U.S. Securities and Exchange Commission's Banc of America Securities Settlement Fund
INFORMATION WEBSITE
Frequently Asked Questions and Answers To help you better understand the SEC's Banc of America Securities Settlement, answers to many frequently asked questions are provided below. To view an answer, just click on the applicable question. If you can't find the answer to your question, or if you need further assistance, please use the following contact information:
Distribution of Claim Payments
Eligibility For a Payment
Questions about the Proof of Claim Form Getting More Information What is the U.S. Securities and Exchange Commission's (SEC's) Banc of America Securities Settlement Fund? The SEC's Banc of America Securities Settlement Fund was created by the settlement of an enforcement action brought by the SEC against Banc of America Securities LLC (BAS). On March 14, 2007, the SEC issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions against Banc of America Securities LLC ("BAS"), Release No. 34-55466 (the "Initial Order"). The Initial Order provides further details regarding this proceeding, including actions to be taken by Banc of America Securities under the terms of the settlement. The SEC alleged, among other things, that BAS failed to address conflicts of interest that compromised the independence and integrity of its analysts during the period 1999 to 2001. These conflicts resulted in the publication of materially false and misleading research reports on Intel Corporation, TelCom Semiconductor, Inc., E-Stamp Corp. and, to some to extent, Amazon.com, Inc. BAS did not admit or deny the SEC's findings. As part of the settlement, BAS agreed to pay a total of $26 million in disgorgement and civil penalties to benefit customers of the firm who purchased stock in the affected companies during the relevant time periods. The SEC appointed Francis E. McGovern as the Distribution Fund Administrator. A proposed distribution plan was prepared and submitted to the SEC, and on August 9, 2007, was posted for public comment (SEC Release No. 34-56234). The plan was approved by the SEC on September 20, 2007 (SEC Release No. 34-56472). The approved Plan of Distribution contains detailed information regarding the distribution of monies from the Settlement Fund. Settlement Fund monies were allocated first to meet all claims for losses from purchases of Intel, TelCom and E-Stamp common stock and then to claims for losses from purchases of Amazon.com stock. Payments for valid, timely claims were mailed on June 23, 2008. After the distribution has been completed, any undistributed Settlement Fund monies will be transferred to the U.S. Treasury. What is the schedule of events? The Plan of Distribution provides that all investors who could be identified from the records of BAS were mailed a Claim Packet in October 2007, informing them of the steps they needed to take to be eligible for a payment. The claim filing deadline was December 31, 2007 and there is no provision for paying late filed claims. Payments were mailed to eligible claimants on June 23, 2008. Updates to this schedule of events will be posted at this site. Who is the Distribution Fund Administrator? The Distribution Fund Administrator appointed by the SEC for this settlement is Professor Francis E. McGovern, pursuant to the Order Appointing Distribution Fund Administrator and Directing Submission of Proposed Distribution Plan, SEC Release No. 34-55467 (March 14, 2007). Professor McGovern is responsible for implementing the Distribution Plan.[Link to Order appointing the Distribution Fund Administrator] Who is the Claims Administrator? The Claims Administrator selected by the Distribution Fund Administrator is Rust Consulting, Inc. Rust Consulting is responsible for performing the day-to-day duties associated with claims administration, including communication with claimants, mailing and receiving claims, validating claims, and mailing payments. Distribution of Claim Payments Payments to eligible investors were mailed on June 23, 2008. Please call our Call Center toll free at 1-800-760-5467 with specific questions about your claim. How was my payment calculated? My transactions clearly showed a loss if you subtracted the sell price from the buy price. Some claimants received less than their realized net loss amount based on the calculation rules for valid claims outlined in the SEC-approved Plan of Distribution. If you still have questions about your payment amount after reading this information, you may call our Call Center toll free at 1-800-760-5467 and request a calculation report for your claim payment. What can I do if I think my payment amount is incorrect? If you believe the amount of your payment is not correct, you may request a copy of your payment calculation by contacting our Call Center toll free at 1-800-760-5467. We will prepare a calculation report for your claim payment and send it to you. After reviewing your payment calculation, if you still believe that it was calculated incorrectly, you may request an appeal form by writing to the address below. Your completed appeal form must be received no later than 15 days after the appeal form is sent out to you (the day we fax it to you or the date it is mailed to you). Appeals will be considered only for errors in determining eligibility or calculation of payment amounts. Appeals will not be allowed for any other reason. If you appeal, please do not cash your check. Return the voided check when you send us the appeal form. You can request an appeal form by writing to SEC's Banc of America Securities Settlement Fund, 201 S. Lyndale Avenue, Suite S-3, P.O. Box 1884, Faribault, MN 55021-7139. I didn't receive my payment - where is it? Payments to eligible investors were mailed on June 23, 2008. If you believe you were eligible but did not receive a check, please contact our Call Center toll free at 1-800-760-5467 for assistance. I received a check made out to a company, who needs to sign the check? An authorized officer of the corporation should be able to sign the check. I can't cash the check due to a problem with the way the name appears. What can I do? (The business is dissolved, the name of the entity has changed, the name is incorrect, my spouse and I are now divorced, etc.) If you cannot cash your check as issued, please call our Call Center toll free at 1-800-760-5467. If your check needs to be re-issued under a new name, we may require documentation to support the change of name. The payee on the payment is now deceased - can someone else be paid? The legal representative of the person who died usually can deposit or cash the check. Examples of legal representatives are the executor/executrix, personal representative or the administrator of the estate. If you are the legal representative, you should explain that to the bank. If you are the legal representative but your bank will not cash the check, please call our Call Center toll free at 1-800-760-5467 for assistance. If the check needs to be re-issued under a new name, we may require documentation to support the change of name. I lost my payment - can I get a new one? We can re-issue your payment. You should contact our Call Center immediately at 1-800-760-5467, so that we can stop payment