# UNITED STATES OF AMERICA

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URL: https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ab19db7e86eff2597

## Record

- **Collection:** Agency decision
- **Document type:** Agency decision

## Text

UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING
File No. 3-20165

In the Matter of
General Electric Company,
Respondent.

I.

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PROPOSED PLAN OF
DISTRIBUTION

OVERVIEW

1.
The Division of Enforcement submits this Proposed Plan of Distribution (the “Plan”)
to the United States Securities and Exchange Commission (the “Commission”) pursuant to Rule
1101 of the Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s Rules”),
17 C.F.R. § 201.1101. This Plan provides for the distribution of a Fair Fund (the “Fair Fund”),
comprised of civil money penalties paid by General Electric Company (the “Respondent” or “GE”)
in the above-captioned matter.1
2.
As described more specifically below, the Plan seeks to compensate investors who
were harmed, by the Respondent’s conduct described in the Order, in connection with its failure to
disclose material information to investors related to two of its key reportable segments during the
period from 2015 through 2017. As calculated using the methodology detailed in the Plan of
Allocation (attached as Exhibit A), investors will be compensated for their losses on shares of
General Electric common stock (the “Securities”) that were purchased from October 16, 2015, and
continuing until the market close on January 16, 2018 (the “Relevant Period”) due to the misconduct
of the Respondent. In the view of the Commission staff and the Fund Administrator, this
methodology constitutes a fair and reasonable allocation of the Fair Fund.
3.
The Commission has custody of the Fair Fund and shall retain control of the assets of
the Fair Fund. The Plan is subject to approval by the Commission, and the Commission retains
jurisdiction over its implementation.

1

See Order Instituting Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section
21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-andDesist Order, Securities Act Rel. No. 10899 (Dec. 9, 2020) (the “Order”).

II.

BACKGROUND

4.
On December 9, 2020, the Commission issued the Order instituting and
simultaneously settling cease-and-desist proceedings against the Respondent. In the Order, the
Commission found that GE, a large publicly-traded company that operates a number of lines of
businesses, failed to disclose material information to investors related to two of its key reportable
segments during the period from 2015 through 2017. First, GE failed to disclose to investors
information concerning the nature of its reported profit growth in its power business and $2.5 billion
in reported cash collections. Second, from the third quarter of 2015 through the first quarter of 2017,
GE failed to disclose to investors worsening trends in its insurance business and the potential for
substantial losses. GE's insurance business ultimately incurred a $9.5 billion pre-tax charge against
GE's earnings for the fourth quarter of 2017 and required capital contributions by GE of
approximately $15 billion over seven years to fund expected future insurance claims. The
Commission ordered the Respondent to pay a $200,000,000 civil money penalty to the Commission.
The Commission also created the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act
of 2002, so the penalty paid can be distributed to harmed investors.
5.
The Respondent has paid in full. The Fair Fund has been deposited at the United
States Department of the Treasury’s Bureau of the Fiscal Service (“BFS”) for investment.
III.

DEFINITIONS
As used in this Plan, the following definitions will apply:

6.
“Administrative Costs” shall mean any administrative costs and expenses including,
without limitation, the fees and expenses of the Tax Administrator and the Fund Administrator, tax
obligations, bond premium expenses, and investment and banking costs.
7.
“Claim Form” means the form designed by the Fund Administrator, in consultation
with the Commission staff, for the filing of claims in accordance with this Plan. The Claim Form
will require, at a minimum, sufficient documentation reflecting any Preliminary Claimant’s
purchases and dispositions of Securities during the Relevant Period such that eligibility under the
Plan can be determined, tax identification and other related information from the Preliminary
Claimant as determined necessary by the Fund Administrator in coordination with the Tax
Administrator, and a certification that the Preliminary Claimant is not an Excluded Party.
8.
“Claim Status Notice” means the notice sent by the Fund Administrator within one
hundred twenty (120) days of the Claims Bar Date to all Preliminary Claimants that submitted a
Claim Form. The Claim Status Notice will set forth the Fund Administrator’s determination of the
eligibility of the claim (eligible, partially or wholly deficient, or ineligible). The Claim Status Notice
will provide to each Preliminary Claimant whose claim is deficient, in whole or in part, the reason(s)
for the deficiency and in the event the claim is denied, the Claim Status Notice will state the
reason(s) for such denial. The Claim Status Notice will also notify the Preliminary Claimant of the
opportunity to cure any deficiency, request reconsideration, or dispute the determination made by the
Fund Administrator and provide instructions regarding what is required to do so.
9.
“Claims Bar Date” means the date established in accordance with this Plan by which
a Preliminary Claimant’s Claim Form must be postmarked or submitted electronically in order to
2

receive consideration under the Plan. The Claims Bar Date shall be one hundred twenty (120) days
from publication of the Summary Notice. Claim Forms submitted by Preliminary Claimants
postmarked or received after the Claims Bar Date will not be accepted unless the Fund
Administrator is directed to do so by the Commission staff.
10.
“Claims Packet” means the materials relevant to submitting a claim that will be
provided to Preliminary Claimants those who request such materials through a website or otherwise
prior to the Claims Bar Date. The Claims Packet will include, at a minimum, a copy of the Plan
Notice and a Claim Form (together with instructions for completion of the Claim Form).
11.
“Distribution Payment” means a payment from the Fair Fund to a Payee in
accordance with the terms of this Plan.
12.
“Eligible Claimant” means a Preliminary Claimant who submitted a valid claim,
who may have suffered a loss from purchases of the Securities during the Relevant Period, pursuant
to the Plan of Allocation, and who is not an Excluded Party.
13.

“Excluded Party” shall mean:
(a)

The Respondent;

(b)

Any current or former adviser or agent of the Respondent who participated in
the conduct described in the Order;

(c)

Any current or former employee of the Respondent or any of its affiliates who
has been terminated for cause or has otherwise resigned, in connection with
the conduct described in the Order;

(d)

Any Person who served at any time from January 1, 2015, through the end of
the Relevant Period as an officer2 or director of the Respondent, or of any
subsidiary or affiliate3 of Respondent;

(e)

Any Person who, as of the Claims Bar Date, has been the subject of criminal
charges related to the conduct described in the Order;

(f)

Any firm, trust, corporation, officer, or other entity in which Respondent and
any assigns, creditors, heirs, distributees, spouses, parents, dependent children
or controlled entities of any of the foregoing persons or entities has or had a
controlling interest;

(g)

The Fund Administrator, its employees, and those persons assisting the Fund
Administrator in its role as the Fund Administrator;

An “officer” excluded under this paragraph is any officer of GE required to file a Form 3, 4, or 5 with the Commission
pursuant to Section 16 of the Securities Exchange Act of 1934 to report transactions in Eligible Securities during the
2015-2018 calendar years.
3
As used herein, “affiliate shall have the meaning described in Section 101(2) of the United States Bankruptcy Code, 11
U.S.C. § 101 et seq.
2

3

(h)

Any purchaser or assignee of another Person’s right to obtain a recovery from
the Fair Fund for value; provided, however, that this provision shall not be
construed to exclude those Persons who obtained such a right by gift,
inheritance or devise.

