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(Exhibit D)

l'XITED STATES COURT OF APPEALS FOR THE FIRST ('IRCUIT

No. 6840

CHARLES E. FONTAINE ET AL., Plaintiffs, Appellants,

1.

SECURITIES AND EXCHANGE COMMISSION ET AL., Defendants, Appellees.

MEMORANDUM AND ORDER

February 14, 1967. The court has considered the motion to stay, and all papers submitted therewith by all parties.

Taking matters somewhat in reverse order, the court is dissatisfied with the record with respect to Rule 25 (5). Movants do not allege facts in indicating that it was “not practicable" to apply to the district court for relief. The court knows of its own knowledge that the only "cast" which Judge Cancio is and has been wearing is a neck collar, and that he has been frequently in court and has been continuously attending to court business. This must have been apparent had anyone sought to inquire of proper sources. The fact that on one particular day he was at home and local counsel was “reluctant" to disturb him there, does not mean it was not practical to comply with the rule.

Nor does the rule make counsel's opinion that relief would be denied an excuse for not making the request. This should be obvious. It is particularly so in view of the fact that one of the express purposes of requiring application to be made is so that the district court shall give reasons for its denial.

In view of this clear disregard of our rule we will presume, in movants' disfavor, that the district court, had application been made, would have given good reasons for denial, namely, that the appeal lacked substantial merit, and that no irreparable injury had been shown. We find this assumption especially easy in the light of the court's comprehensive and, at least on its face, perceptive opinion. On this assumption we will review the record and determine whether, had the court given such reasons, they would be supportable.

We commence with the statement in Exhibit 1, page 14, “there are no factual issues between the parties and there are only legal factors for the court to consider.” We find this surprising. One of the most apparent disputes betwen the parties is the applicability to movants of certain Swiss stautes. Foreign law is a question of fact. Conflicting affidavits were filed on this subject, and the court resolved the issue against movants. Movants still (fn. to page 6 of affidavit of January 26) assert precisely what has been found against them. It is not too much to say on this record that in considering the present motion we will determine that insofar as movants' appeal is based upon a favorable interpretation of Swiss law no substantial question is presented.

We do this with particular ease because we find it difficult to believe that substantial rights depend upon movants' claim as to Swiss law. IOS, Ltd. is a Panamanian corporation. It does business in Switzerland, and it does business in Puerto Rico. Doing business in Puerto Rico requires compliance with local law to the extent applicable. To say that this law becomes inapplicable because local law somewhere else where business is being done conflicts with our law is a proposition we would be slow to recognize. In claiming that the district court erred in this respect movants have a very substantial burden.

It may be conceded that it is onerous for movants to respond to an investigation by the SEC, and that certain harm in addition to expense and inconvenience may be involved. On the other hand, it is unthinkable that an administrative agency cannot even institute a proceeding until it has had, in effect, the permission of the district court and of the court of appeals whenever the parties to be investigated choose to deny its jurisdiction. We see nothing in this record to take this case out of the ordinary run. The motion for stay is denied. By the Court:

PAGE A. STRICKFIELD,

Clerk,

(Exhibit E)

Administrative Proceeding File No. 3–497

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

May 23, 1967

IN THE MATTER OF I.O.S., LTD. (S.A.) D/B/A, INVESTORS OVERSEAS SERVICES (8–

8622) ; INVESTORS CONTINENTAL SERVICES, LTD. (8 6948); BERNARD CORNFELD, EDWARD M. COWETT, ALLEN R. CANTOR, W. THAD LOVETT, ROBERT NAGLER, HYMAN FELD

Securities Exchange Act of 1934

ORDER ACCEPTING OFFER OF SETTLEMENT

On February 3, 1966, the Commission instituted these proceedings pursuant to Sections 15(b) and 15A of the Securities Exchange Act of 1934 (Exchange Act) naming I.O.S., Ltd. (S.A.) d/b/a Investors Overseas Services (IOS) (a Panama corporation with principal offices at Geneva, Switzerland, which became registered with the Commission as a broker-dealer on June 10, 1960); Investors Continental Services, Ltd. (ICS) (a wholly owned subsidiary of IOS with principal offices at New York, New York, which became registered with the Commission as a broker-dealer on November 18, 1958) ; Bernard Cornfeld (president, a director and beneficial owner of more than 10% of the equity securities of IOS and a director and indirect beneficial owner of more than 10% of the equity securities of ICS); Edward M. Cowett (a vice president of IOS and a director of IOS and secretary and director of ICS); Allen R. Cantor (senior vice-president of IOS); W. Thad Lovett (excutive vice-president of IOS) ; Robert Nagler (a director of IOS); and Hyman Feld (president and a director of ICS and an assistant secretary of IOS). The Order for Proceedings alleged violations of:

