UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING

File No. 3-20162

In the Matter of

BlueCrest Capital Management

Limited

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 disgorgement, prejudgment interest, and civil money

penalties paid by BlueCrest Capital Management Limited (the “Respondent”) in the abovecaptioned matter.1

2.

As described more specifically below, the Plan seeks to compensate U.S.

investors for management fees paid in connection with investments in BlueCrest Capital

International Master Fund Limited’s two unregistered feeder funds, BlueCrest Capital

International Limited and BlueCrest Capital L.P., between October 1, 2011 and December 31,

2015, inclusive (the “Relevant Period”), as calculated using the methodology detailed in the Plan

of Allocation (attached as Exhibit A). Based on information obtained by the Commission staff

during and after its investigation, and the review and analysis of applicable records, the

Commission staff has reasonably concluded that it has all records necessary to calculate each

investor’s harm. As a result, the Fair Fund is not being distributed according to a claims-made

process, so procedures for making and approving claims in accordance with Rule 1101(b)(4) of

the Commission’s Rules, 17 C.F.R. § 201.1101(b)(4), are not applicable.

3.

In the view of the Commission staff, this methodology constitutes a fair and

reasonable allocation of the Fair Fund. It is anticipated that there will be one or more

distributions.

1

See Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities

Act of 1933 and Sections 203(e) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and

Imposing Remedial Sanctions and a Cease-and-Desist Order, Securities Act Rel. No. 10896 (Dec. 8, 2020) (the

“Order”).

4.

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.

II.

BACKGROUND

5.

On December 8, 2020, the Commission issued the Order against the Respondent.

The proceedings arose from the Respondent’s management of a proprietary hedge fund, BSMA

Limited (“BSMA”). In the Order, the Commission found that, from October 2011 through

December 2015, the Respondent engaged in a course of conduct stemming from its management

of BSMA that was detrimental to investors in the Respondent’s flagship client hedge fund,

BlueCrest Capital International Master Fund Limited.2 The Commission ordered the Respondent

to pay $107,560,200 in disgorgement, $25,154,306 in prejudgment interest, and a $37,285,494

civil money penalty, for a total of $170,000,000, to the Commission. The Commission created

the Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the penalty paid,

along with the disgorgement and interest paid, can be distributed to harmed investors.

6.

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:

7.

“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.

8.

“Distribution Payment” means a payment from the Fair Fund to a Payee in

accordance with the terms of this Plan.

9.

“Eligible Claimant” means a Preliminary Claimant who is determined to have

suffered a Recognized Loss, pursuant to the Plan of Allocation, and who is not an Excluded

Party or an Unresponsive Preliminary Claimant.

10.

“Excluded Party” shall mean: (a) Respondent and Respondent’s advisers,

agents, nominees, assigns, creditors, affiliates (except AllBlue L.P.) or controlled entities; (b) the

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

as the Fund Administrator; and (c) 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.

2

At all relevant times, BlueCrest Capital International Master Fund Limited was an unregistered Cayman Islandsbased fund, organized in a master-feeder structure with an offshore unregistered feeder fund incorporated in the

Cayman Islands, called BlueCrest Capital International Limited, and a domestic unregistered feeder fund, organized

under Delaware law, called BlueCrest Capital L.P.

2

11.

“Fair Fund” means the $170,000,000.00 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.

12.

“Net Available Fair Fund” means the Fair Fund, plus any interest or earnings,

less Administrative Costs.

13.

“Payee” means an Eligible Claimant whose Distribution Payment is equal to or

greater than $10.00, as calculated in accordance with the Plan of Allocation.

14.

“Person” means natural individuals as well as legal entities such as corporations,

partnerships, or limited liability companies.

15.

“Plan Notice” means a written notice from the Fund Administrator to Preliminary

Claimants regarding the Commission’s approval of the Plan, including, as appropriate: a

statement characterizing the distribution; a link to the approved Plan posted on the Commission’s

website and instructions for requesting a copy of the Plan; specification of any information

needed from the Preliminary Claimant to prevent them from being deemed as an Unresponsive

Preliminary Claimant, such as tax documentation and any other necessary information;

certifications in accordance with paragraph 38, below; a description of the tax information

reporting and other related tax matters; the procedure for the distribution as set forth in the Plan;

and the name and contact information for the Fund Administrator as a resource for additional

information or questions regarding the distribution.

16.

