Exhibit 14.1
AMERITRANS CAPITAL CORPORATION
CODE OF ETHICS
SECTION I: STATEMENT OF PURPOSE AND APPLICABILITY
(A) Statement of Purpose
It is the policy of Ameritrans Capital Corporation (the "Company")
that no affiliated person of the Company shall, in connection with
the purchase or sale, directly or indirectly, by such person of any
security held or to be acquired by the Company,
(1) Employ any device, scheme or artifice to defraud the Company;
(2) Make to the Company any untrue statement of a material fact or
omit to state to the Company a material fact necessary in
order to make the statement made, in light of the
circumstances under which it is made, not misleading;
(3) Engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon the
Company; or
(4) Engage in any manipulative practice with respect to the
Company.
(B) Scope of the Code
In order to prevent the access persons, as defined in Section II,
paragraph (A) below, of the Company from engaging in any of these
prohibited acts, practices or courses of business, the Board of
Directors of the Company has adopted this Code of Ethics.
SECTION II: DEFINITIONS
(A) Access Person. "Access Person" means any director, officer, or
"Advisory Person" of the Company. The Company's Access Persons are
set forth on Exhibit A hereto, as such shall be amended from time to
time.
(B) Advisory Person. "Advisory person" of the Company means:(i) any
employee of the Company or of any company in a control relationship
to the Company, who, in connection with his or her regular functions
or duties, makes, participates in, or obtains information regarding
the purchase or sale of a security by the Company, or whose
functions relate to the making of any recommendations with respect
to such purchases or sales; and (ii) any natural person in a control
relationship to the Company who obtains information concerning
recommendations made to the Company with regard to the purchase or
sale of security.
(C) Beneficial Interest. "Beneficial Interest" includes any entity,
person, trust, or account with respect to which an Access Person
exercises investment discretion or provides investment advice. A
beneficial interest shall be presumed to include all accounts in the
name of or
for the benefit of the Access Person, his or her spouse, dependent
children, or any person living with him or her or to whom he or she
contributes economic support.
(D) Beneficial Ownership. "Beneficial Ownership" shall be determined in
accordance with Rule 16a-1(a)(2) under the Securities Exchange Act
of 1934, except that the determination of direct or indirect
Beneficial Ownership shall apply to all securities, and not just
equity securities, that an Access Person has or acquires. Rule
16a-1(a)(2) provides that the term "beneficial owner" means any
person who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise, has or
shares a direct or indirect pecuniary interest in any equity
security. Therefore, an Access Person may be deemed to have
Beneficial Ownership of securities held by members of his or her
immediate family sharing the same household, or by certain
partnerships, trusts, corporations, or other arrangements.
(E) Covered Security. "Covered Security" means a security as defined in
Section 2(a)(36) of the Investment Company Act of 1940, as amended
(the "1940 Act"), except that it does not include (i) direct
obligations of the Government of the United States; (ii) banker's
acceptances, bank certificates of deposit, commercial paper and high
quality short-term debt instruments including repurchase agreements;
and (iii) shares issued by open-end funds.
(F) Company. The "Company" means Ameritrans Capital Corporation, a
Delaware corporation, and Elk Associates Funding Corporation and any
other subsidiary unless the context otherwise requires.
(G) Designated Officer. "Designated Officer" shall mean the officer of
the Company designated by the Board of Directors from time to time
to be responsible for management of compliance with this Code. The
Designated Officer may appoint a designee to carry out certain of
his or her functions pursuant to this Code. The Designated Officer
is set forth on Exhibit B hereto, as such shall be amended from time
to time.
(H) Disinterested Director. "Disinterested Director" means a director of
the Company who is not an "interested person" of the Company within
the meaning of Section 2(a)(19) of the 1940 Act.
(I) Elk. "Elk" means Elk Associates Funding Corporation, the Company's
wholly-owned operating subsidiary licensed by the U.S. Small
Business Administration under the Small Business Investment Act of
1958.
(J) Purchase or Sale of a Covered Security. Purchase or Sale of a
Covered Security includes, among other things, the writing of an
option to purchase or sell a covered security, or the use of
derivative product to take a position in a Covered Security.
