The Securities and Exchange Commission (SEC)

[Stock]

McCain to SEC chair Cox: "Off with your head!"

Thursday, Sept. 18, 2008 10:58 PDT

John McCain has officially solidified his position as the "change" candidate.

In March, he told the Wall Street Journal that "I'm always for less regulation." He acknowledged that there is a "role over oversight," but reiterated "I am fundamentally a deregulator. I'd like to see a lot of the unnecessary government regulations eliminated, not just a moratorium."

And his record backs that up. He has historically supported reducing the regulatory load on financial institutions -- in particular the banks that have been at the heart of the current financial crisis. In 2000, he declared, "I am convinced that the best thing government can often do to advance the fortunes of the private sector is to stay out of its way."

But now he has changed his tune, calling for the firing of SEC commissioner Christopher Cox, according to excerpts of a speech he is about to deliver.

From the Wall Street Journal:


"The chairman of the SEC serves at the appointment of the president and has betrayed the public's trust. If I were president today, I would fire him," McCain says, according to excerpts for a speech on reforming the ailing U.S. financial markets he will deliver today in Cedar Rapids, Iowa.

"The primary regulator of Wall Street, the Securities and Exchange Commission (SEC) kept in place trading rules that let speculators and hedge funds turn our markets into a casino," McCain says. "They allowed naked short selling–which simply means that you can sell stock without ever owning it. They eliminated last year the uptick rule that has protected investors for 70 years. Speculators pounded the shares of even good companies into the ground."


Make no mistake, in How the World Works' opinion, Christopher Cox should be fired. He's been a virtual nonentity for the entire extent of the credit crunch. While Ben Bernanke and Hank Paulson have been laboring mightily to keep the floodwaters from drowning everyone, we've heard next to nothing from Cox.

But it might be worth remembering that this former Reagan administration lawyer and congressional House representative from Orange County, Calif., has been doing exactly what his party has always wanted him to do. George Bush did not appoint him commissioner in 2005 to crack down on Wall Street. The prevailing ideology of the Republican Party -- and this is one area where the historical evidence, by his own admission, does not justify calling John McCain a "maverick" -- has been to loosen control of Wall Street, not to tighten it. If our markets were turned into casinos, the majority of the blame has to go to the Republican Party, with some assistance from the Clinton administration.

As for short-selling, well, a lot of CEOs who are watching their company's share price crumble would like to line short-sellers up against the wall, although there are also plenty of people on Wall Street, usually from the more conservative side of the political spectrum, who believe the practice is an essential part of how the market is supposed to regulate itself. But short-selling is not the root of Wall Street's current problems -- it's merely collateral damage.

Of course, the last thing Americans want to hear now is a sermon on how government should not get in the way of private business -- not as they watch in stunned amazement the most radical government interventions in the private sector since the Great Depression. So McCain has pulled a remarkable about-face. That is quite a change, no doubt about it.

― Andrew Leonard

http://www.salon.com/tech/htww/2008/09/18/mccain_and_christopher_cox/index.html?source=rss&aim=/tech/htww

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Trading suspensions: 9/17 - 9/30/08

EAIN -- EA Industries, Inc.

EBPR -- Ebiz Enterprises, Inc.

ENBBQ -- Einstein Noah Bagle Corp. (n/k/a ENBC Corp.) (

34-58557: http://www.sec.gov/litigation/suspensions/2008/34-58557.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58557-o.pdf

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Trading suspensions: 9/16 - 9/29/08

CIBM; CIBMP -- Cadema Corp.

CDCM -- Caredata.com, Inc.

34-58551: http://www.sec.gov/litigation/suspensions/2008/34-58551.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58551-o.pdf

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SEC Issues New Rules to Protect Investors Against Naked Short Selling Abuses
FOR IMMEDIATE RELEASE
2008-204
Washington, D.C., Sept. 17, 2008 — The Securities and Exchange Commission today took several coordinated actions to strengthen investor protections against "naked" short selling. The Commission's actions will apply to the securities of all public companies, including all companies in the financial sector. The actions are effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

"These several actions today make it crystal clear that the SEC has zero tolerance for abusive naked short selling," said SEC Chairman Christopher Cox. "The Enforcement Division, the Office of Compliance Inspections and Examinations, and the Division of Trading and Markets will now have these weapons in their arsenal in their continuing battle to stop unlawful manipulation."

In an ordinary short sale, the short seller borrows a stock and sells it, with the understanding that the loan must be repaid by buying the stock in the market (hopefully at a lower price). But in an abusive naked short transaction, the seller doesn't actually borrow the stock, and fails to deliver it to the buyer. For this reason, naked shorting can allow manipulators to force prices down far lower than would be possible in legitimate short-selling conditions.

Today's Commission actions, which are the result of formal rulemaking under the Administrative Procedure Act, go beyond its previously issued emergency order, which was limited to the securities of financial firms with access to the Federal Reserve's Primary Dealer Credit Facility. Because the agency's exercise of its emergency authority is limited to 30 days, the previous order under Section 12(k)(2) of the Securities Exchange Act of 1934 expired on Aug. 12, 2008.

The Commission's actions were as follows:

Hard T+3 Close-Out Requirement; Penalties for Violation Include Prohibition of Further Short Sales, Mandatory Pre-Borrow
The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so.

If a short sale violates this close-out requirement, then any broker-dealer acting on the short seller's behalf will be prohibited from further short sales in the same security unless the shares are not only located but also pre-borrowed. The prohibition on the broker-dealer's activity applies not only to short sales for the particular naked short seller, but to all short sales for any customer.

Although the rule will be effective immediately, the Commission is seeking comment during a period of 30 days on all aspects of the rule. The Commission expects to follow further rulemaking procedures at the expiration of the comment period.

Exception for Options Market Makers from Short Selling Close-Out Provisions in Reg SHO Repealed
The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective at 12:01 a.m. ET on Thursday, Sept. 18, 2008.

As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling.

Rule 10b-21 Short Selling Anti-Fraud Rule
The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This rule also becomes effective at 12:01 a.m. ET on Thursday.

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http://www.sec.gov/news/press/2008/2008-204.htm

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Trading suspensions: 9/15 - 9/26/08

WLKBQ -- B.B. Walker Co.

BLLX -- Bellatrix International, Inc.

BEAAF -- Belmont Resources, Inc.

BERS -- Beres Industries, Inc.

BESOQ -- Best Products Co., Inc.

BEHP -- Bethlehem Corp.

BGUE -- Bogue Electric Manufacturing Co. (n/k/a Bogue International, Inc.)

34-58539: http://www.sec.gov/litigation/suspensions/2008/34-58539.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58539-o.pdf

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Trading suspensions: 9/12 - 9/25/08

TRKB -- American Environmental Corp. (n/k/a TrackBets International, Inc.)

BFUN -- BAM! Entertainment, Inc.

ETPI -- Entertainment Technologies & Programs, Inc.

ICPC -- Inter Con PC, Inc.

RUNU -- Rudy Nutrition

TGSI -- Trans Global Services, Inc.

XCLT -- XCL Ltd.

ZMTX -- ZymeTx, Inc.

34-58526: http://www.sec.gov/litigation/suspensions/2008/34-58526.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58526-o.pdf

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September 8, 2008 SEC News Digest
Issue 2008-174

ENFORCEMENT PROCEEDINGS
Securities And Exchange Commission Orders Hearing on Registration Revocation Against Three Public Companies for Failure to Make Required Periodic Filings
On September 5, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of three companies for failure to make required periodic filings with the Commission:

Karts International, Inc.
Keith Group of Companies, Inc.
KMS Industries, Inc.
In this Order, the Division of Enforcement (Division) alleges that the three issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58468; File No. 3-13160)


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Securities and Exchange Commission Orders Hearing on Registration Revocation Against Three Public Companies for Failure to Make Required Periodic Filings
On September 5, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of three companies for failure to make required periodic filings with the Commission:

MAII Holdings, Inc. (MAII)
Tandycrafts, Inc.
Transportation Equities, Inc. (TEQT)
In this Order, the Division of Enforcement (Division) alleges that the three issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58470; File No. 3-13161)


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Delinquent Filers' Stock Registrations Revoked
The registrations of the securities of Respondents Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc.), Cluster Technology Corp., Global Network, Inc., Micro-Integration Corp., Montt International Corp., and NewCare Health Corp. have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-58471; File No. 3-13140)


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Timothy L. Bradshaw Sanctioned
Timothy L. Bradshaw (Bradshaw) has been barred from association with any broker or dealer. The sanction was ordered in an administrative proceeding before an administrative law judge, following a court-ordered injunction against him. In July 2008, Bradshaw was enjoined from violating the antifraud and registration provisions of the federal securities laws based on misconduct in which he acted both individually and through a staff of sales agents to promote the sale of investment contracts for Mobile Billboards of America, Inc. (MBA).

MBA sold more than $60 million of investments that consisted of mobile billboard frames that were purportedly mounted on the sides of trucks to hold advertising posters. However, the investment program was actually a Ponzi scheme that relied on new investor money to make monthly lease payments to investors. Bradshaw was one of the top three sales agents for MBA. He sold more than $5.3 million of the investments, and sales agents under his direction sold an additional $16 million. (Rel. 34-58472; File No. 3-13116)


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Rick Boros a/k/a Vincent Kwiatkowski and North American Mining Ventures, Inc.
On September 3, the Commission filed a complaint in the United States District Court for the Northern District of Illinois against Rick J. Boros, a/k/a Vincent Kwiatkowski (Boros), and North American Mining Ventures, Inc. The complaint alleges that between May 2005 and June 2007 Boros and North American Mining claimed to operate "low-risk, high-return" gold and silver mines in Durango, Mexico. The complaint further alleges that Boros told investors that their funds would be used to develop and expand the alleged gold and silver mines and obtained at least $1.2 million from approximately 17 investors, a number of whom are elderly or retired. The complaint, however, then alleges that Boros then misappropriated virtually all of these funds, spending $358,358 of investor funds to pay his personal credit card debt, to lease and maintain three BMW automobiles, and to pay for his household expenses and his daughter's college tuition. Boros allegedly also transferred at least $132,750 directly into accounts he controlled and sent at least $251,542 to friends and associates. In addition, Boros allegedly spent investor funds to pay for salon services and visits to spas, to buy clothing, handbags and other personal items.

The complaint alleges that, as a result of their conduct, the Defendants violated Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. [SEC v. Rick J. Boros, a/k/a Vincent Kwiatkowski, and North American Mining Ventures, Inc., Civil Action No. 1:08-CV-5004 (N.D. Ill.)(Lindberg, J.)] (LR-20704)


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Jury Finds Former Master Graphics, Inc. CEO Liable For Securities Fraud Arising From Accounting Scheme
On September 5, a federal jury returned a verdict in the SEC's favor on securities fraud and other charges against John P. Miller, the former Chief Executive Officer, President, and Chairman of the Board of Master Graphics, Inc., a printing company based in Memphis, Tennessee that was publicly traded on the NASDAQ national market system, but is now defunct. Securities and Exchange Commission v. John P. Miller, Civil Action No. 1:04-cv-1655-AJB (N.D.Ga.). The verdict followed a two-week jury trial in Atlanta, Georgia before the honorable Alan J. Baverman, United States Magistrate Judge for the United States District Court for the Northern District of Georgia, Atlanta Division.

The Commission's Complaint, filed June 8, 2004, alleged that Miller, in the spring of 1999, devised and implemented a scheme to fraudulently overstate the company's net income to meet analyst expectations. Pursuant to the plan, the company fraudulently reclassified rent and salary expenses that Master Graphics had already paid to its division presidents in the first quarter as assets on the company's balance sheet. This misstatement caused Master Graphics to materially overstate its earnings for the first quarter of 1999, and materially understate its losses for the second and third quarters of 1999.

The jury found that Miller violated: (1) the antifraud provisions of both the Securities Act of 1933 (Section 17(a)) and the Securities Exchange Act of 1934 (Section 10(b) and Rule 10b-5); and (2) the internal controls and books and records provisions of the Exchange Act (Section 13(b)(5) and Exchange Act Rule 13b2-1). Additionally, the jury found that Miller aided and abetted violations of the issuer reporting, books and records, and internal control provisions of the Exchange Act (Sections 13(a) and 13(b)(2)(A), and Exchange Act Rules 12b-20 and 13a-13).

Judge Baverman will schedule a subsequent hearing to decide what remedies, if any to impose.

For additional information concerning this action see Litigation Release No. 18744 / June 14, 2004, and Litigation Release No. 18733 / June 2, 2004. [SEC v. John P. Miller, Civil Action No. 1:04-cv-1655-AJB (N.D.Ga.)] (LR-20705; AAE Rel. 2873)


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United Rentals, Inc. to Pay $14 Million to Settle Financial Fraud Charges
The Commission announced today that it filed charges against United Rentals, Inc. (URI) alleging that URI engaged in financial fraud and in a broad range of other improper accounting practices. URI is one of the largest equipment rental companies in the world with a network of rental locations in the Unites States, Canada and Mexico.

The Commission's complaint, filed in the United States District Court for the District of Connecticut, alleges that, from late 2000 through 2002, URI engaged in a series of fraudulent transactions undertaken in order to meet URI's earnings forecasts and analyst expectations. The fraud was accomplished primarily through a series of interlocking three-party sale-leaseback transactions orchestrated by URI's then- Chief Financial Officer, Michael Nolan, and its then- Chief Acquisitions Officer, John Milne. Nolan and Milne were previously charged by the SEC for individual wrongdoing.

The complaint alleges that in these transactions URI sold used equipment to a financing company and leased it back for a short period, and then arranged for a third party equipment manufacturer to agree to sell the equipment at the end of the lease period and guarantee the financing company against any losses incurred in the resale of the equipment. URI separately guaranteed the equipment manufacturer against any losses it might incur under the guarantee it had extended to the financing company.

The SEC's complaint also alleges that in another effort to improve its earnings, URI engaged in a series of fraudulent "trade packages" with suppliers. The company sold blocks of used equipment for amounts in excess of fair value, in exchange for certain undisclosed financial inducements offered to those suppliers.

In addition, the SEC alleges that from 1997 to 2000, during a period of enormous growth through acquisitions, URI engaged in other improper accounting practices involving its valuations of acquired assets, use of acquisition reserves, and accounting for customer relationships as well as improperly accounting for other items that overstated net income, including its estimation and recording of self-insurance reserves, its recognition of equipment rental revenues, and its income tax accounting.

Without admitting or denying the charges, URI has agreed to settle the SEC's enforcement action and pay $14 million penalty, which the Commission intends to place in a Fair Fund for distribution to affected investors.

In addition to the financial penalty, URI consented to be permanently enjoined from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934, and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13, thereunder. The settlement is subject to court approval.

In determining to accept URI's settlement offer, the Commission considered URI's cooperation with the Commission and its staff in the investigation leading to this action, and the remedial actions it has taken.

The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Connecticut and the New Haven Field Office of the Federal Bureau of Investigation. The SEC's investigation continues.

For further information, see Litigation Release Nos. 20396 (Dec. 12, 2007), 20418 (Dec. 31, 2007), and 20518 (April 7, 2008). [SEC v. United Rentals, Inc., Civil Action No. 3:08-cv-1354 (CFD) / District of Connecticut] (LR-20706; AAE Rel. 2874)


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INVESTMENT COMPANY ACT RELEASES
Prudential Financial, Inc., et al.
The Commission has issued a temporary order to Prudential Financial, Inc., et al. (Prudential) under Section 9(c) of the Investment Company Act with respect to an injunction issued by the U.S. District Court for the District of New Jersey on Sept. 4, 2008 (Injunction). The temporary order exempts applicants and companies of which Prudential is or becomes an affiliated person from the provisions of Section 9(a) until the Commission takes final action on an application for a permanent order. The Commission also has issued a notice giving interested persons until Sept. 30, 2008, to request a hearing on the application filed by applicants for a permanent order under Section 9(c) of the Act. (Rel. IC-28377 - September 5)


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Fidelity Aberdeen Street Trust, et al.
A notice has been issued giving interested persons until September 29 to request a hearing on an application filed by Fidelity Aberdeen Street Trust, et al., for an order under Section 6(c) of the Investment Company Act for an exemption from Rule 12d1-2(a) under the Act. The order would permit registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28376 - September 5)


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SELF-REGULATORY ORGANIZATIONS
Accelerated Approval of Proposed Rule Change
The Commission issued notice and granted accelerated approval of a proposed rule change submitted by NYSE Arca. (SR-NYSEArca-2008-91), through its wholly owned subsidiary, NYSE Arca Equities, Inc., pursuant to Section 19(b) of the Securities Exchange Act of 1934 regarding the listing of fourteen funds of the Commodities and Currency Trust. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58457)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NYSEArca-2008-95) filed by NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., relating to net asset value calculations for CurrencyShares Trusts has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58458)

A proposed rule change (SR-CBOE-2008-94) filed by the Chicago Board Options Exchange to delete obsolete Rule 15.10 (Reporting Requirements Applicable to Short Sales in Nasdaq National Market) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58455)


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Approval of Proposed Rule Change
The Commission approved a proposed rule change (SR-FINRA-2008-033) submitted by the Financial Industry Regulatory Authority that adopts the short interest reporting requirements (NASD Rule 3360 and Incorporated NYSE Rules 421(1) and 421.10) as FINRA Rule 4560 in the consolidated FINRA rulebook. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58461)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig090808.htm

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September 5, 2008 SEC News Digest
Issue 2008-173

COMMISSION ANNOUNCEMENTS
Commission Meetings
Closed Meeting - Thursday, September 11, 2008 - 1:00 p.m.
The subject matter of the closed meeting scheduled for Sept. 11, 2008, will be: formal orders of investigation; institution and settlement of injunctive actions; institution and settlement of administrative proceedings of an enforcement nature; amicus consideration; and other matters relating to enforcement proceedings.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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RULES AND RELATED MATTERS
SEC Amends the Rule Exempting a Foreign Private Issuer from Registration under Section 12(g) of the Exchange Act
Today the Commission issued a release amending the rule that exempts a foreign private issuer from having to register a class of equity securities under Section 12(g) of the Exchange Act based on the submission to the Commission of information that the issuer has published outside the United States. The adopted rule amendments will eliminate the current written application and paper submission requirements under Rule 12g3-2(b) by automatically exempting from Exchange Act Section 12(g) a foreign private issuer that meets specified conditions. The effective date of the rule amendments will be 30 days after their publication in the Federal Register.

For further information contact: Elliot Staffin, Special Counsel, Office of International Corporate Finance, [phone]. (Rel. 34-58465; International Series Rel. 1309)


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ENFORCEMENT PROCEEDINGS
In the Matter of Joseph Yurkin
On September 4, the Commission issued an Order Instituting Administrative Proceeding Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Joseph Yurkin (Respondent). The Order is based on allegations that Respondent willfully violated Section 15(a)(1) of the Securities Exchange Act of 1934 (Exchange Act) and allegations that a permanent injunction, by consent, was entered against the Respondent for violating the securities registration and antifraud provisions of the federal securities laws.

The Division of Enforcement alleges in the Order that from at least June 2006 through September 2007, Yurkin offered and sold Homeland Communications Corporation's (Homeland) unregistered securities to the public and received transaction-based compensation. Specifically, Yurkin solicited securities transactions on behalf of Homeland and induced investors to purchase securities in the company. Yurkin was one of Homeland's most active telemarketers and he received commissions that were based on the sale of Homeland's securities. During the period that Yurkin engaged in these sales activities, he was not registered with the Commission as a broker-dealer or associated with a registered broker-dealer.

The Order also alleges that on Nov. 16, 2007, a judgment was entered by consent against Yurkin, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled SEC v. Homeland Communications Corp., et al., Civil Action Number 07-80802-CIV-MARRA/JOHNSON (filed Sept. 5, 2007) in the United States District Court for the Southern District of Florida.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, and whether Yurkin willfully violated Section 15(a)(1) of the Exchange Act, and to determine what, if any, remedial action is appropriate in the public interest against Yurkin pursuant to Section 15(b)(6) of the Exchange Act. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of the Order. (Rel. 34-58464; File No. 3-13159)


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Former Natural Health Trends Corp. Executives Settle SEC Charges that they Failed to Disclose Related Party Transactions
On September 3, the Commission filed a civil action in the United States District Court for the Northern District of Texas charging Mark D. Woodburn and Terry LaCore, two former officers of Natural Health Trends Corp. (NHT) of Dallas, Texas, with securities fraud and other violations arising from undisclosed related party transactions from 2001 through 2005. According to the complaint, from 2001 through August 2005, NHT's top distributor paid Woodburn and LaCore, directly and indirectly, approximately $2.5 million in undisclosed payments. The complaint also alleges that, in February 2004, Woodburn caused NHT to loan $256,200 to a Woodburn family-controlled company, and later took steps to conceal related party nature of the loan when it was discovered by NHT's new accounting management in the fall of 2004. As a result of Woodburn and LaCore's activities, the complaint continues, NHT failed to disclose, or inadequately disclosed, the related party transactions in periodic filings, registration statements, and proxy statements.

Woodburn and LaCore agreed to settle the SEC's charges without admitting or denying the allegations of the complaint. Each agreed to be permanently enjoined from violations of the specified statutes and to a five-year officer and director bar. Woodburn agreed to pay a $60,000 civil penalty, and LaCore agreed to pay a $50,000 civil penalty. [SEC v. Mark D. Woodburn and Terry LaCore, Civil Action No. 3:08-cv-1555-G, Northern District of Texas (Dallas Division)] (LR-20702; AAE Rle. 2872)


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SEC Sues Island Pacific and Former CEOs and CFO for Accounting Fraud Scheme
On September 4, the Commission filed securities fraud charges against Retail Pro, Inc. (formerly known as Island Pacific, Inc.), and two former CEOs and a former CFO for their roles in an accounting fraud scheme designed to falsely inflate Island Pacific's revenues. The Commission's lawsuit, filed in federal district court in San Diego, Calif., names Retail Pro, Inc., a La Jolla, Calif. software company, Barry M. Schechter, age 54, of La Jolla, Calif., Ran H. Furman, age 39, of San Diego, Calif., and Harvey Braun, age 69, of Livingston, New Jersey. Island Pacific, Schechter, and Braun have agreed to settle the charges.

The Commission's complaint alleges that Schechter, the former CEO, Furman, the former CFO, and Braun, another former CEO, caused Island Pacific to improperly record and report $3.9 million in revenue from a barter transaction. As alleged in the complaint, the barter transaction had little economic purpose or business substance aside from manipulating Island Pacific's financial statements. The complaint further alleges that as a result of improperly recognizing and reporting the $3.9 million as revenue, Island Pacific overstated its revenues by 140% for the second quarter of 2004, 29% for the nine months ending the third quarter of 2004, and 22% for the 2004 fiscal year. In addition, Island Pacific reported a small profit instead of a massive loss for the second quarter of 2004.

The complaint also alleges that the defendants failed to disclose the barter nature of the transaction and actively concealed their fraud from Island Pacific's outside auditors and the public by creating forged and backdated documents in an attempt to show that recognizing revenue from the transaction was proper. In addition, the complaint alleges that Schechter sold 637,750 shares of Island Pacific stock for more than $1.5 million during the fraudulent scheme.

To settle the Commission's charges, Island Pacific, without admitting or denying the allegations, consented to the entry of a final judgment permanently enjoining it from future violations of the antifraud, reporting, record-keeping, and internal controls provisions of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, and 13a-13 thereunder.

To settle the Commission's charges, Schechter, without admitting or denying the allegations, consented to the entry of a final judgment permanently enjoining him from future violations of the antifraud, record-keeping, internal controls, and lying to the accountants provisions of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, and 13b2-2 thereunder and aiding and abetting Island Pacific's reporting violations; ordering him to pay disgorgement of $488,410 in ill-gotten gains from his stock sales during the fraud, prejudgment interest of $27,437, and a civil penalty of $120,000; and barring him from serving as an officer or director of a public company for a period of ten years. Schechter, who was Chartered Accountant in South Africa, also consented, without admitting or denying the Commission's findings, to entry of an administrative order that makes findings and suspends him from appearing or practicing before the Commission as an accountant pursuant to Rule 102(e)(3) of the Commission's Rules of Practice.

To settle the Commission's charges, Braun, without admitting or denying the allegations, consented to the entry of a final judgment permanently enjoining him from future violations of the antifraud, record-keeping, internal controls, lying to the accountants, and false certification provisions of Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1, 13b2-2, and 13a-14 thereunder and aiding and abetting Island Pacific's reporting violations (except its violation of Rule 13a-1); ordering him to pay a civil penalty of $75,000; and barring him from serving as an officer or director of a public company for a period of five years. [SEC v. Retail Pro, Inc. (fka Island Pacific, Inc.), Barry M. Schecter, Ran H. Furman, and Harvey Braun, Civil Action No. CV 08-1620 WQH (RBB) (S.D. Cal.)] (LR-20703)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig090508.htm

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September 4, 2008 SEC News Digest
Issue 2008-172

COMMISSION ANNOUNCEMENTS
Paul Beswick Named Deputy Chief Accountant for Professional Practice in SEC Office of the Chief Accountant
On September 3, the Commission announced the appointment of Paul A. Beswick as Deputy Chief Accountant for Professional Practice in the agency's Office of the Chief Accountant. Previously, Mr. Beswick served as a senior advisor to the SEC's Chief Accountant.

As Deputy Chief Accountant, Mr. Beswick will play a key role in nearly all aspects of the Commission's work related to overseeing the activities of the Public Company Accounting Oversight Board (PCAOB), managing the resolution of audit independence issues and ethical matters, and monitoring audit and independence standard-setting internationally.

"The SEC and America's investors will benefit from Paul's diverse background, experience and commitment to high quality audits and financial reporting," said Conrad Hewitt, SEC Chief Accountant.

Mr. Beswick added, "I am honored by this opportunity, and look forward to continuing to work with my dedicated and talented colleagues in the Office of Chief Accountant on behalf of the investing public."

Prior to joining the SEC staff, Mr. Beswick was a Partner with Ernst & Young LLP, where he worked in the firm's Professional Practice and Risk Management Group. Mr. Beswick previously served as a practice fellow at the Financial Accounting Standards Board (FASB) from July 2005 through June 2007.