“Plan of Allocation” means the methodology by which a Preliminary Claimant’s

Recognized Loss is calculated. The Plan of Allocation is attached as Exhibit A.

17.

“Preliminary Claimant” means a U.S. Investor, identified by the Fund

Administrator based on its review and analysis of applicable records obtained by the

Commission staff during and after its investigation, who may have suffered a loss as a result of

management fees paid in connection with investments in BlueCrest Capital International Limited

and BlueCrest Capital L.P. during the Relevant Period.

18.

“Recognized Loss” means the total amount of loss calculated for a Preliminary

Claimant in accordance with the Plan of Allocation.

19.

“Unresponsive Preliminary Claimant” means a Preliminary Claimant whose

address the Fund Administrator has not been able to verify and/or who does not timely respond

to the Fund Administrator’s attempts to obtain information, including any information sought in

the Plan Notice. Unresponsive Preliminary Claimants will not be eligible for a distribution under

the Plan.

20.

“U.S. Investor” means a Person or their lawful successor, who held BlueCrest

Capital International Limited and/or BlueCrest Capital L.P. during the Relevant Period, and for

whom/which the country included as the “tax domicile” or “investor domicile” as reflected on

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the records of BlueCrest Capital International Limited or BlueCrest Capital L.P. during any part

of the Relevant Period is the United States and, if no country is listed as the tax domicile or

investor domicile, for whom/which the country included as the “registered country” on those

records is the United States. For purposes of this definition, the “records of BlueCrest Capital

International Limited or BlueCrest Capital L.P.” refers to the records produced by the

Respondent’s administrator on June 25, 2021, July 6, 2021, July 14, 2021, and August 12, 2021.

IV.

TAX COMPLIANCE

21.

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.3 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.4

22.

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 imposed

on distributions from the Fair Fund.

23.

All tax obligations will be paid from the Fair Fund, subject to the review and

approval of Commission staff.

V.

FUND ADMINISTRATOR

24.

On June 3, 2021, the Commission appointed Kurtzman Carson Consultants, LLC,

as the fund administrator for the Fair Fund (the “Fund Administrator”), and the Fund

Administrator has obtained a bond in the amount of $170,000,000, as ordered.5 Pursuant to Rule

1105(a) of the 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.

3

See Order Appointing Tax Administrator, Exchange Rel. No. 34-91588 (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).

5

See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 92097 (June 3,

2021).

4

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25.

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

obtain accurate mailing information for Preliminary Claimants; establishing a website and

staffing a call center to address inquiries regarding the Plan; preparing accountings; cooperating

with the Tax Administrator appointed to satisfy any tax liabilities and to ensure compliance with

income tax reporting requirements, including but not limited to Foreign Act Tax Compliance Act

(FATCA); disbursing the Fair Fund in accordance with this Plan, as ordered by the Commission;

and researching and reconciling errors and reissuing payments, when possible.

26.

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.

27.

The Fund Administrator may extend any procedural deadline contained in the

Plan for good cause shown, if agreed upon by the Commission staff.

28.

The Fund Administrator, and/or each of its designees, agents, and assistants, shall

be entitled to rely on all outstanding rules of law; any orders issued by the Commission, the

Secretary or Director of Enforcement by delegated authority, or an Administrative Law Judge;

and/or any investor information provided by Commission staff.

29.

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.

30.

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.

PLAN PROCEDURES

Specification of Preliminary Claimants

31.

Using information obtained by the Commission staff during and after its

investigation, the Fund Administrator has identified the Preliminary Claimants. Preliminary

Claimants are limited to U.S. Investors who may have suffered a loss as a result of management

fees paid in connection with investments in BlueCrest Capital International Limited and

BlueCrest Capital L.P. during the Relevant Period.

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Procedures for Locating and Notifying Preliminary Claimants

32.

Within thirty (30) days of Commission approval of the Plan, the Fund

Administrator will:

(a)

Establish and maintain a website devoted solely to the Fair Fund. The Fair

Fund’s website will make available a copy of the approved Plan, include a

copy of the Plan Notice, and related materials in downloadable form, and

such other information that the Fund Administrator believes will be

beneficial to Preliminary Claimants.

(b)

Establish and maintain a toll-free telephone number for Preliminary

Claimants to call and speak to a live representative of the Fund

Administrator during its regular business hours or, outside of such hours,

to hear pre-recorded information about the Fair Fund.

