8
reached a settlement. Pursuant to the settlement, Peters was to
pay $50,500, representing the profits of the alleged inside
trading. Such payment was waived in light of Peters' poor
financial condition. The allegations of the SEC were never
proven by the SEC, and Peters did not admit to any wrongdoing.
When the complaint was filed, PGWV was told by counsel to
amend its ADV filing with the SEC. Such amendment, made on
January 3, 1989, disclosed the existence and nature of the suit.
PGWV also disclosed the suit on its audited balance sheets,
indicating that "the company is committed to retaining the
services of this officer and, accordingly, indemnified him for
any legal fees incurred in connection with this complaint". PGWV
hired Sullivan & Higdon, a public relations firm, to assist in
damage control. Deductions were claimed for such payment, but
they are not in issue.
As a result of the SEC's complaint, Merrill Lynch (a
brokerage firm) deleted PGWV from its list of investment managers
available to clients of one of its consulting services. The
notice from Merrill Lynch acknowledged that PGWV was not
implicated, but indicated that the removal of the latter from the
list was "prudent". Licensing bureaus for the States of Maine
and Kentucky suggested that PGWV withdraw its application for
investment adviser registration until the matter with the SEC was
resolved. One of the largest clients of PGWV, the Kansas Public
Employees Retirement System (KPERS), representing about 60
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