Mr. Beswick is a graduate of Miami University in Oxford, Ohio. (Press Rel. 2008-188)


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RULES AND RELATED MATTERS
Exemption from Rule Filing Requirements of Section 19(b)
The Commission issued an order granting application for exemption pursuant to Section 36(a) of the Securities Exchange Act of 1934 by the Philadelphia Stock Exchange, Inc., n/k/a NASDAQ OMX PHLX, Inc., from the rule filing requirements of Section 19(b) of the Exchange Act with respect to certain rules incorporated by reference. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58454)


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ENFORCEMENT PROCEEDINGS
Delinquent Filers' Stock Registrations Revoked
The registrations of the stock of Respondents Waycool3D, Inc., and World Callnet, Inc., have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-58459; File No. 3-13133)


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SEC Charges Former CEO of Kellogg, Brown & Root, Inc. With Foreign Bribery
On September 3, the Commission announced that it charged former KBR executive Albert Jackson Stanley with violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and related provisions of the federal securities laws. The Commission alleges that over a ten-year period, Stanley and others participated in a scheme to bribe Nigerian government officials in order to obtain construction contracts worth more than $6 billion. The contracts were awarded to a four-company joint venture of which The M.W. Kellogg Company, and later KBR, was a member.

The Commission alleges that beginning as early as 1994, Stanley and other members of the joint venture determined that it was necessary to pay bribes to individuals within the Nigerian government in order to obtain contracts to build liquefied natural gas facilities (LNG Trains) in Bonny Island, Nigeria. Stanley and others met with high-ranking Nigerian government officials and their representatives on at least four occasions to arrange the bribe payments. To conceal the illicit payments, Stanley and others approved entering into sham contracts with two "agents" to funnel money to the Nigerian officials. Thereafter, as the joint venture was paid for its work building the LNG Trains, the joint venture paid the agents over $180 million. In turn, substantial payments were made to various Nigerian government officials.

Without admitting or denying the allegations in the complaint, Stanley has consented to the entry of a final judgment that permanently enjoins him from violating the anti-bribery, record-keeping and internal control provisions of Securities Exchange Act of 1934 (Sections 30A and 13(b)(5) and Rule 13b2-1). Stanley has also agreed to cooperate with the SEC's ongoing investigation. The proposed settlement with Stanley is subject to the court's approval. [SEC v. Albert Jackson Stanley, 08-CV-02680, S.D. Tex. (Houston)] (LR-20700; AAE Rel. 2871)


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Jason R. Hyatt, Jay D. Johnson, and Hyatt Johnson Capital, LLC
The Commission announced that on September 3, the Honorable George W. Lindberg of the United States District Court for the Northern District of Illinois entered an Order Making Findings of Contempt (the contempt order) by BCI Aircraft Leasing, Inc. (BCI) and Brian Hollnagel (Hollnagel) for their failure to properly respond to subpoenas issued by the SEC. On Aug. 28, 2008, the SEC filed a Motion to Show Cause, alleging that BCI failed to provide responsive documents in a timely manner, and that Hollnagel had falsely claimed to not have any responsive documents in his possession or control. As part of the contempt order, the Court ordered that BCI and Hollnagel fully respond to the SEC's subpoenas by noon on Friday, Sept. 5, 2008, and that BCI and Hollnagel would each be fined $1,000 per day afterwards if they do not fully respond by that time. The Court also ordered that BCI and Hollnagel pay costs and reasonable attorney fees incurred by the SEC in its repeated attempts to obtain documents responsive to the subpoenas.

On April 18, 2008, the SEC filed a civil injunctive complaint alleging that Defendants Jason Hyatt, Jay Johnson, and Hyatt Johnson Capital, LLC, from approximately 2003 through 2007, while acting as unregistered broker-dealers and investment advisers, misappropriated at least $5.4 million in investor funds purportedly raised to invest in securities offered by BCI. The complaint also alleged that the Defendants made certain false assurances to investors regarding the legitimacy of the BCI securities, without having any reasonable basis for such assurances. The complaint alleged that, as a result of their conduct, the Defendants violated Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

Previously, on Aug. 13, 2007, the SEC filed a civil injunctive complaint alleging that Hollnagel and BCI, from 1999 through 2006, raised at least $82 million from approximately 120 investors through the fraudulent offer and sale of securities issued by BCI. SEC v. Brian N. Hollnagel and BCI Aircraft Leasing, Inc., Civil Action No. 07 C 4538 (N.D. Ill.) (Bucklo, J.). The SEC's complaint alleges that, as a result of their conduct, Hollnagel and BCI violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. [SEC v. Jason R. Hyatt, Jay Johnson and Hyatt Johnson Capital, LLC, Civil Action No. 1:08-cv-2224 (N.D. Ill.) (Lindberg, J.)] (LR-20701)


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INVESTMENT COMPANY ACT RELEASES
Prudential Annuities Life Assurance Corporation, et al.
An order has been issued under Section 6(c) of the Investment Company Act to Prudential Annuities Life Assurance Corporation (PALAC), Prudential Annuities Life Assurance Corporation Variable Account B (Account), and Prudential Annuities Distributors, Inc. (PAD, and collectively with PALAC and the Account, the Applicants) providing exemptions from Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the 1940 Act and Rule 22c-1 thereunder, to permit, under specified circumstances, the recapture of certain credits previously applied to purchase payments made under (1) the Advanced Series XTra Credit Eight variable annuity contract (Contract), or (2) variable annuity contracts issued by PALAC in the future that are substantially similar in all material respects to the Contract and that are issued through the Account or any other separate account established in the future by PALAC (Future Account) that supports variable annuity contracts. The order extends to any FINRA member broker-dealer that serves as a distributor or principal underwriter of the Contract offered through the Account or any Future Account. (Rel. IC-28373 - September 3)


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Advanced Series Trust, et al.
An order has been issued on an application filed by Advanced Series Trust, et al., under Section 6(c) of the Investment Company Act, for an exemption from Rule 12d1-2(a) under the Act. The order permits registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28374 - September 3)


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SELF-REGULATORY ORGANIZATIONS
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSE-2008-79) submitted by the New York Stock Exchange to reduce the monthly fee for NYSE Realtime Reference Prices. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58443)


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Immediate Effectiveness of Proposed Rule Change
A proposed rule change (SR-BSE-2008-43) filed by the Boston Stock Exchange regarding transfer of ownership of MX US 2, Inc. has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58445)


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Proposed Rule Change
The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-78) to allow NYSE Alternext US LLC to participate in the compensation fund established by the NYSE to reimburse claimants for losses associated with NYSE-operated system failures. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58450)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig090408.htm

[jimmenknee]

September 3, 2008 SEC News Digest
Issue 2008-171

COMMISSION ANNOUNCEMENTS
Securities and Exchange Commission Suspends Trading in Continental Beverage and Nutrition, Inc. for Failure to Make Required Periodic and Other Filings
The Commission announced the temporary suspension of trading in the securities of Continental Beverage and Nutrition, Inc. (Continental) commencing at 9:30 a.m. EDT on Sept. 3, 2008, and terminating at 11:59 p.m. EDT on Sept. 16, 2008.

The Commission temporarily suspended trading in the securities of Continental due to a lack of current and accurate information about the company because it has not filed periodic and other reports with the Commission in over one and a half years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by Continental.

Brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered relating to the securities of the subject company unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of Continental that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to Elaine C. Greenberg, Associate Regional Director of the Philadelphia Regional Office at [phone]. (Rel. 34-58452)


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Suspension or Revocation against Continental Beverage and Nutrition, Inc. for Failure to Make Required Periodic and Other Filings
In conjunction with today's trading suspension, the Commission today also instituted a public administrative proceeding to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of Continental Beverage and Nutrition, Inc. (Continental) for failure to make required periodic and other filings with the Commission.

In the Order, the Division of Enforcement (Division) alleges that Continental is delinquent in its required periodic filings with the Commission.

In these proceedings, instituted pursuant to Section 12(j) of the Exchange Act, a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondent to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Section 13(a) of the Exchange Act and Rules 13a-1, 13a-11 and 13a-13 thereunder, are true. The judge in the proceedings will then determine whether the registration pursuant to Section 12 of the Exchange Act of the securities of Continental should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge issue an initial decision not later than 120 days from the date of service of the Order. (Rel. 34-58453; File No. 3-13158)


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Tracinda Corporation Settles Charges Concerning the Sale of General Motors Shares
On September 3, the Commission announced the institution of proceedings against Tracinda Corporation for violations of the reporting provisions of Section 13(d) of the Securities Exchange Act of 1934 concerning its plan and proposal to sell General Motors shares in 2006. Simultaneously with the institution of the proceedings, Tracinda, without admitting or denying the findings in the order, consented to the entry of an SEC cease-and-desist order.

According to the order, on Nov. 16, 2006, Kirk Kerkorian, the sole shareholder and director of Tracinda, met with his advisors to discuss Tracinda's significant investment in GM. In that meeting, Tracinda's key advisor expressed his view that the price of GM stock would likely fall in the future. This led to a discussion as to whether Tracinda should sell half (28 million shares) of its GM holdings.

The order further finds that, on Nov. 20, 2006, Tracinda offered to sell 28 million shares of GM stock to a broker-dealer. That firm was willing to buy 28 million shares, but only at a significant discount to the then-current market price. Tracinda was not willing to sell at that price at that time but requested a bid on 14 million shares. The price was higher for 14 million shares and Tracinda executed the transaction that day. Subsequently, on Nov. 28, 2006, Tracinda sold an additional 14 million shares of GM to another broker-dealer.

On Nov. 22, 2006, Tracinda filed an amendment to its Schedule 13D announcing the sale of 14 million shares of GM stock. In that filing, Tracinda did not disclose that it had a plan to sell half of the GM shares it owned or that it had made a proposal to sell 28 million GM shares. Tracinda violated Section 13(d)(2) of the Exchange Act and Rule 13d-2(a) thereunder, because the amendment that was filed did not disclose the plan and proposal to sell 28 million shares of GM stock and no other amendment was promptly filed to disclose this material change to a previously filed Schedule 13D. Further, that amendment was materially misleading and violated Exchange Act Rule 12b-20 because it stated that Tracinda might purchase or sell more GM stock, when there was only a remote possibility that it would buy any GM stock at that time. (Rel. 34-58451; File No. 3-13157)


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SEC Charges Two Wall Street Brokers in $1 Billion Subprime-Related Auction Rate Securities Fraud
On September 3, the Commission filed securities fraud charges in the United States District Court for the Southern District of New York against Julian Tzolov and Eric Butler, two Wall Street brokers, for defrauding their customers when making more than $1 billion in unauthorized purchases of subprime-related auction rate securities. The SEC's Division of Enforcement in 2007 formed a subprime working group, which is aggressively investigating possible fraud, market manipulation, and breaches of fiduciary duty that may have contributed to the recent turmoil in the credit markets.

The Commission's complaint alleges that Julian Tzolov and Eric Butler misled customers into believing that auction rate securities being purchased in their accounts were backed by federally guaranteed student loans and were a safe and liquid alternative to bank deposits or money market funds. Instead, the securities that Tzolov and Butler purchased for their customers were backed by subprime mortgages, collateralized debt obligations (CDOs), and other non-student loan collateral.

The complaint also alleges that Tzolov and Butler, while employed at Credit Suisse in New York, deceived foreign corporate customers in short-term cash management accounts by sending or directing their sales assistants to send e-mail confirmations in which the terms "St. Loan" or "Education" were added to the names of non-student loan securities purchased for the customers. Tzolov and Butler also routinely deleted references to "CDO" or "Mortgage" from the names of the securities in these e-mails. As a result, the complaint alleges that customers were stuck holding more than $800 million in illiquid securities after auctions for auction rate securities began to fail in August 2007. Those holdings have since significantly declined in value.

The Commission's complaint charges Tzolov and Butler with securities fraud in violation of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The Commission seeks permanent injunctive relief, disgorgement of ill-gotten gains, if any, plus prejudgment interest on a joint and several basis, and civil money penalties.

The Commission acknowledges assistance provided by the U.S. Attorney's Office for the Eastern District of New York and the Federal Bureau of Investigation in this matter. The Commission's investigation is continuing. [SEC v. Julian T. Tzolov and Eric S. Butler, Case No. 08 Civ. 7699 (SAS) (S.D.N.Y.)] (LR-20698)


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SEC v. Donald D. LaBarre
The Commission announced that on Aug. 29, 2008, it filed a civil injunctive action against Donald D. LaBarre (LaBarre) stemming from his role in the fraudulent securities offering scheme involving Homeland Communications Corporation, a purported telecommunications company that he allegedly ran and operated. On Sept. 5, 2007, the SEC filed an emergency civil injunctive action to halt an ongoing securities offering fraud perpetrated by Homeland, Frances LaBarre, the company's reported president and LaBarre's wife, and Joseph Yurkin, Homeland's vice president of Investor Relations (See SEC v. Homeland Communications Corporation, et al. Case No. 07-80802-CIV-MARRA/JOHNSON (S.D. Fla.)). The court appointed a Receiver over Homeland and the SEC froze nearly $1.1 million in investor funds. In late 2007, the court permanently enjoined Homeland, Frances LaBarre, and Yurkin by consent from committing future violations of the federal securities laws.

The SEC's complaint against LaBarre, also filed in the Southern District of Florida, chronicles LaBarre's lengthy securities disciplinary history and alleges that from at least May 2005 through September 2007, he orchestrated Homeland's securities offering scheme that raised at least $3.8 million from approximately 250 investors. According to the SEC's complaint, directly, or by virtue of controlling Homeland, LaBarre made material misrepresentations and omissions in connection with the Homeland offering concerning: (1) promises of an upcoming Homeland initial public offering (IPO) and the involvement of well-known investment banks in that IPO; (2) Homeland's assets and acquisitions; (3) its purported ownership of FCC licenses; and (4) its regulatory history. The complaint also alleges that LaBarre diverted to himself, his family members, and companies he and his family owned or controlled about $3.2 million of the approximately $3.8 million in Homeland investor funds. The SEC's complaint alleges that LaBarre personally solicited several investors to buy securities that Homeland issued and distributed Homeland's private placement memorandum and offering materials to at least one investor that contained numerous misrepresentations.

The SEC's complaint alleges that LaBarre violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The complaint seeks a permanent injunction, disgorgement plus prejudgment interest, and a civil penalty. The complaint also seeks an order directing LaBarre to repatriate assets held outside the United States. [SEC v. Donald D. LaBarre, Case No. 08-80959-CIV-HURLEY/HOPKINS (S.D. Fla.)] (LR-20699)


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INVESTMENT COMPANY ACT RELEASES
PIMCO Municipal Income Fund, et al.
A notice has been issued giving interested persons until Sept. 26, 2008, to request a hearing on an application filed by PIMCO Municipal Income Fund, et al. for an order under Section 6(c) of the Investment Company Act granting an exemption from Section 19(b) of the Act and Rule 19b-1 under the Act. The order would permit certain registered closed-end management investment companies to make a greater number of capital gains distributions to holders of shares of their auction market preferred stock than is permitted by Section 19(b) of the Act and Rule 19b-1 under the Act to the extent necessary to comply with Internal Revenue Ruling 89-81 under the Internal Revenue Code of 1986. (Rel. IC-28370 - August 29)


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John Hancock Income Securities Trust, et al.
A notice has been issued giving interested persons until Sept. 23, 2008, to request a hearing on an application filed by John Hancock Income Securities Trust, et al. under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act, and Rule 19b-1 under the Act. The order would permit certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each year, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28372 - August 29)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Change
The Depository Trust Company filed a proposed rule change (SR-DTC-2008-11) under Section 19(b)(1) of the Securities Exchange Act of 1934. The proposed rule change would implement a new service, the "Security Holder Tracking Service," that would allow issuers, either themselves or through an issuer-designated administrator, to track and limit the number of beneficial owners for an individual CUSIP. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58436)


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Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSEArca-2008-96) submitted by NYSE Arca to establish NYSE Arca Realtime Reference Prices Service. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58444)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig090308.htm

[jimmenknee]

Trading suspensions: COBN -- Continental Beverage and Nutrition, Inc

9/3 - 9/16/08

34-58452: http://www.sec.gov/litigation/suspensions/2008/34-58452.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58452-o.pdf

[jimmenknee]

Re: Daryl Anderson, CMKM Diamonds, Inc-- U.S. SECURITIES AND EXCHANGE COMMISSION
Securities Exchange Act of 1934 Release No. 58449 / September 2, 2008
Admin. Proc. File No. 3-13156
PROCEEDINGS INSTITUTED AGAINST DARYL ANDERSON
On September 2, 2008, the United States Securities and Exchange Commission (Commission) issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Daryl Anderson (Anderson) of Las Vegas, Nevada, based on the entry of a permanent injunction against Anderson in the civil action entitled SEC v. CMKM Diamonds, Inc., et al., Civil Action No. 02:08-cv-00437-LRH-RJJ in the U.S. District Court for the District of Nevada.
In the Order, the Division of Enforcement alleges that on August 8, 2008, the U.S. District Court for the District of Nevada entered a Judgment of Permanent Injunction by consent against Anderson, permanently enjoining him from violating Sections 5(a) and 5(c) of the Securities Act of 1933.
The Division of Enforcement further alleges in the Order that the Commission’s complaint in the civil action alleges that, among other things, from March 2003 until May 2005, Anderson improperly sold more than 259 billion shares of unregistered securities of CMKM Diamonds, Inc. in 569 separate transactions, which generated more than $53.3 million in proceeds and yielded approximately $2.3 million in commissions for Anderson.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Anderson an opportunity to dispute the allegations, and to determine what, if any, remedial action is appropriate and in the public interest, pursuant to the Securities Exchange Act of 1934.
The Order requires the Administrative Law Judge to issue an initial decision no later than 120 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission’s Rules of Practice.

http://www.sec.gov/litigation/admin/2008/34-58449.pdf

Order: http://www.sec.gov/litigation/admin/2008/34-58449-o.pdf


How many legs does a dog have if you call the tail a leg? Four; calling a tail a leg doesn't make it a leg.
Abraham Lincoln

[jimmenknee]

September 2, 2008 SEC News Digest
Issue 2008-170

COMMISSION ANNOUNCEMENTS
SEC Announces Summit to Help Senior Investors Protect Assets
Securities and Exchange Commission Chairman Christopher Cox today announced that helping older investors make difficult decisions about their finances and learn new ways to protect their assets as they age will be the primary focus of the SEC's third annual Seniors Summit to be held at the agency's Washington, D.C., headquarters on September 22.

Chairman Cox, who launched the SEC Seniors Summits in 2006, said the event will not only help educate senior citizen investors and their families, but also the investment advisers or brokers who serve them. An afternoon session tailored to financial services professionals will unveil the most appropriate practices that firms use when advising senior investors, including those with diminishing capacity. The morning session, geared toward senior attendees, will present tips and advice to help senior investors ensure their money is protected and used as desired after they retire or in the event of illness or incapacity.

Chairman Cox noted that the vast majority of the nation's savings is in the hands of America's seniors, and their share is expected to grow significantly as the baby boomers increasingly reap retirement benefits. That makes them prime targets for scam artists and securities swindlers.

"With Americans living far longer than ever before and baby boomer retirees representing the largest demographic wave in our nation's history, it is vitally important that seniors have the information they need to be prepared for the road hazards along the retirement highway," said Chairman Cox. "Studies suggest one reason that many seniors are vulnerable to devastating frauds and scams is that declining mental faculties can negatively impact personal financial management skills. This raises difficult questions about when an investor can no longer make his or her own financial decisions, and requires sensitivity about how best to respect and protect seniors at the same time. Our Seniors Summit will tackle these difficult issues as we continue working to help our nation's senior investors preserve the assets it took them a lifetime to save, and to ensure that seniors are treated fairly and appropriately by brokers, investment advisers, and others in the securities industry."

Kristi Kaepplein, Director of the SEC's Office of Investor Education and Advocacy, added, "There are too many sad stories about unfortunate events that reduce older investors' financial security. This year's Seniors Summit takes up the difficult topic of diminishing capacity and its financial consequences, and provides an opportunity for older investors to learn about ways to protect their assets in their later years. In addition, the afternoon session will provide important and timely information for securities firms and securities professionals who serve senior investors."

In addition to its investor education initiatives to help senior citizens, the SEC has brought more than 50 enforcement actions in the past two years against wrongdoers defrauding retirees and other older investors. The agency's nationwide examination and inspection program also conducts targeted examinations to detect fraud and other violations of securities laws that harm senior investors.

The Financial Industry Regulatory Authority (FINRA), the North American Securities Administrators Association (NASAA), and AARP are participating partners in the SEC's Seniors Summit.

The morning session of the Seniors Summit will begin at 9:30 a.m. ET, and the afternoon session will begin at 1:15 p.m. ET. Senior investors, financial professionals, and other members of the public are invited to attend. Registration information and other materials about this free event are available at www.sec.gov/investor/seniors.shtml or by calling [phone]. (Press Rel. 2008-186)


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Commission Meetings
Following is a schedule of Commission meetings, which will be conducted under provisions of the Government in the Sunshine Act. Meetings will be scheduled according to the requirements of agenda items under consideration.

Open meetings will be held in the Auditorium, Room L-002 at the Commission's headquarters building, 100 F Street, N.E., Washington, D.C. Visitors are welcome at all open meetings, insofar as space is available. Persons wishing to photograph or videotape Commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting.

Any member of the public who requires auxiliary aids such as a sign language interpreter or material on tape to attend a public meeting should contact [e-mail] at least three business days in advance. For any other reasonable accommodation related disability contact DisabilityProgramOfficer or call 202-551-4158.

Open Meeting - September 8, 2008 - 10:00 a.m.
The subject matter of the open meeting will be:

The Commission will hear oral argument in an appeal by Brendan E. Murray from the decision of an administrative law judge. The law judge found that Murray, formerly a managing director of registered investment adviser Cornerstone Equity Advisers, Inc. (Cornerstone) and secretary to Cornerstone's advisory clients the Cornerstone Funds, Inc. (Fund), willfully aided and abetted and caused Cornerstone to violate antifraud provisions of the Investment Advisers Act of 1940, and that Murray converted assets of the Funds in violation of the Investment Company Act of 1940. The law judge barred Murray from associating with any investment adviser and from working for any registered investment company, assessed a civil money penalty, imposed a cease-and-desist order, and ordered disgorgement plus prejudgment interest.

Among the issues likely to be argued are whether Murray is liable as charged, whether Murray acted with scienter, and whether there is merit to Murray's contention that he was denied a fair hearing. The parties may also address whether and to what extent Murray should be sanctioned if he is found to have committed the alleged violations.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Revocation Against Five Delinquent Companies for Failure to Make Required Periodic Filings
On September 2, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of five companies for failure to make required periodic filings with the Commission:

Wall Street Deli, Inc.
Wamex Holdings, Inc.
Waterfalls Corp.
WebMedicalServices.com, Inc.
World Media Group, Inc.
In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58446; File No. 3-13153)


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Securities and Exchange Commission Orders Hearing on Registration Revocation Against Seven Public Companies for Failure to Make Required Periodic Filings
On September 2, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of seven companies for failure to make required periodic filings with the Commission:

Struthers Industries, Inc. (SIIS)
Sun River Development Co.
Sun River Investment Co.
Sun West Enterprises, Inc. (SNWE)
SunBank Resorts International, Inc. (f/k/a Kaufman & Hurtz, Inc.)
Surecare, Inc. (SURC)
Symbolics, Inc. (SMBXQ)
In this Order, the Division of Enforcement (Division) alleges that the seven issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58447; File No. 3-13154)


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Securities and Exchange Commission Orders Hearing on Registration Revocation Against Eight Public Companies for Failure to Make Required Periodic Filings
On September 2, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:

Kaleidoscope Media Group, Inc. (KMGG)
Keo International, Inc.
Kideo Productions, Inc.
Kiwi International Air Lines, Inc.
KP Wingate Insured Partners LP
Krisch American Inns, Inc.
Krupp Realty L.P. IV
Krupp Realty L.P. VII
In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58448; File No. 3-13155)


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In the Matter of Daryl Anderson
On September 2, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Daryl Anderson (Anderson) of Las Vegas, Nevada, based on the entry of a permanent injunction against Anderson in the civil action entitled SEC v. CMKM Diamonds, Inc., et al., Civil Action No. 02:08-cv-00437-LRH-RJJ in the U.S. District Court for the District of Nevada.

In the Order, the Division of Enforcement alleges that on Aug. 8, 2008, the U.S. District Court for the District of Nevada entered a Judgment of Permanent Injunction by consent against Anderson, permanently enjoining him from violating Sections 5(a) and 5(c) of the Securities Act of 1933.

The Division of Enforcement further alleges in the Order that the Commission's complaint in the civil action alleges that, among other things, from March 2003 until May 2005, Anderson improperly sold more than 259 billion shares of unregistered securities of CMKM Diamonds, Inc. in 569 separate transactions, which generated more than $53.3 million in proceeds and yielded approximately $2.3 million in commissions for Anderson.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Anderson an opportunity to dispute the allegations, and to determine what, if any, remedial action is appropriate and in the public interest, pursuant to the Securities Exchange Act of 1934.

The Commission directed that an Administrative Law Judge shall issue an initial decision no later than 120 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58449; File No. 3-13156)


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INVESTMENT COMPANY ACT RELEASES
Notices of Deregistration under the Investment Company Act
For the month of August, 2008, a notice has been issued giving interested persons until Sept. 23, 2008, to request a hearing on any of the following applications for an order under Section 8(f) of the Investment Company Act declaring that the applicant has ceased to be an investment company:

Credit Suisse Japan Equity Fund, Inc. [File No. 811-7371]
AIM Select Real Estate Income Fund [File No. 811-21048]
SEI Opportunity Master Fund, L.P. [File No. 811-21352]
CGM Capital Development Fund [File No. 811-933]
AllianceBernstein International Research Growth Fund, Inc. [File No. 811-8527]
UBS Health Sciences Fund, L.L.C. [File No. 811-9985]
IQ Tax Advantaged Dividend Income Fund Inc. [File No. 811-21555]
S&P 500 GEAREDSM Fund V Inc. [File No. 811-21692]
NASDAQ-100 GEAREDSM Fund Inc. [File No. 811-21693]
S&P 500 GEAREDSM Fund II Inc. [File No. 811-21794]
Eaton Vance Prime Rate Reserves [File No. 811-5808]
EV Classic Senior Floating-Rate Fund [File No. 811-7946]
Eaton Vance Advisers Senior Floating-Rate Fund [File No. 811-8671]
Eaton Vance Institutional Senior Floating-Rate Fund [File No. 811-9249]
Sage Life Investment Trust [File No. 811-8623]
(Rel. IC-28371 - August 29)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by the Chicago Board Options Exchange relating to voluntary professional transaction fees (SR-CBOE-2008-86) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58428)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig090208.htm

[Stock]

Excellent.

