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7 Dec 2011 18:02
North Atlantic Smaller Companies Investment Trust PLC
7 December 2011
Changes to director information
In accordance with Listing Rules 9.6.14(1) and 9.6.13(6), North Atlantic Smaller Companies Investment Trust PLC (the 'Company') announces that on 21 November 2011 an order instituting administrative proceedings pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions was issued by the United States Securities and Exchange Commission (the 'SEC') on terms that Oliver R. Grace, Jr. ('Mr. Grace'), one of the Company's directors, be "barred from association with any broker, dealer, investment adviser, municipal securities dealer, municipal adviser, transfer agent, or nationally recognized statistical rating organization, with the right to reapply for reentry after three (3) years to the appropriate self-regulatory organization, or if there is none, to the Commission".
The sanction quoted above followed the entry by consent of a final judgment against Mr. Grace on 7 November 2011 in the United States District Court for the District of Columbia permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The judgment by consent related to the civil action entitled Securities and Exchange Commission v. Drake Asset Management, LLC and Oliver R Grace, Jr., Civil Action Number 11-01905.
Litigation Release No. 22145 of the SEC dated 31 October 2011 stated that the final judgment by consent, settlement of which was subject to approval by the relevant court, ordered Mr. Grace to pay US$ 838,285 in disgorgement and prejudgment interest and imposed a civil monetary penalty of US$ 150,000.
The SEC's complaint dated 31 October 2011 (the 'Complaint'), the allegations of which Mr. Grace neither admits nor denies, alleged that from 2003 to 2007 Mr. Grace employed a scheme to evade the group purchase limits in seven bank mutual-to-stock conversion offerings. The Complaint alleged that Mr. Grace knowingly or recklessly failed to disclose on stock order forms his associations with certain entities, including Drake Associates L.P. ('Drake') and Diversified Long-Term Growth Fund L.P. ('Diversified'), which participated in five of the conversion offerings alongside Mr. Grace. The Complaint also alleged that Drake Asset Management, LLC, under Mr. Grace's oversight and supervision, knowingly or recklessly failed to disclose on Drake's and Diversified's stock order forms their association with Mr. Grace. The Complaint further alleged that Mr. Grace arranged for his associated entities to use addresses or signatories on order forms that would prevent converting banks from associating those orders with Mr. Grace. The Complaint stated that, by failing to disclose these entities, Mr. Grace was able to acquire stock that exceeded the conversion offerings' purchase limits, in violation of the relevant offering terms and banking regulations.
The Hon. Peregrine Moncreiffe
Chairman
Tel: 01738 813 711
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