The Claim Form will require claimants to certify that they are not an Excluded Party.
14.
“Fair Fund” means the $200,000,000 fund created by the Commission pursuant to
Section 308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by
Respondent’s violations described in the Order.
15.
“Final Determination Notice” shall mean the written notice sent by the Fund
Administrator to any Preliminary Claimant who timely responded to the Claim Status Notice in an
effort to cure a deficiency, seek reconsideration of a denied claim, or otherwise dispute the
determination made by the Fund Administrator, notifying the Preliminary Claimant of its
determination. The Final Determination Notice will constitute the Fund Administrator’s final ruling
regarding the status of the claim.
16.
“Net Available Fair Fund” means the Fair Fund, plus any interest or earnings, less
Administrative Costs.
17.
“Payee” means an Eligible Claimant who is determined to receive a Distribution
Payment, as calculated in accordance with the Plan of Allocation.
18.
“Plan Notice” means a written notice from the Fund Administrator to Preliminary
Claimants informing them of the Fair Fund; the Plan and its eligibility requirements; explaining how
to submit a claim, including directions for any online claims process; and how to obtain a copy of
the approved Plan and Claim Form by request or from the Fair Fund’s website. The Plan Notice will
also be available on the Fair Fund’s website that is maintained by the Fund Administrator.
19.
“Person” means natural individuals as well as legal entities such as corporations,
partnerships, or limited liability companies.
20.
“Plan of Allocation” means the methodology by which an Eligible Claimant’s
Recognized Loss is calculated. The Plan of Allocation is attached as Exhibit A.
21.
“Preliminary Claimant” shall mean a Person, or their lawful successors, identified
by the Fund Administrator as having a possible claim to recover from the Fair Fund pursuant to the
Plan of Allocation or a Person asserting, prior to the Claims Bar Date, that they have a possible
claim to recover from the Fair Fund under the Plan of Allocation.
22.
“Recognized Loss” means the amount of loss calculated for an Eligible Claimant in
accordance with the Plan of Allocation.
23.
“Relevant Period” means the period of time beginning October 16, 2015, and
continuing until the market close on January 16, 2018.
4

24.
“Securities” refers to shares of GE common stock listed on a U.S. exchange and
registered with the Commission, and traded under the symbol GE during the Relevant Period.
25.
“Summary Notice” means the notice published in print or internet media that shall
include, at a minimum, a statement of the purpose of the Fair Fund and the Plan, the means of
obtaining a Claims Packet, and the Claims Bar Date. The Summary Notice will be published two (2)
times and will appear within ten (10) days of the initial mailing of the Plan Notice.
26.
“Third-Party Filer” means a third-party including, without limitation, a nominee,
custodian, or an intermediary holding in street name, who is authorized to submit and submits a
claim(s) on behalf of one or more Preliminary Claimants. Third-Party Filer does not include
assignees or purchasers of claims, who are excluded from receiving Distribution Payments.
IV.

TAX COMPLIANCE

27.
On April 16, 2021, the Commission appointed Miller Kaplan Arase LLP as the tax
administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations of the Fair
Fund.4 The Tax Administrator will be compensated for reasonable fees and expenses from the Fair
Fund in accordance with its 2019-2021 Engagement Letter Agreement with the Commission.5
28.
The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section
468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related
regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the administrator of
such QSF, for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the tax-related
administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not limited to:
(a)

Obtaining a taxpayer identification number;

(b)

Requesting funds necessary for the timely payment of all applicable taxes, the
payment of taxes for which the Tax Administrator has received funds, and the
filing of applicable returns; and

(c)

Fulfilling any information reporting or withholding requirements required for
distributions from the Fair Fund.

29.
All tax obligations will be paid from the Fair Fund, subject to the review and approval
of Commission staff.
V.

FUND ADMINISTRATOR

30.
On September 16, 2021, the Commission appointed RCB Fund Services LLC, as the
fund administrator for the Fair Fund (the “Fund Administrator”), and the Fund Administrator has
obtained a bond in the amount of $200,000,000, as ordered.6 Pursuant to Rule 1105(a) of the
4

See Order Appointing Tax Administrator, Exchange Rel. No. 91606 (Apr. 16, 2021).
See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish
Distribution Funds, Exchange Act Rel. No. 85174 (Feb. 22, 2019).
6
See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 93029 (Sept. 16, 2021).
5

5

Commission’s Rules, 17 C.F.R. § 201.1105(a), the Fund Administrator may be removed at any time
by order of the Commission or hearing officer.
31.
The Fund Administrator will be responsible for administering the Fair Fund in
accordance with the Plan. This will include, among other things, taking reasonable steps to identify
and contact Preliminary Claimants; obtaining mailing information for Preliminary Claimants;
establishing a website and staffing a call center to address inquiries during the claims process;
developing a claims database; preparing accountings; cooperating with the tax administrator
appointed by the Commission to satisfy any tax liabilities and to ensure compliance with income tax
reporting requirements including, but not limited to, Foreign Account Tax Compliance Act
(FATCA); advising Preliminary Claimants of deficiencies in claims and providing an opportunity to
cure any documentary defects; taking antifraud measures, such as identifying false, ineligible and
overstated claims; making determinations under the criteria established herein as to Preliminary
Claimant eligibility; advising Preliminary Claimants of final claim determinations; disbursing the
Fair Fund in accordance with this Plan, as ordered by the Commission; and researching and
reconciling errors and reissuing payments, when possible.
32.
To carry out the purposes of this Plan, the Fund Administrator is authorized to make
and implement immaterial changes to the Plan upon agreement of the Commission staff. If a change
is deemed to be material by the Commission staff, Commission approval is required prior to
implementation by amending the Plan.
33.
The Fund Administrator may extend any procedural deadline contained in the Plan
for good cause shown, if agreed upon by the Commission staff.
34.
The Fund Administrator is authorized to enter into agreements with third-parties as
may be appropriate or necessary in the administration of the Fair Fund, provided such third-parties
are not excluded pursuant to other provisions of this Plan. In connection with such agreements, the
third-parties shall be deemed to be agents of the Fund Administrator under this Plan.
35.
The Fund Administrator will be entitled to payment from the Fair Fund of reasonable
fees and expenses, including the bond premium, incurred in the performance of its duties (including
any such fees and expenses incurred by agents, consultants or third-parties retained by the Fund
Administrator in furtherance of its duties).
VI.