(1) the registration provisions of Section 5 of the Securities Act of 1933 and Section 7 of the Investment Company Act of 1940 with respect to the offer and sale of unregistered interests in The Fund of Funds, Ltd. (a foreign investment company whose portfolio consists largely of shares of investment companies registered under the Investment Company Act of 1940) and unregistered participations in the IOS Investment Program which is a program sponsored by IOS for the accumulation of interests in The Fund of Funds, Ltd.;

(2) Section 17(d) of the Investment Company Act of 1940 and Rule 17d-1 thereunder, relating to transactions between International Investment Trust, and investment company affiliate of IOS and The Fund of Funds, Ltd., and certain registered investment companies; and

(3) Section 17 of the Exchange Act relating to an alleged failure to preserve and produce certain books and records of IOS and ICS required to be maintained, preserved and made available for inspection by registered brok

ers and dealers under said Act. Respondents have submitted an Offer of Settlement under which they propose that the proceeding be terminated without any findings as to the foregoing allegations, and for that purpose they stipulate and agree as follows:

1. I.O.S., Ltd. (S.A.) ("IOS”) is registered with the Commission as a broker and dealer. Investors Continental Services, Ltd., a wholly-owned subsidiary of IOS, is registered with the Commission as a broker and dealer. I.C.S., Ltd., a wholly-owned subsidiary of IOS, is registered with the Commission as a broker and dealer. IOS and I.C.S., Ltd. shall each withdraw its registration as a broker and dealer, such withdrawals to be effective upon the entry of the Order by the Commission based on this Stipulation. Investors Continental Services, Ltd. shall comply with the procedures provided in paragraph 2(a) below. Accordingly, IOS and its affiliates, including The Fund of Funds, Ltd. (“FOF”), International Investment Trust, Ltd. ("IIT”) and any investment company affiliated with any of the foregoing which may now or hereafter be organized, their respective affiliates and investment advisers (but only to the extent that the activities of such advisers relate to any of the foregoing persons), shall conduct no activities subject to the jurisdiction of the Commission as hereinafter defined, except as otherwise provided herein.

2. (a) IOS shall, within ninety (90) days after entry of the Order based on this Stipulation, either dispose (after notice to and with the consent of the Commission) of its interest in Investors Continental Services, Ltd. (“ICS”) to a person independent of and not directly or indirectly affiliated with IOS or merge ICS into Investors Planning Corporation of America, with the latter as the survivor corporation ("IPC”).

(b) Within sixteen (16) months after entry of the Order based on this Stipulation, unless such time is extended in the Commission's discretion, IOS shall sell, transfer or otherwise dispose of its entire interest in IPC to a person who is independent of and not directly or indirectly affiliated with IOS; or within fourteen (14) months after entry of the Order based on this Stipulation by the Commission (unless such time has been extended by the Commission), IOS shall make final arrangements satisfactory to the Commission, in the Commission's sole and absolute discretion, to otherwise remove IOS from any direct or indirect control over the management and policies of IPC. During such periods, no respondent shall remain or become an employee, officer or director of IPC.

(c) Within one hundred twenty (120) days after entry of the Order based on this Stipulation by the Commission, all IOS interest in IPC shall be placed in a voting trust, the terms and independent trustees of which shall be acceptable to the Commission. The trust shall continue until IOS has complied with the provisions of paragraph (b) above.

(d) IOS shall give the Commission notice of any proposed transaction referred to in paragraph (b) thirty (30) days prior to the effective date thereof, said notice to include a statement of all circumstances of any such transaction, and such transaction shall be effected only upon consent of the Commission.

(e) Upon compliance with paragraph (b) neither IPC nor any officer, director, stockholder or employee of IPC shall own stock of IOS or its affiliates (except for current holdings by such persons as investors in the IOS Investment Program, IIT or FOF), except as otherwise approved by the Commission and except that present IPC employees who own IOS stock at that time may thereafter continue their employment with IPC for no more than one (1) year if such continued employment is reasonably required by the person not directly or indirectly affiliated with IOS referred to in paragraph (b) above, and has been approved by the Commission pursuant to paragraph (d) above.