SECTION III: STANDARDS OF CONDUCT
(A) General Standards
-2-
(1) No Access Person shall engage, directly or indirectly, in any
business transaction or arrangement for personal profit that
is inconsistent with the best interests of the Company or its
shareholders; nor shall he or she make use of any confidential
information gained by reason of his or her employment by or
affiliation with the Company or affiliates thereof in order to
derive a personal profit for himself or herself or for any
Beneficial Interest, in violation of the fiduciary duty owed
to the Company or its shareholders.
(2) Any Access Person recommending or authorizing the purchase or
sale of a Covered Security by the Company shall, at the time
of such recommendation or authorization, disclose any
Beneficial Interest in or Beneficial Ownership of such Covered
Security or the issuer thereof.
(3) No Access Person shall dispense any information concerning
Securities holdings or Securities transactions of the Company
to anyone outside the Company, without obtaining prior written
approval from the Designated Officer, or such person or
persons as these individuals may designate to act on their
behalf. Notwithstanding the preceding sentence, such Access
Person may dispense such information without obtaining prior
written approval:
(a) when there is a public report containing the same
information;
(b) when such information is dispensed in accordance with
compliance procedures established to prevent conflicts
of interest between the Company and its affiliates;
(c) when such information is reported to directors of the
Company; or
(d) in the ordinary course of his or her duties on behalf of
the Company.
(4) All personal securities transactions should be conducted
consistent with this Code and in such a manner as to avoid
actual or potential conflicts of interest, the appearance of a
conflict of interest, or any abuse of an individual's position
of trust and responsibility within the Company.
(B) Prohibited Transactions
(1) General Prohibition. No Access Person shall purchase or sell,
directly or indirectly, any Covered Security in which he or
she has, or by reason of such transaction acquires, any direct
or indirect Beneficial Ownership and which such Access Person
knows or should have known at the time of such purchase or
sale is being considered for purchase or sale by the Company,
or is held in the portfolio of the Company unless such Access
Person shall have obtained prior written approval for such
purpose from the Designated Officer.
(a) An Access Person who becomes aware that the Company is
considering the purchase or sale of any Covered Security
by any person (an issuer) must immediately notify the
Designated Officer of any interest that such
-3-
Access Person may have in any outstanding Covered
Securities of that issuer.
(b) An Access Person shall similarly notify the Designated
Officer of any other interest or connection that such
Access Person might have in or with such issuer.
(c) Once an Access Person becomes aware that the Company is
considering the purchase or sale of a Covered Security
or that the Company holds a Covered Security in its
portfolio, such Access Person may not engage, without
prior approval of the Designated Officer, in any
transaction in any Covered Securities of that issuer.
(d) The notifications or permission may be provided
verbally, but should be confirmed in writing as soon and
with as much detail as possible.
(2) Gifts. No Access Person may accept, directly or indirectly,
any gift, favor, or service of more than a de minimis value
from any person with whom he or she transacts business on
behalf of the Company under circumstances when to do so would
conflict with the Company's best interests or would impair the
ability of such person to be completely disinterested when
required, in the course of business, to make judgments and/or
recommendations on behalf of the Company.
(3) Service as Director. No Access Person shall serve on the board
of directors of a portfolio company of the Company without
prior written authorization of the Designated Officer based
upon a determination that the board service would be
consistent with the interests of the Company and its
shareholders.
SECTION IV: PROCEDURES TO IMPLEMENT CODE OF ETHICS
The following reporting procedures have been established to assist Access
Persons in avoiding a violation of this Code, and to assist the Company in
preventing, detecting, and imposing sanctions for violations of this Code.
Every Access Person must follow these procedures. Questions regarding
these procedures should be directed to the Designated Officer.
(A) Applicability
All Access Persons are subject to the reporting requirements set
forth in Section IV(B) except:
(1) with respect to transactions effected for, and Covered
Securities held in, any account over which the Access Person
has no direct or indirect influence or control;
(2) a Disinterested Director who would be required to make a
report solely by reason of being a Director need not make an
annual holdings report.
-4-
(3) an Access Person need not make a quarterly transaction report
if the report would duplicate information contained in broker
trade confirmations or account statements received by the
Company with respect to the Access Person.