ADMINISTRATION OF THE FAIR FUND
Identification of and Notification to Preliminary Claimants

36.
The Fund Administrator will, insofar as practicable, use its best efforts to identify
Preliminary Claimants from a review of trading records, obtaining records from registered brokerdealers and investment advisors, and seeking information from any other source available to them.
The Fund Administrator may also engage a third-party firm, after consultation with and approval
of the Commission staff, to assist in identifying Preliminary Claimants to maximize the
participation rate of GE investors in the Fair Fund.
37.

Within sixty days (60) after Commission approval of the Plan, the Fund
Administrator shall:
6

(a)

Design and submit a Claims Packet, including the Plan Notice and the Claim
Form, to the Commission staff for review and approval;

(b)

Create a mailing and claim database of all Preliminary Claimants based upon
information identified by the Fund Administrator;

(c)

Run a National Change of Address search to retrieve updated addresses for all
records in the database, thereby ensuring the mailing information for
Preliminary Claimants is up-to-date;

(d)

Send by email or mail a Plan Notice to each Preliminary Claimant identified
by the Fund Administrator and to the Fund Administrator’s list of banks,
brokers, and other nominees in accordance with paragraph 42 below;

(e)

Establish and maintain a website devoted solely to the Fair Fund. The Fair
Fund’s website, located at www.gefairfund.com, will make available a copy
of the approved Plan; provide information regarding the claims process and
eligibility requirements for participation in the Fair Fund in the form of
frequently asked questions; include, in downloadable form, the Plan Notice,
Claim Form and other related materials; and such other information the Fund
Administrator believes will be beneficial to Preliminary Claimants;

(f)

Establish and maintain a toll-free telephone number for Preliminary Claimants
to call to speak to a live representative of the Fund Administrator during its
regular business hours or, outside of such hours, to hear prerecorded
information about the Fair Fund. The toll-free number will be listed on all
correspondence from the Fund Administrator to Preliminary Claimants as well
as on the Fair Fund’s website; and

(g)

Establish and maintain a traditional mailing address and an email address
which will be listed on all correspondence from the Fund Administrator to
Preliminary Claimants as well as on the Fair Fund’s website.

38.
The Fund Administrator will publish the Summary Notice on the internet and/or in
print media acceptable to Commission staff. The Summary Notice will be published two (2) times
and will appear within ten (10) days of the initial mailing of the Plan Notice.
39.
The Commission staff retains the right to review and approve any material posted on
the Fair Fund’s website, any material mailed, and any scripts used in connection with any
communication with Preliminary Claimants.
40.
In all materials that refer to the Claims Bar Date, the filing deadline will be clearly
identified with the calendar date, which is one hundred twenty (120) days from the date of the initial
mailing of the Plan Notice.
41.
The Fund Administrator will promptly provide a Claims Packet to any Preliminary
Claimant upon request made via mail, phone, or email prior to the Claims Bar Date.
7

42.
The Fund Administrator will send by mail, email, or other means, the Plan Notice to
the Fund Administrator’s list of banks, brokers, and other nominees, as well as any other institutions
identified during the outreach process, that may have records of the Securities during the Relevant
Period (collectively, the “Nominees or Custodians”). The Fund Administrator will request that these
entities, to the extent that they were record holders for beneficial owners of the Securities:
(a)

Within fourteen (14) days of the Nominees’ or Custodians’ receipt of the Plan
Notice, notify and send the Plan Notice to the respective beneficial owners,
and, as requested, provide the beneficial owners with related information so
that the beneficial owners may timely file a claim. The burden will be on the
Nominees or Custodians to ensure the claims process information, including,
if requested, the Claim Packet and other relevant materials, is properly
disseminated to the beneficial owners; and/or

(b)

Provide to the Fund Administrator, within fourteen (14) days of receipt of the
Plan Notice, a list of last known names and addresses for all beneficial owners
for whom they purchased, as the record holder, the Securities during the
Relevant Period, so that the Fund Administrator can communicate with the
beneficial owners directly.

43.
At the discretion of the Fund Administrator, in consultation with the Commission
staff, a paper or PDF copy of the Claims Packet shall be made available to any Nominee or
Custodian requesting it for the purpose of distribution to beneficial owners.
44.
Documented reasonable out-of-pocket expenses incurred by the Nominees or the
Custodians, which would not have been incurred but for compliance with paragraph 42 above, shall
be reimbursed from the Fair Fund. The amount of such expenses allowed will be at the discretion of
the Fund Administrator, in consultation with the Commission staff. Unless otherwise determined by
the Fund Administrator in consultation with the Commission staff, out –of-pocket expenses based on
the following rates will be considered reasonable:
(a)

a maximum of $0.08 per Claims Packet, plus postage at the pre-sort postage
rate per Claim Packet actually mailed;

(b)

$0.05 per email of Summary Notice of Plan Notice and Claim Form link
disseminated; or

(c)

$0.20 per name, address, and email address provided to the Fund
Administrator, up to a maximum amount of $1,500.00.

45.
The Fund Administrator will attempt to locate any Preliminary Claimant whose
mailing is returned as “undeliverable” and will document all such efforts. The Fund Administrator
shall use its best efforts to make use of commercially available resources and other reasonably
appropriate means to obtain updated addresses in response to “undeliverable” notices, and forward
any returned mail for which an updated address is provided or obtained. The Fund Administrator
will make available, upon request by the Commission staff, a list of all Preliminary Claimants for
whom a Plan Notice has been returned as “undeliverable” due to incorrect addresses and for which
the Fund Administrator has been unable to locate current addresses.
8