[jimmenknee]

Just compiled the latest updates too-- the last being Joseph Miller's (of Morgan Stanley) admin proceeding.


How many legs does a dog have if you call the tail a leg? Four; calling a tail a leg doesn't make it a leg.
Abraham Lincoln

[Stock]

That's it! Thanks. That's the one I remembered exactly.

Kudos 2 you.

[jimmenknee]

Here's the latest I got off the presses-- relates back to an ongoing probe with original indictments of 38 handed down 9/07...
http://www.sec.gov/litigation/complaints/2007/comp20295.pdf
http://www.sec.gov/litigation/complaints/2008/comp20526.pdf
http://www.sec.gov/litigation/admin/2008/34-57810.pdf

U.S. Department of Justice
United States Attorney
Eastern District of New York

271 Cadman Plaza East
Brooklyn, New York 11201

FOR IMMEDIATE RELEASE

Contact:
Robert Nardoza
United States Attorney’s Office
[phone]
May 22, 2008

PRESS RELEASE
SIX DEFENDANTS INDICTED FOR KICKBACKS AND FRAUD AT THE
STOCK-LOAN DESKS OF WALL STREET BROKERAGE FIRMS
Charges Include Conspiracy to Commit Securities and Wire Fraud ,
Money Laundering Conspiracy, and Commercial Bribery Conspiracy
Three indictments were unsealed this morning in federal court in Brooklyn alleging securities fraud conspiracy and related charges against six defendants, including former stockloan supervisors at Morgan Stanley and Co., Inc. (“Morgan Stanley”) and Janney Montgomery Scott LLC (“Janney”).1 The defendants’ initial appearances and arraignments are scheduled for this afternoon before United States Magistrate Judge Roanne L. Mann at the U. S. Courthouse, 225 Cadman Plaza East, Brooklyn, New York. The cases have been assigned to United States District Judge John Gleeson.

The indictments were announced by Benton J. Campbell, United States Attorney for the Eastern District of New York, and Mark J. Mershon, Assistant Director-in-Charge of the Federal Bureau of Investigation, New York Field Division.

The charges arise out of an ongoing industry-wide investigation into allegations of bribery and kickbacks in the securities lending industry, also called the stock-loan industry. Securities firms often borrow and loan securities among themselves for a number of reasons, most commonly to cover short sales of stocks. Stock-loan finders assist these firms by locating stock to be used in covering short sales. The investigation disclosed that stock-loan traders at several large brokerage firms funneled millions of dollars in fraudulent finder fees to their coconspirators, often where no finders’ services had been rendered, in exchange for cash bribes and, in some instances, payments to the traders’ relatives. At times, the finder fees were paid by intermediary firms because the defendants’ brokerage firms did not, as a matter of practice, pay finder fees in connection with stock-loan transactions. To date, eighteen defendants have pleaded guilty in this district to federal kickback and bribery schemes in the stock-loan industry, including former securities lending traders at A.G. Edwards and Sons, Inc.; Kellner Dileo & Company, Inc.; Oppenheimer & Co., Inc.; Morgan Stanley; National Investors Services, also known as TD Waterhouse; Nomura Securities International, Inc.; PFPC Trust Company; Schonfeld Securities, LLC; and Van der Moolen Specialists USA, LLC.

The first indictment announced today charges two defendants, DARIN DEMIZIO, a former supervisor at Morgan Stanley, and ROBERT JOHNSON, a purported stock-loan finder at a company named Tyde, Inc., for their participation in two schemes:

The Morgan Stanley Scheme. The defendants are charged with conspiracy to commit securities and wire fraud. As alleged in the indictment, DEMIZIO routinely directed Morgan Stanley stock-loan business to two finders, including JOHNSON, in exchange for kickbacks and bribes paid to two of DEMIZIO’s family members.

The JPMorgan Chase Scheme. JOHNSON is charged with conspiracy to commit securities and wire fraud, and money laundering conspiracy. As alleged in the indictment, JOHNSON paid kickbacks to a corrupt trader at JPMorgan Chase on stockloan trades. The kickbacks were paid through offshore accounts in the Netherlands Antilles.

The second indictment announced today charges JOSEPH LANDO, a former manager of the stock-loan desk at Janney, for his participation in two schemes:

The Cash Kickback and Bribery Scheme. LANDO is charged with conspiracy to commit securities and wire fraud and with conspiracy to commit commercial bribery in violation of the Travel Act. As alleged in the indictment, LANDO received cash kickbacks in exchange for giving away favorable Janney business to Van der Moolen.

The A.G. Edwards and Nomura Schemes. LANDO is also alleged to have paid kickbacks, in the form of phony finder fees, to the relatives of traders at A.G. Edwards and Nomura in exchange for business from those firms.

The third indictment charges that ANDREW CACCIOPPOLI, another former manager of the stock-loan desk at Janney, stole approximately $350,000 by causing Janney to pay phony finder fees to his sister, DONNA MACLI, and her husband, THOMAS MACLI, who performed no legitimate securities-related services and were employed full-time as a secretary and a letter carrier, respectively, during the period of the conspiracy. The defendants are charged with conspiracy to commit securities fraud and with mail fraud. CACCIOPPOLI was first indicted in September 2007. The superseding indictment adds the charges against the MACLIs.

The U.S. Securities and Exchange Commission previously filed civil charges against Darin DeMizio, Joseph Lando, Thomas Macli, Donna Macli, and Robert Johnson in federal court in the Eastern District of New York.

“The defendants entered into sham trades to enrich themselves and paid kickbacks and bribes either to buy their co-conspirator’s business or to steal money for themselves and their family members,” stated United States Attorney Campbell. “Such conduct undermines the public’s confidence in the nation’s securities markets and will be vigorously investigated and prosecuted.” Mr. Campbell thanked the Securities and Exchange Commission for its assistance.

FBI Assistant Director Mershon stated, “Our ongoing efforts to police the securities industry include targeting not just conduct that directly affects share price for the investing public. We also continue to zero in on schemes that siphon off millions in bogus fees from brokerage firms. The schemes are illegal, the gains ill-gotten, and the losses a threat to market stability and investor confidence.”

If convicted on the conspiracy to commit securities fraud counts, each defendant faces a maximum term of imprisonment of 25 years. The money-laundering charges carry maximum terms of imprisonment of 20 years, and the conspiracy to violate the Travel Act counts carry maximum terms of imprisonment of five years each.

The government’s case is being prosecuted by Assistant United States Attorneys Sean Haran, Daniel Wenner, and Laura Mantell.

The Defendants:

DARIN DEMIZIO
Age: 42

ROBERT JOHNSON
Age: 44

JOSEPH LANDO
Age: 35

ANDREW CACCIOPPOLI
Age: 47

DONNA MACLI
Age: 45

THOMAS MACLI
Age: 51

1 The charges announced today are merely allegations, and the defendants are presumed innocent unless and until proven guilty.

http://newyork.fbi.gov/dojpressrel/pressrel08/securitiesfraud052208.htm






How many legs does a dog have if you call the tail a leg? Four; calling a tail a leg doesn't make it a leg.
Abraham Lincoln

[jimmenknee]

August 29, 2008 SEC News Digest
Issue 2008-169

ENFORCEMENT PROCEEDINGS
In the Matter of Shane Traveller
On August 28, the Securities and Exchange Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Shane H. Traveller. The Order finds that, on Aug. 6, 2008, the United States District Court for the District of Nevada entered a final judgment against Traveller permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5 and 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. Traveller was also ordered to pay a civil penalty of $50,000 and was barred for a period of five years from acting as an officer or director of a public company and from participating in an offering of penny stock. Based on the final judgment of permanent injunction, the Order suspends Respondent Traveller for a period of five years from appearing or practicing before the Commission as an accountant. Traveller consented to the issuance of the Order without admitting or denying the findings in the Order.

According to the Order, the Commission’s complaint alleged that Traveller, a former Director of 21st Century, violated the antifraud provisions of the securities laws when he supervised the drafting of 21st Century Technologies, Inc.’s 2004 Form 1-E and offering circular and failed to ensure that proper disclosures were made concerning the precarious financial state of the company and the terms of its financing arrangement. The complaint further alleged that Traveller aided and abetted 21st Century’s reporting and record-keeping violations when he did nothing to ensure that the company disclosed certain loans, approved certain investments after they had been made, and prepared false Board minutes. (Rels. 34-58438 — In the Matter of Shane H. Traveller, CPA; AAER-2868; File No. 3-13149) [SEC v. Compass Capital Group, Inc., Mark A. Lefkowitz, Alvin L. Dahl, John R. Dumble, John C. Hopf, Kevin D. Romney, and Shane H. Traveller, Case No. 2:08-CV-00457, D. Nev., filed April 10, 2008] (LR-20695)


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In the Matter of Alvin Dahl
On August 28, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Alvin L. Dahl. The Order finds that, on Aug. 6, 2008, the United States District Court for the District of Nevada entered a final judgment against Dahl permanently enjoining him from future violations of Rule 13a-14 of the Securities Exchange Act of 1934, and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. Dahl was also ordered to pay a civil penalty of $5,000 and was barred for a period of five years from participating in an offering of penny stock. Based on the final judgment of permanent injunction, the Order suspends Respondent Dahl for a period of one year from appearing or practicing before the Commission as an accountant. Dahl consented to the issuance of the Order without admitting or denying the findings in the Order.

According to the Order, the Commission’s complaint alleged that Dahl, a consultant who worked part-time as 21st Century Technologies, Inc.’s CFO from 2000 through 2004, prepared 21st Century’s false and misleading Form 10-K for 2003 and Forms 10-Q for the first and second quarters of 2004, and certified that those filings were complete and accurate, even though they contained material omissions concerning certain of 21st Century’s reported investments and loans. (Rels. 34-58439 — In the Matter of Alvin L. Dahl, CPA; AAER-2869; File No. 3-13150) [SEC v. Compass Capital Group, Inc., Mark A. Lefkowitz, Alvin L. Dahl, John R. Dumble, John C. Hopf, Kevin D. Romney, and Shane H. Traveller, Case No. 2:08-CV-00457, D. Nev., filed April 10, 2008] (LR-20695)


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In the Matter of Jerry Burdick, CPA
On August 29, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Jerry L. Burdick, CPA.

The Order finds that Jerry L. Burdick was enjoined by the United States District Court for the Southern District of California. The Order further finds that the complaint filed by the Commission made the following allegations. Burdick, as the interim chief financial officer for SeraCare Life Sciences, Inc., caused SeraCare to misstate its financial statements by inflating income before taxes for the second and third quarters of fiscal year 2005 by 20% and 17%, respectively. Specifically, Burdick improperly released general inventory reserves that he created following a major acquisition by SeraCare, which caused SeraCare’s net income before taxes to be inflated in the second and third quarters of 2005. In addition, Burdick caused misrepresentations to be made to SeraCare’s auditors by creating a backdated letter that was given to the auditors as support for recognizing revenue on an almost $1 million sale before the close of the fiscal year. Burdick also caused misrepresentations to be made to SeraCare’s auditors by providing an increased inventory valuation without any documented or verifiable support.

Based on the above, the Order suspended Burdick from appearing or practicing before the Commission as an accountant. Burdick consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rels. 34-58441; AAER-2870; File No. 3-13151)


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In the Matter of William K. Boston, Jr.
On August 29, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against William K. Boston, Jr. The Order finds that on August 18 an order of permanent injunction was entered by consent against Boston, permanently enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rules 10b-5 and 10b-10 thereunder and from aiding and abetting violations of Exchange Act Rule 10b-10, in the civil action entitled SEC. The Commission’s complaint alleged that Boston and his business, Century Estate Planning, Inc., participated in a massive fraud orchestrated by Michael E. Kelly that victimized thousands of investors across the United States by raising at least $428 million through the offer and sale of fraudulent and unregistered securities called Universal Leases. Universal Leases were securities in the form of investment contracts that were structured as timeshares in several hotels in Cancun, Mexico, coupled with pre-arranged servicing agreements with a purportedly independent leasing agent that promised investors a safe investment and guaranteed returns. The complaint alleged that Boston offered and sold Universal Leases to investors and recruited others to do so. The complaint further alleged, among other things, that Boston made false and misleading statements about the safety of the Universal Leases and about the purportedly independent leasing agent, and also failed to make required disclosures about the commissions he was being paid for his Universal Lease sales.

Based on the above, the Order bars Boston from association with any broker or dealer. Boston consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the entry of the order of permanent injunction against him. (Rel. 34-58442; File No. 3-13152)


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SEC v. American Energy Resources Corp., H&M Petroleum Corp., and Donald Allen
On August 28, the Commission filed a civil action in the United States District Court for the District of Colorado against Donald H. Allen, a resident of Colorado Springs, Colo., and his two wholly-owned companies, H&M Petroleum Corporation (H&M) and American Energy Resources Corporation (AER), for violations of the antifraud and registration provisions of the federal securities laws.

In its complaint, the Commission alleges that, between March 2002 and December 2006, Allen, H&M, and AER raised approximately $9.9 million from at least 355 investors nationwide through a series of unregistered offerings of fractional interests in oil and gas projects. These projects were marketed to the public through cold call telephone solicitations and “seminars” advertised in local newspapers. According to the complaint, Allen, H&M, and AER defrauded investors by using investor funds for undisclosed purposes, including diverting over $2.3 million to Allen’s personal use. The defendants also misrepresented or omitted material information about their track record, projected return on the investments, and their own investment in the offerings. The complaint further alleges that Allen, AER, and H&M violated the securities registration provisions of the federal securities laws and that Allen acted as an unregistered broker-dealer.

Allen, AER, and H&M agreed to settle the SEC’s charges without admitting or denying the allegations in the complaint. These settlements are subject to approval by the court. Allen, AER, and H&M agreed to be permanently enjoined from violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Allen further agreed to be permanently enjoined from violating Section 15(a) of the Exchange Act. Allen, AER, and H&M agreed to jointly and severally pay $510,000 of disgorgement and additionally pay the costs of distributing these funds to harmed investors. [SEC v. American Energy Resources, Corp., H&M Petroleum Corp., and Donald H. Allen, Civil Action No., 08-CV-01847 REB BNB, D. Colo.] (LR-20694)


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SEC Files Enforcement Action Against Mark E. Salyer, a Registered Representative, Relating to His Misappropriation of Millions of Dollars from Customers of Metlife Securities, Inc.
On June 23, 2008, the Commission filed a civil injunctive action against Mark E. Salyer alleging violations of the antifraud provisions of the federal securities laws in connection with his misappropriation of millions of dollars from customers of MetLife Securities, Inc. while he was employed there as a registered representative. Salmar Investors Group, Inc and Horizon Holdings, Inc., two companies purportedly controlled by Salyer, were also named as relief defendants because they received funds fraudulently diverted by Salyer from several MetLife customer accounts.

The Commission’s complaint alleges that, from at least June 2005 through October 2007, Salyer diverted approximately $6 million from MetLife customer accounts to multiple entities, two of which he directly controls. According to the complaint, Salyer diverted the money by forging customer signatures on wire transfer forms and by convincing customers to invest in a company he controlled under the guise that it was a MetLife investment. The complaint further alleges that to facilitate and otherwise conceal his fraud, Salyer falsified customer brokerage account statements or provided customers with fraudulent explanations for discrepancies in the account balances reflected in their account statements. The complaint alleges that Salyer defrauded at least 33 customers, most of whom are senior citizens who had long-standing business relationships with Salyer.

The Commission’s complaint charges Salyer with violating Section 17 (a) of the Securities Act of 1993, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10(b) thereunder. The complaint seeks disgorgement of all ill-gotten gains, a permanent injunction prohibiting future violations of the securities laws and civil money penalties against Salyer. [SEC v. Mark E. Salyer, et al., Case No.:2:08-CV-179, E.D. TN] (LR-20696)


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SEC Amends Complaint to Add Defendant Joseph Shereshevsky’s Wife as Relief Defendant and Obtains Asset Freeze Over More Than $900 Thousand in Assets Transferred to Her
On August 28, the Commission amended its complaint against Wextrust Capital, LLC, its principals, and four affiliated Wextrust entities, to add defendant Joseph Shereshevsky’s wife, Elka Shereshevsky, as a relief defendant, alleging that Joseph Shereshevsky attempted to hide more than $900 thousand in investor funds by placing them in accounts putatively in her name. The amended complaint also adds broker-dealer fraud charges against defendant Steven Byers.

The Commission’s original complaint alleged that defendants conducted a massive Ponzi-type scheme from 2005 or earlier that raised approximately $255 million from approximately 1,200 investors. The targets of the fraudulent offerings are primarily members of the Orthodox Jewish community. Simultaneously with the filing of the original action, the Commission sought and obtained emergency relief from the Court to freeze the defendants’ assets, place the Wextrust entities under the control of a receiver to safeguard assets and issue a temporary restraining order to stop the ongoing offerings and orders granting other immediate relief. With the filing of the amended complaint, the Commission sought and obtained a temporary order freezing the assets of the relief defendant, Elka Shereshevsky.

The Commission's original complaint, filed in federal court in Manhattan on August 11, charged that Wextrust, its principals Steven Byers and Joseph Shereshevsky, and its affiliated entities Wextrust Equity Partners, LLC (WEP), Wextrust Development Group, LLC (WDG), Wextrust Securities, LLC (Wextrust Securities) and Axela Hospitality, LLC (Axela) conducted at least 60 securities offerings through private placements and created approximately 150 entities in the form of limited liability companies or similar vehicles to act as issuers or facilitators of the offerings, purportedly to fund the acquisition of specified assets, the majority of which were commercial real estate ventures. Contrary to representations in the offering memoranda that proceeds would be used for specific projects, the defendants allegedly diverted funds to pay returns to investors in prior offerings, or to fund expenses of the defendants. Overall, the original complaint alleged that defendants diverted at least $100 million dollars to unauthorized purposes and that defendants are conducting at least four ongoing offering frauds intended to raise money to pay back investors from prior offerings. In addition to the emergency relief sought when filed, the Commission’s original complaint seeks disgorgement of the defendants’ ill-gotten gains, civil penalties, and permanent injunctions barring future violations of the antifraud and other provisions of the federal securities laws.

The amended complaint alleges that defendant Joseph Shereshevsky routinely placed his own assets – residential real estate, bank accounts, and a share in the ownership of Wextrust – in his wife’s name. The amended complaint further alleges that Elka Shereshevsky had a “no show” job at Wextrust and received improper transaction-based compensation and bonuses for sales of securities her husband made through Wextrust Securities while he was not registered as an associated person with it. Although Elka Shereshevsky purportedly holds twenty percent ownership of Wextrust Securities as General Partner of the Shereshevsky Family Partnership, the amended complaint alleges that defendant Joseph Shereshevsky controls that interest.

The amended complaint further alleges that in early August 2008, when numerous Wextrust accounts had been frozen, defendant Joseph Shereshevsky directed his wife to open an account with a bank in Norfolk, Va., into which he diverted at least $75,000 of his own or Wextrust investment vehicle assets. In addition, the court-appointed receiver in this matter has identified other accounts putatively controlled by Elka Shereshevsky that contain more than $825,000 of her husband’s or the Wextrust defendants’ assets. One wire transfer report showing a $100,000 transfer into such an account states, “per Joe’s phone call,” indicating Shereshevsky directed the transfer.

The amended complaint further alleges that defendant Byers violated Section 15(a) by effecting securities transactions while he was not registered as, or associated with, a broker-dealer. The amended complaint alleges that defendants violated and are violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Wextrust Securities violated Sections 15(b)(1), 15(b)(7) and 15(c)(1) of the Exchange Act and Rules 10b-3, 15b1-1, 15b3-1 and 15b7-1 promulgated thereunder. Shereshevsky and Byers violated Section 15(a) or alternatively, aided and abetted, Wextrust Securities' violations of Sections 15(b)(1), 15(b)(7) and 15(c)(1) of the Exchange Act and Rules 10b-3, 15b1-1, 15b3-1 and 15b7-1 promulgated thereunder. [SEC v. Steven Byers, Joseph Shereshevsky, Wextrust Capital, LLC, Wextrust Equity Partners, LLC, Wextrust Development Group, LLC, Wextrust Securities, LLC and Axela Hospitality, LLC, and Elka Shereshevsky (Relief Defendant) 08 Civ. 07104, DC, S.D.N.Y.] (LR-20697)


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INVESTMENT COMPANY ACT RELEASE
Allianz Life Insurance Company of North America, et al.
A notice has been issued giving interested persons until Sept. 18, 2008, to request a hearing on an application filed by Allianz Life Insurance Company of North America, Allianz Life Variable Account A, Allianz Life Variable Account B, Allianz Life Insurance Company of New York, and Allianz Life of NY Variable Account C (collectively Applicants), and Allianz Variable Insurance Products Trust (collectively with Applicants, Section 17 Applicants). Applicants request an order under Section 26(c) of the Investment Company Act to permit the substitution of securities issued by certain registered investment companies for shares of certain other registered investment companies. Section 17 Applicants also request an order pursuant to Section 17(b) of the Act exempting them from the provisions of Section 17(a) of the Act to permit certain in-kind transactions in connection with the substitution. (Rel. IC-28369 - August 28)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by National Stock Exchange (SR-NSX-2008-14) to amend the NSX BLADESM Fee Schedule to reduce routing fees has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58342)

The New York Stock Exchange filed a proposed rule change (File No. SR-NYSE-2008-069), which became effective upon filing pursuant to Section 19(b)(3)(A) of the Exchange Act, that amends Section 501.00 of its Listed Company Manual to waive application of this section to any listed company that is a foreign private issuer and that submits a letter from an independent home country counsel certifying that a home country law or regulation prohibits compliance from the rule. Publication of the proposal is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58398)

A proposed rule change filed by the New York Stock Exchange amending NYSE Rule 123B, Exchange Automated Order Routing System, to allow a Member Organization to provide other market participants with access to the Exchange on an agency basis (SR-NYSE-2008-71) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58429)

A proposed rule change filed by the NASDAQ Stock Market (SR-NASDAQ-2008-070) relating to fees and credits for members using the Nasdaq Crossing Network has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58435)


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Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NASDAQ-2008-071) submitted by the NASDAQ Stock Market relating to the generic listing standards for Index Multiple Exchange Traded Fund Shares and Index Inverse Exchange Traded Fund Shares. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58440)


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Proposed Rule Changes
A proposed rule change (SR-CBOE-2008-88) has been filed by the Chicago Board Options Exchange under Section 19(b)(2) of the Securities Exchange Act of 1934 relating to the demutualization of Chicago Board Options Exchange, Incorporated. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58425)

The New York Stock Exchange has filed a proposed rule change (SR-NYSE-2008-76) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, amending NYSE Rule 2B to establish procedures designed to manage potential informational advantages resulting from the affiliation between the Exchange and Archipelago Securities L.L.C. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58430)

NYSE Arca has filed a proposed rule change (SR-NYSEArca-2008-90) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, amending NYSE Arca Equities Rule 7.31(x) to clarify the permissible order entry time and eligibility of its primary only order and amending NYSE Arca Equities Rule 14.3 to establish procedures designed to manage potential informational advantages resulting from the affiliation between the Exchange and Archipelago Securities L.L.C. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58431)


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Approval of Proposed Rule Changes
The Commission granted approval of a proposed rule change (SR-NASDAQ-2008-053) submitted by the NASDAQ Stock Market under Rule 19b-4 of the Securities Exchange Act of 1934 to modify its definition of “Independent Director.” Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58335)

The Commission approved a proposed rule change (SR-NASDAQ-2008-062) submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the NASDAQ Stock Market to clarify the application of Nasdaq rules when a listed company combines with a non-Nasdaq entity. Publication in the Federal Register is expected during the week of Sept. 1, 2008. (Rel. 34-58432)

The Commission has issued an order approving a proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-77) to list and trade the Barclays Middle East Equities (MSCI GCC) Non Exchange Traded Notes due 2038. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58437)


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JOINT INDUSTRY PLAN RELEASES
Order Approving Proposed Amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information
The Commission granted approval to an amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information submitted pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder by the Options Price Reporting Authority (SR-OPRA-2008-02), as modified by Amendment No. 1 thereto, to amend OPRA’s Vendor Agreement and related documents and to adopt a new policy. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58434)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082908.htm

[jimmenknee]

August 28, 2008 SEC News Digest
Issue 2008-168

ENFORCEMENT PROCEEDINGS
James Y. Lee Sanctioned
James Y. Lee has been ordered to cease and desist from violations of the registration provisions of the securities laws and to disgorge $2,866,375 of ill-gotten gains. From 2002 to 2005, Lee advised and guided several microcap issuers in raising millions of dollars by selling their common stock to the public in violation of the registration requirements of the federal securities laws and thereby caused violations of Sections 5(a) and 5(c) of the Securities Act of 1933. The sanctions were ordered in an administrative proceeding before an administrative law judge. (Rel. 33-8954; File No. 3-13123)


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SEC Charges Former CEO in Two Fraudulent Schemes
On August 27, the Commission charged Jeffrey Fishman in connection with two fraudulent schemes in which he received approximately $1.6 million in illicit profits. Fishman is the former president and chief executive officer of One Liberty Properties, Inc. (OLP), a publicly traded New York based real estate investment trust. In one scheme, Fishman misappropriated hundreds of thousands of dollars from Medemil LLC (Medemil), a company Fishman created purportedly to invest in foreign currency options. In the second scheme, Fishman extracted undisclosed kickbacks from two OLP business partners.

The Commission's complaint, filed in the U.S. District Court for the Eastern District of New York, alleges that between 2001 and 2005, Fishman raised approximately $940,000 from seventeen individuals to invest in Medemil and misappropriated at least $609,000 of this amount to pay personal expenses and to gamble. The complaint further alleges that Fishman concealed his misappropriation of Medemil funds by deliberately falsifying account statements and other documents he provided to Medemil's investors and accountants. By 2005, all of the Medemil investors' funds had been dissipated as a result of Fishman's misconduct and through trading losses.

The complaint further alleges that in 2002 and 2003, Fishman received almost $1 million in undisclosed kickbacks from two of OLP's commercial partners in exchange for, among other things, more favorable terms in connection with business transactions involving OLP. Fishman never disclosed these payments and their relation to OLP's business transactions to OLP or to OLP's auditors. Consequently, OLP never disclosed these related party transactions in its financial statements, proxy statements, or registration statements filed with the Commission between 2002 and 2005.

