Prudential Financial, Inc., et al.; Notice of Application and Temporary Order, 52892-52894 [E8-21143]

Download as PDF 52892 Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / Notices POSTAL REGULATORY COMMISSION [Docket Nos. CP2008–11, CP2008–12, and CP2008–13; Order No. 95] Global Expedited Package Services 1 Postal Regulatory Commission. Notice. AGENCY: ACTION: This document announces the filing of three Postal Service notices regarding Global Expedited Package Service (GEPS) contracts and related Commission review. Publication of this document satisfies procedural requirements. It also allows interested persons an opportunity to comment. DATES: Postal Service filings are due August 15, 2008. Public comments are due August 20, 2008. ADDRESSES: Submit comments electronically via the Commission’s Filing Online system at http:// www.prc.gov. FOR FURTHER INFORMATION CONTACT: Stephen L. Sharfman, General Counsel, 202–789–6820 and stephen.sharfman@prc.gov. SUPPLEMENTARY INFORMATION: On August 5, 2008, the Postal Service filed three identical notices, which have been assigned to Docket Nos. CP2008–11, CP2008–12, and CP2008–13, announcing prices and classification changes for competitive products not of general applicability.1 These notices announce individual negotiated service agreements, namely, specific Global Expedited Package Service (GEPS) contracts the Postal Service has entered into with individual mailers. The Postal Service believes each is functionally equivalent to the Global Expedited Package Services 1 (GEPS 1) product established in Docket No. CP2008–5. These dockets have been filed pursuant to 39 U.S.C. 3633, 39 CFR 3015.5 and Order No. 86.2 In Order No. 86, the Commission found that additional contracts may be included as part of the GEPS 1 product if they meet the requirements of 39 U.S.C. 3633 and if they are substantially equivalent to the initial GEPS 1 contract.3 In support of each of these dockets, the Postal Service also filed the contract rmajette on PRODPC74 with NOTICES SUMMARY: 1 Notice of United States Postal Service of Filing of Functionally Equivalent Global Expedited Package Services 1 Negotiated Service Agreements, August 5, 2008, filed in Docket Nos. CP2008–11, CP2008–12, and CP2008–13 (Notices). 2 Docket No. CP2008–5, Order Concerning Global Expedited Package Services Contracts, July 23, 2008 (Order No. 86). 3 Order No. 86 at 7 (‘‘The Commission will verify whether or not any subsequent contract is in fact substantially equivalent. Contracts not having substantially the same terms and conditions as the GEPS 1 contract must be filed under 39 CFR part 3020, subpart B.’’). VerDate Aug<31>2005 14:21 Sep 10, 2008 Jkt 214001 and supporting materials under seal. The Governor’s Decision supporting the GEPS 1 product was filed in consolidated Docket No. CP2008–5.4 The Notices also contain the Postal Service’s arguments that these agreements are substantially equivalent and that they exhibit similar cost and market characteristics. Notices at 3–5. Interested persons may express views and offer comments on whether the planned changes are consistent with the policies of 39 U.S.C. 3632, 3633, or 3642. Comments are due no later than August 20, 2008. In addition, the Commission directs the Postal Service to provide a detailed justification for why it believes that information other than the name of the contracting party and the percentages listed in the certification and explanation filed pursuant to 39 CFR 3015.5(c)(2) is considered highly confidential or otherwise entitled to be filed under seal. An answer is due no later than August 15, 2008. If the Postal Service determines that the filing of a redacted version of the certification is appropriate, it shall file such certification as soon as possible. Pursuant to 39 U.S.C. 505, Michael Ravnitzky is appointed to serve as officer of the Commission (Public Representative) to represent the interests of the general public in the above-captioned dockets. Ordering Paragraphs It is Ordered: 1. Comments on issues in these proceedings are due no later than August 20, 2008. 2. The Postal Service is directed to provide a response to the Commission’s inquiry as set forth in the body of this order no later than August 15, 2008. 3. The Commission appoints Michael Ravnitzky as Public Representative to represent the interests of the general public in this proceeding. 4. The Secretary shall arrange for publication of this order in the Federal Register. Issued: August 11, 2008. By the Commission. Steven W. Williams, Secretary. [FR Doc. E8–21055 Filed 9–10–08; 8:45 am] BILLING CODE 7710–FW–P 4 Docket No. CP2008–5, United States Postal Service Notice of Filing Redacted Copy of Governors’ Decision No. 08–7, July 23, 2008. PO 00000 Frm 00084 Fmt 4703 Sfmt 4703 SECURITIES AND EXCHANGE COMMISSION [Release No. IC–28377; 812–13572] Prudential Financial, Inc., et al.; Notice of Application and Temporary Order September 5, 2008. Securities and Exchange Commission (‘‘Commission’’). ACTION: Temporary order and notice of application for a permanent order under section 9(c) of the Investment Company Act of 1940 (‘‘Act’’). AGENCY: Applicants have received a temporary order exempting them from section 9(a) of the Act, with respect to an injunction entered against Prudential