Filing a Claim
46.
To avoid being barred from asserting a claim, on or before the Claims Bar Date, each
Preliminary Claimant must submit to the Fund Administrator, electronically through the Fund
Administrator’s web-based claim portal located at www.gefairfund.com or through other means, a
properly completed Claim Form reflecting such Preliminary Claimant’s claim, together with all
required supporting documentation as the Fund Administrator, in its discretion, deems necessary or
appropriate to substantiate the claim. Without limitation, this information may include third-party
documentary evidence of purchases and dispositions of Securities during the Relevant Period, as
well as holdings of Securities at pertinent dates. The burden will be upon the Preliminary Claimant
to ensure that his, her or its Claim Form has been properly and timely received by the Fund
Administrator. A Claim Form that is postmarked or otherwise submitted after the Claims Bar Date
will not be accepted unless the deadline is extended by the Fund Administrator for good cause
shown, after consultation with the Commission staff.
47.
The burden to prove receipt of the claim by the Fund Administrator will be upon the
Preliminary Claimant; therefore, the Preliminary Claimants will be instructed to submit their claims
in a manner that will enable them to prove receipt of the claim by the Fund Administrator.
48.
All Claim Forms and supporting documentation necessary to determine a Preliminary
Claimant’s eligibility to receive a distribution from the Fair Fund under the terms of the Plan must
be verified by a declaration executed by the Preliminary Claimant under penalty of perjury under the
laws of the United States. The declaration must be executed by the Preliminary Claimant, unless the
Fund Administrator accepts such declaration from a Person authorized to act on the Preliminary
Claimant’s behalf, whose authority is supported by such documentary evidence as the Fund
Administrator deems necessary.
49.
Electronic claims submission is strongly encouraged; the Plan Notice will include
directions on how Preliminary Claimants can submit their claims electronically via the Fair Fund’s
website at www.gefairfund.com. If using the web-based claim filing option, a Preliminary Claimant
must submit their claim to the Fund Administrator by 11:59 p.m. on the Claims Bar Date. The Plan
Notice will also include directions for submission of claims if the Preliminary Claimant is unable to
submit their claim electronically.
50.
When submitting claims to the Fair Fund on behalf of its clients, all Third-Party
Filers must use the electronic filing template provided by the Fund Administrator in this matter.
Third-Party Filers that do not comply with the template and format provided by the Fund
Administrator may be rejected. Third-Party Filers must also submit a signed master Claim Form and
release, as well as proof of authority to file on behalf of the Preliminary Claimant(s) at the time the
electronic file of transactions is submitted. Failure to do so may result in rejection of the claim.
51.
Each Third-Party Filer must establish the validity and amount of each claim in its
submission. Like all other Preliminary Claimants to the Fair Fund, Third-Party Filers must submit
such supporting documentary evidence of purchases, dispositions, and holdings of Securities as the
Fund Administrator deems necessary or appropriate to substantiate each individual claim. Without
limitation, this includes the complete name of the Preliminary Claimant (beneficial account owner)
and its TIN (for individuals) or EIN (for companies), sufficient contact information to confirm the
9

identity of the beneficial owner, and documentation from the original bank, broker or other
institution of purchases and dispositions of Securities (account statements, confirmations and other
documentation of purchases and dispositions), as well as holdings of the Securities on pertinent
dates. Documentation generated by the Third-Party Filer as well as affidavits in lieu of supporting
documentation, will not be accepted unless, for good cause, the Fund Administrator determines it
acceptable. The Fund Administrator will have the right to request, and the Third-Party Filer will
have the burden of providing to the Fund Administrator, any additional information and/or
documentation deemed necessary by the Fund Administrator to substantiate the claim(s) contained in
the submission. Documentation from a Third-Party Filer that is not acceptable to the Fund
Administrator will result in rejection of the affected claim(s). The determination of the Fund
Administrator to reject a claim for insufficient documentation, as reflected on the Final
Determination Notice, is final and within the discretion of the Fund Administrator.
52.
The receipt of Securities by gift, inheritance, devise, or operation of law will not be
deemed to be a purchase of Securities, nor will it be deemed an assignment of any claim relating to
the purchase of such Securities unless specifically so provided in the instrument of inheritance.
However, the recipient of Securities as a gift, inheritance, devise or by operation of law will be
eligible to file a Claim Form and participate in the distribution of the Fair Fund to the extent the
original purchaser would have been eligible under the terms of the Plan. Only one claim may be
submitted with regard to the same transactions in Securities, and in cases where multiple claims are
filed by the donor and donee, the donee claim will be honored, assuming it is supported by proper
documentation.
53.
Claims on behalf of a retirement plan covered by Section 3(3) of ERISA, 29 U.S.C.§
1002(3), which do not include Individual Retirement Accounts and such plan’s participants, are
properly made by the administrator, custodian or fiduciary of the plan and not by the plan’s
participants. The Fund Administrator will distribute any payments on such claims directly to the
administrator, custodian or fiduciary of the retirement plan. The custodian or fiduciary of the
retirement plan will distribute any payments received in a manner consistent with its fiduciary duties
and the governing account or plan provisions.
Claims Determination
54.
The Fund Administrator will review all claim submissions and determine the
eligibility of each Preliminary Claimant to participate in the Fair Fund by reviewing claim data and
supporting documentation (or the lack thereof) and verifying the claim. The Fund Administrator
will calculate each Eligible Claimant’s Recognized Loss pursuant to the Plan of Allocation. Each
Preliminary Claimant will have the burden of proof to establish the validity and amount of his, her or
its claim, and qualification as an Eligible Claimant. The Fund Administrator will have the right to
request, and the Preliminary Claimant will have the burden of providing to the Fund Administrator,
any additional information and/or documentation deemed relevant by the Fund Administrator.
55.
The Fund Administrator will provide a Claim Status Notice within one hundred
twenty (120) days of the Claims Bar Date to each Preliminary Claimant who has filed a Claim Form
with the Fund Administrator, setting forth the Fund Administrator's determination of the eligibility of
the claim (eligible, partially or wholly deficient, or ineligible). The Claim Status Notice will provide
to each Preliminary Claimant whose claim is deficient, in whole or in part, the reason(s) for the
deficiency (e.g., failure to provide required information or documentation). In the event the claim is
10

denied, in whole or in part, the Claim Status Notice will state the reason(s) for such denial. The
Claim Status Notice will also notify the Preliminary Claimant of the opportunity to cure any
deficiency or request reconsideration, or dispute the determination made by the Fund Administrator
and provide instructions regarding what is required to do so.
56.
Any Preliminary Claimant with a deficient claim will have thirty (30) days from the
date of the Claim Status Notice to cure any deficiencies identified in the Claim Status Notice.
57.
Any Preliminary Claimant seeking reconsideration of a denied claim must advise the
Fund Administrator in writing within thirty (30) days of the date of the Claim Status Notice. All
requests for reconsideration must include the necessary documentation to substantiate the basis upon
which the Preliminary Claimant is requesting reconsideration of their claim.
58.
The Fund Administrator may, in its sole discretion, consider disputes of any nature
presented in writing within thirty (30) days of the Claim Status Notice by Preliminary Claimants,
and will consult Commission staff as appropriate.
59.
The Fund Administrator will send, as appropriate, a Final Determination Notice to all
Preliminary Claimants who responded to the Claim Status Notice in an effort to cure a deficiency,
seek reconsideration of a rejected claim, or dispute the determination made by the Fund
Administrator, notifying the Preliminary Claimant of its determination. The Fund Administrator will
send such Final Determination Notices no later than thirty (30) days following receipt of
documentation or information in response to the Claim Status Notice, or such longer time as the
Fund Administrator determines is necessary for a proper determination concerning the claim.
60.
The Fund Administrator will have the authority, in its sole discretion, to waive
technical claim deficiencies and approve claims on a case-by-case basis, or in groups of claims. All
determinations made by the Fund Administrator in accordance with the Plan in any dispute, request
for reconsideration, or request to cure a deficient claim will be final and not subject to appeal.
61.
The Preliminary Claimant has the burden of notifying the Fund Administrator of a
change in his, her or its current address and other contact information, and of ensuring that such
information is properly reflected on the Fund Administrator's records.
Third-Party Review
62.
After the Fund Administrator has completed the process of analyzing the claims and
determining claim amounts in accordance with the Plan, and prior to the distribution of any funds,
the Fund Administrator will engage an independent, third-party firm, not unacceptable to
Commission staff, to perform a set of agreed upon procedures, review a statistically significant
sample of claims and ensure accurate and comprehensive application of the Plan of Allocation. The
Fund Administrator will communicate the results of the review to Commission staff together with
any written analysis or reports related to the review, and, upon request, will make the firm available
to the Commission staff to respond to questions concerning the review.