(c)

Establish and maintain a traditional mailing address and an email address

that will be listed on all correspondence from the Fund Administrator to

investors, as well as on the Fair Fund’s website.

(d)

Establish and maintain a case specific database of all Preliminary

Claimants based upon information provided to and obtained by the Fund

Administrator, including the last known physical and email addresses.

(e)

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.

(f)

Send the Plan Notice to each Preliminary Claimant’s last known email

address (if known) and/or mailing address.

The Commission staff retains the right to review and approve any material posted on the

Fair Fund’s website, any communication with investors, and any scripts used in connection with

communications with investors.

Undeliverable Mail

33.

The Fund Administrator will attempt to locate any Preliminary Claimant whose

mailing is returned as undeliverable by the U.S. Postal Service or otherwise, including an

advanced address search, if feasible, and will document all such efforts. The Fund Administrator

will utilize all means reasonably available, including LexisNexis, to obtain updated addresses in

response to undeliverable notices. If another address is obtained, the Fund Administrator will

then resend it the Preliminary Claimant’s new address within twenty (20) days of receipt of the

returned mail. If the mailing is returned again, and the Fund Administrator, despite best

practicable efforts, is unable to find a Preliminary Claimant’s correct address, the Fund

Administrator, in consultation with the Commission staff, may deem such Preliminary Claimant

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an Unresponsive Preliminary Claimant.

34.

The Fund Administrator, with Commission staff approval, may engage a third

party search firm to conduct more rigorous searches for persons whose mailings are returned as

undeliverable.

35.

Any Preliminary Claimant who relocates or otherwise changes contact

information after receipt of the Plan Notice must promptly communicate any change in address

or contact information to the Fund Administrator.

Procedures to Request Plan Notice

36.

Any person who does not receive a Plan Notice, as described in paragraph 32(f),

but who is aware of this Plan (e.g., through other Preliminary Claimants or on www.sec.gov) and

believes they should be included as a Preliminary Claimant should contact the Fund

Administrator no later than sixty (60) days from the approval of the Plan to establish that they

should be considered a Preliminary Claimant. The Fund Administrator will send the person a

Plan Notice within twenty (20) days of receiving the Person’s documentation, if the Fund

Administrator determines that the Person should have received a Plan Notice.

Failure to Respond to Plan Notice

37.

If a Preliminary Claimant is requested to respond and fails to respond within

thirty (30) days from the mailing of the Plan Notice, and their Plan Notice has not been returned

as undeliverable, the Fund Administrator will make no fewer than two (2) attempts to contact the

Preliminary Claimants by telephone, email, or, in the absence of a current email address or

telephone number, mailed correspondence. The second attempt will, in no event, take place

more than forty-five (45) days from the date their response was due. If a Preliminary Claimant

fails to respond to the Fund Administrator’s contact attempts as described in this paragraph, the

Fund Administrator, in its discretion, may deem such Preliminary Claimant an Unresponsive

Preliminary Claimant.

Preliminary Claimants with Underlying Investors

38.

If a Preliminary Claimant is a fund or other entity that has underlying investors,

the Fund Administrator will require from that Preliminary Claimant, prior to the issuance of any

Distribution Payment, a certification that the Preliminary Claimant will allocate the distribution

to the underlying investors, and will not otherwise use the funds. Alternatively, the Preliminary

Claimant may provide to the Fund Administrator, by secure transmission, sufficient information

as specified by the Fund Administrator such that the Fund Administrator is able to distribute the

funds to the underlying investors in accordance with the Plan. The Fund Administrator shall

provide a response date within thirty (30) days of the initial request and if no response is

received, shall make two additional efforts to obtain the information. If, despite these efforts, the

Preliminary Claimant does not provide the certification or alternate information within sixty (60)

days of the initial request, the Fund Administrator, in its discretion, may deem such Preliminary

Claimant an Unresponsive Preliminary Claimant.

7

Distribution Methodology

39.

The Fund Administrator will calculate each Preliminary Claimant’s Recognized

Loss in accordance with the Plan of Allocation. All Preliminary Claimants who are determined

to have suffered a Recognized Loss in accordance with the Plan of Allocation, and who are not

deemed an Excluded Party or an Unresponsive Preliminary Claimant, will be deemed an Eligible

Claimant. All Eligible Claimants who are determined to receive a Distribution Payment will be

deemed a Payee.