The Commission's complaint charges Fishman with violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13a-14, and 13b2-2 thereunder, and with aiding and abetting violations by OLP of Sections 13(a), 13(b)(2)(B)(i), and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13, and 14a-9 thereunder.
Fishman agreed to settle the Commission's claims against him. Without admitting or denying the allegations in the complaint, Fishman consented to the entry of a final judgment, subject to approval by the court, that enjoins him from violating or aiding and abetting future violations of the above provisions of the securities laws, permanently bars him from serving as an officer or director of a public company, and orders him to pay $821,843.65 in disgorgement and prejudgment interest, and a $75,000 civil penalty. The Commission will seek the court's approval to place the disgorgement, prejudgment interest and civil penalty in a Fair Fund, as provided in the Sarbanes-Oxley Act of 2002, in order to distribute the money to Medemil investors who were harmed by Fishman's misconduct.

The Commission acknowledges the assistance and cooperation of the United States Attorney's Office for the Eastern District of New York and the New York Office of the Federal Bureau of Investigation in this matter. [SEC v. Jeffrey Fishman, 08 Civ. 3509 (E.D.N.Y.) (SJF)] (LR-20691)


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Court Imposes $10,000 Civil Penalty Against SEC Defendant in Market Manipulation Case
The Commission announced today that on Aug. 27, 2008, the Honorable Janet C. Hall, United States District Court Judge for the District of Connecticut, imposed a civil penalty of $10,000 against Sheldon A. Strauss of Cleveland, Ohio, a defendant in a previously-filed civil injunctive action involving a multi-faceted scheme to manipulate the stock price of Competitive Technologies, Inc., (CTT), a technology development company located in Fairfield, Connecticut. In addition, Judge Hall permanently enjoined Strauss from violating the antifraud provisions of the federal securities laws. These remedial penalties follow a Nov. 29, 2007 verdict for the Commission on all of its securities fraud charges against Strauss after a three-week jury trial in Bridgeport, Connecticut.

The Commission's complaint, filed against a total of eight defendants on Aug. 11, 2004, alleged that the defendants participated in a scheme to manipulate and inflate the price of CTT stock from at least July 1998 to June 2001. The complaint alleged that the defendants artificially raised and maintained the price of CTT's stock and created a false or misleading appearance with respect to the market for CTT stock through manipulative practices such as placing buy orders at or near the close of the market in order to inflate the reported closing price (marking the close), placing successive buy orders in small amounts at increasing prices (painting the tape), and using accounts they controlled or serviced to place pre-arranged buy and sell orders in virtually identical amounts (placing "matched trades").

The jury found Strauss liable for violating Sections 9(a) and 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. In addition, the jury found Strauss liable for aiding and abetting defendant and former registered representative Chauncey Steele's violations of Sections 9(a) and 10(b) of the Exchange Act. Steele previously settled the Commission's action against him in 2005. The jury was unable to reach verdicts on most of the charges against two remaining defendants: Richard A. Kwak, a registered representative formerly associated with a broker-dealer in San Diego, California and Stephen J. Wilson, a registered representative formerly associated with a broker-dealer in Media, Pennsylvania. The Commission expects to retry its case against defendant Wilson, currently scheduled to begin on September 29, 2008, and its case against defendant Kwak, which is expected to occur in early 2009.

The SEC also announced that on April 8, 2008, the Court determined that a bar from serving as an officer or director of any public company was not warranted against CTT's former CEO, defendant Frank R. McPike of Ridgefield, Connecticut. On Oct. 31, 2007, the Court entered a final judgment by consent against defendant McPike, enjoining him from violating Sections 9(a) and 10(b) of the Exchange Act and Rule 10b-5 thereunder and ordering him to pay a civil penalty of $60,000, but leaving the issue of an officer and director bar open.

For further information about the Commission's action in SEC v. Competitive Technologies, Inc., et al., see Litigation Release No. 18827 (Aug. 11, 2004), Litigation Release No. 19320 (Aug. 2, 2005), Exchange Act Release No. 56785 (Nov. 14, 2007), and Litigation Release No. 20388 (Dec. 7, 2007). [SEC v. Competitive Technologies, Inc., et. al., Civil Action No. 3:04 CV 1331 JCH (District of Connecticut)] (LR-20692)


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Former ProVision Operation Systems, Inc. Chief Executive Officer, Robert Fletcher, Ordered to Pay More than $5 Million in Disgorgement and Penalties in Securities Fraud Action
On Aug. 14, 2008, Judge Alicemarie H. Stotler of the United States District Court for the Central District of California entered an order permanently enjoining Robert Thomas Fletcher III (Fletcher) from violating the antifraud and registration provisions of the federal securities laws. The order against Fletcher also requires him to disgorge $5,000,000, plus prejudgment interest, and pay a civil money penalty of $130,000.

The SEC's complaint charges that ProVision and Fletcher fraudulently raised millions of dollars from investors, and then Fletcher used the money for personal expenses and to support his lavish lifestyle, including purchasing jewelry and clothing, and for gambling. The complaint alleges that Fletcher was the chief executive officer, chairman and president of ProVision, a company that purportedly provided continuing education and support to investors through seminars and workshops focusing on real estate investing, stock investing and other wealth-building strategies. The Commission's complaint also alleges that while raising funds from investors, ProVision and Fletcher fraudulently represented that the company was successful and expanding. They allegedly made materially false or misleading statements about ProVision's business operations, profitability, and financial condition. According to the complaint, ProVision and Fletcher falsely claimed to own or control, or have the ability to acquire, yachts, real property, and millions of tons of a mineral substance called "humate," which they fraudulently claimed was worth $137,000,000.

On Aug. 14, 2008, Judge Stotler also entered an order permanently enjoining ProVision Operations Systems, Inc. (ProVision) from violating the antifraud and registration provisions of the federal securities laws.

The orders permanently enjoin Fletcher and ProVision from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder, and Sections 17(a), 5(a), and 5(c) of the Securities Act of 1933. ProVision agreed that, upon motion of the Commission, the Court will determine whether it is appropriate to order disgorgement and a civil penalty. Fletcher and ProVision consented to the entry of the orders without admitting or denying the allegations in the complaint. The SEC's action against remaining defendants James Stock and Lawrence Morris is also ongoing.

For Additional information, see Litigation Release No. 20301 (Sept. 27, 2007). [SEC v. ProVision Operation Systems, Inc., Robert T. Fletcher III, Richard C. Hill, James W. Stock, and Lawrence D. Morris, Civil Action No. 8-07-1130(C.D. Cal.)] (LR-20693)


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INVESTMENT ADVISERS ACT RELEASES
Woodcock Financial Management Company, LLC
A notice has been issued giving interested persons until Sept. 23, 2008, to request a hearing on an application filed by Woodcock Financial Management Company, LLC for an order under Section 202(a)(11)(G) of the Investment Advisers Act. The order would declare Woodcock Financial Management Company, LLC to be a person not within the intent of Section 202(a)(11) of the Advisers Act, which defines the term "investment adviser." (Rel. IA-2772 - August 26)


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INVESTMENT COMPANY ACT RELEASES
Goldman Sachs Trust, et al.
An order has been issued on an application filed by Goldman Sachs Trust, et al., under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act. The order permits certain registered open-end management investment companies to acquire shares of other registered open-end management investment companies and unit investment trusts that are within and outside the same group of investment companies. (Rel. IC-28366 - August 26)


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Javelin Exchange-Traded Trust
An order has been issued on an application filed by Javelin Exchange-Traded Trust, et al. The order permits: (a) certain registered open-end management investment companies and their series to issue shares that can be redeemed only in large aggregations; (b) secondary market transactions in shares of the series to occur at negotiated prices; (c) dealers to sell shares of the series to purchasers in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series; (e) certain series to pay redemption proceeds more than seven days after the tender of shares for redemption under certain circumstances; and (f) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire shares of the series. (Rel. IC-28367 - August 26)


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DNP Select Income Fund Inc., et al.
An order has been issued on an application filed by DNP Select Income Fund Inc. and Duff & Phelps Investment Management Co. under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act, and Rule 19b-1 under the Act. The order permits certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each year, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28368 - August 26)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Change
The Depository Trust Company filed a proposed rule change (SR-DTC-2008-08) pursuant to Section 19(b)(1) of the Act that would amend its Withdrawal-by-Transfer service to eliminate the ability of participants to receive physical certificates for securities positions withdrawn from participants' accounts at DTC when the issue of such securities is eligible and participating in the Direct Registration System. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58404)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-Phlx-2008-63) filed by the Philadelphia Stock Exchange relating to execution fees on the XLE Fee Schedule has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58405)

A proposed rule change filed by Chicago Board Options Exchange, Incorporated (SR-CBOE-2008-87) relating to foreign members has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58414)


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Approval of Proposed Rule Change
The Commission approved a proposed rule change (SR-Phlx-2008-53) filed by the Philadelphia Stock Exchange. (n/k/a NASDAQ OMX PHLX, Inc.) (Phlx) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. The rule change amends Phlx Rules 1024 (Conduct of Accounts for Options Trading), 1025 (Supervision of Accounts), 1027 (Discretionary Accounts), and 1049 (Communications to Customers) that govern a Phlx member's conduct of doing business with the public. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58410)


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JOINT INDUSTRY PLAN RELEASES
Notice of Filing and Immediate Effectiveness of Proposed Amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information
The Options Price Reporting Authority filed a notice of filing and immediate effectiveness of a proposed amendment pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder (SR-OPRA-2008-03) to OPRA's Academic Waiver Policy. Publication is expected in the Federal Register during the week of September 1. (Rel. 34-58424)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082808.htm

[jimmenknee]

August 27, 2008 SEC News Digest
Issue 2008-167

COMMISSION ANNOUNCEMENTS
Securities and Exchange Commission Suspends Trading in Markland Technologies, Inc. for Failure to Make Required Periodic Filings
The Commission announced the temporary suspension of trading in the securities of Markland Technologies, Inc. (Markland), commencing at 9:30 a.m. EDT on Aug. 27, 2008, and terminating at 11:59 p.m. EDT on Sept. 10, 2008. The Commission temporarily suspended trading in the securities of Markland due to a lack of current and accurate information about the company because it failed to file certain periodic reports with the Commission. The order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by this company.

Brokers and dealers should be alerted to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of Markland unless and until the broker or dealer has strictly complied all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of Markland until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, D.C. at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, John T. Dugan of the Boston Regional Office of the Securities and Exchange Commission should be telephoned at [phone]. (Rel. 34-58426)


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SEC Votes to Modernize Disclosure Requirements to Help U.S. Investors in Foreign Companies
The Securities and Exchange Commission today voted unanimously to update and modernize the disclosure requirements for foreign companies offering securities in U.S. markets, making it easier for U.S. investors to gain access to timely financial information that can help them make better informed investment decisions.

The rule amendments approved by the Commission reflect advances in technology and other recent global changes, and bring the SEC's foreign company disclosure requirements into the 21st Century. The rule amendments eliminate requirements for foreign companies without SEC-registered securities to submit paper disclosures, and instead give investors instant electronic access to foreign company disclosure documents, in English, on the Internet. After a period of transition, foreign reporting companies also will be required to file their annual reports with the SEC two months earlier, making those submissions more timely and therefore more useful to investors. The rule amendments also facilitate the ability of U.S. investors to participate in cross-border tender offers and other business combinations.

"Today's action will make foreign companies' disclosures available to U.S. investors more quickly and without cost - and in English," said SEC Chairman Christopher Cox. "These changes to our regulation of foreign private issuers will encourage cross-border capital flows and eliminate needless barriers to our securities markets, so U.S. investors have better information about the securities of foreign companies."

John White, Director of the SEC's Division of Corporation Finance, added, "The action that the Commission has taken today in updating our rules governing foreign private issuers is particularly important in light of the ongoing globalization of our securities markets. We received many helpful public comments on the rule proposals, and we considered these comments carefully. An important goal that is achieved in the new rules is to fully protect investors without unduly burdening foreign private issuers."

Specifically, the Commission adopted three sets of rule amendments.

One set of amendments, called Foreign Issuer Reporting Enhancements, will update Securities Exchange Act filing requirements and enhance disclosure required by foreign private issuers in response to changes in foreign filing requirements, market practices, and other areas of SEC regulation. The rule amendments shorten the deadline for annual reports filed by foreign private issuers from six months to four months. The rule amendments also enable foreign issuers to test their eligibility to use the special forms and rules available to foreign private issuers once a year, rather than continuously; enhance the disclosures a foreign private issuer provides to investors regarding any changes in and disagreements with its certifying accountant in its annual reports and registration statements; and revise the annual report and registration statement forms used by foreign private issuers to improve certain disclosures provided in these forms.

A second set of amendments concerns Exchange Act Rule 12g3-2(b), which exempts a foreign private issuer from registering a class of equity securities based on submission to the SEC of certain information published outside the U.S. The exemption allows a foreign private issuer to have its equity securities traded in the U.S. over-the-counter (OTC) market without registration under Section 12(g). The adopted rule amendments will eliminate the current written application and paper submission requirements under Rule 12g3-2(b) by automatically exempting a foreign private issuer from Section 12(g) provided they meet specified conditions. As is currently the case, issuers must continue registering their securities under the Exchange Act to have them listed on a national securities exchange or traded on the OTC Bulletin Board.

The Commission also voted to adopt changes to its cross-border exemptions. These amendments are intended to expand and enhance the utility of the exemptions for business combination transactions, tender offers, and rights offerings and to encourage offerors and issuers to permit U.S. security holders to participate in these transactions on the same terms as other security holders. Among the amendments are codifications of existing interpretive positions and exemptive orders in the cross-border area, as well as amendments to allow specified foreign institutions to report beneficial ownership on Schedule 13G to the same extent as their U.S. institutional counterparts. The Commission also voted to provide interpretive guidance on several topics that come up frequently for practitioners in the cross-border area. (Press Rel. 2008-183)


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SEC Proposes Roadmap Toward Global Accounting Standards to Help Investors Compare Financial Information More Easily
The Securities and Exchange Commission today voted to publish for public comment a proposed Roadmap that could lead to the use of International Financial Reporting Standards (IFRS) by U.S. issuers beginning in 2014. Currently, U.S. issuers use U.S. Generally Accepted Accounting Principles (U.S. GAAP). The Commission would make a decision in 2011 on whether adoption of IFRS is in the public interest and would benefit investors. The proposed multi-year plan sets out several milestones that, if achieved, could lead to the use of IFRS by U.S. issuers in their filings with the Commission.

The increasing integration of the world’s capital markets, which has resulted in two-thirds of U.S. investors owning securities issued by foreign companies that report their financial information using IFRS, has made the establishment of a single set of high quality accounting standards a matter of growing importance. A common accounting language around the world could give investors greater comparability and greater confidence in the transparency of financial reporting worldwide.

“An international language of disclosure and transparency is a goal worth pursuing on behalf of investors who seek comparable financial information to make well-informed investment decisions,” said SEC Chairman Christopher Cox. “The increasing worldwide acceptance of financial reporting using IFRS, and U.S. investors’ increasing ownership of securities issued by foreign companies that report financial information using IFRS, have led the Commission to propose this cautious and careful plan. Clearly setting out the SEC’s direction well in advance, as well as the conditions that must be met, will help fulfill our mission of protecting investors and facilitating capital formation.”

Chairman Cox noted that since March 2007, the Commission and staff have held three roundtables to examine IFRS, including one earlier this month regarding the performance of IFRS and U.S. GAAP during the subprime crisis. Almost one year ago, the Commission issued a concept release on allowing U.S. issuers to prepare financial statements using IFRS.

Today, more than 100 countries around the world, including all of Europe, currently require or permit IFRS reporting. Approximately 85 of those countries require IFRS reporting for all domestic, listed companies.

Public comment on the SEC’s proposing release should be received by the Commission no later than 60 days after its publication in the Federal Register. (Press Rel. 2008-184)


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ENFORCEMENT PROCEEDINGS
In the Matter of Euro Capital Incorporated
On August 26, the Commission issued an Order Making Findings, Staying Procedures and Delegating Authority pursuant to its acceptance of Euro Capital Incorporated's (Euro Capital) Offer of Settlement in this proceeding. Previously, on Jan. 4, 2008, the Commission instituted proceedings temporarily suspending Euro Capital's Regulation A exemption pursuant to Rule 258 of the General Rules and Regulations under the Securities Act of 1933 (Temporary Suspension).

The Order stays the current administrative proceeding and directs Euro Capital to comply with its undertaking to file a written request to withdraw its offering statement. The Order also delegates to the Director of the Division of Corporation Finance, or such staff as the Director may authorize, authority to accept Euro Capital's request. In the event that the Director of the Division of Corporation Finance accepts Euro Capital's withdrawal request, then the Commission will issue an order vacating the Temporary Suspension and dismissing this proceeding without prejudice. In the event that Euro Capital fails to comply with the undertaking, the Order specifies that the Temporary Suspension order will be converted into a permanent suspension.

Euro Capital consented to the entry of the Order without admitting or denying the findings therein. (Rel. 33-8953; File No. 3-12925)


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Commission Orders Hearing on Registration Suspension or Revocation Against Markland for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission announced the issuance of an Order Instituting Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Order) against Markland Technologies, Inc. (Respondent). The Order alleges that the Respondent is delinquent in its periodic filings with the Commission, having not filed any periodic reports since it filed a Form 10-QSB for the period ended Sept. 30, 2005. The Respondent did not respond to a delinquency letter sent to it by the Commission's Division of Corporation Finance requesting compliance with its periodic filing obligations.

A hearing will be held by an Administrative Law Judge to determine whether the allegations contained in the Order are true, to afford the Respondent an opportunity to establish any defenses to such allegations, and to determine whether it is necessary or appropriate for the protection of investors to suspend for a period not exceeding twelve months, or revoke the registration of each class of securities of the Respondent registered pursuant to Section 12 of the Securities Exchange Act of 1934. The Order requires the Administrative Law Judge to issue an initial decision no later than 120 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58427; File No. 3-13147)


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SEC Charges Bay Area Investment Adviser, Others in Real Estate Investment Scam
The Commission today charged a Portola Valley investment adviser and newsletter publisher, Mark J.P. Boucher, with misleading clients into investing in two failed real estate development companies.

According to the Commission, Boucher helped raise around $20 million for the companies by falsely representing that the investments were secured by real estate, when in reality one of the companies owned no property, and the other owned a single property that was wholly underwater in debt. The Commission also sued the owners of each company, John E. Brake and Gary P. Johnson (both of Southern California) for misappropriating millions of dollars of investor funds to finance everything from beachfront homes to undisclosed side businesses. Boucher and Johnson have settled with the Commission without admitting or denying the allegations.

According to complaints filed today in federal district court in San Francisco, from 1999 through 2005, the defendants collectively raised about $20 million from investors based upon misrepresentations that the money would be used to fund large-scale real estate development projects and that the investments were secured by real property. In reality, the investments were not secured: one development company never owned property, and by the summer of 2002, the other company's lone property was so heavily debt laden that its debts exceeded potential profits. In the end, neither company successfully developed a real estate project, and investors lost millions of dollars.

The Commission alleges that many investors became interested because Boucher - a hedge fund manager and the author of the book The Hedge Fund Edge - recommended the investments in a monthly newsletter he circulated to his advisory clients.

The Commission's complaints allege that the defendants misused investor funds to pay for a wide variety of personal expenses. Among other things, Brake allegedly used investor funds to pay for a beachfront home rental in Carmel, California, luxury automobiles, a personal chauffeur, private jet travel, jewelry and designer clothing, while Johnson used investor funds to launch a failed furniture business. The Commission also alleges that Boucher used investor money to pay a portion of the mortgage on his personal residence.

Boucher, without admitting or denying the allegations in the Commission's complaint, has agreed to a permanent injunction from further violations of Sections 17(a) and 17(b) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder (Exchange Act), and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Boucher will also pay a $100,000 civil penalty. In addition, Boucher has consented to the institution of public administrative proceedings against him in which he will be barred from serving as an investment adviser with a right to reapply after five years.

Johnson, without admitting or denying the allegations, has likewise agreed to a permanent injunction from further violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Johnson has also consented to an order requiring him to disgorge more than $1.8 million in ill-gotten gains and approximately $700,000 in prejudgment interest, and to pay a civil penalty of $120,000.

Brake is charged with violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission is seeking injunctive relief, disgorgement, and civil money penalties against Brake. [SEC v. Mark Joseph Peterson Boucher and Gary Paul Johnson, Case No. CV 08-4088 (N.D. Cal.); SEC v. John E. Brake, Case No. CV 08-4089 (N.D. Cal.)] (LR-20689)


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SEC Files Settled Enforcement Action Charging Con-way Inc. with Violations of the Foreign Corrupt Practices Act
The Commission today filed a settled civil action in the United States District Court for the District of Columbia charging Con-way Inc. (Con-way), a San Mateo, California international freight transportation company, with violations of the books and records and internal controls provisions of the Foreign Corrupt Practices Act. According to the complaint, a Philippines-based firm controlled by Con-way made approximately $417,000 in improper payments to numerous foreign government officials between 2000 and 2003. Without admitting or denying the allegations in the Commission's complaint, Con-way agreed to pay a $300,000 civil penalty.

The complaint alleges that Emery Transnational, a Manila, Philippines-based firm engaged in shipping and freight operations in the Philippines, was controlled by a wholly-owned, U.S.-based subsidiary of Con-way. The complaint further alleges that between 2000 and 2003, Emery Transnational made approximately $244,000 in improper payments to foreign officials at the Philippines Bureau of Customs and the Philippine Economic Zone Area. The complaint alleges that these payments were made to induce these foreign officials to violate customs regulations, settle customs disputes, and reduce or not enforce otherwise legitimate fines for administrative violations.

The complaint also alleges that, during this period, Emery Transnational made approximately $173,000 in improper payments to foreign officials at fourteen state-owned airlines that conducted business in the Philippines. The complaint alleges that these payments were made to induce airline officials to improperly reserve space for Emery Transnational on the airplanes, to falsely under-weigh shipments, and to improperly consolidate multiple shipments into a single shipment, resulting in lower shipping charges.

According to the complaint, none of the improper payments made by Emery Transnational were accurately reflected in Con-way's books and records, and Con-way knowingly failed to implement a system of internal accounting controls concerning Emery Transnational that would both ensure that Emery Transnational complied with the FCPA and require that the payments it made to foreign officials were accurately reflected on its books and records. As a result of the conduct described above, the Commission's complaint alleges violations of Sections 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of the Securities Exchange Act of 1934.

In a related administrative proceeding, the Commission today issued a settled cease-and-desist order against Con-way finding that Con-way violated the books and records and internal controls provisions of the Exchange Act in connection with the improper payments made by Emery Transnational. Without admitting or denying the Commission's findings, Con-way consented to the issuance of an order that requires Con-way to cease and desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A), 13(b)(2)(B), and 13(b)(5) of the Exchange Act. [SEC v. Con-way Inc., Civil Action No. 1:08-CV-01478 (D.D.C.) (EGS)] (LR-20690; AAE Rel. 2866); Administrative Proceeding In the Matter of Con-Way, Inc. - (Rel. 34-58433; AAE Rel. 2867; File No. 3-13148)


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INVESTMENT COMPANY ACT RELEASES
Aberdeen Asset Management Inc. and Aberdeen Funds
A notice has been issued giving interested persons until Sept. 19, 2008, to request a hearing on an application filed by Aberdeen Asset Management Inc. and Aberdeen Funds for an order exempting them from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order would permit the applicants to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements. (Rel. IC-28364 - August 25)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by the Philadelphia Stock Exchange relating to the Exchange's fee schedule concerning Complex Orders has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of Sept. 1, 2008. (Rel. 34-58420)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082708.htm

[jimmenknee]

August 26, 2008 SEC News Digest
Issue 2008-166

INVESTMENT COMPANY ACT RELEASES
Van Eck Associates Corporation, et al.
An order has been issued on an application filed by Van Eck Associates Corporation, et al. The order amends an existing order that permits: (a) series of an open-end management investment company that are based on equity or fixed-income indexes for which no entity that creates, compiles, sponsors, or maintains the indexes is or will be an affiliated person, or an affiliated person of an affiliated person, of any applicant, or any sub-adviser or promoter to a series, to issue shares that can be redeemed only in large aggregations; (b) secondary market transactions in shares to occur at negotiated prices; (c) dealers to sell shares to purchasers in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of large aggregations of shares; (e) under specified limited circumstances, certain series to pay redemption proceeds more than seven days after the tender of shares; and (f) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire shares. The amended order permits applicants to offer series based on securities indexes for which the investment adviser applicant may be deemed a sponsor. (Rel. IC-28365 - August 25)


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STANDARDS SETTING BOARDS
Final Rule
The Commission approved proposed Ethics and Independence Rule 3526, Communication with Audit Committees Concerning Independence, conforming amendments to interim standard ISB No. 1 and two related interpretations, and amendment to Rule 3523, Tax Services for Persons in Financial Reporting Oversight Roles (PCAOB-2008-03) submitted by the Public Company Accounting Oversight Board. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58415)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-ISE-2008-65) filed by the International Securities Exchange relating to fee changes has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58411)

A proposed rule change (SR-NYSEArca-2008-84)filed by NYSE Arca to discontinue its policy of requiring legal opinions in connection with listings of securities has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58413)

A proposed rule change (SR-CBOE-2008-89) filed by the Chicago Board Options Exchange to amend its rules related to the Hybrid 3.0 Platform and Lead Market-Makers has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58422)


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Approval of Proposed Rule Change
The Commission approved a proposed rule change (SR-FINRA-2008-025) submitted by the Financial Industry Regulatory Authority that moves current NASD Rule 2790 (Restrictions on the Purchase and Sale of Initial Equity Public Offerings) to the Consolidated FINRA Rulebook as FINRA Rule 5130 as well as minor technical changes to the rule text. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58421)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082608.htm

[jimmenknee]

August 25, 2008 SEC News Digest
Issue 2008-165

COMMISSION ANNOUNCEMENTS
SEC, Australian Authorities Sign Mutual Recognition Agreement

ASIC Chairman Tony D'Aloisio, Senator Nick Sherry, and SEC Chairman Christopher Cox exhibit their mutual recognition agreement at a Washington D.C. news conference. Securities and Exchange Commission Chairman Christopher Cox, the Australian Minister for Superannuation and Corporate Law - Senator Nick Sherry, and Australian Securities and Investments Commission (ASIC) Chairman Tony D'Aloisio today entered into a mutual recognition arrangement between the SEC, the Australian government, and ASIC. The mutual recognition arrangement provides a framework for the SEC, the Australian government, and ASIC to consider regulatory exemptions that would permit U.S. and eligible Australian stock exchanges and broker-dealers to operate in both jurisdictions, without the need for these entities (in certain aspects) to be separately regulated in both countries.