11

Distribution Methodology
63.
A Preliminary Claimant, who may have suffered a loss as a result of transactions in
the Securities during the Relevant Period and who is not an Excluded Party will be deemed an
Eligible Claimant. The Fund Administrator will calculate each Eligible Claimant’s Recognized Loss
in accordance with the Plan of Allocation. All Eligible Claimants who are determined to receive a
Distribution Payment will be deemed a Payee.
Establishment of a Reserve
64.
Before determining the amount of funds available for distribution and calculating
each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax
Administrator, will establish a reserve to pay Administrative Costs and to accommodate any
unexpected expenditures (the “Reserve”).
65.
After all disbursements and Administrative Costs are paid, any remaining amounts in
the Reserve will become part of the Residual described in paragraph 87 below.
Preparation of the Payment File
66.
Within sixty (60) days following the date of the Final Determination Notices
described in paragraph 59 above, the Fund Administrator will compile and send to the Commission
staff a list identifying information for each Payee, including the name, address, and calculated
Recognized Loss, as well as, the amount of the Distribution Payment for each Payee (the “Payee
List”). The Fund Administrator will also provide a Reasonable Assurances Letter to the
Commission staff, representing that the Payee List: (a) was compiled in accordance with the
approved Plan; (b) is accurate as to Payees’ names, addresses, Recognized Losses and amounts of
their Distribution Payments; (c) includes the number of Payees compensated; (d) the total amount
being distributed; and (e) provides all information necessary to make a Distribution Payment to each
Payee.
The Escrow Account
67.
Prior to the disbursement of the Net Available Fair Fund, the Fund Administrator will
establish an escrow account (the “Escrow Account”) with a United States commercial bank that is a
well-capitalized financial institution as defined by the Federal Reserve Act, Subpart D, 12 C.F.R.
208.43 and that is not unacceptable to the Commission staff (the “Bank”), pursuant to an escrow
agreement (the “Escrow Agreement”) to be provided by Commission staff.
68.
The Fund Administrator, pursuant to the Escrow Agreement, shall also establish with
the Bank a separate deposit account (e.g. controlled distribution account, managed distribution
account, linked checking and investment account) (the “Distribution Account”), insured by the
Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass through limit. The
Distribution Account shall be linked with the Escrow Account and shall be named, and records
maintained, in accordance with the Escrow Agreement.
69. During the term of the Escrow Agreement, the portions of the Fair Fund transferred to
the Escrow Account (the “Escrow Property”), shall be invested and reinvested in short-term U.S.
12

Treasury securities backed by the full faith and credit of the United States Government or an agency
thereof. The investment shall be, of a type and term necessary to meet the cash liquidity
requirements for payments to Payees, tax obligations, and/or fees of the Tax Administrator and/or
Fund Administrator, including investment or reinvestment in a bank account insured by the FDIC up
to the guaranteed FDIC limit, or in money market mutual funds registered under the Investment
Company Act of 1940 that invest 100% of their assets in direct obligations of the United States
Government.
70. The Fund Administrator shall provide duplicate original bank and/or investment
statements on any accounts established by the Fund Administrator to the Tax Administrator on a
monthly basis and shall assist the Tax Administrator in obtaining mid-cycle statements, as necessary.
71. The Fund Administrator shall deposit or invest funds in the Escrow and Distribution
Accounts so as to result in the maximum reasonable net return, taking into account the safety of such
deposits or investments. In consultation with Commission staff, the Fund Administrator shall work
with the Bank on an ongoing basis to determine an allocation of funds between the Escrow and
Distribution Account.
72. All interest, dividends, and/or income earned by the Escrow Property will accrue for
the benefit of the Escrow Property. All Administrative Cost associated with the Escrow and
Distribution Accounts will be the responsibility of the Fund Administrator, who may be reimbursed
for said costs as provided in this Plan. No such Administrative Costs may be paid to the Bank, its
agents, and/or its affiliates from the Escrow Property.
Distribution of the Fair Fund
73.
The Fund Administrator will seek to distribute the Net Available Fair Fund to all
Payees only after all Claim Forms have been processed and all Preliminary Claimants whose claims
have been rejected or disallowed, in whole or in part, have been notified and provided the
opportunity to contest or cure pursuant to the procedures set forth herein.
74. Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List and
Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek an
Order from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 C.F.R. §
210.1101(b)(6), to disburse funds to the Bank in accordance with the Payee List for distribution by
the Fund Administrator in accordance with the Plan. All disbursements will be made pursuant to a
Commission Order.
75. Upon issuance of an Order to disburse, the Commission staff will direct the transfer of
funds to the Bank in accordance with the Payee List. The Fund Administrator will then use its best
efforts to commence mailing Distribution Payment checks and/or effect wire transfers within ten
(10) business days of the release of the funds into the Escrow Account. All efforts will be
coordinated to limit the time between the Escrow Account’s receipt of the funds and the issuance of
Distribution Payments.
76.
All Distribution Payments will be issued by the Fund Administrator from the
Distribution Account. All checks will bear a stale date of one hundred twenty (120) days from the
date of issuance. Checks that are not negotiated by the stale date will be voided, and the Bank will
13