Financial, Inc. (‘‘Prudential’’) on September 4, 2008 by the United States District Court for the District of New Jersey (‘‘Injunction’’) until the Commission takes final action on an application for a permanent order. Applicants also have applied for a permanent order. APPLICANTS: Prudential, Prudential Investment Management, Inc. (‘‘PIM, Inc.’’), Prudential Investments LLC (‘‘PI LLC’’), The Prudential Insurance Company of America (‘‘Prudential Insurance’’), Jennison Associates LLC (‘‘Jennison’’), Prudential Bache Asset Management, Inc. (‘‘Bache’’), Quantitative Management Associates LLC (‘‘QMA, LLC’’), Pruco Securities, LLC (‘‘Pruco’’), AST Investment Services, Inc. (‘‘AST Investment’’), Prudential Annuities Distributors, Inc. (‘‘PAD’’), Prudential Investment Management Services LLC (‘‘PIMS LLC’’), Pruco Life Insurance Company (‘‘Pruco Life’’), Pruco Life Insurance Company of New Jersey (‘‘Pruco Life NJ’’), Prudential Annuities Life Assurance Corporation (‘‘PALAC’’) and Prudential Retirement Insurance and Annuity Company (‘‘PRIAC’’) (collectively, other than Prudential, the ‘‘Fund Servicing Applicants’’ and together with Prudential, the ‘‘Applicants’’).1 FILING DATES: The application was filed on September 5, 2008. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests SUMMARY OF APPLICATION: 1 Applicants request that any relief granted pursuant to the application also apply to any other company of which Prudential is or may become an affiliated person (together with the Applicants, the ‘‘Covered Persons’’). E:\FR\FM\11SEN1.SGM 11SEN1 Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / Notices The following is a summary of the application. The complete application may be obtained for a fee at the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549–1520 (tel. 202–551–5850). 2. On September 4, 2008, the United States District Court for the District of New Jersey entered the Injunction against Prudential in a matter brought by the Commission.2 The Commission alleged in the complaint (‘‘Complaint’’) that Prudential violated sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and rules 12b–20, 13a–1, 13a–11 and 13a–13 under the Exchange Act, in connection with Prudential’s accounting and public reporting practices. The Complaint relates to Prudential’s inaccurate recording of income for 2000, 2001, and 2002 in the consolidated financial statements included in its periodic and other filings for the years 2001, 2002 and 2003. The inaccuracies in the financial statements related to recorded income from a series of purported reinsurance contracts entered into from 1997 to 2002 between the General Reinsurance Company and two former property and casualty subsidiaries of Prudential. The Complaint alleged that Prudential violated the financial reporting, books and records, and internal controls provisions of the Exchange Act. Without admitting or denying any of the allegations in the Complaint, except as to jurisdiction, Prudential consented to the entry of the Injunction. Applicants’ Representations Applicants’ Legal Analysis 1. Prudential, through its subsidiaries and affiliates, offers a wide array of financial products and services, including life insurance, annuities, mutual funds, pension and retirementrelated services and administration, investment management, real estate brokerage and relocation services. Each of the Fund Servicing Applicants is an indirect wholly owned subsidiary of Prudential. PIM, Inc., PI LLC, Jennison, QMA, LLC and AST Investment (collectively, ‘‘Adviser Applicants’’) are investment advisers registered under the Investment Advisers Act of 1940 (‘‘Advisers Act’’) that provide investment management and advisory services to certain registered investment companies (‘‘Funds’’). Bache is an investment adviser registered under the Advisers Act and plans to provide advisory services to Funds in the near future. Pruco, PAD, and PIMS LLC are broker-dealers registered under the Securities Exchange Act of 1934 (‘‘Exchange Act’’) and serve as a principal underwriter to open-end Funds and Funds that are unit investment trusts (‘‘UITs’’). Prudential Insurance, Pruco Life, Pruco Life NJ, PALAC and PRIAC serve as depositors for registered separate accounts, all of which are Funds. 1. Section 9(a)(2) of the Act, in relevant part, prohibits a person who has been enjoined from engaging in or continuing any conduct or practice in connection with the purchase or sale of a security, or in connection with activities as an affiliated person of any insurance company, from acting, among other things, as an investment adviser or depositor of any registered investment company or a principal underwriter for any registered open-end investment company, registered unit investment trust, or registered face-amount certificate company. Section 9(a)(3) of the Act makes the prohibition in section 9(a)(2) applicable to a company, any affiliated person of which has been disqualified under the provisions of section 9(a)(2). Section 2(a)(3) of the Act defines ‘‘affiliated person’’ to include, among others, any person directly or indirectly controlling, controlled by, or under common control, with the other person and any person directly or indirectly owning, controlling, or holding with the power to vote, 5 percent