SEC Chairman Cox said, "Today's signing marks a significant milestone in our partnership with Australia to reduce the barriers that U.S. and Australian investors now face in investing in each other's markets. The framework we are establishing is designed to ensure that the significant protections afforded to investors under each nation's regulatory system are maintained and enhanced. An important part of this arrangement is strengthening the ability of the SEC and ASIC to cooperate with each other in our enforcement and supervisory efforts, thereby enhancing the integrity of both our markets."

ASIC Chairman D'Aloisio said, "ASIC welcomes this opportunity to be included in the first mutual recognition arrangement with the SEC and looks forward to strengthening the connections between the USA's and Australia's capital markets. This arrangement reflects the importance of promoting the freer flow of capital in providing wider investment opportunities for Americans and Australians where sound market integrity and investor protection regulatory regimes are in place."

Through this mutual recognition arrangement, the SEC and the Australian authorities agree to consider providing exemptions to exchanges and securities brokers in one another's countries. Once implemented, these exemptions could permit U.S. stock exchanges and broker-dealers regulated by the SEC, subject to conditions imposed by the Australian authorities, to offer their services to Australian wholesale investors and financial firms without being subject to most ASIC regulation. Likewise, eligible Australian stock exchanges and broker-dealers regulated by ASIC, subject to conditions imposed by the SEC, could offer their services to certain types of U.S. investors and firms without being subject to most SEC regulation.

Chairman D'Aloisio also noted, "This will give both Australian and U.S. investors easier and more competitive access to each other's markets, and will offer Australian market participants and U.S. broker-dealers new ways of doing business with clients in each other's markets."

Ethiopis Tafara, Director of the SEC's Office of International Affairs, added, "Over the past several years and continuing to this day, there has been increased interest by U.S. investors in foreign securities. The SEC-Australia mutual recognition arrangement recognizes this investor interest and serves as a pilot exercise in building a cross-border regulatory infrastructure to address the increasing globalization of our securities markets."

An integral component of the mutual recognition arrangement is an Enhanced Enforcement Memorandum of Understanding (MOU) and a new Supervisory MOU that will allow for considerably greater regulatory and enforcement cooperation and coordination between the SEC and ASIC. These MOUs will apply broadly to all U.S. and Australian market activity and not just those related to the mutual recognition arrangement.

Under the arrangement, both the SEC and ASIC will retain jurisdiction to pursue violations of their respective anti-fraud laws and regulations.

Following today's signing of the mutual recognition arrangement, the SEC and Australian authorities will begin considering regulatory exemptions under the arrangement as they are submitted to the two agencies. It is expected that the process of considering the initial applications for exemptions for approval by the authorities could be concluded in early 2009. (Press Rel. 2008-182)


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ENFORCEMENT PROCEEDINGS
Commission Sustains Disciplinary Action Against Geoffrey Ortiz
The Commission has sustained NASD disciplinary action against Geoffrey Ortiz of Los Angeles, California, a former registered representative of UBS Financial Services, Inc., an NASD member. The Commission also sustained NASD's imposition of a bar from association with any NASD member for Ortiz's misconduct.

The Commission upheld NASD findings that Ortiz forged or caused the forgery of customer initials on account application forms, submitted false information to UBS and provided false information to NASD in response to an information request. In approving NASD's sanctions, the Commission observed that Ortiz's forgery-related violations showed "a disregard of his responsibilities to his customers and his employing [NASD] member." Moreover, his provision of false information to NASD's investigators "subvert[ed] NASD's ability to perform its regulatory function and protect the public interest." The Commission found that NASD's sanctions were neither excessive nor oppressive. (Rel. 34-58416; File No. 3-12889)


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In the Matter of William Clark Davis
On August 25, the Commission instituted settled administrative proceedings against William Clark Davis (Davis), who was the president and CEO of Continental Capital Corporation, the parent company of Continental Capital Securities, Inc. and Continental Capital Investment Services, Inc., both broker-dealers that were registered with the Commission during the relevant time period. Davis was a registered representative with Continental Capital Investment Services, Inc. from March 2001 until March 2003.

In the order, the Commission finds that on February 19, 2008, the Honorable James Carr of the United States District Court for the Northern District of Ohio entered a permanent injunction order against Davis, permanently enjoining him from future violations of Sections 5 and 17(a) of the Securities Act of 1933 and Section l0 (b) of the Securities Exchange Act of 1934 and Rule l0b-5 thereunder, in the civil action entitled United States Securities and Exchange Commission v. William Clark Davis, Civil Action Number 3:03CV7332 (N.D. Ohio). The Commission's complaint alleged that beginning in May 2001, Davis: (1) defrauded investors by purchasing promissory notes on their behalf, without their knowledge or consent; (2) liquidated securities in customer brokerage accounts and used the proceeds to purchase promissory notes; (3) executed the transactions by having customers sign blank letters of authorization (LOAs), by misrepresenting to customers the purpose of the LOAs, and by forging customer signatures on LOAs; (4) had a financial interest in all of the companies issuing promissory notes; and (5) sold unregistered securities.

The Commission's order, which is based on the entry of the permanent injunction against Davis, bars Davis from association with any broker or dealer, pursuant to Section 15(b) of the Securities Exchange Act of 1934. Davis consented to the issuance of the Order without admitting or denying the Commission's findings, except he admits the Commission's jurisdiction over him and the subject matter of the administrative proceedings, and the entry of the permanent injunction in the civil action. (Rel. 34-58418; File No. 3-13143)


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Delinquent Filers' Stock Registrations Revoked
The registrations of the stock of Respondents Viragen, Inc., and Viragen International, Inc., have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-58419; File No. 3-13101)


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In the Matter of Robert L. Carver and Robert L. Carver, II
On August 25, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Robert L. Carver and Robert L. Carver, II. The Order finds that on August 1, 2008, judgments were entered against Robert L. Carver (Carver) and Robert L. Carver, II (Carver II), permanently enjoining them from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, in the civil action entitled SEC v. Robert Louis Carver, et al., Civil Action Number, 8:08-CV-627 in the United States District Court for the Central District of California.

The Order further finds that the Commission's complaint alleged that Carver and Carver II made fraudulent misrepresentations and omissions in the unregistered offer and sale of securities in Lincoln Funds International, Inc., Brookstone Capital, Inc., and three biotechnology funds created for making biotechnology-related investments. In addition, the Order finds that the complaint alleged that Carver and Carver II misappropriated investors' funds, while acting as investment advisers, which constituted fraud on the biotechnology funds. Additionally, the Order finds that the complaint alleged that Carver and Carver II acted as unregistered broker-dealers.

Based on the above, the Order bars Carver and Carver II from association with any broker, dealer, or investment adviser. Carver and Carver II consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the Commission's jurisdiction over them, the subject matter of these proceedings, and the entry of the judgments in the civil injunctive action. (Rels. 34-58423; IA-2771; File No. 3-13146)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by International Securities Exchange to retire a pilot program to list and trade options on the iShares Emerging Markets Index Fund (SR-ISE-2008-66) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58400)

A proposed rule change filed by the Municipal Securities Rulemaking Board relating to revisions to the Series 51 Examination Program (SR-MSRB-2008-06) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58406)


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Proposed Rule Change
The Boston Stock Exchange filed a proposed rule change (SR-BSE-2008-42) under Rule 19b-4 relating to the appointment of market makers on the Boston Options Exchange facility. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58408)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082508.htm

[jimmenknee]

August 22, 2008 SEC News Digest
Issue 2008-164

COMMISSION ANNOUNCEMENTS
Statement of SEC Chairman Christopher Cox Regarding Today's Circuit Court Decision
SEC Chairman Christopher Cox today issued the following statement regarding a decision in Free Enterprise Fund v. Public Company Accounting Oversight Board:

"The decision today of the Court of Appeals for the District of Columbia Circuit upholding the constitutionality of the Public Company Accounting Oversight Board is welcome news for the Commission, investors and U.S. capital markets.

"The creation of the PCAOB was a central feature of the Sarbanes-Oxley Act, which was enacted in part in response to repeated failures of audit effectiveness and loss of investor confidence. The Commission believes that the PCAOB is a highly effective organization whose continued existence is vital to protecting investors and furthering the public interest in the preparation of accurate and informative audit reports." (Press Rel. 2008-180)


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SEC Enforcement Division Announces Preliminary Settlement with Merrill Lynch to Help Auction Rate Securities Investors
The Securities and Exchange Commission's Division of Enforcement today announced that a preliminary settlement in principle has been reached with Merrill Lynch, Pierce, Fenner & Smith, Inc. (Merrill Lynch) that would enable investors who purchased auction rate securities from the firm to receive a total of up to $7 billion to restore their losses and liquidity.

In addition to helping individual investors, small businesses, and charities who were ARS customers of Merrill Lynch, the preliminary settlement also would require Merrill Lynch to use its best efforts to provide liquidity for approximately $1.5 billion worth of ARS purchased through Merrill Lynch by other business and institutional customers. The terms of the settlement are subject to finalization, review and approval by the Commission.

The proposed charges involve alleged misrepresentations by Merrill Lynch to thousands of its customers that ARS were safe, highly liquid investments equivalent to money market instruments and cash. Merrill Lynch did not make adequate disclosures that the liquidity of these securities was based on Merrill Lynch supporting the auctions it managed when there was not enough demand. Investors were left holding illiquid securities when Merrill Lynch stopped supporting auctions in February 2008. Furthermore, Merrill Lynch continued to tout the purported liquidity of ARS to customers despite its awareness of the escalating liquidity risks in the weeks and months preceding the collapse of the ARS market.

"Merrill Lynch's conduct harmed tens of thousands of investors who will have the opportunity to get their money back through this agreement pending Commission approval," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "We will continue to aggressively investigate wrongdoing in the marketing and sale of auction rate securities, and will seek prompt and meaningful relief to auction rate securities investors as a top priority."

Under the terms of the agreement in principle:

No later than Oct. 1, 2008, Merrill Lynch will offer to liquidate at par all ARS from individual, charitable, and small business investors with account values up to $4 million who purchased ARS from Merrill Lynch prior to the collapse of the ARS market in mid-February 2008. This offer will include investors who held ARS in their Merrill Lynch account as of Feb. 13, 2008, but who subsequently transferred the account to another firm. The offer will remain open until Jan. 15, 2010, and investors may accept it at any time before that date.

No later than Jan. 2, 2009, Merrill Lynch will offer to liquidate at par all ARS from remaining individual and charitable investors, and from small businesses with account values up to $100 million who purchased ARS from Merrill Lynch prior to the collapse of the ARS market in mid-February 2008. This offer will include investors who held ARS in their Merrill Lynch account as of Feb. 13, 2008, but who subsequently transferred the account to another firm. The offer will remain open until Jan. 15, 2010, and investors may accept it at any time before that date.

Until Merrill Lynch actually provides for the buy back of ARS on the schedule set forth above, Merrill Lynch will provide certain investors no cost loans that will remain outstanding until the ARS are repurchased or until an investor declines Merrill Lynch's offer to repurchase the securities at par.

Merrill Lynch will reimburse customers for costs incurred under any prior loan programs the firm provided to its ARS investors.

Merrill Lynch will make whole any losses sustained by any of the investors described above who sold ARS after Feb. 13, 2008, at a loss.

To the extent that any of the investors described above has incurred consequential damages due to the loss of liquidity in the customer's ARS holdings, Merrill Lynch will participate in a special arbitration process that the investor may elect, and that will be overseen by the Financial Industry Regulatory Authority (FINRA), whereby Merrill Lynch will not contest liability for its misrepresentations and omissions concerning ARS.

Merrill Lynch will use its best efforts to provide liquidity to its ARS institutional customers and business customers with accounts of more than $100 million by the end of 2009.

Merrill Lynch will not liquidate its own inventory of a particular ARS before it liquidates investors' holdings in that security.

Merrill Lynch will provide notice to all of its ARS investors of the settlement terms and will establish a telephone assistance line to respond to questions from investors concerning the settlement.

Merrill Lynch will be permanently enjoined from violating the provisions of Section 15(c) of the Securities Exchange Act of 1934, and Rule 15c1-2 thereunder, which prohibit the use of manipulative or deceptive devices by broker-dealers.

Merrill Lynch faces the prospect of a financial penalty to the SEC after it has completed its obligations under the settlement agreement. A determination as to the amount of the penalty, if any, will take into account, among other things, the extent of Merrill Lynch's misconduct in marketing and selling ARS, an assessment of whether Merrill Lynch has satisfactorily completed its obligations under the settlement, and the costs incurred by Merrill Lynch in meeting those obligations, including penalties incurred and the cost of remediation.
The SEC notes the substantial assistance and cooperation from the Massachusetts Secretary of State, the North American Securities Administrators Association, the New York Attorney General and FINRA.

The SEC's investigation is continuing.

For more information, contact: David Rosenfeld, Associate Director, SEC's New York Regional Office, at [phone] or Maureen F. Lewis, Branch Chief, SEC's New York Regional Office, at [phone]. (Press Rel. 2008-181)


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Commission Meetings
Following is a schedule of Commission meetings, which will be conducted under provisions of the Government in the Sunshine Act. Meetings will be scheduled according to the requirements of agenda items under consideration.

Open meetings will be held in the Auditorium, Room L-002 at the Commission's headquarters building, 100 F Street, N.E., Washington, D.C. Visitors are welcome at all open meetings, insofar as space is available. Persons wishing to photograph or videotape Commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting.

Any member of the public who requires auxiliary aids such as a sign language interpreter or material on tape to attend a public meeting should contact [e-mail] at least three business days in advance. For any other reasonable accommodation related disability contact DisabilityProgramOfficer or call 202-551-4158.

Open Meeting - August 27, 2008 - 10:00 a.m.
The subject matter of the open meeting will be:

The Commission will consider whether to adopt amendments to its rules regarding the circumstances under which a foreign private issuer is required to register a class of equity securities under Section 12(g) of the Exchange Act.

The Commission will consider whether to adopt amendments to the forms and rules applicable to foreign private issuers that are intended to enhance the information that is available to investors.

The Commission will consider whether to adopt revisions to the current exemptions for cross-border business combination transactions and rights offerings to expand and enhance the usefulness of the exemptions, and to adopt changes to the beneficial ownership reporting rules to permit certain foreign institutions to file reports on a shorter form. The Commission also will consider whether to publish interpretive guidance on issues related to cross-border transactions.

The Commission will consider whether to propose a Roadmap for the potential use by U.S. issuers for purposes of their filings with the Commission of financial statements prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. As part of the Roadmap, the Commission will also consider whether to propose amendments to various rules and forms that would permit early use of IFRS by a limited number of U.S. issuers.
At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
Commission Declares Decision as to Amaroq Asset Management, LLC and Dwight Andre Sean O'Neal Jones Final
The decision of an administrative law judge ordering Amaroq Asset Management, LLC, and Dwight Andree Sean O'Neal Jones to cease and desist from committing or causing any violations or future violations of Section 204 of the Investment Advisers Act of 1940 and Advisers Act Rule 204-1 has been declared final. The law judge further ordered that the registration of Amaroq Asset Management, LLC be revoked; that Dwight Andree Sean O'Neal Jones be barred from association with any investment adviser, with a right to apply for association after one year; and ordered that Jones pay a civil penalty in the amount of $15,000.

The law judge concluded that Jones willfully aided and abetted and was a cause of Amaroq's failure to: (1) file annual amendments to Form ADV; (2) promptly update its Form ADV to reflect its current business address; (3) submit to a reasonable examination and failing to furnish copies of the required books and records in connection with the scheduled examination. The law judge found that Jones showed indifference and/or a series of broken promises, when Commission attorneys repeatedly and explicitly informed him of the law's requirements, thereby demonstrating extreme recklessness. (Rel. IA-2770) Finality Order; File No. 3-12822)


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In the Matter of Warren T. Chambers
On August 21, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against Warren T. Chambers (Chambers). The Order finds that on August 6, 2008, an order of permanent injunction was entered by consent against Chambers, permanently enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rules 10b-5 and 10b-10 thereunder and from aiding and abetting violations of Exchange Act Rule 10b-10, in the civil action entitled Securities and Exchange Commission v. Michael E. Kelly, et al., Civil Action Number 07-cv-4979, in the United States District Court for the Northern District of Illinois. The Commission's complaint alleged that Chambers and his business, Century Estate Planning, Inc., participated in a massive fraud orchestrated by Michael E. Kelly that victimized thousands of investors across the United States by raising at least $428 million through the offer and sale of fraudulent and unregistered securities called Universal Leases. Universal Leases were securities in the form of investment contracts that were structured as timeshares in several hotels in Cancun, Mexico, coupled with pre-arranged servicing agreements with a purportedly independent leasing agent that promised investors a safe investment and guaranteed returns. The complaint alleged that Chambers offered and sold Universal Leases to investors and recruited others to do so. The complaint further alleged, among other things, that Chambers made false and misleading statements about the safety of the Universal Leases and about the purportedly independent leasing agent, and also failed to make required disclosures about the commissions he was being paid for his Universal Lease sales.

Based on the above, the Order bars Chambers from association with any broker or dealer. Chambers consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the entry of the order of permanent injunction against him. (Rel. 34-58402; File No. 3-13144)


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In the Matter of Raymond L. Leonard, Jr.
On August 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (the Order) in the above-referenced matter against Raymond L. Leonard, Jr. (Leonard). The Order finds that, on May 28, 2008, the Commission filed a complaint against Leonard in SEC v. Raymond L. Leonard, Jr. (Civil Action No. 6:08-cv-01159), in the United States District Court for the District of Kansas. It also finds that, on June 26, 2008, the court entered an order permanently enjoining Leonard, by consent, from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(b) of the Securities Exchange Act of 1934, and Rule 10b-5.

Based on the above, the Order finds that Respondent Leonard, pursuant to Section 15(b)(6) of the Exchange Act, is barred from association with any broker or dealer. Leonard consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-58409; File No. 3-13145)


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SEC Settles Enforcement Proceedings Against Former Fleming Companies, Inc. Executives Mark David Shapiro, Albert M. Abbood, and James H. Thatcher for Their Roles in Financial Fraud Scheme
The Commission announced that on Aug. 15, 2008, the Honorable Michael H. Schneider, United States District Judge for the Eastern District of Texas, entered Final Judgments as to former Fleming Companies, Inc. executives Mark David Shapiro, Albert M. Abbood, and James H. Thatcher, in SEC v. Mark David Shapiro, et al., permanently enjoining the defendants from future violations of Sections 10(b) and 13(b)(5) of the Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1 and 13b2-2 thereunder. The defendants consented to the entry of the Final Judgments without admitting or denying the allegations of the Commission's complaint. Pursuant to the Final Judgments, Abbood and Thatcher will pay civil penalties of $25,000 each, and Shapiro will pay a civil penalty of $135,000. Further, Shapiro agreed to settle proposed administrative proceedings against him pursuant to Rule 102(e) of the Commission's Rules of Practice, to be based on the entry of the Court's final judgment enjoining him. Pursuant to his offer of settlement, Shapiro consented to the issuance of a Commission order suspending him from appearing or practicing before the Commission as an accountant with a right to apply for reinstatement after three years.

The Commission's complaint alleges that over several quarters in late 2001 and the first half of 2002, Fleming improperly executed and recorded a number of accounting transactions to "bridge the gap" between Wall Street expectations and disappointing actual operation results. According to the complaint, the defendants participated directly and indirectly in this wrongdoing by obtaining misleading side letters from Fleming vendors that were used to improperly accelerate recognition of the vendors' up-front payments, in violation of generally accepted accounting principles. These transactions were the subject of settled enforcement actions the Commission brought against Fleming and several of its vendors and vendor employees on Sept. 14, 2004. See In the Matter of Fleming Companies, Inc., Lit. Rel. No. 18884 (Sept. 14, 2004). The complaint alleges that Shapiro, Fleming's chief accounting officer at the time, compounded his wrongdoing by giving Fleming's outside auditors false and misleading representation letters and signing Fleming's fraudulent 2001 Form 10-K and Forms 10-Q for the first and second quarters of 2002. Further, the complaint alleges that Shapiro inflated earnings by executing large quarter-end inventory purchases solely to generate discounts that Fleming could immediately recognize as earnings in an effort to help meet Wall Street analysts' earnings expectations. Fleming failed to disclose that these purchases were part of an intentional scheme to inflate earnings. Finally, the complaint alleges that Shapiro improperly inflated Fleming's 2001 earnings by directing the release of extensive accounting reserves, without proper justification or disclosure.

Two other defendants, former Fleming executives Philip B. Murphy and Thomas Gerald Dahlen, Jr., previously settled Commission charges concerning the same conduct. [SEC v. Mark David Shapiro, et al., Civil Action No. 4:05-CV-0364 (E.D. Texas) Sherman Division, (Schneider, J.)] (LR-20687; AAE Rel. 2865)


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SEC Obtains Temporary Restraining Order Halting Sales of Fraudulent Foreign Currency Investments by Carrollton, Texas, Man and His Company
On August 20, the Commission filed a civil action in Dallas federal court against Patrick H. Haxton and Royal Forex Management, LLC (Royal) alleging that the defendants fraudulently offered unregistered securities in the form of investment contracts involving the trading of foreign currencies on the Forex market. On Aug. 21, 2008, United States District Judge Sam A. Lindsay entered orders temporarily suspending the offering, freezing the defendants' assets, and granting other emergency relief.

The SEC's complaint alleges that from at least June 2007 to the present, Haxton, personally and through Royal, raised at least $305,000 from 8 investors in three states. Haxton offers the Forex investments through the Royal web site, advertising on his work truck and personal contacts. Royal's promotional materials and Haxton's oral statements are replete with representations of phenomenal past trading returns, including claims of 400% to 500% annual returns, generated by a complex software program named "The Currency Trading Robot," purportedly created by Haxton. Haxton and the web site also represent that there is very little risk of loss. The complaint alleges, however, that Haxton and Royal never generated the claimed phenomenal returns by trading currency. Indeed, according to the complaint, Haxton lost a significant portion of investor funds trading foreign currencies and misappropriated the remaining funds for his own personal use. In some instances, investor funds were never traded, but were used to pay business and personal expenses.

The SEC's complaint alleges that defendants violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. [SEC v. Royal Forex Management, LLC and Patrick H. Haxton (U.S.D.C., Northern District of Texas, Dallas Division, Civil Action No. 3:08-CV-1467-L)] (LR-20688)


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INVESTMENT COMPANY ACT RELEASES
Genworth Life of New York VL Separate Account 1
An order has been issued under Section 8(f) of the Investment Company Act declaring that Genworth Life of New York VL Separate Account 1 has ceased to be an investment company. ((Order: Rel No. IC-28363) - August 20)


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SELF-REGULATORY ORGANIZATIONS
Approval of Proposed Rule Changes
The Commission approved a proposed rule change as modified by Amendment No. 1 (SR-NASDAQ-2007-067) submitted by The NASDAQ Stock Market under Rule 19b-4 of the Securities Exchange Act of 1934 to establish an Imbalance Cross. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58386)

The Commission approved a proposed rule change (SR-NASDAQ-2008-019) submitted by The NASDAQ Stock Market to remove from the Nasdaq rules fee provisions relating to Nasdaq's Mutual Fund Quotation Service. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58392)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-CBOE-2008-85) filed with the Chicago Board Options Exchange adopting a new order type has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58394)

A proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-88) to eliminate the requirement that orders sent via the InterMarket Linkage System and broker dealer orders receive the same billing treatment has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58399)


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Proposed Rule Changes
The Depository Trust Company filed a proposed rule change (SR-DTC-2008-10) under Section 19(b)(1) of the Exchange Act, which proposed rule change became effective upon filing, to make technical changes to the Collateral Loan System. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58407)

The International Securities Exchange filed a proposed rule change (SR-ISE-2008-63) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to the Price Improvement Mechanism. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58401)


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JOINT INDUSTRY PLAN RELEASES
Notice of Filing and Order Approving on a Temporary Basis a Proposed Amendment to the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options
The American Stock Exchange, the Boston Stock Exchange, Chicago Board Options Exchange, the International Securities Exchange, The NASDAQ Stock Market, NYSE Arca, the Philadelphia Stock Exchange, and the Options Clearing Corporation filed, pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder, Amendment 2 to the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options (File No. 4-443). Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58385)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082208.htm

[jimmenknee]

August 21, 2008 SEC News Digest
Issue 2008-163

COMMISSION ANNOUNCEMENTS
Commission Meetings
Closed Meeting - Thursday, August 28, 2008 - 2:00 p.m.
The subject matter of the closed meeting scheduled for Thursday, Aug. 28, 2008, will be: formal orders of investigation; institution and settlement of injunctive actions; institution and settlement of administrative proceedings of an enforcement nature; resolution of litigation matters; and other matters relating to enforcement proceedings.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
In the Matter of Nicholas Thompson
On August 21, the Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 as to Nicholas Thompson (Order), a former branch manager of registered broker-dealer vFinance Investments, Inc. (vFinance).

The Order finds that Thompson willfully aided and abetted and caused vFinance's failure to preserve records and produce them promptly to the Commission staff by repeatedly failing to produce records located in his branch office and by deliberately deleting data from his hard drive relating to a matter under investigation by the Commission. Thompson, without admitting or denying the findings, consented to the issuance of the Order, under which the Commission barred Thompson from association with any broker or dealer with the right to reapply after five years, ordered Thompson to pay a civil penalty of $30,000 and ordered Thompson to cease and desist from causing any violations and any future violations of the document retention and production requirements of Section 17(a) of the Securities Exchange Act of 1934 and Rules 17a-4(b)(4) and 17a-4(j) thereunder. (Rel. 34-58403; File No. 3-12918)


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Jury Finds Former Hayes Lemmerz International CEO and CFO Liable for Securities Fraud Arising from Accounting Scheme
The Commission announced today that on Aug. 20, 2008, a federal jury returned a verdict in the SEC's favor on securities fraud charges against Ranko Cucuz, the former Chief Executive Officer of automobile parts manufacturer Hayes Lemmerz International, Inc., and William D. Shovers, the former Chief Financial Officer of the company. The verdict followed a two-week jury trial in Detroit, Michigan, before the Honorable Arthur J. Tarnow, United States District Judge for the United States District Court for the Eastern District of Michigan. The Commission's complaint, filed on April 25, 2006, alleged that Hayes, acting through former senior officers and employees, engaged in a fraudulent scheme to achieve corporate earnings targets and mask declining operating results. The complaint alleged that as a result of the fraudulent accounting scheme, Hayes made materially false filings with the Commission in fiscal years 1999 and 2000 and for the first quarter of 2001, including the company's annual report on Form 10-K for the fiscal year ending Jan. 31, 2001, and the quarterly reports on Forms 10-Q for the quarterly periods ended April 30, 2000, July 31, 2000, Oct. 31, 2000 and April 30, 2001.

