[Federal Register Volume 63, Number 34 (Friday, February 20, 1998)]
[Notices]
[Pages 8710-8711]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-4256]
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SECURITIES AND EXCHANGE COMMISSION
[Rel. No. IA-1700/803-130]
Moreland Management Company; Notice of Application
February 12, 1998.
AGENCY: Securities and Exchange Commission (``SEC'').
ACTION: Notice of Application for Exemption under the Investment
Advisers Act of 1940 (``Advisers Act'').
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Applicant: Moreland Management Company.
Relevant Advisers Act Sections: Exemption requested under section
202(a)(11)(F) from section 202(a)(11).
Summary of Application: Applicant requests an order declaring it to
be a person not within the intent of section 202(a)(11), which defines
the term ``investment adviser.''
Filing Dates: The application was filed on December 19, 1997 and
amended on January 29, 1998.
Hearing or Notification of Hearing: An order granting the
application will be issued unless the SEC orders a hearing. Interested
persons may request a hearing by writing to the SEC's Secretary and
serving applicant with a
[[Page 8711]]
copy of the request, personally or by mail. Hearing requests should be
received by the SEC by 5:30 p.m. on March 9, 1998, and should be
accompanied by proof of service on applicant, 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 may request notification of
a hearing by writing to the SEC's Secretary.
ADDRESSES: Secretary, SEC, 450 5th Street, N.W., Washington, D.C.
20549. Applicant, Moreland Management Company, Suite 550 at Cambridge
Court, 28601 Chagrin Boulevard, Cleveland, Ohio 44122-4531.
FOR FURTHER INFORMATION CONTACT: Catherine M. Saadeh, Staff Attorney,
at (202) 942-0650, Jennifer S. Choi, Special Counsel, at (202) 942-0725
(Division of Investment Management, Task Force on Investment Adviser
Regulation).
SUPPLEMENTARY INFORMATION: The following is a summary of the
application. The complete application may be obtained for a fee at the
SEC's Public Reference Branch.
Applicant's Representations
1. Applicant was organized as an Ohio corporation in 1987 by LJR
Trust (the ``Trust''), which owns all of applicant's outstanding stock.
The Trust exists for the benefit of Mr. Leonard C. Horvitz and his
descendants (the ``Horvitz Family'').
2. Applicant was formed to serve as the ``family office'' for the
Horvitz Family. In addition to the Trust, applicant's other clients
consist of (i) The immediate members of Mr. Horvitz's family and (ii)
the trusts, foundations, partnerships, and other entities created by
them, or by the Trust, to serve as vehicles for investments.
3. Applicant provides asset allocation, record-keeping, investment
due diligence, federal and state tax advice, coordination of
professional relationships with accountants and attorneys, and other
services to the Trust and applicant's other clients. Applicant
currently has 14 employees. Applicant is paid for its services by the
Trust and applicant's other clients.
Applicant's Legal Analysis
1. Section 202(a)(11) of the Advisers Act defines the term
``investment adviser'' to mean ``any person who, for compensation,
engages in the business of advising others, either directly or through
publications or writings, as to the value of securities or as to the
advisability of investing in, purchasing, or selling securities, or
who, for compensation and as a part of a regular business, issues or
promulgates analyses or reports concerning securities * * *.'' Section
202(a)(11)(F) of the Advisers Act authorizes the SEC to exclude from
the definition of ``investment adviser'' persons that are not within
the intent of section 202(a)(11).
2. Section 203(a) of the Advisers Act requires investment advisers
to register with the SEC. Section 203(b) of the Advisers Act provides
exemptions from this registration requirement.
3. Applicant asserts that it does not appear to qualify for any of
the exemptions provided by section 203(b). Applicant states that it is
not prohibited from registering with the SEC under section 203A of the
Advisers Act because its principal office and place of business is
located in Ohio.\1\ Applicant requests that the SEC declare it to be a
person not within the intent of section 202(a)(11).
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\1\ Ohio does not currently regulate investment advisers.
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4. Applicant asserts that there is no public interest in requiring
it to be registered under the Advisers Act. Applicant states that it is
a private organization that was formed to be the ``family office'' for
the Horvitz Family. Applicant represents that all of its clients have a
close relationship with the Horvitz Family in that they are all either
immediate members of Mr. Horvitz's family or are entities created by
and for the Horvitz Family. Applicant states that it has no public
clients in the sense of retail investors, and that it has no plans, now
or in the future, to solicit clients from the retail public. Applicant
asserts that serving as the ``family office'' for the Horvitz Family
will be its exclusive mission.
5. Applicant states that it does not hold itself out to the public
as an investment adviser. Applicant states that only its name, which
doe not itself have any suggestive connotations, is listed in the
Cleveland-area telephone book and on the index of residents located in
the lobby of its building. Applicant represents that it does not engage
in any advertising, attend investment management-related conferences as
a vendor, or conduct any marketing activities.
6. Applicant states that its investment advisory activities
constitute a very small portion of its overall activities. Applicant
represents that of its 14 employees, only three have any involvement in
applicant's investment advisory activities. Applicant states that these
three employees estimate that investment advisory activities make up
less than 25 percent of their responsibilities. Applicant states that
its principal activities are not investment advisory in nature, and
that the largest portion of its activities involve providing services
that do not involve investment advice of any kind.
For the SEC, by the Division of Investment Management, under
delegated authority.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 98-4256 Filed 2-19-98; 8:45 am]
BILLING CODE 8010-01-M