or more of the outstanding voting securities of such other person. should be received by the Commission by 5:30 p.m. on September 30, 2008, and should be accompanied by proof of service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549– 1090; Applicants c/o Kathryn Quirk, Prudential Financial, Inc., 751 Broad Street, Newark, New Jersey 07102. FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel, at 202–551–6815 or Janet M. Grossnickle, Assistant Director, at 202–551–6821 (Division of Investment Management, Office of Investment Company Regulation). rmajette on PRODPC74 with NOTICES SUPPLEMENTARY INFORMATION: VerDate Aug<31>2005 14:21 Sep 10, 2008 Jkt 214001 2 Securities and Exchange Commission v. Prudential Financial, Inc., Final Judgment on Consent Against Defendant Prudential Financial, Inc. 08–cv–03916 (PGS) (D.N.J. Sept. 4, 2008). PO 00000 Frm 00085 Fmt 4703 Sfmt 4703 52893 Applicants state that Prudential is an affiliated person of each of the other Applicants within the meaning of section 2(a)(3). Applicants state that, as a result of the Injunction, they would be subject to the prohibitions of section 9(a). 2. Section 9(c) of the Act provides that the Commission shall grant an application for an exemption from the disqualification provisions of section 9(a) of the Act if it is established that these provisions, as applied to Applicants, are unduly or disproportionately severe or that the conduct of the Applicants has been such as not to make it against the public interest or the protection of investors to grant the exemption. Applicants have filed an application pursuant to section 9(c) seeking temporary and permanent orders exempting them from the disqualification provisions of section 9(a). 3. Applicants believe that they meet the standards for exemption specified in section 9(c). Applicants state that the prohibitions of section 9(a) as applied to them would be unduly and disproportionately severe and that it would not be against the public interest or the protection of investors to grant the requested exemption from section 9(a). 4. Applicants state that the alleged conduct giving rise to the Injunction did not involve any of the Applicants acting in the capacity of investment adviser, subadviser, depositor or principal underwriter for any Fund. Applicants note that none of the current or former directors, officers, or employees of the Applicants (other than Prudential itself) had any involvement in the conduct alleged in the Complaint. Applicants further state that the personnel at Prudential who were involved in the violations alleged in the complaint have had no and will not have any future involvement in providing advisory, subadvisory, depository, or underwriting services to Funds. In addition, Applicants represent that no Fund to which any Fund Servicing Applicant provides investment advisory, depository or underwriting services bought or held any securities issued by Prudential during the period covered by the Complaint, other than with respect to index funds and routine trade errors that were promptly corrected. 5. Applicants state that their inability to continue to provide advisory and underwriting services to the Funds and to serve as depositor to Funds would result in potentially severe hardships for the Funds and their shareholders. Applicants state that they will distribute E:\FR\FM\11SEN1.SGM 11SEN1 52894 Federal Register / Vol. 73, No. 177 / Thursday, September 11, 2008 / Notices written materials, including an offer to meet in person to discuss the materials, to the boards of directors of the Funds (the ‘‘Boards’’), including the directors who are not ‘‘interested persons,’’ as defined in section 2(a)(19) of the Act, of such Funds, and their independent legal counsel as defined in rule 0–1(a)(6) under the Act, if any, regarding the Injunction, any impact on the Funds, and the application. Applicants state that they will provide the Boards with all information concerning the Injunction and the application that is necessary for the Funds to fulfill their disclosure and other obligations under the federal securities laws. 6. Applicants also state that, if they were barred from providing services to the Funds, the effect on their businesses and employees would be severe. Applicants state that they have committed substantial resources to establish an expertise in advising, subadvising, and distributing the Funds, and acting as a depositor to registered separate accounts. Applicants further state that prohibiting them from providing advisory and distribution services or acting as a depositor to the registered separate accounts would not only adversely affect their businesses, but would also adversely affect over 2000 employees that are involved in those activities. Applicants state that they have not previously applied for an exemptive order under section 9(c) of the Act. Applicants state that an affiliate of Prudential previously obtained an order under section 9(c) of the Act.3 Applicants’ Condition Applicants agree that any order granting the requested relief will be subject to the following condition: Any temporary exemption granted pursuant to the application shall be without prejudice to, and shall not limit the Commission’s rights in any manner with respect to, any