SIMPSON THACHER & BARTLETT LLP

SIMPSON THACHER & BARTLETT LLP

1155 F STREET, N.W.

WASHINGTON, D.C. 20004

(202) 636·5500

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DIRECT DIAL NUMBER

E-MAIL ADDRESS

(202) 636·5569

pbrcsnan@stblaw.com

May 19,2014

Re:

United States v. Credit Suisse AG

Sebastian Gomez Abero

Chief, Office of Small Business Policy

U.S. Securities and Exchange Commission

I 00 F Street, NE, 3 rd Floor

Washington, DC 20549-3628

Dear Mr. Gomez Abero:

We write, not on behalf of Credit Suisse AG ("CSAG"), but rather on behalf of any

fund or other investment vehicle which, as of the date of this letter, relies on the Regulation D

private placement exemption and which is managed, advised, or sub-advised by Credit Suisse

Asset Management, LLC ("CSAM") Credit Suisse Securities (USA) LLC ("CSSU"), Credit

Suisse Asset Management Limited, Credit Suisse Hedging-Griffo Servicos Internacionais

S.A., or Aventicum Capital Management Holding AG and its subsidiaries including but not

limited to the funds or other investment vehicles listed on Schedule A to this letter (the

"Current Fund" or "Current Funds"). 1 This letter also seeks relief on behalf of any issuer as to

which CSAG is, directly or indirectly, the beneficial owner of20% or more but less than 50%

of the issuer's outstanding voting equity securities, calculated on the basis of voting power,

including but not limited to the issuers listed on Schedule B to this letter (or any fund or other

investment vehicle managed, advised, or sub-advised by any such issuer) (the "Third Party

Issuers"). Finally, this letter seeks relief on behalf of any portfolio company of any fund or

investment vehicle managed, advised, or sub-advised by CSAM, CSSU or any other subsidiary

of CSAG as to which CSAG thereby is, directly or indirectly, the beneficial owner of20% or

more of the issuer's outstanding voting equity securities, calculated on the basis of voting

power (any such portfolio company, a "Portfolio Company" or "Portfolio Companies"). We

For purposes of this letter, a "Current Fund" includes a fund or other investment

vehicle and its alternative investment vehicles, parallel fund vehicles, master fund

vehicles, feeder fund vehicles, co-investment vehicles and any other vehicles formed or

to be formed in the future in connection with the fundraising or investment program for

a Current Fund.

NEW YoRK

BEIJING

HoNG KONG

HOUSTON

LONDON

Los ANGELES

PALO ALTO

SAo PAULO

SEOUL

TOKYO

2

Sebastian Gomez Abero

hereby respectfully request, pursuant to Rule 506 of Regulation D of the Securities Act of

1933 ("Securities Act"), a waiver of any disqualification arising from the designation of CSAG

as a "bad actor" for purposes of Rule 506 of Regulation D with respect to any of the Current

Funds, the Third Party Issuers or Portfolio Companies as a result of the conviction arising

from the plea agreement pursuant to which CSAG-the defendant in the above-captioned

proceeding- pleaded guilty to one count of violating 18 U.S.C. § 371 (the "Plea Agreement").

Background

The United States Department of Justice engaged in settlement discussions with CSAG

in connection with its investigation of violations of 18 U.S.C. § 371. As a result of these

discussions, CSAG entered into the Plea Agreement.

On May 19, 2014, the U.S. Department of Justice (the "Department of Justice") filed a

one-count criminal information (the "Information") in the District Court for the Eastem

District of Virginia (the "District Court") charging CSAG with conspiracy to commit tax fraud

related to accounts CSAG established for cross-border clients in violation of 18 U.S.C. § 371.

CSAG has agreed to resolve the action brought by the Department of Justice through

the Plea Agreement. Under the Plea Agreement, CSAG pleaded guilty to the charge set out in

the Information (the "Plea"). Applicants expect that the District Court will enter a judgment of

conviction against CSAG that will require remedies that are materially the same as set forth in

the Plea Agreement.

According to the Statement of Facts that served as the basis for the Plea Agreement,

CSAG assisted in the preparation and presentation of false income tax returns and other

documents to the Internal Revenue Service ("IRS"). CSAG, including tln·ough its subsidiary

Clariden Leu, operated a cross-border banking business that aided U.S. clients in opening and

maintaining undeclared accounts and concealing foreign assets and income from the IRS.