(4) an Access Person need not file an initial, quarterly, or
annual report with respect to any publicly listed security so
long as (i) the Company operates through Elk, which is
licensed by the U.S. Small Business Administration under the
Small Business Investment Company Act of 1958 (the "1958
Act"), which act prohibits the purchase or investment in any
publicly held or marketable securities by any licensee company
such as Elk and (ii) it is the policy of the Company or any
existing or future subsidiary not to invest in any publicly
traded securities.
(5) so long as (i) the Company's policy continues to be not to
invest in any Covered Securities, including, but not limited
to, securities which are distributed pursuant to an exemption
from registration under the 1933 Act, as amended (the
"Registered Securities"), and (ii) the Company's operations
continue to be conducted through Elk, which is engaged in the
business, as a licensed SBIC, of making small business loans
to small businesses as defined under the 1958 Act, an Access
Person must file initial, quarterly, and annual reports only
with respect to any Covered Securities (including Registered
Securities) held or to be acquired by the Company or Elk.
(B) Report Types
(1) Initial Holdings Report. An Access Person must file an initial
report not later than 10 days after that person became an
Access Person. The initial report must (a) contain the title,
number of shares and principal amount of each Covered Security
in which the Access Person had any direct or indirect
beneficial ownership when the person became an Access Person;
(b) identify any broker, dealer or bank with whom the Access
Person maintained an account in which any Covered Securities
identified in the Initial Holdings Report required by this
paragraph (1) were held for the direct or indirect benefit of
the Access Person as of the date the person became an Access
Person, and (c) indicate the date that the report is filed
with the Designated Officer. Provided, however, such Access
Person need only identify those Covered Securities that are
designated in writing (the "Designated Covered Security") to
such Access Person by the Designated Officer in connection
with the Access Person's preparation of such initial report.
(2) Quarterly Transaction Report. An Access Person must file a
quarterly transaction report not later than 10 days after the
end of a calendar quarter. With respect to any transaction
made during the reporting quarter, the quarterly transaction
report must contain (a) the transaction date, title, interest
date and maturity date (if applicable), the number of shares
and the principal amount of each Designated Covered Security;
(b) the nature of the transaction; (c) the price of the
Designated Covered Security at which the transaction occurred;
(d) the name of the broker, dealer or bank through which the
transaction was effected; and (e) the date that the report is
submitted by the Access Person.
-5-
(3) Annual Holdings Report. An Access Person must file an annual
holdings report not later than 30 days after the end of a
fiscal year. The annual report must contain (a) the title,
number of shares, and principal amount of each Designated
Covered Security in which the Access Person had any direct or
indirect beneficial ownership; (b) the name of any broker,
dealer or bank in which any Designated Covered Securities are
held for the direct or indirect benefit of the Access Person;
and (c) the date the report is submitted.
(4) Confirmations and Account Statements. In lieu of providing a
quarterly transaction report, an Access Person may direct his
or her broker to provide to the Designated Officer (a)
duplicate confirmations of all transactions in any Designated
Covered Security in which he or she has, or by reason of such
transaction acquires, any direct or indirect Beneficial
Ownership, and (b) copies of periodic statements for all
investment accounts in which they have Beneficial Ownership.
(5) Each Access Person shall be required to provided a signed
written statement to the Designated Officer in each instance
that such Access Person had during the applicable period any
interest, directly or indirectly, in any Designated Covered
Securities other than those identified, if any.
(6) Company Reports. No less frequently than annually, the Company
must furnish to the Board of Directors, and the Board of
Directors must consider, a written report that:
(a) describes any issues arising under the Code of Ethics
since the last report to the Board of Directors,
including but not limited to, information about material
violations of the code or procedures and sanctions
imposed in response to the material violations; and
(b) certifies that the Company has adopted procedures
reasonably necessary to prevent Access Persons from
violating the code.
(C) Disclaimer of Beneficial Ownership. Any report required under this
Section IV may contain a statement that the report shall not be
construed as an admission by the person submitting such duplicate
confirmation or account statement or making such report that he or
she has any direct or indirect beneficial ownership in the Covered
Security to which the report relates.