Commission investigation of, or administrative proceedings involving or against, Covered Persons, including without limitation, the consideration by the Commission of a permanent exemption from section 9(a) of the Act requested pursuant to the application, or the revocation or removal of any temporary exemptions granted under the Act in connection with the application. rmajette on PRODPC74 with NOTICES Temporary Order The Commission has considered the matter and finds that the Applicants 3 In the Matter of Prudential Securities Incorporated, Investment Company Act Rel. Nos. 18031 (Mar. 6, 1991) (notice) and 18096 (Apr. 15, 2005) (order). VerDate Aug<31>2005 14:21 Sep 10, 2008 Jkt 214001 have made the necessary showing to justify granting a temporary exemption. Accordingly, It is hereby ordered, pursuant to section 9(c) of the Act, that Applicants and any other Covered Persons are granted a temporary exemption from the provisions of section 9(a), solely with respect to the Injunction, subject to the condition in the application, from September 5, 2008, until the Commission takes final action on their application for a permanent order. By the Commission. J. Lynn Taylor, Assistant Secretary. [FR Doc. E8–21143 Filed 9–10–08; 8:45 am] BILLING CODE 8010–01–P SECURITIES AND EXCHANGE COMMISSION [Investment Company Act Release No. 28376; 812–13505] Fidelity Aberdeen Street Trust, et al.; Notice of Application September 5, 2008. Securities and Exchange Commission (‘‘Commission’’). ACTION: Notice of an application under section 6(c) of the Investment Company Act of 1940 (‘‘Act’’) for an exemption from rule 12d1–2(a) under the Act. AGENCY: Applicants request an order to permit registered open-end management investment companies relying on rule 12d1–2 under the Act to invest in certain financial instruments. APPLICANTS: Fidelity Management & Research Company (‘‘FMR’’), Strategic Advisers, Inc. (‘‘SAI’’), FMR Co., Inc. (‘‘FMRC’’) (each, an ‘‘Adviser’’); Fidelity Distributors Corporation (‘‘FDC’’) and National Financial Services LLC (‘‘NFS’’) (each, a ‘‘Distributor’’); and Fidelity Aberdeen Street Trust, Fidelity Fixed-Income Trust, Fidelity Income Fund, and Variable Insurance Products Fund V (each, a ‘‘Trust’’). FILING DATES: The application was filed on February 29, 2008, and amended on June 18, 2008, and September 2, 2008. HEARING OR NOTIFICATION OF HEARING: An order granting the application will be issued unless the Commission orders a hearing. Interested persons may request a hearing by writing to the Commission’s Secretary and serving applicants with a copy of the request, personally or by mail. Hearing requests should be received by the Commission by 5:30 p.m. on September 29, 2008 and should be accompanied by proof of SUMMARY OF APPLICATION: PO 00000 Frm 00086 Fmt 4703 Sfmt 4703 service on applicants, in the form of an affidavit or, for lawyers, a certificate of service. Hearing requests should state the nature of the writer’s interest, the reason for the request, and the issues contested. Persons who wish to be notified of a hearing may request notification by writing to the Commission’s Secretary. ADDRESSES: Secretary, Commission, 100 F Street, NE., Washington, DC 20549– 1090; Applicants, 82 Devonshire Street, Boston, MA 02109. FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel, at (202) 551–6815, or Michael W. Mundt, Assistant Director, at (202) 551–6821 (Division of Investment Management, Office of Investment Company Regulation). The following is a summary of the application. The complete application may be obtained for a fee at the Commission’s Public Reference Room, 100 F Street, NE., Washington, DC 20549–1520 (telephone (202) 551–5850). SUPPLEMENTARY INFORMATION: Applicants’ Representations 1. Each Trust is organized as either a Delaware statutory trust or a Massachusetts business trust and is registered under the Act as an open-end management investment company. Applicants request an exemption to the extent necessary to permit any existing or future registered open-end management investment company or series thereof advised by an Adviser or an entity controlling, controlled by, or under common control with an Adviser and that invests in other investment companies in reliance on section 12(d)(1)(G) of the Act, and that is also eligible to invest in securities (as defined in section 2(a)(36) of the Act) in reliance on rule 12d1–2 under the Act (together with the Trusts and their series, the ‘‘Funds’’), to also invest, to the extent consistent with its investment objective, policies, strategies and limitations, in financial instruments that may not be securities within the meaning of section 2(a)(36) of the Act (‘‘Other Investments’’).1 2. SAI or FMRC currently serves as the investment adviser to each of the Funds. Each Adviser is an investment adviser registered under the Investment Advisers Act of 1940 and a direct or indirect subsidiary of FMR LLC, a 1 Each existing registered open-end management investment company that currently intends to rely on the order is named as an applicant. Any other existing or future registered open-end management investment company that subsequently relies on the order will do so only in accordance with the terms and conditions of the application. E:\FR\FM\11SEN1.SGM 11SEN1

