Balter Oracle Distribution

DISTRIBUTION Q&A

1. Why did I receive this check from the Balter Oracle Fair Fund?

You received a check because your Oracle Investment Research account(s) was impacted as described in the Settlement Order entered by the United Security and Exchange Commission (the “Commission” or “SEC”) and you have been identified as an Eligible Claimant.

2. What was the settlement about?

On May 26, 2017, the Commission issued the Order settling previously instituted cease-and-desist proceedings against the Respondent. In the Order, the Commission found that from January 2011 through April 2014, the Respondent, a former registered investment adviser to the Oracle Mutual Fund (the “Oracle Fund”), (a) fraudulently allocated profitable trades to his own accounts to the detriment of several investors’ accounts (“Cherry-Picking”); (b) falsely told investors that they would not pay both advisory fees and management fees for the portions of their accounts invested in the Oracle Fund (“Misrepresentation”); and (c) made trades for the Oracle Fund that deviated from two of the Oracle Fund’s fundamental investment limitations.

3. Who is Laurence I. Balter?

Balter is a former registered investment adviser to the Oracle Mutual Fund (the “Oracle Fund”). He was the founder, principal, chief compliance officer, and sole owner of Oracle Investment Research (“Oracle”), which was a sole proprietorship for most of its existence.

4. What is the relevant period for those impacted by this settlement?

The settlement timeframe is January 2011 through April 2014.

5. How much was Balter ordered to pay in the settlement?

As a result of the conduct described in the Order, the Commission ordered the Respondent to pay disgorgement of $489,921 plus prejudgment interest of $10,079, and a civil penalty of $50,000, for a total of $550,000 to the Commission. Payments were to be made in installments over a three-year period. In the Order, the Commission established a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the civil penalties paid, along with the disgorgement and prejudgment interest paid, can be distributed to harmed investors (the “Fair Fund”).

6. What if the amount of the distribution is very small?

A de Minimis distribution amount has been set at $25.00. Eligible investors with distributions of less than $25.00 will be gross-up in order to receive a payment equal to the de Minimis distribution amount.

7. Who performed the payment calculations?

Commission staff, in the course of its investigation, calculated the excess fees paid by each investor.

8. What is my payment amount comprised of:

Your distribution payment is comprised of 2 components. These components are:

Losses Component
Pre-Judgment Interest Component

9. What if I don't receive a check but I believe I should? What do I need to do if I disagree with the amount of the distribution check I received?

The preliminary recognized loss payment amounts were calculated by the SEC. The fund administrator calculated the final payment amounts and a payment file was reviewed and accepted by the SEC. The payments amount are final for all eligible claimants.

10. How long do I have to cash the check?

Checks may be cashed within 90 days of the original issuance date noted on the check. If you requested a replacement check, it must be cashed within 90 days of the reissuance date noted on your check. In no event will a check be reissued after 90 days from the original check date without approval of the Commission staff. Once these periods have passed, the funds will no longer be available. It is important that you cash your check(s) as soon as possible to ensure that you receive all the money that was allocated to you. Checks WILL NOT be honored after the stale date.

11. What if the check cashing period has ended?

Once the time for cashing checks has passed, the remaining funds will be sent to the U.S Treasury, per terms of the settlement. DO NOT try to negotiate your check(s) after this point as the payment will no longer be valid and your banking institution may charge you a fee for presenting a stale dated or bounced check.

12. What happens if I do not cash the check?

Checks that are not cashed will be sent to the U.S Treasury, per terms of the settlement.

13. I have more than one account. Will I receive one check or multiple checks?

Depending on the account registration, address of record and eligibility, shareholders owning more than one account may receive one or more checks.

14. My check(s) has been lost/destroyed. What should I do?

Check’s can be replaced within 90 days of the original check issuance.

15. Are there tax implications for cashing this payment?

The Commission appointed Miller Kaplan Arase, LLP (MKA) as Tax Administrator in this matter. MKA has reviewed the potential tax consequences and a “Statement to Eligible Claimants” can be found on the Tax Information page on this website.

16. I have an IRA/retirement account. What are the tax consequences for me?

You should consult with your financial advisor or tax professional to determine the appropriate tax treatment for your situation.

Due to the complexities involved, we have included additional information about the tax consequences of this distribution in a Statement to Affected Investors available on the Tax Information page on this website.

17. I received a check made payable to my custodian. What do I do with this check?

If your account is still with the custodian listed on the check, forward this check with a letter of instruction (LOI) to your current custodian to have them deposit the check into your account. Be sure to include your current account number with the correspondence.

PLAN NOTICE Q&A

1. Why did I receive this Plan Notice?

You received a Plan Notice because your Oracle Investment Research account(s) was impacted as described in the Settlement Order entered by the United Security and Exchange Commission (the “Commission” or “SEC”) and you have been identified as a Preliminary Claimant.

2. How long do I have to send in the IRS Form W-8 or W-9 as required in the Plan Notice communication?

Preliminary Claimants have 30 calendar days to respond. Plan Notices are dated June 1, 2022 so the W-8 or W-9 documentation will need to be delivered, in good order, on or before July 1, 2022.

3. What happens if I do not respond with the IRS Form W-8 or W-9 information requested in the Plan Notice?

If a Preliminary Claimant fails to respond within thirty (30) days from the mailing of the Plan Notice, the Fund Administrator will make no fewer than two (2) attempts to contact the Preliminary Claimants by telephone or email. The second attempt will in no event take place more than forty-five (45) days from the mailing of the Plan Notice. 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.

NOTE: Unresponsive Preliminary Claimants will be sent a Final Determination Notice as described in the Plan of Distribution. Unresponsive Preliminary Claimants will not be deemed Eligible Claimants and will not be eligible to receive a distribution payment.

4. What was the settlement about?

5. Who is Laurence I. Balter?

6. What is the relevant period for those impacted by this settlement?

The settlement timeframe is January 2011 through April 2014.

7. How much was Balter ordered to pay in the settlement?

8. What are the tax consequences from this settlement?

The Commission appointed Miller Kaplan Arase, LLP (MKA) as Tax Administrator in this matter. MKA will review the potential tax consequences and a Statement to Eligible Investors (SEI) will be posted to the Tax Information page on this website prior to the disbursement of Fair Fund payments.

9. When will distribution payments be made?

It is estimated that Eligible Claimant payments will be issued between December 2022 and March 2023. Please check this website or Contact Us for updates.