(D) Review of Reports. The reports, duplicate confirmations, and/or
account statements submitted under this Section IV shall be
delivered to the Designated Officer. The Designated Officer shall
review such reports, duplicate confirmations, and account statements
to determine whether any transactions recorded therein constitute a
violation of the Code of Ethics. Before making any determination
that a violation has been committed by any Access Person, such
Access Person shall be given an opportunity to supply additional
explanatory material. The Designated Officer shall maintain copies
of the reports, duplicate confirmations, and account statements as
required by Rule 17j-1(d).
-6-
(E) Acknowledgment and Certification. Upon becoming an Access Person and
annually thereafter, all Access Persons shall sign an acknowledgment
and certification of their receipt of and intent to comply with this
Code in the form attached hereto as Exhibit A and return it to the
Designated Officer.
(F) Records. The Company shall maintain records with respect to this
Code in the manner and to the extent set forth below, which records
may be maintained on microfilm under the conditions described in
Rule 31a-2(f)(1) under the 1940 Act and shall be available for
examination by representatives of the Securities and Exchange
Commission (the "SEC").
(1) A copy of this Code and any other Code of Ethics of the
Company that is, or at any time within the past five years has
been, in effect shall be preserved in an easily accessible
place.
(2) A record of any violation of this Code and of any action taken
as a result of such violation shall be preserved in an easily
accessible place for a period of not less than five years
following the end of the fiscal year in which the violation
occurs.
(3) A copy of each report made or duplicate confirmation or
account statement received pursuant to this Code shall be
preserved for a period of not less than five years from the
end of the fiscal year in which it is made, the first two
years in an easily accessible place.
(4) A list of all persons who are, or within the past five years
have been, required to make reports pursuant to this Code
shall be maintained in an easily accessible place.
(5) A record of any decision, and the reasons supporting the
decision, to approve a request by an Access Person to purchase
or sell any Covered Security shall be maintained for at least
five years after the end of the fiscal year in which the
request is approved.
(G) Obligation to Report a Violation. Every Access Person who becomes
aware of a violation of this Code of Ethics by any person must
report it to the Designated Officer, who shall report it to
appropriate management personnel. The management personnel will take
such disciplinary action that they consider appropriate under the
circumstances. In the case of officers or other employees of the
Company, such action may include removal from office. If the
management personnel consider disciplinary action against any
person, they will cause notice thereof to be given to that person
and provide to that person the opportunity to be heard. The Board of
Directors will be notified, in a timely manner, of remedial action
taken with respect to violations of the Code of Ethics.
(H) Confidentiality. All reports of Covered Securities transactions,
duplicate confirmations, account statements and other information
filed with the Company or furnished to any person pursuant to this
Code shall be treated as confidential, but are subject to review as
provided herein and by representatives of the SEC.
-7-
SECTION V: SANCTIONS
Upon determination that a violation of this Code has occurred, appropriate
management personnel of the Company may impose such sanctions as they deem
appropriate, including, among other things, a letter of censure or
suspension or termination of the employment of the violator. All
violations of this Code and any sanctions imposed with respect thereto
shall be reported in a timely manner to the Board of Directors of the
Company.
-8-
ACKNOWLEDGMENT AND CERTIFICATION
I acknowledge receipt of the Code of Ethics of Ameritrans Capital
Corporation. I have read and understand such Code of Ethics and agree to be
governed by it at all times. Further, if I have been subject to the Code of
Ethics during the preceding year, I certify that I have complied with the
requirements of the Code of Ethics and have disclosed or reported all personal
securities transactions required to be disclosed or reported pursuant to the
requirements of the Code of Ethics.
____________________________________
(signature)
____________________________________
(please print name)
Date:_______________________________
-9-
EXHIBIT A
AMERITRANS CAPITAL CORPORATION
Access Persons
Gary C. Granoff
Ellen M. Walker
Lee A. Forlenza
Steven Etra
Wesley Finch
Paul Creditor
Allen Kaplan
Howard Sommer
John Laird
Margaret Chance
Silvia Mullens
-10-
EXHIBIT B
AMERITRANS CAPITAL CORPORATION
Designated Officer
Gary C. Granoff -- Designated Officer
Ellen M. Walker to review quarterly reports submitted by Designated Officer.
-11-