Establishment of a Reserve

40.

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 future Administrative Costs and to accommodate

any unexpected expenditures (the “Reserve”).

41.

After all Distribution Payments are made and all Administrative Costs are paid,

any remaining amounts in the Reserve will become part of the Residual described in paragraph

61 below.

Preparation of the Payment File

42.

Within one hundred sixty (160) days of Commission approval of the Plan, the

Fund Administrator will compile and send to the Commission staff the payee information,

including the name, address, calculated Recognized Loss, and the amount of the Distribution

Payment for all Payees (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 Payment; and (c) provides all information

necessary to make a payment to each Payee.

The Escrow Account

43.

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.

44.

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.

8

45. During the term of the Escrow Agreement, the portions of the Fair Fund transferred

to the Escrow Account (the “Escrow Property”), if invested, shall be invested and reinvested in

short-term U.S. 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 and Administrative Costs, 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.

46. 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.

47. The Fund Administrator, in consultation with the Commission staff, shall work

with the Bank on an ongoing basis to 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 and tax implications; and to determine an allocation of funds

between the Escrow and Distribution Account.

48.

All interest, dividends, and/or income earned by the Escrow Property will accrue

for the benefit of the Escrow Property. All Administrative Costs 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

49. 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.

50. Upon issuance of an Order to disburse, the Commission staff will direct the transfer

of the amount of funds referred to on the Payee List to the Bank. The Fund Administrator will

then use its best efforts to commence mailing Distribution Payment checks and/or effect

electronic payments within twenty (20) 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.

51.

All checks will be issued by the Fund Administrator from the Distribution

Account. All checks will bear a stale date of ninety (90) days from the date of issuance. Checks

that are not negotiated by the stale date will be voided, and the Bank will be instructed to stop

9

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 paragraphs 55 and 60.

52.

All Distribution 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 ninety (90) 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.

53.

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.

Post Distribution; Handing of Returned or Uncashed Checks; and Reissues

54.

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 ninety (90) 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.

55.

The Fund Administrator will reissue checks or electronic payments 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 ninety

(90) days from issuance of the original check or sixty (60) days from the reissuance, and in no

event will a check be reissued after ninety (90) days from the date of the original issuance

without the approval of Commission staff.

10

56.

The Fund Administrator will work with the Bank and maintain information about

uncashed checks and any returned items due to non-delivery, insufficient addresses, and/or other

deficiencies. The Fund Administrator is responsible for researching and reconciling errors and

reissuing payments when possible. The Fund Administrator is also responsible for accounting

for all payments. The amount of all uncashed and undelivered payments will continue to be held

in the Fair Fund.

57.

The Fund Administrator will make and document reasonable efforts to contact

Payees to follow-up on the status of uncashed distribution checks (other than those returned as

“undeliverable”) or electronic payments that were not delivered and take appropriate action to

follow-up on the status of uncashed checks and undelivered electronic payments at the request

of Commission staff. The Fund Administrator may reissue such payments, subject to the time

limits detailed herein.

58.

At the discretion of the Fund Administrator, costs that were not factored into the

Reserve, such as bank fees offset upon the return of a payment, intermediary fees, or fees

specific to a Payee’s recipient bank account, may reduce the Payee’s Distribution Payment. In

such situations, the Fund Administrator will immediately notify the Tax Administrator of the

reduction in Distribution Payment.

Receipt of Additional Funds

59.

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.

Disposition of Undistributed Funds

60.

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(s) of any available remaining funds, pursuant to the Commission’s

Rules. All subsequent distributions shall be made in a manner that is consistent with this Plan.

61.

A residual within the Fair Fund will be established for any amounts remaining

after the final disbursement to Payees from the Fair Fund and the payment of all Administrative

Costs (the “Residual”). The Residual may include, among other things, the remaining funds in

the Reserve; funds from distribution checks that have not been cashed, electronic payments that

were not delivered, or funds returned to the Commission; and tax refunds for overpayment of

taxes or for waiver of IRS penalties.

62.

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. Returning such money to the Respondent would be

inconsistent with the equitable principle that no person should profit from his wrongdoing.

Therefore, in these circumstances distributing disgorged funds to the U.S. Treasury is the most

11

equitable alternative.

Administrative Costs

63.

All Administrative Costs will be paid from the Fair Fund, in accordance with the

Commission’s Rules.

Accountings

64.