Private bankers based in Switzerland solicited U.S. clients to open undeclared financial

accounts based on the protection offered by Swiss bank secrecy laws, which allowed U.S.

clients to avoid disclosure of their ownership of the accounts and avoid obligations to pay U.S.

taxes.

CSAG relationship managers traveled fi·om Switzerland to the United States to meet

with U.S. clients with undeclared financial accounts and to offer investment advice, even

though they were not registered with the Commission to provide such services in the U.S.

CSAG relationship managers based in Switzerland also communicated with U.S. clients by

phone and e-mail. Switzerland-based bank relationship managers advised U.S. clients not to

keep records in the U.S. related to their undeclared accounts.

CSAG assisted some U.S. clients in ensuring that their ownership of undeclared

financial accounts would not be apparent. CSAG relationship managers in Switzerland

assisted U.S. clients with undeclared financial accounts in establishing sham entities that

disguised U.S. clients' interest in accounts but allowed the U.S. clients or their relationship

managers to maintain control over the account assets.

Sebastian Gomez Abero

3

Due in part to the assistance of CSAG and its relationship managers, numerous U.S.

clients-with knowledge that Swiss bank secrecy laws would prevent CSAG from disclosing

their identities to the IRS-filed false tax returns with the IRS that failed to disclose their

interests in undeclared accounts and related income.

Although CSAG made attempts to consolidate U.S. clients' accounts in entities that

complied with U.S. law, those attempts were ineffective. CSAG initiatives and directives

designed to promote compliance with U.S. tax law did not stop Switzerland-based relationship

managers from maintaining undeclared accounts for U.S. clients. When CSAG determined in

2009 to exit the cross-border banking business, the process of resolving all accounts with

connections to U.S. clients took a matter of years to complete. Had CSAG implemented its

exit project earlier and dedicated itself to investigating potential violations of U.S. law sooner,

more information about the improper conduct may have been available to CSAG and U.S.

investigators.

On February 21, 2014, Credit Suisse Group AG reached a settlement with the

Commission that resolved its investigation into the provision of umegistered broker-dealer and

investment adviser services to U.S. clients during the period of time between 2002-2008. The

conduct that was the subject of the Commission investigation related to the conduct charged in

the Information. As part of the Commission administrative proceeding, Credit Suisse Group

AG agreed to pay $196,511,014, which includes $82,170,990 in disgorgement, $64,340,024 in

interest and a $50,000,000 penalty. Credit Suisse Group AG also retained an independent

consultant in connection with this settlement.

Discussion

We understand that the conviction arising from the Plea Agreement will designate

CSAG as a "bad actor" for purposes of Rule 506 of Regulation D pursuant to 17 C.F.R. §

230.506(d). The Commission has the authority to waive the Regulation D exemption

disqualification upon a showing of good cause that it is not necessary under the circumstances

that the exemption be denied. See 17 C.F.R. § 230.506(d). For the reasons discussed below,

we request, on behalf of the Current Funds, the Third Party Issuers and the Portfolio

Companies that the Commission waive the disqualifYing effects that the conviction arising

from the Plea Agreement has under Rule 506 of Regulation D with respect to the Current

Funds, Third Party Issuers and Portfolio Companies on the following grounds:

First, while the Plea Agreement does concern activities of CSAG that arise from its

activities as an unregistered investment adviser and broker dealer, as explained above, the

misconduct alleged in the Plea Agreement does not relate to any activities of the Current

Funds, the Third Party Issuers and the Portfolio Companies related to securities offerings

under Regulation D, or otherwise. No current directors, officers or employees of any of the

Current Funds, or ofCSAM, CSSU, Credit Suisse Asset Management Limited, Credit Suisse

Hedging-Griffo Servicos Internacionais S.A., or Aventicum Capital Management Holding AG

or its subsidiaries were responsible for the conduct underlying the Plea Agreement.

Second, the disqualification of the Current Funds, the Third Party Issuers and the

Portfolio Companies from the exemption under Rule 506 of Regulation D would adversely

Sebastian Gomez Abero

4

impact investors in the Current Funds that had no involvement in the misconduct alleged in the

Plea Agreement, as well as the Third Party Issuers and non-CSAG affiliated shareholders and

Portfolio Company investors, who likewise had no involvement in the misconduct alleged in

the Plea Agreement.