The complaint also alleged that, upon learning of the fraudulent accounting scheme, Cucuz and Shovers made affirmative misrepresentations to the company's outside independent auditor about Hayes' financial statements and caused Hayes to make Commission filings containing material misrepresentations. The complaint further alleged that Cucuz and Shovers took affirmative steps to conceal information about the improper accounting practices from Hayes' outside independent auditor and Hayes' Audit Committee and Board of Directors. Finally, the complaint alleged that Cucuz and Shovers made material misrepresentations about Hayes' financial condition in connection with a $300 million Rule 144A bond offering by Hayes in June 2001.

Cucuz and Shovers are the last two remaining defendants in this action. Previously, the Commission reached settlements with the company, Ronald Lee Kolakowski (the former President of Hayes' North American Wheel Group), and Jesus Bonilla-Valdez (former Vice President of Hayes' Aluminum Wheel Group). Moreover, in previously settled related administrative proceedings, the Commission issued Orders Instituting Administrative Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions against three other former Hayes employees: Allen Buntin, James Jarrett, and Greg Jones. [SEC v. Ranko Cucuz, William D. Shovers, Jesus Bonilla-Valdez, Ronald Lee Kolakowski, and HLI Operating Company, Inc., f/k/a Hayes Lemmerz International, Inc., Civil Action No. 2:06-CV-11935 (E.D. Mich.)] (LR-20686; AAE Rel. 2864)


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INVESTMENT COMPANY ACT RELEASES
Cohen & Steers Advantage Income Realty Fund, Inc, et al.
An order has been issued on an application filed by Cohen & Steers Advantage Income Realty Fund, et al., under Section 6(c) of the Investment Company Act, for an exemption from Section 19(b) of the Act, and Rule 19b-1 under the Act. The order permits certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each year, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28358 - August 19)


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Deregistrations Under the Investment Company Act
Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:

Legg Mason Partners Investment Funds, Inc. [File No. 811-3275]
(Order: Rel No. IC-28359)

Delaware Investments Municipal Trust [File No. 811-6411]
(Order: Rel No. IC-28360)

C Funds Group, Inc. [File No. 811-4246]
(Order: Rel No. IC-28361)

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SEI Insurance Products Trust
An order has been issued pursuant to Section 8(f) of the Investment Company Act declaring that SEI Insurance Products Trust has ceased to be an investment company. (Order: Rel No. IC-28362) - August 20)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-CBOE-2008-83) filed by the Chicago Board Options Exchange related to complex order price check parameters has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58387)

A proposed rule change (SR-NYSEArca-2008-83) filed by NYSE Arca amending the Schedule of Fees and Charges for Exchange Services to add a credit that applies to indications of interest that result in routed and executed orders has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58397)


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Proposed Rule Changes
The Commission issued notice of a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2008-85), through its wholly owned subsidiary, NYSE Arca Equities, Inc., relating to listing and trading shares of the PowerShares Active U.S. Real Estate Fund. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58395)

NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., filed with the Securities and Exchange Commission a proposed rule change (SR-NYSEArca-2008-86) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to listing of the WisdomTree Dreyfus Emerging Markets Fund. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58396)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082108.htm

[jimmenknee]

August 20, 2008 SEC News Digest
Issue 2008-162

COMMISSION ANNOUNCEMENTS
Securities and Exchange Commission Suspends Trading in Ten Issuers for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EDT on Aug. 20, 2008 and terminating at 11:59 p.m. EDT on Sept. 3, 2008.

Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc.) (ACMG)
Cluster Technology Corp. (CLTT)
Consolidated Growers and Processors, Inc. (CGPRQ)
Global Network, Inc. (GLNW)
Micro-Integration Corp. (MINT)
Monsoon International Manufacturing & Distribution, Inc. (MIMF)
Montt International Corp. (MNTT)
Pony Express U. S. A., Inc. (PYXP)
SUMmedia.com, Inc. (ISUM)
Sunflower USA, Ltd. (SFLW)
The Commission temporarily suspended trading in the securities of these ten issuers due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission in over three years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies.

Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of the subject company unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at [phone], or by e-mail at [e-mail]. (Rel. 34-58389)


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Suspension or Revocation Against Eleven Companies for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission today also instituted a public administrative proceeding to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of eleven companies for failure to make required periodic filings with the Commission:

In the Matter of Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc.), et al. Administrative Proceeding File No. 3-13140

Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc.) (ACMG)
Cluster Technology Corp. (CLTT)
Global Network, Inc. (GLNW)
Micro-Integration Corp. (MINT)
Montt International Corp. (MNTT)
NewCare Health Corp.
In the Matter of Consolidated Growers and Processors, Inc., et al. Administrative Proceeding File No. 3-13141

Consolidated Growers and Processors, Inc. (CGPRQ)
Monsoon International Manufacturing & Distribution, Inc. (MIMF)
Pony Express U. S. A., Inc. (PYXP)
SUMmedia.com, Inc. (ISUM)
Sunflower USA, Ltd. (SFLW)
In the Orders, the Division of Enforcement (Division) alleges that the respective respondents are delinquent in their required periodic filings with the Commission.

In these proceedings, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Orders, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceedings will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (In the Matter of Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc., et al. - Rel. 34-58390, File No. 3-13140); (In the Matter of Consolidated Growers and Processors, Inc., et al. - Rel. 34-58391, File No. 3-13141)


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Commission Orders Hearings on Registration Revocation Against Seven Public Companies for Failure to Make Required Periodic Filings
The Commission today instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of seven companies for failure to make required periodic filings with the Commission:

Aqua Vie Beverage Corp. (AQVB)
Asia Biotechnology Group, Inc. (ABTH)
Caravan Acquisition Corp.
Century Investments International, Inc.
Diversified Holdings International, Inc.
Milinx Business Group, Inc. (MIXB)
MSC Group, Inc.
In this Order, the Division of Enforcement (Division) alleges that the seven issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58393; File No. 3-13142)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NYSE-2008-75) filed by the New York Stock Exchange to amend Section 303A.02(b) of its Listed Company Manual with respect to two of its director independence tests has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58367)

A proposed rule change (SR-Amex-2008-67) filed by the American Stock Exchange modifying the definition of "Independent Director" in the Amex Company Guide has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58378)

A proposed rule change filed by the Philadelphia Stock Exchange (SR-Phlx-2008-61) relating to changing its name has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58380)


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Approval of Proposed Rule Change
The Commission granted approval to a proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-47) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to waive retroactively as of June 24, 2008, initial listing fees for companies who apply to list securities currently listed on another national securities exchange. Publication is expected in the Federal Register during the week of August 25. (Rel. 34-58379)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig082008.htm

[jimmenknee]

August 19, 2008 SEC News Digest
Issue 2008-161

COMMISSION ANNOUNCEMENTS
SEC Announces Successor to Edgar Database

"IDEA" Will Make Company and Fund Information Interactive

SEC Chairman Christopher Cox demonstrates the future benefits of interactive data financial reporting to investors Securities and Exchange Commission Chairman Christopher Cox today unveiled the successor to the agency's 1980s-era EDGAR database, which will give investors far faster and easier access to key financial information about public companies and mutual funds.

The new system is called IDEA, short for Interactive Data Electronic Applications. Based on a completely new architecture being built from the ground up, it will at first supplement and then eventually replace the EDGAR system. The decision to replace EDGAR marks the SEC's transition from collecting forms and documents to making the information itself freely available to investors to give them better and more up-to-date financial disclosure in a form they can readily use.

Currently, most SEC filings are available only in government-prescribed forms through EDGAR. Investors looking for information must sift through one form at a time, and then re-keyboard the information - a painstaking task. With IDEA, investors will be able to instantly collate information from thousands of companies and forms, and create reports and analysis on the fly, in any way they choose.

IDEA will ensure that both the SEC and the investors who rely upon the financial reporting the agency demands are ready for the new world of financial disclosure that will soon arrive when financial information is presented in interactive data format. The SEC has formally proposed requiring U.S. companies to provide financial information using interactive data beginning as early as next year, and separately has proposed requiring mutual funds to submit their public filings using interactive data.

"IDEA will ensure that the SEC continues to stay ahead of the needs of investors," said Chairman Cox. "This new SEC resource powered by interactive data will give investors far faster, more accurate, and more meaningful information about the companies and mutual funds they own. IDEA's launch represents a fundamental change in the way the SEC collects and publishes company and fund information - and in the way that investors will be able to use it."

Interactive data relies on computer "tags," similar in function to bar codes, which identify individual items in a company's financial disclosures. With every number on an income statement or balance sheet individually labeled, information about thousands of companies contained on thousands of forms could be easily searched on the Internet, downloaded into spreadsheets, reorganized in databases, and put to any number of other comparative and analytical uses by investors, analysts, journalists, and financial intermediaries.

The ease with which interactive data will make financial information available also is expected to generate many new Web-based services and products for investors.

As he unveiled the new IDEA platform at a Washington news conference today, Chairman Cox announced that the IDEA logo will begin to appear immediately on the SEC's Web site as the agency transitions to making IDEA the new primary source for all SEC filings. Companies' interactive data filings are expected to be available through IDEA beginning late this year.

Investors and others who currently use EDGAR will be able to continue doing so for the indefinite future. During the transition to IDEA, investors will be able to take advantage of new interactive, IDEA-like features that will be grafted onto EDGAR in the short run. This will make it possible for investors to tap IDEA's advanced search capabilities, and to use the information from EDGAR within spreadsheets and analytical software - something that was never possible with EDGAR. The EDGAR database also will continue to be available as an archive of company filings for past years.

"When Congress created the SEC, and even when EDGAR was launched, the markets worked on paper and by mail. Today, the marketplace works online and by e-mail," explained disclosure and transparency expert Dr. William D. Lutz, who is leading the SEC's 21st Century Disclosure Initiative. "Companies and investors alike compile, analyze, and produce information and reports electronically. With the move to an electronic data-based filing system, the SEC will not only keep pace with the markets, but will provide investors with a dynamic system they can use to get the information they need, rather than having to wade through an avalanche of paper forms, legalese, and doublespeak."

David Blaszkowsky, Director of the SEC's Office of Interactive Disclosure, added, "After 75 years of document-based static financial reporting, whether in paper documents or in electronic equivalents, it is exciting to see the SEC poised to cross the 'data threshold' and help investors receive financial information that is dynamic, usable and ready to go as they make their investment decisions. And when the investor wins, so does the public company, fund, or other filer who simultaneously benefits from greater transparency and trust in our markets. By tapping the power of interactive data to tear down barriers to quick and meaningful investment information, markets can become fairer and more efficient while investors can possess far better quality data than was ever possible before." (Press Rel. 2008-179)


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Securities and Exchange Commission Suspends Trading in Eight Issuers for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission announced the temporary suspension of trading of the securities of the following issuers, commencing at 9:30 a.m. EDT on Aug. 19, 2008 and terminating at 11:59 p.m. EDT on Sept. 2, 2008:

Atomic Burrito, Inc. (ATOM)
Earthcare Co. (ECCOQ)
Global Concepts, Ltd. (GCCP)
New York Bagel Enterprises, Inc. (NYBSQ)
Precept Business Services, Inc. (PBSI)
Reorganized Sale OKWD, Inc. (OKWHQ)
Villageworld.com, Inc. (n/k/a Biometrics 2000 Corp.) (BTOO)
Wireless Webconnect!, Inc. (WWCO)
The Commission temporarily suspended trading in the securities of the companies due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission for over two years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies.

Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspension, no quotation may be entered relating to the securities of the subject companies unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at [phone], or by e-mail at [e-mail]. (Rel. 34-58381)


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Securities and Exchange Commission Suspends Trading in Three Issuers for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EDT on Aug. 19, 2008 and terminating at 11:59 p.m. EDT on Sept. 2, 2008.

Ocean Resources, Inc. (OCRI)
Officeland, Inc. (OFLD)
Online Gaming Systems Ltd. (n/k/a Advanced Resources Group Ltd. (AVRG)
Open EC Technologies, Inc. (OCEIF)
OVM International Holding Corp. (OVMI)
The Commission temporarily suspended trading in the securities of these five issuers due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission in over one year. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies.

Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of the subject company unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at [phone], or by e-mail at [e-mail]. (Rel. 34-58383)


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RULES AND RELATED MATTERS
Notice of Findings, Opinion, and Order of the Commission
The Commission has approved a Form 1 application submitted by BATS Exchange seeking registration as a national securities exchange pursuant to Section 6 of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58375)


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Suspension or Revocation Against Eight Companies for Failure to Make Required Periodic Filings

On August 19, the Commission instituted public administrative proceedings against the following eight companies to determine whether the registration of each class of their securities should be revoked or suspended for a period not exceeding twelve months for failure to file required periodic reports:

Atomic Burrito, Inc. (ATOM)
Earthcare Co. (ECCOQ)
Global Concepts, Ltd. (GCCP)
New York Bagel Enterprises, Inc. (NYBSQ)
Precept Business Services, Inc. (PBSI)
Reorganized Sale OKWD, Inc. (OKWHQ)
Villageworld.com, Inc. (n/k/a Biometrics 2000 Corp.) (BTOO)
Wireless Webconnect!, Inc. (WWCO)
In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58382; File No. 3-13138)


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Commission Orders Hearings on Registration Suspension or Revocation Against Five Companies for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission today also instituted a public administrative proceeding to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of five companies for failure to make required periodic filings with the Commission:

Ocean Resources, Inc. (OCRI)
Officeland, Inc. (OFLD)
Online Gaming Systems Ltd. (n/k/a Advanced Resources Group Ltd. (AVRG)
Open EC Technologies, Inc. (OCEIF)
OVM International Holding Corp. (OVMI)
In the Order, the Division of Enforcement (Division) alleges that the respective respondents are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58384; File No. 3-13139)


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SELF-REGULATORY ORGANIZATIONS
Approval of Proposed Rule Change
The Commission granted approval of a proposed rule change (SR-NYSEArca-2008-70) submitted by NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, amending NYSE Arca Equities Rule 5.2(j)((6)(B)(I), the Generic Listing Standard for Equity Index-Linked Securities. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58376)


--------------------------------------------------------------------------------

SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig081908.htm

[jimmenknee]

August 18, 2008 SEC News Digest
Issue 2008-160

COMMISSION ANNOUNCEMENTS
Securities and Exchange Commission Suspends Trading in Five Issuers for Failure to Make Required Periodic Filings
The Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EDT on Aug. 18, 2008, and terminating at 11:59 p.m. EDT on Aug. 29, 2008.

Pacific Gateway Exchange, Inc. (PGEXQ)
Pallet Management Systems, Inc. (PALTQ)
Panaco, Inc. (PNOIQ)
Paragon Financial Corp. (n/k/a NewMarket Latin America, Inc.) (NLAI)
Patriot Motorcycle Corp. (PMCY)
The Commission temporarily suspended trading in the securities of these five issuers due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission in over three years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies.

Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of the subject company unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at [phone]. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at [phone], or by e-mail at [e-mail]. (Rel. 34-58371)


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SEC Announces $18 Million Fair Fund Distribution to Investors Affected by Undisclosed Market Timing in Janus Mutual Funds
On August 15, the Securities and Exchange Commission distributed more than $18 million to more than 325,000 investors who were affected by undisclosed market timing in certain mutual funds managed by Denver-based Janus Capital Management LLC (JCM).

The distribution is the first in a series that will return approximately $100 million to harmed investors as part of the Commission's 2004 settlement with JCM. The firm had been charged with facilitating undisclosed market timing in some of its mutual funds.

"This case provides a tremendous amount of satisfaction to our staff as we are able to provide funds to hundreds of thousands of harmed investors," said Dick D'Anna, Director of the SEC's Office of Collections and Distributions. "We look forward to completing the full distribution in the coming months."

Donald M. Hoerl, Acting Regional Director of the SEC's Denver Regional Office, said, "We are very pleased to begin distributing money in the Fair Fund to Janus investors harmed by market timing misconduct. This distribution is another example of the Commission's ongoing commitment to return money to injured investors."

The Fair Fund provision of the Sarbanes-Oxley Act of 2002 provides the SEC with authority to distribute financial penalties along with disgorgement to injured investors. Since 2002, more than $4 billion has been returned to investors.

The SEC brought and settled public administrative and cease-and-desist proceedings in 2004 against JCM. Without admitting or denying the Commission's allegations, JCM consented to a Commission Order charging anti-fraud violations and requiring the respondents to pay $50 million in disgorgement and $50 million in civil penalties for distribution through a Fair Fund. In addition to disgorgement and civil penalties, JCM also consented to a cease-and-desist order and a censure, and agreed to undertake certain compliance and mutual fund governance reforms.

The Fair Fund Administrator responsible for distribution is Rust Consulting, Inc. Investor questions regarding the distribution may be directed to Rust at [phone]. Information regarding the distribution can also be obtained at http://www.JCMFairFund.com.

Additional materials:
Modified Plan of Distribution:
http://www.sec.gov/litigation/admin/2008/34-57721-mdp.pdf

April 25, 2008 Order Approving the Modified Plan of Distribution:
http://www.sec.gov/litigation/admin/2008/34-57721.pdf

August 18, 2004 Order Instituting Administrative and Cease-and-Desist Proceedings:
http://www.sec.gov/litigation/admin/ia-2277.htm

For more information, contact: Donald M. Hoerl, Acting Regional Director, or Amy Norwood, Assistant Regional Director, SEC's Denver Regional Office , at [phone].

(Press Rel. 2008-177)


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SEC Announces Fair Fund Distribution to Harmed Investors in Putnam Mutual Funds
The Securities and Exchange Commission today announced the distribution of nearly $40 million to more than 600,000 investors who were harmed by undisclosed market timing and excessive short-term trading in certain mutual funds managed by Putnam Investment Management, LLC. This is the first in a series of Fair Fund distributions that will ultimately return a total of more than $150 million to more than 1.5 million affected Putnam mutual fund investors.

"The SEC is privileged to play a role in bringing some measure of monetary relief to Putnam mutual fund shareholders," said David Bergers, Director of the SEC's Boston Regional Office.

Dick D'Anna, Director of the SEC's Office of Collections and Distributions, added, "These payments exemplify the SEC's commitment to dealing with the complications inherent in processing Fair Fund distributions to large and diverse groups of investors, in this case more than 1.5 million investors who held mutual fund shares over a span of several years."

The Sarbanes-Oxley Act of 2002 provided the SEC with authority to increase the amount of money returned to injured investors by allowing financial penalties to be included in Fair Fund distributions. Prior to Sarbanes-Oxley, only disgorgement could be returned to investors. Since 2002, SEC enforcement actions have resulted in the return of more than $4 billion to harmed investors.

In October 2003, the SEC and the Massachusetts Securities Division brought separate administrative proceedings against Putnam. In these proceedings, which were fully settled in April 2004, Putnam agreed to pay disgorgement and financial penalties and to implement certain compliance, mutual fund governance, and employee trading reforms. The Fair Fund distribution is comprised of money that Putnam paid to settle both the SEC and Massachusetts actions.

The SEC acknowledges the assistance and involvement of the Massachusetts Securities Division throughout the distribution process.

For more information about the administration of the Fair Fund distribution, please visit http://www.putnam.com/individual/fair_fund or call 1-800-848-9697.

Additional materials:
Distribution Plan:
http://www.sec.gov/litigation/admin/2007/34-56115-pd.pdf

Order Approving Modified Distribution Plan:
http://www.sec.gov/litigation/admin/2007/34-56115.pdf

Orders Imposing Remedial Sanctions:
http://www.sec.gov/litigation/admin/ia-2192.htm
http://www.sec.gov/litigation/admin/ia-2226.htm

For more information, contact: David P. Bergers, Regional Director, or John T. Dugan, Associate Regional Director, SEC's Boston Regional Office, at [phone].

(Press Rel. 2008-178)


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Revocation Against Five Delinquent Companies for Failure to Make Required Periodic Filings
On August 15, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of five companies for failure to make required periodic filings with the Commission:

Sunbase Asia, Inc. (n/k/a Centire International, Inc.)
Supply Chain Services, Inc.
Sustainable Development International, Inc. (n/k/a Clean Energy, Inc.)
SWI Steelworks, Inc. (f/k/a ESC Envirotech Systems Corp.)
Symphony Telecom Corp.
In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58368; File No. 3-13134)


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Commission Orders Hearings on Registration Suspension or Revocation Against Eight Companies for Failure to Make Required Periodic Filings
In conjunction today's trading suspension, the Commission today also instituted a public administrative proceeding to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of eight companies for failure to make required periodic filings with the Commission:

Pacific Coast Apparel Co., Inc.
Pacific Gateway Exchange, Inc. (PGEXQ)
Pacific International Services Corp.
Pallet Management Systems, Inc. (PALTQ)
Palm Desert Art, Inc.
Panaco, Inc. (PNOIQ)
Paragon Financial Corp. (n/k/a NewMarket Latin America, Inc.) (NLAI)
Patriot Motorcycle Corp. (PMCY)
In the Order, the Division of Enforcement (Division) alleges that the respective respondents are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58372; File No. 3-13135)


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Commission Revokes Registrations of Securities of Two Issuers for Failure to Make Required Periodic Filings
On August 18, the Commission instituted and settled separate administrative proceeding pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act) revoking the registration of each class of registered securities of each of the following issuers for failure to make required periodic filings with the Commission (ticker symbols provided).

Ajay Sports, Inc. (AJAY)
Heritage American Resource Corp. (n/k/a St Andrew Goldfields Ltd.) (SASXF)
Without admitting or denying the findings of the order pertaining to that issuer, except as to jurisdiction, which each admitted, each of the foregoing issuers separately consented to the entry of an order pertaining to that issuer finding that it had failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of the issuer's securities pursuant to Exchange Act Section 12(j).

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

(In the Matter of Ajay Sports, Inc. - Rel. 34-58373, File No. 3-13136; In the Matter of Heritage American Resource Corp. (n/k/a St Andrew Goldfields Ltd.) - Rel. 34-58374, File No. 3-13137)


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Commission Declares Decision as to Clarence Friend Final
The decision of an administrative law judge barring Clarence Friend from associating with any broker or dealer has become final. Friend, of Fountain Valley, California, was the founder, controlling shareholder and former CEO of AirTrac, Inc. On April 2, 2008, the district court entered a Second Revised Final Judgment, permanently enjoining him from violations of Section 5 and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5. The court imposed civil penalties in the amount of $130,000 each against Friend and AirTrac and disgorgement in the amount of $273,487.87 against Friend and $1,759, 542.28 (less any amount Friend disgorges) against AirTrac, plus prejudgment interest on the disgorgement amounts. See SEC v. AirTrac, Inc., Civil Action No. SACV 06-582 (RNBx)(C.D. Cal.)

Friend, along with employees of AirTrac, used scripts that had been approved by Friend, to tell investors through correspondence and via telephone, that AirTrac would take part in an initial public offering and public trading on the NASDAQ in late 2004 or early 20005. Friend further perpetrated the lie by telling an investor that, as early as 2003, AirTrac had filed a Form 10 with the Commission. AirTrac had never applied for a listing with the NASDAQ nor had it filed a Form 10 or Form 10-SB, which could have been filed in lieu of the Form 10.

AirTrac employees further attempted to mislead several investors through the use of Friend-approved false scripts that stated that AirTrac was in the process of negotiating lucrative business contracts with widely-known telecommunications companies, such as SBC, Cingular and AT&T.

Between January 2004 and April 2005, investors received copies of AirTrac's private placement memorandum, which represented that their invested funds would be utilized for business activities, when, in fact, Friend used $273,487.87 of the funds for personal expenses. (Rel. 34-58370; File No. 3- 13017)


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In the Matter of Mitchell M. Maynard and Dorice A. Maynard
An Administrative Law Judge has issued an Initial Decision in Mitchell M. Maynard and Dorice A. Maynard, finding that the allegations in the Order Instituting Proceedings are true that the State of Vermont's Department of Banking, Insurance, Securities, and Health Care Administration found that Mitchell M. Maynard and Dorice A. Maynard (together, Respondents) violated various provisions of Vermont's securities statutes and barred Respondents from association or employment with a registered broker-dealer or investment adviser or any "federal covered" investment adviser, required Respondents to pay $400,000 in restitution, and imposed a $20,000 administrative penalty. Based on these findings, the Administrative Law Judge found it to be in the public interest to bar each of the Respondents from association with an investment adviser. (Initial Decision No. 354; File No. 3-13008)


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SEC Settles Civil Injunctive Action with Bryan S. Behrens and His Company National Investments, Inc.
The Commission announced today that on July 28, 2008, the Honorable Laurie Smith Camp of the United States District Court for the District of Nebraska entered a judgment by consent against Bryan S. Behrens and his company National Investments, Inc. The Commission's complaint, filed on Jan. 10, 2008, alleged that from at least year 2002, Behrens operated a fraudulent Ponzi-like investment scheme that succeeded in raising at least $6.5 million from investors, some of whom are senior citizens, and that he misappropriated more than $3.5 million of investor funds for his personal use.

Without admitting or denying the allegations in the Commission's complaint, Behrens and National Investments consented to the entry of a judgment that permanently enjoins them from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. Also pursuant to the judgment, Behrens and National Investments are obligated to pay disgorgement with prejudgment interest and a civil penalty in amounts yet to be determined. Further, the court appointed a receiver to locate, preserve and protect all assets that are subject to disgorgement and penalties, and to maximize returns to investors.