Pursuant to Rule 1105(f) of the Commission’s Rules, once the Commission orders

the transfer of funds from BFS to the Bank, the Fund Administrator will file an accounting of all

monies earned or received and all monies spent in connection with the administration of the Plan

with the Commission staff during the first ten (10) days of each calendar quarter on a

standardized accounting form provided by the Commission staff.

65.

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.

Wind-down and Document Retention

66.

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.

67.

The Fund Administrator will retain all materials submitted by Payees 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 documents, including

materials documents in any media, upon expiration of this period.

Termination of the Fair Fund

68.

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 any Residual

12

remaining in the Fair Fund that is infeasible to return to investors, and any amounts returned to it

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.

VII.

NOTICE OF PROPOSED PLAN AND OPPORTUNITY FOR COMMENT

69.

The Notice of the Proposed Plan of Distribution and Opportunity for Comment

(the “Notice”) shall be published on the Commission’s website

http://www.sec.gov/litigation/fairfundlist.htm. Any person wishing to comment on the Plan must

do so in writing by submitting their comments within thirty (30) days of the date of the Notice

(a) to the Office of the Secretary, United States Securities and Exchange Commission, 100 F

Street, N.E., Washington, D.C. 20549-1090; (b) by using the Commission’s Internet comment

form (www.sec.gov/litigation/admin.shtml); or (c) by sending an e-mail to rulecomments@sec.gov. Comments submitted by e-mail or via the Commission’s website should

include “Administrative Proceeding File No. 3-20162 in the subject line. Comments received

will be publicly available. Persons should only submit comments that they wish to make

publicly available.

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Exhibit A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate investors based on the management

fees paid to the Respondent in connection with BlueCrest Capital International Master Fund

Limited’s two unregistered feeder funds, BlueCrest Capital International Limited and BlueCrest

Capital L.P. (the “Securities”), between October 1, 2011 and December 31, 2015, inclusive (the

“Relevant Period”). Based upon records obtained by the Commission during and after its

investigation, the Fund Administrator has identified those U.S. Investors, as defined in paragraph

20 of the Plan, who may have suffered a loss as a result of management fees paid in connection

with investments in the Securities during the Relevant Period (the “Preliminary Claimants”).

Investors who did not pay management fees in connection with the Securities during the

Relevant Period are ineligible to recover under this Plan.

The Fund Administrator will calculate each Preliminary Claimant’s “Recognized Loss”

as the sum of the management fees the Preliminary Claimant paid in connection with

investments in either or both of the Securities during the Relevant Period, as recorded in

documents obtained from the Respondent.

If the Recognized Loss calculates to a gain, then the Recognized Loss will be $0.00.

To avoid payment of a windfall, the Recognized Loss will be reduced by 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.

A Preliminary Claimant who suffered a Recognized Loss pursuant this Plan of Allocation

and who is not an Excluded Party or an Unresponsive Preliminary Claimant, as defined in the

Plan, will be deemed an Eligible Claimant.

Additional Provisions

Allocation of Funds: If the Net Available Fair Fund, as defined in the Plan, 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 their Recognized Losses, 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 their respective Recognized Losses. Reasonable interest

will be calculated using the Short-term Applicable Federal Rate plus three percent (3%),

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compounded quarterly from the end of the Relevant Period through the approximate date of the

disbursement of the funds. If there are insufficient funds to pay Reasonable Interest in full to all

Eligible Claimants, each Eligible Claimant will receive his, her, or its Pro Rata Share of the

excess funds as the Reasonable Interest amount in their distribution amount.

Pro Rata Share: A Pro Rata Share computation is intended to measure Eligible

Claimants’ Recognized Losses against one another. The Fund Administrator shall determine

each Eligible Claimant’s Pro Rata Share as the ratio of the Eligible Claimant’s Recognized Loss

to the sum of Recognized Losses of all Eligible Claimants.

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00. 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 their

distribution amount will be reallocated on a pro-rata basis to Eligible Claimants that have

distribution amounts that are greater than or equal to the Minimum Distribution Amount.

Payee: An Eligible Claimant that has a 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 their distribution amount. In no event will a

Payee receive from the Fair Fund more than the Eligible Claimant’s Recognized Loss plus

Reasonable Interest if applicable.

Currency: Calculations pursuant to this Plan of Allocation will be made in U.S. Dollars.

Distribution Payments will also be made in U.S. Dollars.

15