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Investment Co. v. Clarke

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


May 2, 1986

INVESTMENT COMPANY INSTITUTE, PLAINTIFF-APPELLANT,
v.
ROBERT L. CLARKE, OFFICE OF THE COMPTROLLER OF THE CURRENCY, UNITED STATES OF AMERICA, THE CONNECTICUT BANK & TRUST COMPANY, N.A. AND THE CONNECTICUT BANK AND TRUST COMPANY IRA COLLECTIVE INVESTMENT FUND, DEFENDANTS-APPELLEES

Appeal from a January 22, 1986 judgment of the United States District Court for the District of Connecticut, Cabranes, J., granting defendants' motion for summary judgment. Held that the Comptroller of the Currency was correct in holding that the Glass-Steagall Act does not prohibit Connecticut Bank & Trust Company from creating a mutual fund for Individual Retirement Accounts or marketing and promoting the funds' shares to the public. Affirmed.

Before: TIMBERS, MESKILL and ALTIMARI, Circuit Judges.

Per Curiam :

This is an appeal by Investment Company Institute from a January 22, 1986 judgment of the United States District Court for the District of Connecticut, Cabranes, J., granting the motion for summary judgment of defendants Connecticut Bank & Trust Company, N.A. (CBT) and the Connecticut Bank & Trust Company IRA Collective Investment Fund and entering judgment in defendants' favor. Judge Cabranes' decision is reported at F.Supp. (D. Conn. 1986). Plaintiff in its complaint challenged the legality of an administrative ruling of the Office of the Comptroller of the Currency which declared that the Glass-Steagall Act does not prohibit, and that 12 U.S.C. § 92a (1982) and the Employee Retirement Income Security Act of 1974 permit, CBT to create a mutual fund for Individual Retirement Accounts and to market and promote the funds' shares to the public.

The key issue in this appeal is whether CBT's offering of shares of its IRA Collective Investment Fund constitutes the sale of securities, barred by the Glass-Steagall Act, 12 U.S.C. § 24 (Seventh), or a sale of fiduciary services permissible under the Act as construed by Investment Company Institute v. Camp, 401 U.S. 617, 638 (1971).

We believe that it is the latter and affirm the district court judgment for substantially the reasons contained in Judge Cabranes' Ruling on Cross-Motions For Summary Judgment dated January 21, 1986 and reported at F.Supp. (D.Conn. 1986).

19860502

© 1998 VersusLaw Inc.



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