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News January 3, 2005 Issue

Solicitation Questionnaire

This questionnaire can be used as part of an effort to determine whether a potential solicitor is subject to one of the disqualifying events in Advisers Act Rule 206(4)-3, the cash solicitation rule (see IM Insight December 13, 2004 and December 20, 2004).

A few things to keep in mind:

  • This questionnaire covers only the events that trigger disqualification under Rule 206(4)-3. There may be other types of questions that you might want to ask your potential solicitors (for example, information about the solicitorís registrations and affiliations). And there may be other items you want to put on the form (for example, instructions, a signature line certifying the solicitorís truthfulness, a date line, etc.)
  • For any "yes" answer you receive, you may want to follow up with the solicitor and request a copy of any court order or other document memorializing the disciplinary event, to confirm that the reported event is, in fact, disqualifying. Donít forget to ask whether the solicitor has obtained no-action relief from the SEC staff permitting him to serve as a solicitor, despite the disqualifying event.
  • For best results, check with your favorite lawyer before relying on this or any other model form.

1. SEC order

Have you ever been subject to an SEC order under Advisers Act 203(f) (namely, an SEC order that censured you, placed limitations on your adviser-related activities, suspended you from being associated with an investment adviser, or barred you from being associated with an investment adviser)?

___ yes ___ no

2. Felonies and misdemeanors

A. Within the past 10 years, have you ever been convicted of any felony?

___ yes ___ no

B. Within the past 10 years, have you ever been convicted of any misdemeanor?

___ yes ___ no

C. If you answered "yes" to either A or B above, did the felony or misdemeanor involve:

  • the purchase or sale of any security, the taking of a false oath, the making of a false report, bribery, perjury, burglary, any substantially equivalent activity under foreign law, or conspiracy to commit any such offense?

___ yes ___ no

  • the business of an investment adviser, broker, dealer, municipal securities dealer, bank, insurance company, government securities broker or dealer, fiduciary, transfer agent, the business of a foreign person or company performing a function substantially equivalent to any of the above, or a person or entity required to be registered under the Commodity Exchange Act or any substantially equivalent statute or regulation?

___ yes ___ no

  • larceny, theft, robbery, extortion, forgery, counterfeiting, fraudulent concealment, embezzlement, fraudulent conversion, or misappropriation of funds or securities or substantially equivalent activity under foreign law?

___ yes ___ no

  • violation of one of the following:

o 18 USC Section 152 (concealment of assets, false oaths and claims, or bribery, in connection with a bankruptcy proceeding)?

___ yes ___ no

o 18 USC Sections 1341, 1342, or 1343 (dealing with a variety of frauds: mail fraud, wire fraud, and fraud by means of radio or television, etc.)?

___ yes ___ no

o 18 USC Chapter 25 (dealing with counterfeiting and forgery)?

___ yes ___ no

o 18 USC Chapter 47 (dealing with fraud and deception in a variety of contexts including immigration matters, computers, access to airports and aircraft, highway projects, and healthcare benefits)?

___ yes ___ no

o a foreign statute substantially equivalent to one listed in the four sub-bullet points above?

___ yes ___ no

3. Failure to supervise, false statement in SEC filings, violation of the federal securities laws, or aiding and abetting anotherís violation.

Have you ever been "found" by the SEC or been convicted of having:

Note: if youíve settled an SEC enforcement case, you may have been "found" by the SEC to have engaged in the conduct, even if you did not admit or deny guilt.

  • Willfully made or caused to be made in any application for registration or report required to be filed with the SEC under the Advisers Act, or in any proceeding before the SEC with respect to registration, any statement which was at the time and in the light of the circumstances under which it was made false or misleading with respect to any material fact, or omitted to state in any such application or report any material fact that was required to be stated therein?

___ yes ___ no

  • Willfully violated any provision of the Securities Act of 1933, the Securities Exchange Act of 1934, the Investment Company Act of 1940, the Advisers Act, the Commodity Exchange Act, the rules or regulations under any of such statutes, or the rules of the Municipal Securities Rulemaking Board ("the Laws")?

___ yes ___ no

  • Willfully aided, abetted, counseled, commanded, induced, or procured the violation by any other person of any provision of the Laws?

___ yes ___ no

  • Failed reasonably to supervise, with a view to preventing violations of the Laws, another person subject to your supervision who committed such a violation?

___ yes ___ no

4. Court action

Are you subject to any court order, judgment or decree (including one issued by a foreign court) that permanently or temporarily enjoins you:

  • From acting as an investment adviser, underwriter, broker, dealer, municipal securities dealer, government securities broker or dealer, transfer agent, a foreign person or entity performing a function substantially equivalent to any of the above, or entity or person required to be registered under the Commodity Exchange Act or any substantially equivalent statute or regulation?

___ yes ___ no

  • From acting as an affiliated person or employee of any investment company, bank, insurance company, foreign entity substantially equivalent to any of the above, or entity or person required to be registered under the Commodity Exchange Act or any substantially equivalent statute or regulation?

___ yes ___ no

  • From engaging in or continuing any conduct or practice in connection with any such activity, or in connection with the purchase or sale of any security?

___ yes ___ no