UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
INVESTMENT ADVISERS ACT OF 1940
Release No. 1848 / December 22, 1999
INVESTMENT COMPANY ACT OF 1940
Release No. 24218 / December 22, 1999
ADMINISTRATIVE PROCEEDING
File No. 3-10121
In the Matter of
SCUDDER KEMPER INVESTMENTS, INC.,
and GARY PAUL JOHNSON
Respondents.
ORDER INSTITUTING PROCEEDINGS,
MAKING FINDINGS, IMPOSING
REMEDIAL SANCTIONS AND
CEASE-AND-DESIST ORDER
I.
The Securities and Exchange Commission ("Commission") deems it
appropriate and in the public interest that public administrative and
cease-and-desist proceedings be, and hereby are, instituted pursuant
to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940
(the "Advisers Act") and Sections 9(b) and 9(f) of the Investment
Company Act of 1940 (the "Investment Company Act") against Scudder
Kemper Investments, Inc. (the "registrant"), and pursuant to Section
203(f) of the Advisers Act against Gary Paul Johnson ("Johnson")
(collectively, the "Respondents").
II.
In anticipation of the institution of these administrative
proceedings, the Respondents have submitted Offers of Settlement
("Offers"), which the Commission has determined to accept. Solely for
the purpose of these proceedings, and any other proceedings brought by
or on behalf of the Commission or in which the Commission is a party,
prior to a hearing pursuant to the Commission's Rules of Practice, 17
C.F.R. Section 201.100 ., and without admitting or denying the
findings contained herein, except those findings pertaining to the
jurisdiction of the Commission over them and over the subject matter
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
and GARY PAUL JOHNSON
The Securities and Exchange Commission deems it appropriate and in the public interest that
In anticipation of the institution of these administrative proceedings, the Respondents have
Solely for the purpose of these proceedings, and any other proceedings brought by or on
the entry of this Order Instituting Proceedings, Making Findings, Imposing Remedial Sanctions and
The registrant is registered with the Commission as an investment adviser pursuant to Section
The registrant manages more than $280 billion in assets for mutual fund investors, retirement
Johnson, 50, was employed by the registrant from December 1987 to January 1999 and, at all
This matter arises from unauthorized trading by a former trader at the registrant's Boston
From at least July 1997 through October 9, 1998, the trader initiated over one hundred
Although the trader had been given limited discretion to execute a derivatives trading
The trader concealed his activities by miscoding order tickets, forging the signatures of the
The overlay program was a hedging strategy, designed to improve the risk-return profiles of
The portfolio managers for all of the participating accounts imposed a monthly basis point
By virtue of his conduct, the trader willfully violated Section 34of the Investment Company
Johnson was responsible for supervising both the trader and the overlay program through,
Section 203of the Advisers Act authorizes the Commission to impose sanctions against an
Johnson shall, within 30 days of the entry of this Order, pay a civil money penalty of
A copy of the cover letter and money order or check shall be sent to Juan Marcel Marcelino,
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