Agencies

[Federal Register Volume 73, Number 177 (Thursday, September 11, 2008)]
[Notices]
[Pages 52892-52894]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: E8-21143]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28377; 812-13572]


Prudential Financial, Inc., et al.; Notice of Application and 
Temporary Order

September 5, 2008.
AGENCY: Securities and Exchange Commission (``Commission'').

ACTION: Temporary order and notice of application for a permanent order 
under section 9(c) of the Investment Company Act of 1940 (``Act'').

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Summary of Application:  Applicants have received a temporary order 
exempting them from section 9(a) of the Act, with respect to an 
injunction entered against Prudential Financial, Inc. (``Prudential'') 
on September 4, 2008 by the United States District Court for the 
District of New Jersey (``Injunction'') until the Commission takes 
final action on an application for a permanent order. Applicants also 
have applied for a permanent order.

Applicants:  Prudential, Prudential Investment Management, Inc. (``PIM, 
Inc.''), Prudential Investments LLC (``PI LLC''), The Prudential 
Insurance Company of America (``Prudential Insurance''), Jennison 
Associates LLC (``Jennison''), Prudential Bache Asset Management, Inc. 
(``Bache''), Quantitative Management Associates LLC (``QMA, LLC''), 
Pruco Securities, LLC (``Pruco''), AST Investment Services, Inc. (``AST 
Investment''), Prudential Annuities Distributors, Inc. (``PAD''), 
Prudential Investment Management Services LLC (``PIMS LLC''), Pruco 
Life Insurance Company (``Pruco Life''), Pruco Life Insurance Company 
of New Jersey (``Pruco Life NJ''), Prudential Annuities Life Assurance 
Corporation (``PALAC'') and Prudential Retirement Insurance and Annuity 
Company (``PRIAC'') (collectively, other than Prudential, the ``Fund 
Servicing Applicants'' and together with Prudential, the 
``Applicants'').\1\
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    \1\ Applicants request that any relief granted pursuant to the 
application also apply to any other company of which Prudential is 
or may become an affiliated person (together with the Applicants, 
the ``Covered Persons'').

---------------------------------------------------------------------------
Filing Dates:  The application was filed on September 5, 2008.

Hearing or Notification of Hearing:  An order granting the application 
will be issued unless the Commission orders a hearing. Interested 
persons may request a hearing by writing to the Commission's Secretary 
and serving applicants with a copy of the request, personally or by 
mail. Hearing requests

[[Page 52893]]

should be received by the Commission by 5:30 p.m. on September 30, 
2008, and should be accompanied by proof of service on applicants, in 
the form of an affidavit or, for lawyers, a certificate of service. 
Hearing requests should state the nature of the writer's interest, the 
reason for the request, and the issues contested. Persons who wish to 
be notified of a hearing may request notification by writing to the 
Commission's Secretary.

