An administrative law judge has revoked the registration to operate as an investment adviser of Piper Capital Management of Minneapolis, a unit of U.S. Bancorp Piper Jaffray, and fined the firm $2.005 million. The actions, by Judge H. Peter Young, came in an initial decision with regard to allegations brought by the Securities and Exchange Commission. The SEC's division of enforcement, in the decision, characterized the proceeding as "one of the largest and most complex it has ever conducted."

The SEC allegations stemmed from the 1994 collapse of the Piper Jaffray Institutional Government Income Portfolio, a diversified mutual fund. The judge confirmed the SEC's allegation that the fund violated the Securities Act by deviating from the preservation of capital component of the fund's investment objective and failing to disclose the deviation, the SEC said.

Judge Young also determined that the fund was guilty of misrepresenting or failing to disclose several facts about the fund's composition from 1991 to 1994, according to the decision. The judge concluded that Worth Bruntjen and Marijo Goldstein, the fund's co-managers and several other Piper employees misrepresented the fund's net asset value in an effort to incorporate the fund's losses into the net asset value, according to the decision.

Although the judge determined that the actions of the fund co-managers and other Piper Capital Management employees were inappropriate' and reckless,' he did not impose monetary sanctions on them or ban them from investment advising, according to the SEC.

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