SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
SECURITIES ACT OF 1933
Rel. No. 8274 / August 25, 2003
INVESTMENT COMPANY ACT OF 1940
Rel. No. 26169 / August 25, 2003
Admin. Proc. File No. 3-9730
_________________________________________________________________
In the Matter of
BYRON G. BORGARDT
and
ERIC M. BANHAZL
_________________________________________________________________
OPINION OF THE COMMISSION
CEASE-AND-DESIST PROCEEDING
Antifraud Violations
Two officers of a registered investment company, one of whom was also
a director of the company, caused and committed violations of
antifraud provisions of the federal securities laws by causing the
company to file registration statements with the Commission from which
material information was omitted. , it is in the public interest for
each respondent to be ordered to cease and desist from committing or
causing further antifraud violations.
APPEARANCES
, of Swidler Berlin Shereff Friedman, LLP, for Eric M. Banhazl.
, Law Offices of Irving Einhorn, for Byron G. Borgardt.
, for the Division of Enforcement.
Appeal filed June 22, 2000
Last brief received October 19, 2000
Oral argument April 30, 2003
I.
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
Two officers of a registered investment company, one of whom was also a director of the
it is in the public interest for each respondent to be ordered to cease and desist from
, of Swidler Berlin Shereff Friedman, LLP, for Eric M. Banhazl.
, Law Offices of Irving Einhorn, for Byron G. Borgardt.
Respondents Byron G. Borgardt and Eric M. Banhazl, as well as the Division of Enforcement,
From April 28, 1992 to May 3, 1994, Borgardt was president and a director of Target Income
The omitted facts pertained to the Fund's special relationship with Concord Growth
The second Fund director, Borgardt, was in charge of selecting loan participations offered by
The law judge found that the Respondents caused the Fund's violations of Sections 17and 17of
He ordered the Respondents to cease and desist from causing any violations or future
Hicks discussed his idea of starting a mutual fund with Matthew Carpenter, who was Concord's
In late 1991, Jeffers attended several pre-organizational meetings at which Banhazl,
Rutherford served as chairman of the board and chief executive officer of Concord; he was
he was concerned that including such a disclosure might give investors the impression that
The examination later developed into aninvestigation, which led to this proceeding.
the law judge granted the Division's motion to amend the OIP.
Respondents argue that the amendment should not have been allowed, contending that the
The Ratner Report concluded, among other things, that the Fund's registration statements
Section 34of the Investment Company Act, among other things, makes it unlawful for any person
Once the basis for Jeffers' opinion proved to be incorrect, Respondents, as officers of the
the court stated that requiring a higher level of proof regarding knowledge of materiality
|