3. (a) Within five (5) days after entry of the Order based on this Stipulation, The York Fund, Inc., The Alger Fund, Inc., The Douglas Fund, Inc. and Computer Directions Fund, Inc. Shall each adopt a plan of complete liquidation and dissolution. Such liquidation shall be effected as to at least 50% of net assets of each such registered company on or before July 15, 1967 and shall be completed on or before October 10, 1967.

(b) Immediately upon the entry of the Order based on this Stipulation, each of said investment companies shall cease to effect any transactions in securities except for purposes of effecting the plan of complete liquidation and dissolution provided herein.

(c) Immediately upon effecting the plan of complete liquidation and dissolution described herein, each of said investment companies shall file with the Commission an application pursuant to Section 8if) of the Investment Company Act of 1940 for an order declaring that each said company has ceased to be an investment company.

(d) Financial Institutions Growth Stock Fund, Inc. (“FIG”) shall effect a liquidation as to all of its net assets except for $1,000,000 (no more than 25% of which shall consist of marketable securities) on or before July 15, 1967, and shall on or before such date file the application set forth in paragraph (c) above. On or before August 15, 1967 FOF shall have either completely liquidated FIG or have sold (after notice to and with the consent of the Commission) its entire stock interest in FIG to a person who is independent of and not directly or indirectly affiliated with IOS.

4 Upon entry of the Order based on this Stipulation. IOS and all of its affiliates shall cease all sales of securities to United States citizens or nationals wherever located, except for (i) offers and sales outside of the United States (and its territories, possessions or commonwealth subject to the jurisdiction of the United States) to officers, directors and full-time personnel of IOS and its subsidiaries; (ii) sales by IPS; and (iii) sales by Pension Life Insurance Company of America, as provided in paragraph 6.

5. (a) Upon entry of the Order based on this Stipulation, no IOS officer, director or employee shall engage in any activity subject to the jurisdiction of the Commission.

46-824 04-709

(b) While no IOS person, as that term is defined below, has any present intention of terminating his present affiliation with IOS, such person shall not in any event engage in any activity subject to the jurisdiction of the Commission except (i) to the extent necessary to consumate the arrangements referred to in paragraph 2 above, or (ii) upon prior notice to and with the approval of the Commission.

(c) The term IOS person means any person who is a respondent in this pro ceeding and who at the date of this Stipulation is an officer or employee of IOS or any of its affiliates.

6. (a) IOS and its affiliates, including any of their officers, directors, controlling persons or any persons acting directly or indirectly on their behalf, shall not, except upon prior consent of the Commission, acquire, directly or indirectly, any controlling interest in any financial entity doing business in the United States, including but not limited to a broker-dealer, investment company, investment adviser, bank or similar entity, or any other business whose activities directly or indirectly are subject to the jurisdiction of the Commission; provided, however, that any of the aforementioned persons may purchase interests, including voting securities, in any such financial entity if such interests are not, in the aggregate, controlling interests but, as to investment companies, such purchase shall be subject to the provisions of paragraph 7. The aforementioned persons may, however, acquire a controlling interest in any financial entity whose principal business is without the United States and which carries on no business subject to the jurisdiction of the Commission.

(b) IOS and affiliates may retain their interests in Pension Life Insurance Company of America (“Pension”) provided that Pension conducts a normal and customary insurance business. Such business shall not include the offer or sale of variable annuities or other security interests subject to the jurisdiction of the Commission. It is further agreed that Pension shall not make any public offering of its securities unless such offering is made through a registered broker-dealer who is independent of Pension, IOS or any of their affiliates. The foregoing pro vision shall not apply when Pension is making an offering of its securities on a pro rata basis to its existing stockholders. IOS may transfer its interests in Pension to IPC.

7. (a) IOS will cause FOF, or any other investment company affiliate of IOS, to make only such further purchases of shares of registered investment companies as are within the limitations of Section 12(d) (1) of the Investment Company Act as if applicable.

(b) IOS will not seek or accept directly or indirectly representation on the board of any registered investment company or investment adviser or underwriter (other than IPC, during the periods set forth in paragraph 2(b)) thereto.

(c) IOS will cause FOF, or any other investment company affiliate of IOS, to abide by any law passed by Congress in the future which is applicable to foreign investment companies which invest in whole or in part in shares of registered investment companies, whether or not such law is made directly applicable to such foreign investment companies.

8. Since IOS will, pursuant to the terms and conditions of this Stipulation, conduct all of its securities activities outside the jurisdiction of the Commission and limit all future sales to foreign nationals only, it agrees as a part of this Stipulation to offer, within a reasonable period of time, to persons who purchased interests in FOF who were either members of the armed forces, other employees of the United States, or residents of the United States, its territories possessions or commonwealth subject to the jurisdiction of the United States, the opportunity of substituting under terms satisfactory to the Commission, shares of registered investment companies for their interests in FOF or of exercising other options which would terminate any continuing or further ownership of FOF interests.

