Federal Street, Suite 1000 Boston, MA 02110

2.1%

Merrill Lynch International Value R 800 Scudders Mill Road Plainsboro, NJ 08536

2.0%

JPMorgan International Eq A c/o J.P. Morgan Fund Distributors, Inc. 522 Fifth Avenue, 11th Floor New York, NY 10036

1.9%

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Alger Capital Appreciation A 111 Fifth Avenue New York, NY 10003

1.9%

JPMorgan Large Cap Growth A c/o J.P. Morgan Fund Distributors, Inc. 522 Fifth Avenue, 11th Floor New York, NY 10036

1.9%

Nicholas 700 N. Water Street Milwaukee, WI 53202

1.9%

Wells Fargo Advantage International Eq A Wells Fargo Funds Trust 525 Market Street San Francisco, CA 94163

1.7%

Legg Mason Opportunity Prim 100 Light Street Baltimore, MD 21202

1.7%

Alger LargeCap Growth A 111 Fifth Avenue New York, NY 10003

1.7%

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JPMorgan International Equity Index A c/o J.P. Morgan Fund Distributors, Inc. 522 Fifth Avenue, 11th Floor New York, NY 10036

1.5%

MFS Massachusetts Investors Trust A 500 Boylston Street, 15th Floor Boston, MA 02116

1.5%

Tweedy, Browne Global Value 350 Park Avenue, 9th Floor New York, NY 10022

1.5%

Loomis Sayles Bond Instl 399 Boylston Street Boston, MA 02116

1.2%

Merrill Lynch International Value A 800 Scudders Mill Road Plainsboro, NJ 08536

1.2%

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JPMorgan U.S. Equity A c/o J.P. Morgan Fund Distributors, Inc. 522 Fifth Avenue, 11th Floor New York, NY 10036

1.2%

Dreyfus Premier International Gr A 200 Park Avenue, 8th Floor The Dreyfus Corporation New York, NY 10166

1.2%

MFS Massachusetts Investors Gr Stk A 500 Boylston Street, 15th Floor Boston, MA 02116

1.1%

Wells Fargo Advantage Intl Eq Adm Wells Fargo Funds Trust 525 Market Street San Francisco, CA 94163

1.1%

MFS Research A 500 Boylston Street, 15th Floor Boston, MA 02116

1%

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Spectra Fund A 111 Fifth Avenue New York, NY 10003

0.9%

IT IS SO ORDERED. DATED at Anchorage, Alaska, this 16th day of December 2005.

/s/ JOHN W. SEDWICK UNITED STATES DISTRICT JUDGE

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