be instructed to stop payment on those checks. A Payee’s claim will be extinguished if he, she, or it
fails to negotiate his, her or its check by the stale date, and the funds will remain in the Fair Fund,
except as provided in paragraph 84.
77.
All payments will be preceded or accompanied by a communication that includes, as
appropriate: (a) a statement characterizing the distribution; (b) a statement that the tax treatment of
the distribution is the responsibility of each Payee and that the Payee should consult his, her or its
tax advisor for advice regarding the tax treatment of the distribution; (c) a statement that checks will
be void and cannot be reissued after one hundred twenty (120) days from the date the original check
was issued; and (d) contact information for the Fund Administrator for questions regarding the
Distribution Payment. The letter or other mailings to Payees characterizing a Distribution Payment
will be submitted to the Tax Administrator and Commission staff for review and approval.
78.
All Distribution Payments, either on their face or in the accompanying mailing, will
clearly indicate that the money is being distributed from the Fair Fund established by the
Commission to compensate investors for harm as a result of securities law violations.
79.
Distribution Payments must be made by check or electronic payment payable to the
Payee (the beneficial account owner). A Third-Party Filer shall not be the payee of any Distribution
Payment check or electronic Distribution Payment. Any other payment arrangement must be
discussed with the Fund Administrator in consultation with the Commission staff and must be
authorized by the Payee. Compensation to a Third-Party Filer for its services may not be paid or
deducted from the Distribution Payment.
80.
If, after discussion with the Fund Administrator in consultation with the Commission
staff, and authorization by the Payee(s), a Distribution Payment is to be made to a Third-Party Filer
to distribute to the Payee(s), the Third-Party Filer will be required to complete a certification, which
will require them, at a minimum, to attest that any distribution to the custodian, trustee, or
investment professional representing multiple potentially eligible beneficial owners, will be
allocated for the benefit of current or former pooled investors and not for the benefit of management.
The certification form will be available on the Fair Fund website and upon request from the Fund
Administrator. All such Third-Party Filers must have an auditable mechanism available to the Fund
Administrator and the Commission staff to confirm that each Payee received the Distribution
Payment directed to them.
81.
The submission of a Claim Form and the receipt and acceptance of a Distribution
Payment by a Payee is not intended to be a release of a Payee’s rights and claims against any party.
82.
Electronic or wire transfers may be utilized at the discretion of the Fund
Administrator to transfer approved Distribution Payments to filers of claims on behalf of twenty (20)
or more Payees. Wire transfers will be initiated by the Fund Administrator using a two-party check
and balance system, whereby completion of a wire transfer will require an authorization by two
members of the Fund Administrator’s senior staff.

14

Post Distribution; Handling of Returned or Uncashed Checks; and Reissues
83.
The Fund Administrator shall use its best efforts to make use of commercially
available resources and other reasonably appropriate means to locate all Payees whose checks are
returned to the Fund Administrator as “undeliverable.” If new address information becomes
available, the Fund Administrator will repackage the distribution check and send it to the new
address. If new address information is not available after a diligent search (and in no event no later
than one hundred twenty (120) days after the initial mailing of the original check) or if the
distribution check is returned again, the check shall be voided and the Fund Administrator shall
instruct the issuing financial institution to stop payment on such check. If the Fund Administrator is
unable to find a Payee’s correct address, the Fund Administrator, in its discretion, may remove such
Payee from the distribution and the allocated Distribution Payment will remain in the Fair Fund for
distribution, if feasible, to the remaining Payees.
84.
The Fund Administrator will reissue checks to Payees upon the receipt of a valid,
written request from the Payee prior to the initial stale date. In cases where a Payee is unable to
endorse a Distribution Payment check as written (e.g., name changes, IRA custodian changes, or
recipient is deceased) and the Payee or a lawful representative requests the reissuance of a
Distribution Payment check in a different name, the Fund Administrator will request, and must
receive, documentation to support the requested change. The Fund Administrator will review the
documentation to determine the authenticity and propriety of the change request. If, in the discretion
of the Fund Administrator, such change request is properly documented, the Fund Administrator will
issue an appropriately redrawn Distribution Payment to the requesting party. Reissued checks will
be void at the later of one hundred twenty (120) days from issuance of the original check or sixty
(60) days from the reissuance, and in no event will a check be reissued after one hundred twenty
(120) days from the date of the original issuance without the approval of Commission staff.
85.
The Fund Administrator will make and document all reasonable efforts to contact
Payees who have failed to negotiate their Distribution Payment check and take appropriate action to
follow up on the status of uncashed checks at the request of Commission staff. The Fund
Administrator may reissue such checks subject to the time limits detailed herein.
Disposition of Undistributed Funds
86.
If funds remain following the initial distribution and payment of all Administrative
Costs, the Fund Administrator, in consultation with the Commission staff, may seek subsequent
distribution of any available remaining funds, pursuant to the Commission’s Rules.
87.
A residual within the Fair Fund will be established for any amounts remaining after
the final disbursement to Payees from the Fair Fund (the “Residual”). The Residual may include
funds from, among other things, amounts remaining the Reserve, distribution checks that have not
been cashed, checks or electronic payments that were not delivered or returned to the Commission,
tax refunds for overpayment or for waiver of IRS penalties.
88.
All funds remaining in the Residual that are infeasible to distribute to investors will
be returned to the Commission and transferred to the U.S. Treasury after the final accounting is
approved by the Commission.
15

Accountings
89.
Pursuant to Rule 1105(f) of the Commission’s Rules, during the first ten (10) days of
each calendar quarter after funds have been transferred from the BFS to the Bank, the Fund
Administrator will file with the Commission an accounting of all monies earned or received and all
monies spent in connection with the administration of the Plan on a standardized accounting form
provided by the Commission staff.
90.
Upon completion of all distributions to Payees pursuant to the procedures described
above, the Fund Administrator shall arrange for the payment of all Administrative Costs, transfer all
remaining funds to the Commission, and submit a final accounting for approval by the Commission
on a standardized form provided by the Commission staff. The Fund Administrator will also submit
a report to the Commission staff containing the final distribution statistics regarding distributions to
individuals and entities, and such other information requested by the Commission staff.
Termination of the Fair Fund
91.
The Fair Fund will be eligible for termination and the Fund Administrator will be
eligible for discharge after all of the following have occurred (a) a final accounting, in a standard
accounting format provided by the Commission staff, has been submitted by the Fund Administrator
and approved by the Commission; (b) all Administrative Costs have been paid; and (c) any amount
remaining in the Fair Fund has been returned to the Commission for transfer to U.S. Treasury. Once
the Commission has approved the final accounting, the Commission staff will seek an order from the
Commission authorizing: (a) the transfer of the Residual that is infeasible to return to investors, and
any amounts returned to the Fair Fund in the future that are infeasible to return to investors, to the
U.S. Treasury, subject to Section 21F(g)(3) of the Exchange Act; (b) discharge of the Fund
Administrator; (c) cancellation of the Fund Administrator’s bond; and (d) termination of the Fair
Fund.
92.
Once the Fair Fund has been terminated and funds, if any, are transferred to the U.S.
Treasury, no further claims will be allowed and no additional payments will be made whatsoever.
Miscellaneous
93.
When administering this Plan, the Fund Administrator, and/or each of its designees,
agents and assigns, may rely on: all applicable law; orders issued by the Commission, including
orders issued by delegated authority; orders issued by an administrative law judge, if any, appointed
in this proceeding; and any records, including records containing investor information, provided by
Commission staff.
94.
Should any additional funds be received pursuant to Commission or Court order,
agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will be
added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the
Commission’s Rules.