The Commission acknowledges the assistance of The Financial Industry Regulatory Authority in this matter. For further information, please see Litigation Rel. No. 20427 (Jan. 10, 2008). [SEC v. Bryan S. Behrens, et al., Civil Action No. 8:08CV13 (D. Nebraska)] (LR-20685)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NASDAQ-2008-068) filed by The NASDAQ Stock Market, as modified by Amendment No. 1, to modify Rule 4770 to enhance trading in the NASDAQ Crossing Network has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58357)

A proposed rule change filed by the Chicago Stock Exchange relating to participant fees and credits (SR-CHX-2008-13) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58362)


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Approval of Proposed Rule Change
A proposed rule change (SR-Phlx-2008-50) filed by the Philadelphia Stock Exchange relating to the electronic handling of complex orders has been approved pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58361)


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Proposed Rule Changes
The American Stock Exchange filed a proposed rule change (SR-Amex-2008-65) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to allow issuers voluntarily delisting ETFs and structured products to submit to the Exchange a letter from an authorized officer of the issuer rather than a board resolution. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58364)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-52), and Amendment No. 1 thereto, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to modify the method by which it allocates and reallocates securities to specialist units and to establish an allocation system based on a single objective measure to determine a specialist unit's eligibility to participate in the allocation process. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58363)


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Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSEArca-2008-81), as modified by Amendment No. 1 thereto, submitted by NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., relating to listing and trading of four CurrencyShares Trusts. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58365)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig081808.htm

[jimmenknee]

August 15, 2008 SEC News Digest
Issue 2008-159

COMMISSION ANNOUNCEMENTS
Wachovia Agrees to Preliminary Auction Rate Securities Settlement that Would Offer Approximately $9 Billion to Investors
The Securities and Exchange Commission's Division of Enforcement today announced that investors, small businesses, and charities who purchased auction rate securities (ARS) through Wachovia Securities, LLC and Wachovia Capital Markets, LLC (collectively Wachovia) could receive up to $9 billion to fully restore their losses and liquidity through a preliminary settlement that has been reached in principle with Wachovia.

The proposed charges stem from alleged misrepresentations made by Wachovia to thousands of its customers about the liquidity risk associated with ARS. Specifically, Wachovia marketed ARS to investors as cash alternatives, and represented that it would provide one-day or same-day liquidity by purchasing customers' ARS. However, Wachovia failed to adequately disclose that the liquidity of these securities was premised on Wachovia providing support bids for auctions it managed when there was not enough customer demand, and that its offer to provide one-day liquidity could be withdrawn at any time. When Wachovia stopped supporting auctions in February 2008, there were widespread auction failures and Wachovia stopped making good on its offer to provide one-day liquidity.

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "We continue to work with state regulators and others to bring real relief to investors who were not given the forthright information they needed in the process of purchasing auction rate securities. This agreement in principle with Wachovia, if approved by the Commission, will permit tens of thousands of Wachovia investors to get their money back."

Under the terms of the agreement in principle, which are subject to finalization, review and approval by the Commission:

Wachovia agrees to repurchase ARS from all investors who purchased ARS from Wachovia prior to the collapse of the ARS market in mid-February 2008. In the wake of the market collapse, Wachovia investors are currently unable to liquidate approximately $8.8 billion in ARS holdings. Under the proposed settlement, Wachovia will offer to purchase roughly $5.7 billion of ARS held by individual investors, small businesses, and charitable organizations. The buy back will begin on Nov. 10, 2008 and conclude by Nov. 28, 2008. Wachovia also will offer to purchase the roughly $3.1 billion of ARS held by all other Wachovia investors in a buy back that will occur between June 10 and June 30, 2009.

Wachovia Securities, LLC will be permanently enjoined from violating the provisions of Section 15(c) of the Securities Exchange Act of 1934, and Rule 15c1-2 thereunder, which prohibit the use of manipulative or deceptive devices by broker-dealers.

Until Wachovia actually provides for the liquidation of the ARS, Wachovia will provide customers no net loans that will remain outstanding until the ARS are repurchased.

To the extent customers have incurred consequential damages beyond the loss of liquidity in the customer's holdings of ARS, Wachovia will participate in a special arbitration process that the customer may elect and that will be overseen by the Financial Industry Regulatory Authority (FINRA), whereby Wachovia will not contest liability for its misrepresentations or omissions concerning ARS.

Wachovia will provide notice to all customers of the settlement terms.

Wachovia faces the prospect of a financial penalty to the SEC after it has completed its obligations under the settlement agreement. Determinations as to the amount of the penalty, if any, will take into account, among other things, an assessment of whether Wachovia has satisfactorily completed its obligations under the settlement, and the costs incurred by Wachovia in meeting those obligations, including other penalties incurred and the cost of remediation.
The SEC acknowledges the substantial assistance and cooperation from the Missouri Secretary of State, the North American Securities Administrators Association (NASAA), the New York Attorney General, and FINRA.

The SEC's investigation into individuals and other entities that participate in the ARS market is continuing.

For more information, contact: Merri Jo Gillette, Regional Director, SEC's Chicago Regional Office, [phone] or Robert J. Burson, Associate Regional Director, SEC's Chicago Regional Office, [phone]. (Press Rel. 2008-176)


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Commission Meetings
Closed Meeting - Thursday, August 21, 2008 - 2:00 p.m.
The subject matter of the closed meeting scheduled for Aug. 21, 2008, will be: formal orders of investigation; institution and settlement of injunctive actions; institution and settlement of administrative proceedings of an enforcement nature; and adjudicatory matters.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
Securities And Exchange Commission Orders Hearing On Registration Revocation Against Five Public Companies For Failure To Make Required Periodic Filings
Today the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of five companies for failure to make required periodic filings with the Commission:

Walking Stick Oil & Gas Corp.
Waycool3d, Inc.
Wineshares International, Inc.
World Callnet, Inc.
World Container Corp.
In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58366; File No. 3-13133)


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SEC Freezes Funds in Trans-Atlantic "Pump and Dump" Scheme
The Commission announced today that it obtained an emergency court order freezing the profits from an alleged $13 million international fraud involving a Seattle-area microcap company and a Barcelona stock promoter. The Commission charged Bremerton, Wash.-based GHL Technologies, Inc., and its CEO Gene Hew-Len with issuing a series of false press releases touting the company's business dealings. The Commission also charged Francisco Abellan (also known as "Frank Abel") of Barcelona, Spain with coordinating the scheme, sending glossy promotional mailers to over 2 million U.S. recipients and unloading over $13 million in GHL stock on unsuspecting investors.

At the SEC's request, the federal district court in Tacoma, Wash. Thursday issued an order freezing Abellan's assets and prohibiting him from further dissipating the proceeds of the scheme (most of which, according to the SEC, he transferred to multiple bank accounts in the principality of Andorra).

GHL (later renamed NXGen Holdings, Inc.) is an installer of GPS-based navigation equipment. According to the Commission's complaint, in early 2006, President and CEO Hew-Len and stock promoter Abellan arranged for GHL to issue millions of shares of GHL stock to offshore entities designated by Abellan. In April 2006, the SEC alleges, Abellan caused the dissemination of "The Street Stock Report," a full-color glossy mailer sent to millions of U.S. addresses urging investors to purchase GHL stock quickly to see huge trading profits. Around the same time, Hew-Len issued nine press releases over a nine-week period hyping the company. Among other things, according to the SEC, the press releases made false claims about contracts with large customers, fraudulently touting millions of dollars in potential revenues.

Following this concerted promotion campaign, GHL's stock price doubled and trading volume spiked nearly 1500%. Abellan and his entities sold their GHL stock holdings for profits in excess of $13 million. The stock, which reached a high of nearly $9 per share at the height of the scheme, now trades at under a penny.

The SEC's complaint charges GHL, Hew-Len and Abellan with violating Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks preliminary and permanent injunctions, disgorgement, penalties, and other permanent and emergency relief. The complaint also names various entities associated with Abellan, including Vega Star Capital, EU Equity Holdings, and KLO Financial Services, as defendants or relief defendants. Pursuant to the court's order, a hearing will be held on August 27, 2008 to determine whether the asset freeze will remain in place during the remainder of the litigation. [SEC v. Francisco Abellan, et al., Case No. 3:08-cv-05502-FDB (W.D. Wash.)] (LR-20684)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by National Stock Exchange (SR-NSX-2008-15) relating to the operative date of NSX Rule 2.11 has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58354)


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JOINT INDUSTRY PLAN RELEASES
Notice of Filing of The Twelfth Substantive Amendment to the Second Restatement of the Consolidated Tape Association Plan and the Eighth Substantive Amendment to the Restated Consolidated Quotation Plan
Pursuant to Rule 608 under the Securities Exchange Act of 1934, the Consolidated Tape Association (CTA) has filed amendments to the CTA and CQ Plans (Plans) (SR-CTA/CQ-2008-02) to permit the Chairman of the CTA and the CQ Plan Operating Committee in lieu of signatures from each Participant to file ministerial Plans amendments. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58358)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig081508.htm

[Stock]

Thanks. I think the one I read about was very old. And in fact, it's probably on the FINRA web site. I'll look too.

[jimmenknee]

August 14, 2008 SEC News Digest
Issue 2008-158

RULES AND RELATED MATTERS
Proposed Plan for the Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2
The American Stock Exchange, the Boston Stock Exchange, the CBOE Stock Exchange, the Chicago Stock Exchange, Financial Industry Regulatory Authority, the International Securities Exchange, The NASDAQ Stock Market, the National Stock Exchange, the New York Stock Exchange, NYSE Arca, NYSE Regulation, and the Philadelphia Stock Exchange filed a proposed plan for the allocation of regulatory responsibilities pursuant to Rule 17d-2 (File No. 4-566). Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58350)


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ENFORCEMENT PROCEEDINGS
In the Matter of Christopher L. Martin
On August 13, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (the Order) in the above-referenced matter against Christopher L. Martin (Martin). The Order finds that, on July 21, 2008, the Commission filed a complaint against Martin in SEC v. Christopher L. Martin (Civil Action No. 4:08-cv-02270), in the United States District Court for the Southern District of Texas. It also finds that, on July 22, 2008, the court entered an order permanently enjoining Martin, by consent, from future violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), Sections 13(b)(5) and 16(a) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rules 13b2-1, 13b2-2, and 16a-3, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, 13a-13, 14a-3, and 14a-9 thereunder.

Based on the above, the Order suspended Martin from appearing or practicing before the Commission as an attorney for two years from the date of the entry of the Order. Martin consented to the issuance of the Order without admitting or denying any of the allegations in the civil injunctive action, which involved misconduct relating to options backdating at HCC Insurance Holdings, Inc. (Rel. 34-58356; File No. 3-13130)


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In the Matter of Mark T. Duboise and Mid Western Natural Gas, Inc.
On August 14, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (the Order) in the above-referenced matter against Mark T. DuBoise (DuBoise) and Mid Western Natural Gas, Inc. (Mid Western). The Order finds that, on May 28, 2008, the Commission filed a complaint against DuBoise and Mid Western in SEC v. Mark T. DuBoise and Mid Western Natural Gas, Inc. (Civil Action No. 6:08-cv-01159), in the United States District Court for the District of Kansas. It also finds that, on May 29, 2008, the court entered an order permanently enjoining DuBoise and Mid Western, by consent, from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(b) of the Securities Exchange Act of 1934, and Rule 10b-5.

Based on the above, the Order finds that Respondents DuBoise and Mid Western, pursuant to Section 15(b)(6) of the Exchange Act, are barred from association with any broker or dealer. DuBoise consented to the issuance of the Order without admitting or denying any of the findings in the civil Order. (Rel. 34-58359; File No. 3-13132)


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In the Matter of Bryan S. Behrens
On August 14, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Bryan S. Behrens. The Order finds that on July 28, 2008, a final judgment was entered by consent against Respondent permanently restraining and enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Bryan S. Behrens, et. al., Civil Action Number 8:08CV13, in the United States District Court for the District of Nebraska.

The Order further finds that the Commission's complaint alleged that from at least year 2002, Behrens operated a fraudulent Ponzi-like investment scheme that succeeded in raising at least $6.5 million from investors, some of whom are senior citizens, and that he misappropriated more than $3.5 million of investor funds for his personal use.

Based on the above, the Order bars Behrens from associating with any broker, dealer, or investment adviser. Behrens consented to the issuance of the Order without admitting or denying any of the findings of the Order. (Rel. 34-58360; IA-2769; File No. 3-13131)


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SEC Settles Options Backdating Charges with Former Apple General Counsel for $2.2 Million
The Commission today announced that it has settled options backdating charges against Nancy R. Heinen, the former General Counsel of Apple, Inc. As part of the settlement Heinen, of Portola Valley, California, agreed (without admitting or denying the Commission's allegations) to pay $2.2 million in disgorgement, interest and penalties, be barred from serving as an officer or director of any public company for five years, and be suspended from appearing or practicing as an attorney before the Commission for three years.

The settlement stems from a complaint filed by the Commission in April 2007 in federal court in the Northern District of California. According to the complaint, Heinen caused Apple to fraudulently backdate two large options grants to senior executives of Apple - a February 2001 grant of 4.8 million options to Apple's Executive Team and a December 2001 grant of 7.5 million options to Apple Chief Executive Officer Steve Jobs - and altered company records to conceal the fraud. The complaint alleges that as a result of the backdating Apple underreported its expenses by nearly $40 million.

In the first instance, Apple granted 4.8 million options to six members of its Executive Team (including Heinen) in February 2001. Because the options were in-the-money when granted (i.e. could be exercised to purchase Apple shares at a below market price), Apple was required to report a compensation charge in its publicly-filed financial statements. The Commission alleges that, in order to avoid reporting this expense, Heinen caused Apple to backdate options to January 17, 2001, when Apple's share price was substantially lower. Heinen is also alleged to have directed her staff to prepare documents falsely indicating that Apple's Board had approved the Executive Team grant on January 17. As a result, Apple failed to record approximately $18.9 million in compensation expenses associated with the option grant.

The Commission's complaint also alleges improprieties in connection with a December 2001 grant of 7.5 million options to CEO Steve Jobs. Although the options were in-the-money at that time, Heinen - as with the Executive Team grant - caused Apple to backdate the grant to October 19, 2001, when Apple's share price was lower. As a result, the Commission alleges that Heinen caused Apple to improperly fail to record $20.3 million in compensation expense associated with the in-the-money options grant. The Commission further alleges that Heinen then signed fictitious Board minutes stating that Apple's Board had approved the grant to Jobs on October 19 at a "Special Meeting of the Board of Directors" - a meeting that, in fact, never occurred.

As part of the settlement, Heinen consented (without admitting or denying the allegations) to a court order that:

enjoins her from violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(b)(5), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, 13b2-2, and 16a-3 thereunder, and from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-13, and 14a-9 thereunder;

orders her to pay disgorgement of $1,575,000 (representing the in-the-money portion of the proceeds she received from exercising backdated options) plus $400,219.78 in interest;

imposes a civil penalty of $200,000; and

bars her from serving as an officer or director of any public company for five years.

In addition, Heinen agreed to resolve a separate administrative proceeding against her by consenting to a Commission order that suspends her from appearing or practicing before the Commission as an attorney for three years. [SEC v. Nancy R. Heinen, Case No. C-07-2214 (JF) (N.D. Cal.)] (LR-20683)


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SELF-REGULATORY ORGANIZATIONS
Approval of Proposed Rule Changes
The Commission approved a proposed rule change (SR-NASDAQ-2008-053) submitted by the NASDAQ Stock Market under Rule 19b-4 of the Securities Exchange Act of 1934 to modify its definition of "Independent Director." Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58335)

The Commission approved a proposed rule change (SR-NSCC-2007-15) filed by the National Securities Clearing Corporation under Section 19(b)(1) of the Securities Exchange Act of 1934 to establish a policy statement regarding the admission of entities that are organized in a foreign country and are not subject to U.S. federal or state regulation as members of NSCC. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58344)

The Commission approved a proposed rule change (SR-DTC-2007-16) filed by the Depository Trust Company under Section 19(b)(1) of the Securities Exchange Act of 1934 to establish a policy statement regarding the admission as participants of DTC of entities that are organized in a foreign country and are not subject to U.S. federal or state regulation. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58345)

The Commission approved a proposed rule change (SR-OCC-2008-08) filed by the Options Clearing Corporation under Section 19(b)(1) of the Exchange Act relating to its facilities management agreements. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58346)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by National Stock Exchange (SR-NSX-2008-14) to amend the NSX BLADESM Fee Schedule to reduce routing fees has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58342)

The Options Clearing Corporation filed a proposed rule change (SR-OCC-2008-15) under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. The proposed rule change, which was effective upon filing with the Commission, will clarify how a listing exchange may define the exercise settlement amount for binary options and that escrow deposits are not permitted in lieu of margin with respect to binary options on any underlying interest. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58349)

A proposed rule change filed by the New York Stock Exchange amending NYSE Rule 104(b) to provide for an automated opening message that will be effectuated through the Specialist Application Programmed Interface to allow specialists to automatically open a security on a trade (SR-NYSE-2008-73) has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58351)


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Proposed Rule Changes
The Options Clearing Corporation filed a proposed rule change (SR-OCC-2008-09) under Section 19(b) of the Exchange Act relating to eligible margin assets. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58347)

The Options Clearing Corporation filed a proposed rule change (SR-OCC-2008-16) under Section 19(b) of the Exchange Act relating to the cash dividend threshold. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58353)


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Accelerated Approval of Proposed Rule Change
The Options Clearing Corporation filed a proposed rule change (SR-OCC-2008-17) under Section 19(b)(1) of the Exchange Act allowing OCC to clear and settle options on the realized variance and realized volatility of an index. The Commission has granted accelerated approval of the proposed rule change. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58352)


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SECURITIES ACT REGISTRATIONS
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RECENT 8K FILINGS
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http://www.sec.gov/news/digest/2008/dig081408.htm

[jimmenknee]

August 13, 2008 SEC News Digest
Issue 2008-157

COMMISSION ANNOUNCEMENTS
SEC Announces Proposed Plan to Enhance Insider Trading Surveillance and Detection
The Securities and Exchange Commission today announced that it has published for public comment an agreement among the securities self-regulatory organizations (SROs) that is designed to improve detection of insider trading across the equities markets by centralizing surveillance, investigation, and enforcement under NYSE Regulation, Inc. (NYSE Regulation) and the Financial Industry Regulatory Authority, Inc. (FINRA). Currently, each equity exchange is responsible for surveillance of trading on its market and any investigations and enforcement actions involving its members.

This proposed new approach by the SROs to detect and enforce prohibitions against insider trading arose from yearlong discussions among the SEC, NYSE Regulation, FINRA and the exchanges to improve market integrity and better protect investors. The proposed plan would focus expertise and eliminate gaps and duplication in surveillance for insider trading among the equities markets.

SEC Chairman Christopher Cox said, "We have immediately published this proposal for public comment because of its potential to increase the likelihood that those who engage in insider trading will be caught and punished. This should send a strong warning to those who would undermine market integrity and undercut investor confidence for their own personal gain."

To complement the regulatory allocation agreement published for comment today, the securities exchanges and FINRA also entered into regulatory services agreements. Together, these agreements would provide NYSE Regulation with responsibility for surveillance, investigation, and enforcement of insider trading in securities listed on the New York Stock Exchange and NYSE Arca; FINRA would have such responsibility with respect to NASDAQ-listed and Amex-listed securities, and securities listed solely on the Chicago Stock Exchange.

FINRA and the following equity exchanges are parties to these agreements:

American Stock Exchange LLC
Boston Stock Exchange, Inc.
CBOE Stock Exchange, LLC
Chicago Stock Exchange, Inc.
International Securities Exchange, LLC
NASDAQ Stock Market, LLC
National Stock Exchange, Inc.
New York Stock Exchange, LLC
NYSE Arca Inc.
Philadelphia Stock Exchange, Inc.
NYSE Regulation, Inc. (acting under authority delegated to it by NYSE)
The insider trading initiative for the equities markets follows a similar consolidation of responsibility for surveillance for insider trading involving securities options, which the SEC approved in June 2006. The Order approving the Options Regulatory Surveillance Authority Plan can be found on the SEC Web site.

Public comments should be received by the Commission no later than 21 days after publication of the proposed plan in the Federal Register. (Press Rel. 2008-174)


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ENFORCEMENT PROCEEDINGS
In the Matter of Scott Hirth
On August 13, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Scott Hirth (Order). The Order finds that, on July 28, 2008, the United States District Court for the Eastern District of Michigan entered a final judgment against Hirth permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act), and Rules 10b-5, 13b2-1, 13b2-2 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. Hirth was also ordered to pay $233,676.00 in disgorgement of ill-gotten gains, $54,474.25 in prejudgment interest, a $130,000 civil money penalty, and was permanently barred from serving as an officer or director of a public company. Based on the final judgment of permanent injunction, the Order suspends Respondent Hirth from appearing or practicing before the Commission as an accountant. Hirth consented to the issuance of the Order without admitting or denying the findings in the Order.

According to the Order, the Commission's complaint alleged that Scott Hirth, of Carleton, Michigan, engaged in accounting fraud at ProQuest Company from at least 2001 through 2005. The complaint further alleged that Hirth made fraudulent manual journal entries in order to favorably alter ProQuest's financial results and that these manual journal entries were designed to increase revenue and decrease expenses at ProQuest. (Rel. 34-58355; AAE Rel. 2863; File No. 3-13129)


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INVESTMENT COMPANY ACT RELEASES
Pimco Funds, et al.
An order has been issued on an application filed by PIMCO Funds, et al., under Section 6(c) of the Investment Company Act for an exemption from Rule 12d1-2(a) under the Act. The order permits funds of funds relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28356 - August 12)


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The Mexico Fund, et al.
An order has been issued on an application filed by The Mexico Fund, et al. under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act and Rule 19b-1 under the Act. The order permits The Mexico Fund, a registered closed-end management investment company, to make periodic distributions of long-term capital gains with respect to its common stock as part of a managed distribution plan as frequently as twelve times each year. (Rel. IC-28357 - August 12)


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SELF-REGULATORY ORGANIZATIONS
Approval of Proposed Rule Changes
The Commission approved a proposed rule change, as modified by Amendment Nos. 1 and 2 thereto, filed by the Philadelphia Stock Exchange (SR-Phlx-2007-33) relating to margining. Publication is expected in the Federal Register during the week August 18. (Rel. 34-58340)

The Commission approved a proposed rule change (SR-NYSE-2008-45) and Amendment No. 1 thereto submitted by the New York Stock Exchange pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, amending NYSE Rule 98 and related rules to redefine specialist operations at the NYSE. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58328)


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Proposed Rule Changes
The American Stock Exchange filed a proposed rule change (SR-Amex-2008-60) related to margin requirements for fixed return options. Publication is expected in the Federal Register during the week August 18. (Rel. 34-58341)

The Depository Trust Company filed a proposed rule change (SR-DTC-2008-06) under Section 19(b)(1) of the Exchange Act that would allow DTC to modify its end of day settlement procedures relating to settlement acknowledgement cut-off time frames for settling banks. Publication is expected in the Federal Register during the week of August 18. (Rel. 34-58343)


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SECURITIES ACT REGISTRATIONS
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RECENT 8K FILINGS
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http://www.sec.gov/news/digest/2008/dig081308.htm

[jimmenknee]

August 12, 2008 SEC News Digest
Issue 2008-156

ENFORCEMENT PROCEEDINGS
In the Matter of Mark G. Meyer
On August 11, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against Mark G. Meyer (Meyer). The Order finds that on July 28, 2008, an order of permanent injunction was entered by consent against Meyer, permanently enjoining him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act of 1934 and Rules 10b-5 and 10b-10 thereunder and from aiding and abetting violations of Exchange Act Rule 10b-10, in the civil action entitled SEC v. Michael E. Kelly, et al., Civil Action Number 07-cv-4979, in the United States District Court for the Northern District of Illinois. The Commission's complaint alleged that Meyer and his business, Mark Meyer & Associates, Inc, participated in a massive fraud orchestrated by Michael E. Kelly that victimized thousands of investors across the United States by raising at least $428 million through the offer and sale of fraudulent and unregistered securities called Universal Leases. Universal Leases were securities in the form of investment contracts that were structured as timeshares in several hotels in Cancun, Mexico, coupled with pre-arranged servicing agreements with a purportedly independent leasing agent that promised investors a safe investment and guaranteed returns. The complaint alleged that Meyer offered and sold Universal Leases to investors and recruited others to do so. The complaint further alleged, among other things, that Meyer made false and misleading statements about the safety of the Universal Leases and about the purportedly independent leasing agent, and also failed to make required disclosures about the commissions he was being paid for his Universal Lease sales.

Based on the above, the Order bars Meyer from association with any broker or dealer. Meyer consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the entry of the order of permanent injunction against him. (Rel. 34-58339; File No. 3-13126)


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Court Permanently Enjoins Cedar Park, Texas Resident Warren Todd Chambers and His Company Century Estate Planning, Inc. from Violating Certain Antifraud and Registration Provisions
The Commission announced that on Aug. 6, 2008, Judge Elaine Bucklo of the United States District Court for the Northern District of Illinois entered an order permanently enjoining Warren Todd Chambers (Chambers) of Cedar Park, Texas and Century Estate Planning, Inc. (Century Estate Planning), Chambers' business, from violating certain of the antifraud and registration provisions of the federal securities laws. The order, entered with Chambers and Century Estate Planning's consent, permanently enjoins them from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 10b-10 promulgated thereunder, and enjoins Chambers from aiding and abetting violations of Rule 10b-10 of the Exchange Act.

The SEC's complaint in this matter charges that Michael E. Kelly and 25 other defendants, including Chambers and Century Estate Planning, participated in a massive fraud on U.S. investors that involved the offer and sale of securities in the form of Universal Lease investments. Universal Leases were structured as timeshares in several hotels in Cancun, Mexico, coupled with a pre-arranged rental agreement that promised investors a high, fixed rate of return. The SEC's complaint alleges that from 1999 until 2005, Kelly and others, including Chambers and Century Estate Planning, raised at least $428 million through the Universal Lease scheme from investors throughout the United States, with more than $136 million of the funds invested coming from IRA accounts. The SEC further alleges that a nationwide network of unregistered salespeople who sold the Universal Leases, including Chambers and Century Estate Planning, collected undisclosed commissions totaling more than $72 million. The SEC also alleges that Kelly and others ran the scheme from Cancun, Mexico, through a number of foreign entities in Mexico and Panama. According to the SEC's complaint, Kelly and others told investors that Universal Leases would generate guaranteed income through the leasing of investor timeshares by a large, independent leasing agent. In fact, the complaint alleges the leasing agent was a small Panamanian travel agency controlled by Kelly and for most of the scheme its payments to investors came from accounts funded by money raised from new investors. Further, the complaint alleges that Kelly and others, including Chambers and Century Estate Planning, failed to disclose key facts about the Universal Lease investments, including the risks of the investments and that more than $72 million in investor funds were used to pay commissions as high as 27% to the selling brokers. The SEC continues to pursue its claims against Chambers and Century Estate Planning for disgorgement and civil penalties. The SEC's action against the remaining defendants is also pending.

