In the Matter of The First Galleon Family Fund, Inc.

August 11, 2010 SEC-CFD ORDER NO. 198-10 IN THE MATTER OF THE FIRST GALLEON FAMILY FUND, INC. ORDER OF REVOCATION The records on file with this Commission show the failure of The First Galleon Family Fund, Inc. ("Fund") to: I. Publish its Net Asset Value Per Share Daily, in violation of ICA Rule 35-1 (e) (3) and pay the assessed penalty 1 corresponding to said violation; II. Failure to effect redemption of shares within 7 days, in violation of ICA Rule 35-1 (e) (5); III. Comply with the requirements of SRC Rule 68.1 and Philippine Accounting Standards 1 and 24 in the Fund's 2008 Audited Financial Statements and pay the assessed penalty 2 corresponding to said violation; and IV. Comply with the Department's directive dated 19 November 2009 requiring explanation to its Audit Findings and the submission of the following documents: 1. Certified true copy of the bank statements for the year ended 31 December 2008 and from January to 30 September 2009; 2. Board Resolution adopting the Fund's Anti-Money Laundering Manual; and 3. Certificate of attendance of the Fund's Compliance Officer to the Anti-Money Laundering Seminar conducted by the Bangko Sentral ng Pilipinas. DaTICE within the sixty (60)-day suspension period as set forth in the Suspension Order dated 17 May 2010 issued by the Commission. Records further show that it subsequently failed to file its 2009 Annual Report (SEC Form 17-A) for the year ended 31 December 2009 and its 2010 1st Quarter Report (SEC Form 17-Q) failed to fully comply with the disclosure requirements under SRC Rule 17.1 (A) (ii), in violation of SRC Rule 17.1 (A) (i) and (ii), respectively. Finally, a Notice of Hearing for Revocation was issued by the Department on 20 July 2010 setting a hearing on 28 July 2010, the 60-day suspension period having ended on 18 July 2010. Said Notice was personally delivered to all the Directors/Officers of the company on 23-26 July 2010. Despite receipt of said Notice, no representative from the Fund appeared on the scheduled hearing date. Pursuant to the resolution of the Commission in its meeting of 05 August 2010, the company's Registration of Securities and Certificate of Permit to Sell Securities are hereby REVOKED. Accordingly, the company is prohibited from selling/offering for sale its securities to the public. Notwithstanding said revocation, the Fund shall continue processing requests for redemption of investments. This revocation order shall not exempt the company from complying with its reportorial obligations. Let a copy of this Order be published in a newspaper of general circulation in the Philippines and in the official website of the Commission for the information and guidance of the public. SO ORDERED. Signed this 11th day of August 2010 at Mandaluyong City, Philippines. For the Commission: (SGD.) JUSTINA F. CALLANGAN Director Footnotes 1. On 20 January 2010, the Department issued an assessment for P48,800.00 which was computed from 16 December 2009 until 17 January 2010. Per SEC Memorandum Circular No. 6, Series of 2005 (Consolidated Scale of Fines), the penalty for a second violation of ICA Rule 35-1 (e) (3) is P10,000.00 plus P200.00 per day of continuing violation. 2. The penalty of P80,500.00 (computed pursuant to SEC Memorandum Circular No. 8, Series of 2009) was imposed on 12 January 2010.