16

Wind-down and Document Retention
95.
The Fund Administrator will shut down the website, P.O. Box and customer service
telephone line(s) established specifically for the administration of the Fair Fund six (6) months after
the transfer of any remaining funds to the Commission, or at such earlier time as the Fund
Administrator determines with the concurrence of the Commission staff.
96.
The Fund Administrator will retain all materials submitted by Preliminary Claimants
in either paper or electronic form for a period of six (6) years from the date of approval of a final
fund accounting. Materials maintained in electronic form must be accessible and readable for the
duration of retention. Pursuant to the Commission staff's direction, the Fund Administrator will
either turn over to the Commission or destroy all materials, including documents in any media, upon
expiration of this period.
VII.

NOTICE AND COMMENT PERIOD

97.
The Notice of Proposed Plan of Distribution and Opportunity to Comment (the
“Notice”) will be published on the Commission’s website at
http://www.sec.gov/litigation/fairfundlist.htm. Any person wishing to comment on the Plan must do
so in writing by submitting their comments to the Commission within thirty (30) days of the
publication of the Notice: (a) to the Office of the Secretary, United States Securities and Exchange
Commission, 100 F Street, NE, Washington, DC 20549-1090; (b) by using the Commission’s
Internet comment form (www.sec.gov/litigation/admin.shtml); or (c) by sending an email to rulecomments@sec.gov. Comments submitted by email or via the Commission’s website should
include “Administrative Proceeding File Number 3-20165” in the subject line. Comments received
will be available to the public. Persons should only submit comments that they wish to make
publicly available.

17

EXHIBIT A
Plan of Allocation
This Plan of Allocation is designed to compensate investors based on their losses on
shares of General Electric common stock (the “Securities”) purchased from October 16, 2015
and continuing until the market close on January 16, 2018 (the “Relevant Period”) due to the
misconduct of the Respondent. Investors who did not purchase shares of the Security during the
Relevant Period at prices inflated by the Respondent’s misconduct or who are an Excluded
Party1 are ineligible to recover under this Plan. A Preliminary Claimant, who submits a valid
claim, who may have suffered a loss as a result of transactions in the Securities during the
Relevant Period, who is not an Excluded Party, will be deemed an Eligible Claimant. Artificial
inflation in the price of the Security over various date ranges surrounding corrective disclosures
and average closing prices of the Security during the 90-day Lookback Period (defined below)
have been calculated by the Commission’s staff economists and are reflected in Table A and
Table B, respectively.
The Fund Administrator will calculate the amount of loss for each share of the Securities
purchased during the Relevant Period (“Recognized Loss per Share”) as follows:
For each share of the Security purchased from October 16, 2015 through January 16,
2018, and
A.

Sold prior to October 23, 2017, the Recognized Loss per Share is $0.00.

B.

Sold on or after October 23, 2017, and prior to the close of trading on
January 16, 2018, the Recognized Loss per Share is the lesser of:
i.
the amount of inflation per share on the purchase/acquisition date
as set forth in Table A below minus the amount of inflation per
share on the sale date as set forth in Table A below; or
ii.

C.

1

the purchase/acquisition price minus the sale price.

Sold after the close of trading on January 16, 2018 and prior to the close of
trading on April 16, 2018 (the “Lookback Period”), the Recognized Loss
per Share is the least of:
i.
the amount of inflation per share on the
purchase/acquisition date as set forth in Table A below;
ii.

the purchase/acquisition price minus the moving average
closing price of GE common stock on the sale date as set
forth in Table B below; or

iii.

the purchase/acquisition price minus the sale price.

All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.

1

D.

Held as of the close of trading on April 16, 2018, the last day of the
Lookback Period, the Recognized Loss per Share is the lesser of:
i.

the amount of inflation per share on the purchase/acquisition date
as set forth in Table A below; or

ii.

the purchase/acquisition price minus $14.56 (the average closing
price of GE common stock during the Lookback Period, as shown
on the last row in Table B below).

If the Recognized Loss per Share calculates to a negative number, reflecting a gain, the
Recognized Loss per Share on such shares will be $0.00.
All prices mentioned in the calculations exclude all taxes, fees and commissions.
Purchases and sales shall be deemed to have occurred on the “contract” or “trade” date as
opposed to the “settlement” or “payment” date.
Additional Provisions
FIFO Methodology: For each Eligible Claimant who made multiple purchases and sales
of Security during the Relevant Period, the transactions will be matched according to the first-in,
first-out (“FIFO”) method. The earliest sales during the Relevant Period will be matched first
against any holdings at the opening of the Relevant Period. Once the beginning holdings have
all been matched, or in the event that the Eligible Claimant had no beginning holdings, then any
further sales will be matched against the earliest Relevant Period purchases and chronologically
thereafter.
Acquisitions: The receipt or grant of the Security to the Eligible Claimant by gift, devise,
inheritance, or operation during the Relevant Period is not considered an eligible purchase if the
original purchase did not occur during the Relevant Period. Such shares are not eligible for a
recovery and will be excluded from the Recognized Loss calculation.
Options and Derivatives: GE common stock is the only security eligible for recovery
under this Plan. Option contracts to purchase or sell the Security are not securities eligible for
recovery under the Plan. With respect to the Security purchased or sold through the exercise of
an option, the purchase/sale date is the exercise date of the call and the assignment date of the
put, and the purchase/sale price is the strike price of the call at the time of exercise and the strike
price of the put at the time of assignment. Any other transactions in the Security during the
Relevant Period that are pursuant to, or in connection with, a swap, or another derivative are not
eligible for a recovery and will be excluded from the Recognized Loss calculation.
Short Sales: Shares purchased during the Relevant Period to cover short positions held at
the beginning of the Relevant Period or to cover short positions opened during the Relevant
Period will have a Recognized Loss per Share of $0.00. The date of a “short sale” is deemed to
be the date of sale of the Security and the date of covering a “short sale” is deemed to be the date
of purchase of the Security. The earliest Relevant Period purchases will be matched against any
2