ADDRESSES: Secretary, U.S. Securities and Exchange Commission, 100 F 
Street, NE., Washington, DC 20549-1090; Applicants c/o Kathryn Quirk, 
Prudential Financial, Inc., 751 Broad Street, Newark, New Jersey 07102.

FOR FURTHER INFORMATION CONTACT: Keith A. Gregory, Senior Counsel, at 
202-551-6815 or Janet M. Grossnickle, Assistant Director, at 202-551-
6821 (Division of Investment Management, Office of Investment Company 
Regulation).

SUPPLEMENTARY INFORMATION: The following is a summary of the 
application. The complete application may be obtained for a fee at the 
Commission's Public Reference Room, 100 F Street, NE., Washington, DC 
20549-1520 (tel. 202-551-5850).

Applicants' Representations

    1. Prudential, through its subsidiaries and affiliates, offers a 
wide array of financial products and services, including life 
insurance, annuities, mutual funds, pension and retirement-related 
services and administration, investment management, real estate 
brokerage and relocation services. Each of the Fund Servicing 
Applicants is an indirect wholly owned subsidiary of Prudential. PIM, 
Inc., PI LLC, Jennison, QMA, LLC and AST Investment (collectively, 
``Adviser Applicants'') are investment advisers registered under the 
Investment Advisers Act of 1940 (``Advisers Act'') that provide 
investment management and advisory services to certain registered 
investment companies (``Funds''). Bache is an investment adviser 
registered under the Advisers Act and plans to provide advisory 
services to Funds in the near future. Pruco, PAD, and PIMS LLC are 
broker-dealers registered under the Securities Exchange Act of 1934 
(``Exchange Act'') and serve as a principal underwriter to open-end 
Funds and Funds that are unit investment trusts (``UITs''). Prudential 
Insurance, Pruco Life, Pruco Life NJ, PALAC and PRIAC serve as 
depositors for registered separate accounts, all of which are Funds.
    2. On September 4, 2008, the United States District Court for the 
District of New Jersey entered the Injunction against Prudential in a 
matter brought by the Commission.\2\ The Commission alleged in the 
complaint (``Complaint'') that Prudential violated sections 13(a), 
13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and rules 12b-20, 13a-
1, 13a-11 and 13a-13 under the Exchange Act, in connection with 
Prudential's accounting and public reporting practices. The Complaint 
relates to Prudential's inaccurate recording of income for 2000, 2001, 
and 2002 in the consolidated financial statements included in its 
periodic and other filings for the years 2001, 2002 and 2003. The 
inaccuracies in the financial statements related to recorded income 
from a series of purported reinsurance contracts entered into from 1997 
to 2002 between the General Reinsurance Company and two former property 
and casualty subsidiaries of Prudential. The Complaint alleged that 
Prudential violated the financial reporting, books and records, and 
internal controls provisions of the Exchange Act. Without admitting or 
denying any of the allegations in the Complaint, except as to 
jurisdiction, Prudential consented to the entry of the Injunction.
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    \2\ Securities and Exchange Commission v. Prudential Financial, 
Inc., Final Judgment on Consent Against Defendant Prudential 
Financial, Inc. 08-cv-03916 (PGS) (D.N.J. Sept. 4, 2008).
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Applicants' Legal Analysis