Third, for a period of five years from the date of the guilty plea entered into by CSAG

pursuant to the Plea Agreement, the Current Funds will furnish (or cause to be furnished) to

each purchaser in a Rule 506 offering by one of the Current Funds that would otherwise be

subject to the disqualification under Rule 506(d)(l) as a result of the conviction arising from

the Plea Agreement, a description in writing of the Plea Agreement a reasonable time prior to

sale.

Fourth, the Current Funds, Third Party Issuers and the Portfolio Companies in many

cases would not be able to take advantage of any exemption provided by Section 4(a)(2) of

Securities Act of 1933, should there not be a waiver of disqualification under Rule 506, in light

of the broadly based marketing efforts typically undertaken in institutional and high net worth

private placements, which are inconsistent with the numerical limitation on the number of

offerees under case law interpreting Section 4(a)(2) of Securities Act of 1933.

In li ght of the grounds for relief discussed above, we believe that disqualification is not

necessary, in the public interest, or for the protection of investors, and that good cause has

been shown that relief should be granted. Accordingly, we respectfully request the

Commission to waive the disqualification provisions in Rule 506 of Regulation D to the extent

they are applicable to the Current Funds, the Third Party Issuers and the Portfolio Companies

as a result of the conviction arising from the Plea Agreement.

Very truly yours,

~~ '-~196

Peter H. Bresnan

SCHEDULE A

Asset Management Funds

Credit Suisse Systematic Trading CTA 2.0 Fund Ltd.

Commingled Asset Short Term Fund (CAST) Ltd.

Credit Suisse Dollar Senior Loan Fund Ltd.

Credit Suisse Dollar Senior Loan Offshore Fund Ltd.

Credit Suisse Fixed Income Opportunities Fund Limited

Terlingua Fund l, LP

Credit Suisse GAINS Commodity Plus, LP

Credit Suisse Risk Parity Commodity Fund LP

SAPIC 98 Fund Ltd.

SAPIC Global Macro Fund Ltd.

Phoenix Distressed Opportunities Fund (Cayman) Ltd.

Phoenix Distressed Opportunities Fund LP

SAPIC Global Macro Fund, LP

ILS Property & Casualty Master Fund Ltd.

ILS Property & Casualty Feeder Fund Ltd.

Boreas Limited

Levanto Limited

Credit Suisse Merger Arbitrage Liquid Index Fund Ltd.

Credit Suisise Liquid Alternative Beta Index Fund, Ltd.

Credit Suisse Securitized Products Fund Ltd.

Credit Suisse Securitized Products Fund LP

Credit Suisse Securitized Products Intermediate Fund Ltd.

Credit Suisse Securitized Products Master Fund Ltd.

Solon Capital Ltd.

CS Long/Short Equity Strategy Master Fund

CS Strategic Partners PB Feeder VI, L.P.

CS Strategic Partners PB Offshore Feeder VI, L.P.

Aventicum MENA Fund Limited

Aventicum SPC- European Alpha Fund SP

Credit Suisse Access Commodity Fund, Ltd.

Alpha HG Fund Ltd.

CSHG Fix BRL Fund LLC

CSHG Fix USD Fund LLC

CSHG Unique Fund LLC

CSHG Unique Long Bias Master Fund LLC

Strategy HG Long & Short Fund LLC

IP III Co-Investors, L.P.

CFIG Co-Investors, L.P.

Credit Suisse NEXT Investors

CSFB Equity Partners

CSFB International Equity Partners

DLJ Merchant Banking Partners II

Mas dar

Sprout

Private Bank Funds

York Total Return

Gavea Global Macro

Finisterre Sovereign Debt Fund

Armajaro Commodities Fund

Aspect

Och ZiffHedgeFocus Fund

Absolute Return Capital HedgeFocus Fund

Hedging Griffo

PWP Tokum Healthcare HedgeFocus Fund

MKP Opportunity HedgeFocus Fund

BlackGold Opportunity HedgeFocus Fund

Doonbeg HedgeFocus Fund

Millennium HedgeFocus Fund

York Multi-Strategy HedgeFocus Fund

York Credit Opportunities HedgeFocus Fund

SCHEDULEB

China Renaissance Capital Investment

DLJ Real Estate Capital Partners

ESP Holdings

Global Infrastructure Partners

Gulf Capital

Helvetica

HighTower Holding LLC

Hudson Clean Energy Pminers

ICBC Credit Suisse Asset Management Co.

Institutional Capital Network, Inc.

Mubadala Infrastructure Investment Limited LLC

Ospraie Partners

Peninsula Administracao de Recursos e Investimentos S.A.

Victoria Capital Pminers, LP