short position existing on the date prior to the start of the Relevant Period until that short position
is fully covered.
Recognized Loss: An Eligible Claimant’s Recognized Loss will be the sum of the
Recognized Loss per Share, as calculated above, on all shares of the Security purchased or
acquired during the Relevant Period and will be subject to certain minimum and maximum
constraints described below. If the Recognized Loss calculates to a negative number (i.e., a
gain), then the Recognized Loss will be $0.00.
Market Loss Limitation: If an Eligible Claimant’s actual market loss on shares of the
Security purchased during the Relevant Period is less than his, her or its Recognized Loss, then
the Eligible Claimant’s Recognized Loss shall be limited to the actual market loss amount. If the
actual market loss calculates to a gain, then the Claimant’s Recognized Loss will be $0.00. The
actual market loss will be calculated as (a) the total purchase amount for shares of the Security
purchased during the Relevant Period,2 less the sum of (b) the sales proceeds from shares of the
Security purchased/acquired during the Relevant Period and sold during the Relevant Period or
during the Lookback Period,3 and (c) the holding value on the remaining of those shares,4 which
for the purposes of this calculation will be $14.56 per share, the moving average price as of the
last day of the Lookback Period.
Allocation of Funds: If the Net Available Fair Fund is equal to or exceeds the sum of
Recognized Losses of all Eligible Claimants, each Eligible Claimant’s distribution amount will
equal his, her or its Recognized Loss, plus “Reasonable Interest” if applicable. If the Net
Available Fair Fund is less than the sum of the Recognized Losses of all Eligible Claimants, each
Eligible Claimant’s distribution amount will equal his, her or its “Pro Rata Share” of the Net
Available Fair Fund (and no Reasonable Interest). In either case, the distribution amount will be
subject to the “Minimum Distribution Amount.”
Reasonable Interest: If the Net Available Fair Fund exceeds that necessary to pay all
Eligible Claimants his, her, or its Recognized Losses in full, the Fund Administrator, in
consultation with the Commission staff, may include reasonable interest in the distribution
amount to compensate Eligible Claimants for the time value of his, her, or its respective
Recognized Losses. Reasonable Interest will be calculated using the Short-term Applicable
Federal Rate plus three percent (3%), compounded quarterly October 16, 2015 through
December 9, 2020. If there are insufficient funds to pay Reasonable Interest in full to all Eligible
Claimants, each Eligible Claimant’s Reasonable Interest amount will be his, her or its Pro Rata
Share of the excess funds.

2

Purchases/acquisitions that are not eligible for recovery will not be considered for purposes of calculating the actual
market loss.
3
Sales of the Security during the Relevant Period will be matched first against the opening position and the proceeds
of such sales will not be considered for purposes of calculating the actual market loss.
4
The actual market loss will also include realized gains/losses on short positions opened and closed in the Security
during the Relevant Period.

3

Pro Rata Distribution: A Pro Rata Share computation is intended to measure Eligible
Claimant’s Recognized Losses against one another. The Fund Administrator shall determine
each Eligible Claimant’s Pro Rata Share as the ratio of his, her, or its Recognized Loss to the
sum of Recognized Losses of all Eligible Claimants.
Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00
(inclusive of Reasonable Interest, if any). If an Eligible Claimant’s distribution amount is less
than the Minimum Distribution Amount, that Eligible Claimant will be deemed ineligible to
receive a Distribution Payment and his, her, or its distribution amount will be reallocated on a
pro-rata basis to Eligible Claimants whose distribution amounts are greater than or equal to the
Minimum Distribution Amount.
Payee: An Eligible Claimant whose distribution amount (inclusive of Reasonable
Interest, if any) that equals or exceeds the Minimum Distribution Amount will be deemed a
Payee and receive a Distribution Payment equal to his, her, or its distribution amount. In no
event will a Payee receive from the Fair Fund more than his, her, or its Recognized Loss, plus
Reasonable Interest, if applicable.
Prior Recovery: To avoid payment of a windfall, the Distribution Payment will be no
larger than the Payee’s Recognized Loss minus the amount of any compensation for the loss that
resulted from the conduct described in the Order that was received from another source (e.g.,
class action settlement), to the extent known by the Fund Administrator, Reasonable Interest, if
awarded, may be added to such Distribution Payment.

4

Table A: GE Common Stock Inflation Schedule
Date Range

Inflation
per Share

October 16, 2015 through October 22, 2017
October 23, 2017 through November 12, 2017
November 13, 2017
November 14, 2017 through January 16, 2018
On or after January 17, 2018

$4.88
$3.49
$2.04
$0.98
$0.00

Table B: GE Common Stock Moving Average Closing Price, January 17, 2018 – April 16, 2018
Moving
Moving
Moving
Average
Average
Average
Closing
Closing
Closing
Price from
Price from
Price from
January 17,
January 17,
January 17,
2018 to Date
2018 to Date
2018 to Date
Shown
Date
Shown
Date
Shown
1/17/2018
$17.35
2/15/2018
$15.74
3/19/2018
$15.13
1/18/2018
$17.06
2/16/2018
$15.71
3/20/2018
$15.10
1/19/2018
$16.79
2/20/2018
$15.67
3/21/2018
$15.07
1/22/2018
$16.64
2/21/2018
$15.62
3/22/2018
$15.03
1/23/2018
$16.69
2/22/2018
$15.59
3/23/2018
$14.99
1/24/2018
$16.65
2/23/2018
$15.54
3/26/2018
$14.95
1/25/2018
$16.58
2/26/2018
$15.51
3/27/2018
$14.92
1/26/2018
$16.52
2/27/2018
$15.48
3/28/2018
$14.89
1/29/2018
$16.50
2/28/2018
$15.43
3/29/2018
$14.86
1/30/2018
$16.44
3/1/2018
$15.39
4/2/2018
$14.83
1/31/2018
$16.42
3/2/2018
$15.35
4/3/2018
$14.80
2/1/2018
$16.38
3/5/2018
$15.32
4/4/2018
$14.77
2/2/2018
$16.33
3/6/2018
$15.30
4/5/2018
$14.75
2/5/2018
$16.23
3/7/2018
$15.28
4/6/2018
$14.72
2/6/2018
$16.16
3/8/2018
$15.26
4/9/2018
$14.68
2/7/2018
$16.11
3/9/2018
$15.25
4/10/2018
$14.66
2/8/2018
$16.01
3/12/2018
$15.24
4/11/2018
$14.63
2/9/2018
$15.95
3/13/2018
$15.22
4/12/2018
$14.60
2/12/2018
$15.89
3/14/2018
$15.20
4/13/2018
$14.58
2/13/2018
$15.83
3/15/2018
$15.18
4/16/2018
$14.56
2/14/2018
$15.78
3/16/2018
$15.16

5

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Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Asec%3Ab19db7e86eff2597. Public record. Not legal advice.