    1. Section 9(a)(2) of the Act, in relevant part, prohibits a person 
who has been enjoined from engaging in or continuing any conduct or 
practice in connection with the purchase or sale of a security, or in 
connection with activities as an affiliated person of any insurance 
company, from acting, among other things, as an investment adviser or 
depositor of any registered investment company or a principal 
underwriter for any registered open-end investment company, registered 
unit investment trust, or registered face-amount certificate company. 
Section 9(a)(3) of the Act makes the prohibition in section 9(a)(2) 
applicable to a company, any affiliated person of which has been 
disqualified under the provisions of section 9(a)(2). Section 2(a)(3) 
of the Act defines ``affiliated person'' to include, among others, any 
person directly or indirectly controlling, controlled by, or under 
common control, with the other person and any person directly or 
indirectly owning, controlling, or holding with the power to vote, 5 
percent or more of the outstanding voting securities of such other 
person. Applicants state that Prudential is an affiliated person of 
each of the other Applicants within the meaning of section 2(a)(3). 
Applicants state that, as a result of the Injunction, they would be 
subject to the prohibitions of section 9(a).
    2. Section 9(c) of the Act provides that the Commission shall grant 
an application for an exemption from the disqualification provisions of 
section 9(a) of the Act if it is established that these provisions, as 
applied to Applicants, are unduly or disproportionately severe or that 
the conduct of the Applicants has been such as not to make it against 
the public interest or the protection of investors to grant the 
exemption. Applicants have filed an application pursuant to section 
9(c) seeking temporary and permanent orders exempting them from the 
disqualification provisions of section 9(a).
    3. Applicants believe that they meet the standards for exemption 
specified in section 9(c). Applicants state that the prohibitions of 
section 9(a) as applied to them would be unduly and disproportionately 
severe and that it would not be against the public interest or the 
protection of investors to grant the requested exemption from section 
9(a).
    4. Applicants state that the alleged conduct giving rise to the 
Injunction did not involve any of the Applicants acting in the capacity 
of investment adviser, subadviser, depositor or principal underwriter 
for any Fund. Applicants note that none of the current or former 
directors, officers, or employees of the Applicants (other than 
Prudential itself) had any involvement in the conduct alleged in the 
Complaint. Applicants further state that the personnel at Prudential 
who were involved in the violations alleged in the complaint have had 
no and will not have any future involvement in providing advisory, 
subadvisory, depository, or underwriting services to Funds. In 
addition, Applicants represent that no Fund to which any Fund Servicing 
Applicant provides investment advisory, depository or underwriting 
services bought or held any securities issued by Prudential during the 
period covered by the Complaint, other than with respect to index funds 
and routine trade errors that were promptly corrected.
    5. Applicants state that their inability to continue to provide 
advisory and underwriting services to the Funds and to serve as 
depositor to Funds would result in potentially severe hardships for the 
Funds and their shareholders. Applicants state that they will 
distribute

[[Page 52894]]

written materials, including an offer to meet in person to discuss the 
materials, to the boards of directors of the Funds (the ``Boards''), 
including the directors who are not ``interested persons,'' as defined 
in section 2(a)(19) of the Act, of such Funds, and their independent 
legal counsel as defined in rule 0-1(a)(6) under the Act, if any, 
regarding the Injunction, any impact on the Funds, and the application. 
Applicants state that they will provide the Boards with all information 
concerning the Injunction and the application that is necessary for the 
Funds to fulfill their disclosure and other obligations under the 
federal securities laws.
    6. Applicants also state that, if they were barred from providing 
services to the Funds, the effect on their businesses and employees 
would be severe. Applicants state that they have committed substantial 
resources to establish an expertise in advising, subadvising, and 
distributing the Funds, and acting as a depositor to registered 
separate accounts. Applicants further state that prohibiting them from 
providing advisory and distribution services or acting as a depositor 
to the registered separate accounts would not only adversely affect 
their businesses, but would also adversely affect over 2000 employees 
that are involved in those activities. Applicants state that they have 
not previously applied for an exemptive order under section 9(c) of the 
Act. Applicants state that an affiliate of Prudential previously 
obtained an order under section 9(c) of the Act.\3\
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    \3\ In the Matter of Prudential Securities Incorporated, 
Investment Company Act Rel. Nos. 18031 (Mar. 6, 1991) (notice) and 
18096 (Apr. 15, 2005) (order).
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Applicants' Condition

    Applicants agree that any order granting the requested relief will 
be subject to the following condition:
    Any temporary exemption granted pursuant to the application shall 
be without prejudice to, and shall not limit the Commission's rights in 
any manner with respect to, any Commission investigation of, or 
administrative proceedings involving or against, Covered Persons, 
including without limitation, the consideration by the Commission of a 
permanent exemption from section 9(a) of the Act requested pursuant to 
the application, or the revocation or removal of any temporary 
exemptions granted under the Act in connection with the application.

Temporary Order

    The Commission has considered the matter and finds that the 
Applicants have made the necessary showing to justify granting a 
temporary exemption.
    Accordingly,
    It is hereby ordered, pursuant to section 9(c) of the Act, that 
Applicants and any other Covered Persons are granted a temporary 
exemption from the provisions of section 9(a), solely with respect to 
the Injunction, subject to the condition in the application, from 
September 5, 2008, until the Commission takes final action on their 
application for a permanent order.

    By the Commission.
J. Lynn Taylor,
Assistant Secretary.
[FR Doc. E8-21143 Filed 9-10-08; 8:45 am]
BILLING CODE 8010-01-P