on the lost check. My name is changed - can I get a new payment in my name? If you cannot cash your check as issued, please call our Call Center toll free at 1-800-760-5467. We may require documentation to support your name change. What if I refuse to cash my payment? It is your decision as to whether you cash your payment or not. If you do not cash your check within 90 days of issuance, you will not be able to cash it. The claim filing deadline was December 31, 2007 and there is no provision for paying late filed claims. Eligibility for a Payment What did I need to do to be eligible for a payment from the Settlement Fund? You may have been eligible for a payment from the Settlement Fund if: (1) you bought stock through Banc of America Securities; and (2) that stock is on the list of qualifying stocks; and (3) the purchase was made during the qualifying time period for that stock; and (4) you suffered a net financial loss. For more information about eligibility, calculation of payments, or other details, you can read the Plan of Distribution on this Website. The postmark deadline for submitting a claim was December 31, 2007. If I am eligible, when should I expect to receive a check? Payments to eligible investors were mailed on June 23, 2008 What if I bought stock outside the listed qualifying time periods? In order to qualify for a payment, an investor must have purchased one of the qualifying stocks from BAS during the qualifying period of purchase. If you purchased the stock outside the qualifying period of purchase, you were not eligible for funds from the SEC's BAS Settlement Fund. What if I read the research in question but bought the stock from another brokerage company, such as an online one? In order to qualify for a payment, an investor must have purchased Intel Corporation, TelCom Semiconductor, E-Stamp Corporation, or Amazon.com stock from Banc of America Securities during the qualifying period of purchase. If you purchased the stock from a different brokerage firm - such as an online trading entity - you were not eligible for funds from the SEC's BAS Settlement Fund. If I still own the stock, did I need to sell it to be eligible for a payment? No. A key principle in the Plan of Distribution is that investors who held on to a stock should not be disadvantaged simply because they did not sell. Therefore, investors were allowed to recover both realized and unrealized net losses. Please read the Plan of Distribution to learn about how unrealized net losses were determined. What if I think I am owed more money than I received? There is a written appeals process. Appeals will be accepted only for errors in determining eligibility or calculating the payment to a recipient. Appeals will not be allowed for any other reason. In addition, the SEC's BAS Settlement Fund preserved the right for investors to pursue, to the extent otherwise available, any other remedy or recourse against the settling party. Do I have to pay taxes on the amount I received? Individual circumstances vary; you should consult a tax adviser regarding the tax implications of any payments you received from the SEC's BAS Settlement Fund. Are investments made through 401(k)s eligible? If an investor purchased one of the qualifying stocks through BAS during the qualifying time period for that stock and the investor suffered a net loss, the investor was eligible for a payment, regardless of whether the investment was made through a 401(k) or a traditional brokerage account. If I purchased a bond through Banc of America Securities, was I eligible for the settlement? Investors in bonds or other debt instruments were not eligible for compensation from the SEC's BAS Settlement Fund. Click here to view a list of eligible stocks. Were mutual funds eligible to receive payments from the SEC's BAS Settlement Fund? If a mutual fund purchased one of the qualifying stocks through BAS during the qualifying period for that stock, and the mutual fund suffered a net loss, the mutual fund was eligible for a payment. How were the qualifying stocks determined? Why were other equity securities sold by BAS not included? The qualifying stocks were determined based on the findings of misconduct in the Initial Order. In its order appointing the distribution fund administrator, the SEC directed that the settlement funds be allocated to purchasers of the equity securities for which the Initial Order found BAS published false research reports. (See Order Appointing Distribution Fund Administrator, SEC Release No. 34-55467, 3/14/07, at page 2, section II.B.2.) The Initial Order found that BAS published false research reports on three companies: Intel Corporation, TelCom Semiconductor, Inc., and E-Stamp Corp. Those are the qualifying stocks. To the extent that any money remained after all qualifying claims on those three stocks were paid, the Distribution Plan provided that payment may be made to qualifying purchasers of Amazon.com, which was referenced in the Initial Order as an example of the conflicts of interest and their impact on research. Why were Amazon.com transactions treated differently from the qualifying stocks in the settlement? The Initial Order found that BAS published false research reports on three companies: Intel Corporation, TelCom Semiconductor, Inc., and E-Stamp Corp. Those are the qualifying stocks for purposes of the settlement fund. To the extent that any money remained after all qualifying claims on those three stocks were paid, the Distribution Plan provided that payment may be made to qualifying purchasers of Amazon.com, which was referenced in the Initial Order as an example of the conflicts of interest and their impact on research. Were investors who qualified for payment reimbursed for commissions and fees, as well as their losses? Investors who qualified were reimbursed for net losses, which included commissions and fees paid on the qualifying security transactions. If I did not qualify for a payment under the terms of the SEC Order and Plan of Distribution, what are my options? The SEC's BAS Settlement Fund preserved the right for investors to pursue, to the extent otherwise available, any other remedy or recourse. Questions About the Claim Filing Process What is the deadline for submitting a claim? The postmark deadline for submitting a claim was December 31, 2007. Will the information I send be kept confidential?Yes. The Claims Administrator will protect the privacy of the information you provide. The information in your claim and your supporting documents will be used only to process your claim and issue a payment if you are eligible. Getting More Information
If I want to ask a question about the Plan, what should I do? If you want to ask a question about the Plan, you can do so from this website by sending an email to mail@SECBASsettlement.com, or by calling the Claims Administrator toll free at 1-800-760-5467. Call Center hours of operation are 9:00 AM to 5:30 PM Eastern Time Monday through Friday. The Claims Administrator will also post answers to the most frequently asked questions on this website on a periodic basis. What if I still have questions? If you still have questions after reviewing information on this website, you may
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