3C1

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3C1

A section in the Investment Company Act of 1940 exempting certain investment companies from its provisions. Under the exemption, investment companies with fewer than one hundred investors and no intention of making a public offering are not required to register with the SEC. These companies are known as private investment companies, and include charitable organizations and pensions. Hedge funds often use this section to avoid SEC registration.
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Henning, Balancing the Need for Enhanced Sentences for Perjury at Trial Under Section 3C1.1 of the Sentencing Guidelines and the Defendant's Right to Testify, 29 Am.
3B1.1(b) and the two-level obstruction enhancement at section 3C1.1
Reading "process" in the process enhancement broadly would also contravene the restrictive language in the process enhancement that indicates that the provision only covers violations of process "not addressed elsewhere in the guidelines."(39) Section 3C1.1 provides an enhancement for obstruction of justice, including the submission of false documents to a court.(40) Many courts have applied section 3C1.1 to enhance the sentences of defendants who have submitted false documents in the context of a formal hearing.(41) Bankruptcy fraud involves an analogous abuse of process.(42) Since reading "process" in the process enhancement broadly would make section 3C1.1 redundant, courts should interpret "process" narrowly.
In addition, where the Sentencing Commission intends the application notes to provide an illustrative but nonbinding interpretation of a provision, it usually expresses this intent explicitly.(59) The application notes to section 3C1.1, for example, repeatedly indicate that the enumerated examples should not be considered exhaustive.(60) By contrast, the application note to the process enhancement does not contain any such qualification.(61) The Sentencing Commission's inclusion of discussion related only to violations of court orders or decrees in the application notes to the process enhancement indicates that it intended for courts to apply the provision only when a defendant violates an order or decree.(62)
In fact, where the Sentencing Commission intends to give sentencing courts discretion to apply a provision by analogy, the commentary typically reflects this intent.(80) The commentary to section 3C1.1, for example, states that "[o]bstructive conduct can vary widely in nature, degree of planning, and seriousness" and offers examples to "assist the court in determining whether application of this adjustment is warranted in a particular case."(81) Where the text and commentary do not indicate that the Sentencing Commission intended to allow a provision to be applied by analogy, sentencing courts should apply the Guidelines as written.
Application notes 4(c) and 4(f) to section 3C1.1 state that the provision applies to "producing or attempting to produce a false, altered, or counterfeit document or record during an official investigation or judicial proceeding" and to "providing materially false information to a judge or magistrate." Id.
that Burke sold the fraudulent securities while under a consent decree not to sell such securities"); Lamere, 980 F.2d at 517 (reversing a section 3C1.1 enhancement for concealing evidence where the defendant's crime of conviction included concealment of counterfeit currency).
1991) (refusing to impose a section 3C1.1 enhancement for bankruptcy fraud because concealing assets formed the basis of the defendant's fraud charge); see also Rappaport, 999 F.2d at 60-61 (stating that enhancements relate to conduct beyond that which underlies the base offense).