9. IOS and FOF will supply, on a regular periodical basis, information that the Commission may request concerning their operations to show compliance with the terms of this Stipulation.

10. It shall be breach of the terms of this Stipulation for IOS, or any affiliate, or any person, or any IOS person directly or indirectly controlling or controlled by any of the foregoing, to do any act or thing which would be a breach of this Stipulation through or by means of or on behalf of any other person, including any individual, corporation, partnership, association, joint stock company, business trust or unincorporated organization.

11. If at any time, subsequent to the acceptance of this Stipulation, it appears that any term or condition of the Stipulation has been breached by respondents, the Commission may, upon thirty (30) days notice to respondents, order a hearing be held at a place designated by the Commission to determine only whether a breach of such Stipulation occurred and to afford respondents an opportunity to deny that a breach occurred or to establish mitigating circumstances with respect to such breach. For the purposes of such proceedings, service may be duly made on respondents by mailing a copy of the notice for hearing to the last known address of IOS. If respondents fail to appear at such hearing, of which they have been duly notified, or upon such hearing if the Commission finds a breach of any term or condition of the Stipulation, the Commission may, without further proceedings, deem respondents to be in default of its Order for Proceeding in the Matter of 1.0.8., Ltd. (S.A.), et al., of February 3, 1966 and may determine such proceedings against respondents in accordance with the provisions of Rule 7(e) of the Commission's Rules of Practice.

12. Definitions. The terms used in this Stipulation, except as set forth below, are those used in the Securities Exchange Act of 1934.

“Affiliate” means (i) any company or person directly or indirectly owning, controlling or holding 1% or more of the securities of iOS or 5% or more of the securities of any subsidiary of IOS; (ii) any company or person, 5% or more of whose securities are directly or indirectly owned, controlled or held by IOS or any of its subsidiaries; (iii) any person directly or indirectly controlling, controlled by or under common control with IOS or any of its subsidiaries; and (iv) any officer or employee of IOS or any of its subsidiaries. For purposes of this Stipulation, the term “affiliate” shall also include an affiliate as defined in Section 2(a) (3) of the Investment Company Act of 1940, of an affiliate of IOS. "Subsidiary” means any company, 10% or more of the outstanding voting securities of which are directly or indirectly owned, controlled or held with power to vote by IOS. Provided, however, that the companies, other than those named in paragraph 3 herein, whose securities were owned by FOF and IIT on April 27, 1967 shall not be deemed affiliates of IOS solely by reason of the relationship with and extent of such ownership on the aforesaid date.

“Investment company affiliate of IOS”, for the purpose of paragraph 7(a) above only, shall not include the IOS Investment Programs for the accumulation of shares of Dreyfus Fund and the IOS Investment Programs for the accumulation of shares of Research Investing Corporation so long as the shares of Dreyfus Fund and Research Investing Corporation held by said IOS Investment Programs are voted at any regular or special meeting of stockholders for quorum purposes only and are not voted on any matter which may be voted upon at any meeting.

"Jurisdiction of the Commission” shall include, but shall not be limited to, any activity in connection with the conduct of any securities business (which shall include the offer, purchase or sale of a security or the delivery or payment after sale) involving :

(a) any use of the United States mail, including all A.P.O. mail ;

(b) any use of the means or instrumentalities of trade, commerce (including the facilities of a national securities exchange), transportation or communication within or between any state, territory, possession or commonwealth of the United States ;

(c) any means within the District of Columbia cr on any military base, embassy consular post or ship of the United States; or

(d) any use of the means or instrumentalities of trade, commerce (in. cluding the facilities of a national securities exchange), transportation or communication between any foreign nation or ship and any state, territory, possession or commonwealth of the United States or the District of Columbia or any military base, embassy, consular post or ship of the United

States. 13. Respondents waive:

(1) A hearing pursuant to Section 15(b) of the Securities Exchange Act of 1934;

(2) All post-hearing procedures pursuant to Rules 16 and 17 of the Com. mission's Rules of Practice; and

(3) Judicial review by any court. After due consideration the Commission has determined that it is in the public interest to accept respondents' Offer of Settlement and accordingly

IT IS ORDERED that the Offer of Settlement be, and it hereby is accepted the terms and conditions of which shall become effective on June 5, 1967. By the Commission.

ORVAL L. DuBois, Secretary.

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