For additional information, see Litigation Release Nos. 20267 (Sept. 5, 2007), 20573 (May 14, 2008), 20578 (May 15, 2008), 20579 (May 15, 2008) and 20664 (July 31, 2008) [SEC v. Michael E. Kelly, et al., Civil Action No. 07-cv-4979 (N.D. Ill.)] (LR-20679)


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SEC Resolves Sun Communications Litigation
The Commission announced that it has resolved its litigation against certain officers and employees of Sun Communities, Inc., a publicly-traded company headquartered in Michigan which owns and operates manufactured housing and mobile home communities. Without admitting or denying the findings therein, Sun's former Chief Financial Officer, Jeffrey P. Jorissen, consented to an administrative order suspending him from appearing or practicing before the Commission as an accountant with a right to apply for reinstatement after two years. Without admitting or denying the allegations of the Commission's complaint, which was filed in the United States District Court for the Eastern District of Michigan, Jorissen consented to the entry of a final judgment enjoining him from violations of Rule 13b2-1 of Securities Exchange Act of 1934 and from aiding and abetting violations of Section 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder and imposing a civil penalty of $25,000. The SEC agreed to dismiss its claims against the company's Chief Executive Officer, Gary A. Shiffman, and former Controller, Mary A. Petrella. For more information, see LR-19580 (Feb. 27, 2006) and LR-20680 (August 12, 2008). [SEC v. Jeffrey P. Jorissen, Gary A. Shiffman and Mary A. Petrella, Civil Action No. 2:06-CV-10845 (E.D. Mich. filed Feb. 27, 2006) (Feikens, J.)] (LR-20680; AAE Rel. 2861); Administrative Proceeding - (Rel. 34-58348; AAE Rel. 2862; File No. 3-13127)


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SEC Files Suit Against David B. Stocker Alleging Corporate Identity Theft
On August 11, the Commission filed a civil complaint against David B. Stocker, a Phoenix, Arizona attorney, and his wholly-owned corporation, Carrera Capital, Inc. The Commission's complaint alleges that Stocker perpetrated multiple instances of corporate identity theft. Beginning in early 2006, Stocker allegedly found several public companies that had become defunct corporations. Stocker then allegedly caused stock in the old companies to be exchanged for stock in the new companies under the false pretense that the old company was undergoing a reverse stock split. Stocker thereafter allegedly caused the new companies to issue large blocks of stock to Carrera Capital, Inc., or to other persons. Through this scheme, Stocker was allegedly able to gain control of public shells, which he then sold for cash.

The Commission alleges that Stocker violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that both defendants violated Sections 5(a) and (c) of the Securities Act. The Commission's complaint seeks permanent injunctions, orders to provide an accounting, disgorgement plus prejudgment interest, third tier civil penalties, and penny stock bars against each defendant. [SEC v. David B. Stocker and Carrera Capital, Inc., Civil Action No. 2:08-CV-01475 D. Arizona] (LR-20681)


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SEC v. Kay Services, LLC, et al.
The Commission announced today that it filed a civil injunctive action against Kay Services, LLC, and its sole owner and officer, Marcia Sladich, alleging that they orchestrated a Ponzi scheme raising more than $10 million from at least 1,000 victims, many of whom were members of the Family Federation for World Peace, formerly known as the Unification Church.

The complaint alleges that Sladich repeatedly told investors that their money would be invested in domestic and international real estate that would generate substantial returns. Indeed, Sladich promised investors 50-100% guaranteed return on their investment in one year. She also promised investors additional payments for every investor they referred.

Sladich's representations to investors were simply false. Throughout the scheme, Kay Services had no revenue-generating business or assets. Instead of investing in real estate, Sladich used investor money: (1) to pay Kay Services' obligations to existing investors; (2) to pay Sladich's personal expenses; and (3) to purchase real property and other assets for Sladich and her relatives. Sladich never disclosed any of these facts to investors.

The complaint charges the defendants with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In its enforcement action, the Commission is seeking an order permanently enjoining the defendants from committing future violations of the foregoing federal securities laws and a final judgment ordering the individual defendants to disgorge their ill-gotten gains and to pay civil penalties. [SEC v. Kay Services, LLC, et al., Civil Action No. 08-Civ-4016 (SDW) (D.N.J.)] (LR-20682)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Changes
A proposed rule change (SR-NYSE-2008-74) was filed by the New York Stock Exchange to enable the Exchange to waive annual listing fees for securities transferring from the Amex or NYSE Arca, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58311)

NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., filed a proposed rule change (SR-NYSEArca-2008-51) and Amendment No. 1 thereto pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt generic listing and trading rules for Commodity Based Trust Shares, Currency Trust Shares and Commodity Index Trust Shares. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58332)

The Commission issued notice of a proposed rule change (SR-FINRA-2008-032) submitted by the Financial Industry Regulatory Authority, pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to adopt FINRA Rules 2350 through 2359 (regarding trading in index warrants, currency index warrants, and currency warrants), FINRA Rule 2360 (options), and FINRA Rule 2370 (security futures) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58333)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by Chicago Board Options Exchange to amend its rules related to the Hybrid Agency Liaison and the Complex Order RFQ Auction (SR-CBOE-2008-82) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58326)

A proposed rule change filed by the Philadelphia Stock Exchange relating to changes in its equity option fees (SR-Phlx-2008-59) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58334)


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Accelerated Approval of Proposed Rule Change
The Commission published notice of filing of Amendment No. 2 and granted accelerated approval to a proposed rule change (SR-CBOE-2008-09), as modified by Amendment No. 2 thereto, submitted by Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to voluntary professional designation. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58327)


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Approval of Proposed Rule Change
The Commission approved a proposed rule change (SR-FINRA-2008-016), submitted under Section 19(b)(1) of the Securities Exchange Act of 1934, by the Financial Industry Regulatory Authority to align the reporting requirements and dissemination protocols for OTC equity transactions involving foreign securities with all other OTC Equity Securities. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58331)


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RECENT 8K FILINGS
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http://www.sec.gov/news/digest/2008/dig081208.htm

[jimmenknee]

August 11, 2008 SEC News Digest
Issue 2008-155

COMMISSION ANNOUNCEMENTS
UBS Securities LLC and UBS Financial Services, Inc. Agree in Principle to Auction Rate Securities Settlement
Firm Will Provide Liquidity and Remediate Losses
On August 8, the Securities and Exchange Commission's Division of Enforcement announced a preliminary settlement in principle with UBS Securities LLC and UBS Financial Services, Inc. (collectively, UBS) including proposed charges and a plan that would restore approximately $22 billion in liquidity to its customers who invested in auction rate securities (ARS). This plan includes approximately $8.2 billion for individual investors, small businesses, and charitable organizations, $3.3 billion for holders of tax-exempt Auction Preferred Shares (subject to regulatory review), and $10.3 billion for institutional investors.

The ARS market collapsed in mid-February 2008, leaving over 40,000 UBS customers holding these illiquid securities indefinitely. The conduct underlying the proposed charges stems from UBS's marketing of auction rate securities as cash alternatives. However, the liquidity of these securities was premised on UBS providing support bids for auctions it managed when there was not enough customer demand, but this was not adequately disclosed to customers. When UBS stopped supporting auctions in February 2008, it led to widespread auction failures for UBS customers.

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "The Division's agreement in principle with UBS, if approved by the Commission, will quickly restore liquidity to tens of thousands of UBS investors. In a short time, approximately 31,300 individual, charitable, and small business investor accounts will receive more than $8.2 billion in liquidity, and approximately 9,200 investor accounts holding tax-exempt Auction Preferred Shares will receive nearly $3.3 billion in liquidity. UBS also will begin the process of restoring $10.3 billion in liquidity to approximately 1,000 institutional investor accounts."

The terms of the agreement in principle, which are subject to finalization, review and approval by the Commission, provide:

UBS will be permanently enjoined from violating the provisions of Section 15(c) of the Securities Exchange Act of 1934, and Rule 15c1-2 thereunder, which prohibit the use of manipulative or deceptive devices by broker-dealers.

No later than Oct. 31, 2008, UBS will offer to liquidate at par all ARS from individual investors and charitable organizations who have less than $1,000,000 in funds on deposit at UBS.

No later than Oct. 31, 2008, subject to regulatory approval, UBS will proceed with its plan for the repurchase of tax-exempt Auction Preferred Shares held by all UBS investors.

No later than Jan. 2, 2009, UBS will offer to liquidate at par all ARS from all other UBS individual investors and charitable organizations as well as from small business investors with account and household values up to $10,000,000.

UBS will use its best efforts to offer to liquidate at par ARS from its institutional customers by the end of 2009. However, by no later than June 30, 2010, UBS will offer to liquidate at par all ARS held by institutional customers.

UBS will make whole by Sept. 15, 2008, any losses sustained by the customers described above who sold ARS after Feb. 13, 2008.

Until UBS actually provides for the liquidation of the securities on the schedule set forth above, UBS will provide customers no-cost loans that will remain outstanding until the ARS are repurchased.

To the extent that the customers described above have incurred consequential damages beyond the loss of liquidity in the customer's holdings of ARS (which should be restored pursuant to the settlement terms above), UBS will participate in a special arbitration process that the customer may elect, and that will be overseen by the Financial Industry Regulatory Authority (FINRA), whereby UBS will not contest liability for its misrepresentations and omissions concerning the ARS, but may challenge the existence or amount of any consequential damages. The arbitration claim will be heard by a single, non-industry arbitrator.

This arbitration process will be voluntary on the part of the customer and if a customer elects not to take advantage of these special procedures, a customer may pursue all other arbitration or legal or equitable remedies available through any other administrative or judicial process available to the customer.

UBS will not liquidate its own inventory of a particular ARS before it liquidates its customers' holding in that security.

UBS will provide notice to all customers of the settlement terms.

UBS will establish a telephone assistance line, with appropriate staffing, to respond to questions from customers concerning the terms of the settlement.

UBS faces the prospect of a financial penalty to the SEC after it has completed its obligations under the settlement agreement. Determinations as to the amount of the penalty, if any, will take into account, among other things, an assessment of whether UBS has satisfactorily completed its obligations under the settlement, and the costs incurred by UBS in meeting those obligations, including penalties incurred and the cost of remediation.

The Commission notes the substantial assistance and cooperation from the New York Attorney General, FINRA, and the North American Securities Administrators Association.

The Commission's investigation is continuing as to individuals and other entities that participate in the auction rate securities market.

Contacts: Fredric Firestone, [phone] or Kenneth R. Lench, [phone]

(Press Rel. 2008-171)


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SEC Announces Distribution of $48 Million to Defrauded Vivendi Universal Investors
The Securities and Exchange Commission today announced the distribution of more than $48 million to more than 12,000 investors who were victims of fraudulent financial reporting by media conglomerate Vivendi Universal, S.A. Investors receiving checks reside in the United States and in 15 other countries. More than half bought heir Vivendi stock on foreign exchanges and are receiving their Fair Fund distribution in euros.

"Today we are able to provide financial remediation to investors who were misled by Vivendi's false financial reporting," said David Nelson, Regional Director of the Commission's Miami Regional Office. "I am particularly gratified that we have been able to identify and help investors not just in this country, but overseas as well."

Dick D'Anna, Director of the SEC's Office of Collections and Distributions, said, "This distribution highlights the continued efforts and increased capacity of the Commission to repay injured investors, regardless of their physical location and their currency of choice. Our ongoing focus will be to improve our assistance to these investors."

The Commission filed a settled enforcement action in December 2003 against Vivendi, its former CEO Jean-Marie Messier, and its former CFO, Guillaume Hannezo, alleging violations of the antifraud and other provisions of the federal securities laws. Among other things, the Commission alleged that the defendants engaged in antifraud violations by making misleading statements about Vivendi's financial condition. According to the Commission's complaint, the defendants engaged in misconduct that disguised Vivendi's cash flow and liquidity problems, improperly adjusted accounting reserves to meet earnings targets, and failed to disclose material financial commitments.

As part of their settlement, which was without admitting or denying the Commission's allegations, the defendants agreed to certain financial relief. Vivendi agreed to pay a $50 million civil money penalty and disgorgement of $1. Messier agreed to pay a $1 million civil penalty and disgorgement of $1, and Hannezo agreed to pay disgorgement and a civil money penalty totaling more than $250,000. The Fair Funds being distributed today come from all of those financial payments. In addition to that relief, Messier also agreed to forfeit a severance package of about 21 million euros.

In the Fair Funds provisions of the Sarbanes-Oxley Act of 2002, Congress gave the Commission increased authority to distribute ill-gotten gains and civil money penalties to harmed investors. To date, the Commission has returned more than $4 billion to investors since 2002.

Of the 12,115 investors receiving checks, approximately 5,300 are from the United States or receiving claims in dollars. The remaining 6,800 claimants are from 15 countries, including more than 3,300 claimants who bought shares on the Paris Stock Exchange. They will receive checks in Euros. The distribution agent in the case hopes to make a second, smaller distribution in the future.

Questions regarding the Fair Fund distribution may be directed to the Court-appointed distribution agent, Jeffrey Sklaroff, Esq., by:

Sending an e-mail to [e-mail] or visiting the fund website at http://www.vivendisecsettlement.com

Calling toll-free 1-800-295-3152 in the United States or visiting the fund website for toll-free numbers in other countries;

Writing to Jeffrey Sklaroff, Esq., at either Greenberg Traurig, LLP, 200 Park Avenue, New York, New York, 10166, or c/o the Garden City Group, Vivendi SEC Settlement Fund Administration, P.O. Box 9000 #6371, Merrick, NY 11566-9000

(Press Rel. 2008-172)


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Closed Meeting - August 8, 2008 - 11:30 a.m.
The Commission held a closed meeting on August 8, 2008. The matters discussed were: institution and settlement of injunctive actions; and other matters related to enforcement proceedings.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
In the Matter of Acclaim Entertainment, Inc.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default (Default Order) in the matter of Acclaim Entertainment, Inc. The Order Instituting Proceedings alleged that Acclaim Entertainment, Inc., Family Golf Centers, Inc., Graham-Field Health Products, Inc., Lechters, Inc., and Texfi Industries, Inc., each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission.

The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of all five Respondents pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-58336; File No. 3-13078)


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In the Matter of Timothy J. Ward
On August 11, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Section 15(b)of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Timothy J. Ward. The Order finds that on July 16, 2008, a judgment was entered by consent against Ward, permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder; aiding and abetting future violations of Section 15(c)(3) of the Exchange Act and Rule 15c3-3 thereunder; and aiding and abetting future violations of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder, in the civil action entitled SEC v. North American Clearing, Inc., et al., Civil Action Number 6:08-cv-829-ORL-28GJK, in the United States District Court for the Middle District of Florida.

Based on the above, the Order bars Ward from association with any broker or dealer. Ward consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-58337; File No. 3-13124)


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In the Matter of James M. Jordan
On August 11, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against James M. Jordan. The Order finds that on May 5, 2008, a Final Judgment as To James M. Jordan was entered against Jordan permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled SEC v. William P. Sauer, James M. Jordan and Phil D. Kerley, Civil Action Number 1:02-CV-2191, in the United States District Court for the Northern District of Georgia. The Commission's complaint alleged that, in connection with the unregistered sale of investment contracts, from September 1998 until September 2000, Jordan, through a company that he controlled, used independent sales agents to sell more than $84 million of ETS payphone investments. Similarly, from November 1999 through June 2000, Jordan, through his company and another entity that he controlled, sold more than $10 million of the GTS investments. According to the complaint, the ETS and GTS investment agreements were substantially similar in structure, although each investment had a different purchase price and promised investors a slightly different return varying from 14 percent to 15 percent. The complaint alleged that Jordan knew, or was severely reckless in failing to discover, that ETS and GTS were functioning as Ponzi schemes. The Commission's complaint also alleged that Jordan knew, or was severely reckless in not knowing, that his representations that ETS and GTS were safe investments and that ETS and GTS were profitable companies, were false. The complaint also alleged that by virtue of his conduct, Jordan engaged in business as a broker-dealer and induced and attempted to induce the purchase and sale of securities. Jordan was not registered with the Commission as a broker or dealer, and was not associated with any broker or dealer.

Based on the above, the Order bars James M. Jordan from association association with any broker or dealer. Jordan consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-58338; File No. 3-13125)


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SEC Charges Participants in Fraudulent Scheme to Manipulate Stock and Evade Registration Requirements and Settles Charges Against Attorney
On August 8, the Commission charged Alliance Transcription Services, Inc. and others in connection with a scheme to manipulate Alliance's stock price and trading volume through false and misleading public disclosures and to issue and sell Alliance's common stock in an unregistered distribution. Alliance is a Nevada corporation, formerly known as Strategy X, Inc., that was headquartered in the State of Maine from at least December 2004 through August 2007, and is now located in Ranch Palos Verdes, California. Also charged for various roles in the scheme were Clifford A. Lewis of Huntsville, Alabama; Richard A. Dabney of Rancho Palos Verdes, California; Raymond C. Dabney of Vancouver, British Columbia; Philip M. Young of Phoenix, Arizona; Charles J. Smith of Reno, Nevada; and William D. O'Neal of Fountain Hills, Arizona. The Commission settled charges against O'Neal, an attorney who allegedly issued a series of legal opinions that enabled Alliance to illegally issue purportedly unrestricted shares of its stock in unregistered transactions. O'Neal agreed to pay more than $220,000 in disgorgement of ill-gotten gains, prejudgment interest and civil penalties, and to be prohibited from issuing similar legal opinions in the future or accepting securities of Pink Sheets issuers in consideration for legal services.

According to the Commission's complaint, filed in the United States District Court for the District of Arizona, Alliance, Richard Dabney, and Lewis manipulated the market for Alliance's stock by issuing press releases that made false and misleading claims about the company's contracts and revenues. The complaint alleges that the press releases issued by Alliance were published through business newswire services and on Alliance's website from at least April 2005 through at least September 2006.

The Commission's complaint further alleges that, from July 2005 to September 2006, Alliance, Richard Dabney, Raymond Dabney, Young, Smith, and O'Neal participated in an unregistered distribution of Alliance securities through a series of purported stock offerings by Alliance to North American Funding, Inc. (NAF), a Texas corporation controlled by Smith. According to the complaint, Raymond Dabney, Young, and Smith arranged for Alliance to issue stock to NAF in offerings that purportedly were exempt from registration. The complaint alleges that, in fact, the transactions between Alliance and NAF were not exempt from registration and were merely a device to evade the registration provisions of the federal securities laws. According to the Commission's complaint, the stock was immediately distributed to third parties and sold into the market, without being paid for by NAF. Richard Dabney, an officer and director of Alliance, and O'Neal enabled Alliance to engage in those transactions by providing the necessary corporate resolutions and legal opinions, respectively. The Commission's complaint also alleges that Young, Smith, and O'Neal received some of the Alliance stock through the unregistered distribution and sold it into the market without registration or a valid exemption from registration. According to the complaint, Lewis, Richard Dabney, and Raymond Dabney received a portion of the proceeds that Young obtained by selling the Alliance stock.

The Commission's complaint charges Alliance, Lewis, and Richard Dabney with violating the antifraud provisions of the federal securities laws (Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder) and charges Alliance, Richard Dabney, Raymond Dabney, Young, Smith, and O'Neal with violating the securities registration provisions of the federal securities laws (Section 5 of the Securities Act of 1933 (Securities Act)). In its complaint, the Commission seeks permanent injunctions against all the defendants, disgorgement plus prejudgment interest and civil monetary penalties against Lewis, Richard Dabney, Raymond Dabney, Young, Smith, and O'Neal, officer and director bars against Lewis and Richard Dabney, and penny stock bars against Lewis, Richard Dabney, Raymond Dabney, Young, and Smith.

The Commission previously issued an Order on Oct. 4, 2007, suspending trading in the securities of Alliance.

Upon the filing of the Commission's complaint, and without admitting or denying the allegations in the complaint, O'Neal consented to the entry of a final judgment permanently enjoining him from violating Section 5 of the Securities Act, ordering him to pay disgorgement of $163,246.22 and prejudgment interest of $33,000.78 plus a civil penalty of $25,000. In addition, the final judgment prohibits O'Neal from issuing any legal opinions to the effect that unregistered offerings are exempt from SEC registration under Rule 504 of Regulation D under the Securities Act and that securities issued in such Rule 504 offerings are unrestricted. The final judgment also prohibits O'Neal from accepting securities of any Pink Sheets issuer in consideration for legal or consulting services rendered. [SEC v. Alliance Transcription Services, Inc., Clifford A. Lewis, Richard A. Dabney, Raymond C. Dabney, Philip M. Young, Charles J. Smith, and William D. O'Neal, 2:08-CV-01464-NVW (District of Arizona))] (LR-20676)


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Defendants in SEC Enforcement Action Sentenced in Federal Court on Related Criminal Charges
The Commission announced today that on Aug. 7, 2008, Christian Rochon, a defendant in a previously-filed Commission enforcement action, was sentenced in U.S. District Court for the District of Massachusetts based on his June 4, 2007 guilty plea to related criminal charges of mail fraud, conspiracy and money laundering in connection with a fraudulent investment scheme. Rochon was sentenced to 5 years probation, with the first year to be served in home confinement.

Two other defendants in the Commission's action had previously been sentenced on charges of mail fraud, conspiracy and money laundering in the related criminal action. On Nov. 28, 2007, James Bunchan was sentenced to 35 years in prison and Seng Tan was sentenced to 20 years in prison. The United States Attorney for the District of Massachusetts had obtained indictments against Bunchan and Tan on Jan. 5, 2006 and both defendants were convicted on June 27, 2007 after a criminal trial.

The Commission filed its complaint against Bunchan, Tan, Rochon and two corporate defendants, WMDS, Inc. and OneUniverseOnline, Inc., on Nov. 16, 2005, alleging that they operated a fraudulent investment scheme that targeted Cambodian immigrants and that purported to guarantee returns for future generations. The complaint alleged that the defendants emphasized their shared Cambodian heritage with their victims, and written solicitation documents drew a parallel between investing in WMDS and fulfilling the American dream, stating that WMDS "urges you to sign up now or you will miss your best chance of fulfilling your American dream." In fact, according to the complaint, the defendants were operating a fraudulent pyramid scheme and ceased making the promised monthly payments. On Jan. 24, 2006, the Commission amended its complaint to add Bunchan's former wife as a relief defendant. The Commission's case is pending as to all defendants. [U.S. v. Bunchan et al. (Criminal Action No. 06-10004-RGS) (D.Mass); SEC v. WMDS, Inc. et al. (Civil Action No.05-12268-RCL) (D. Mass)] (LR-20677)


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SEC Charges Defendants in $255 Million Ponzi-Type Scheme Involving Wextrust Capital, LLC and Other Wextrust Entities
The United States Securities and Exchange Commission today filed charges against Wextrust Capital, LLC (Wextrust), its principals, and four affiliated Wextrust entities, alleging that defendants conducted a massive Ponzi-type scheme from 2005 or earlier that raised approximately $255 million from approximately 1,200 investors. The targets of the fraudulent offerings are primarily members of the Orthodox Jewish community. Simultaneously with the filing of the action, the Commission is seeking emergency relief from the Court to freeze the defendants' assets and place the Wextrust entities under the control of a receiver to safeguard assets. The Commission is also seeking a temporary restraining order to stop the ongoing offerings and other immediate relief.

The Commission's complaint, filed in federal court in Manhattan, charges that Wextrust, its principals Steven Byers and Joseph Shereshevsky, and its affiliated entities Wextrust Equity Partners, LLC (WEP), Wextrust Development Group, LLC (WDG), Wextrust Securities, LLC (Wextrust Securities) and Axela Hospitality, LLC (Axela) conducted at least 60 securities offerings through private placements and created approximately 150 entities in the form of limited liability companies or similar vehicles to act as issuers or facilitators of the offerings, purportedly to fund the acquisition of specified assets, the majority of which were commercial real estate ventures. Contrary to representations in the offering memoranda that proceeds would be used for specific projects, the defendants allegedly diverted funds to pay returns to investors in prior offerings, or to fund expenses of the defendants.

In one offering, conducted in 2005, the SEC complaint alleges that defendants falsely represented to investors that the more than $9 million raised would be used to purchase seven specifically identified real estate properties that were leased by federal government agencies, such as the General Services Administration. In fact, according to the complaint, the defendants never purchased the seven properties. Moreover, at the time the offering occurred, they knew or were reckless in not knowing that the seven properties would not be acquired. Significantly, while the offering was ongoing, the Wextrust entities "borrowed" more than $6 million from the funds raised in the GSA offering and used these funds for purposes unrelated to the GSA offering.

Overall, the complaint alleges, defendants diverted at least $100 million dollars to unauthorized purposes. The complaint alleges that the defendants are conducting at least four ongoing offering frauds intended to raise money to pay back investors from prior offerings.

In addition to the emergency relief sought today, the Commission's complaint seeks disgorgement of the defendants' ill-gotten gains, civil penalties, and permanent injunctions barring future violations of the antifraud and other provisions of the federal securities laws.

The complaint names the following defendants.

Byers, age 46, is a resident of Oakbrook, Ill., and owns sixty percent of Wextrust. He is the Chairman of Wextrust and President and Chief Operating Officer of WEP, the arm of Wextrust focusing on income-producing properties, and is also an owner or controlling person of Wextrust Securities. Together with Shereshevsky and others not named in the complaint, Byers controls the Wextrust affiliated entities.

Shereshevsky, age 51, is a resident of Norfolk, Va., and owns twenty percent of Wextrust through a partnership interest held in the name of his wife. Shereshevsky was, until recently, Wextrust's Chief Operating Officer, was instrumental in founding Wextrust Securities, and was responsible for Wextrust's expansion into purported diamond mining investments in Africa. Shershevsky pled guilty to one felony count of bank fraud in June 2003, U.S. v. Shereshevsky, 94 Cr. 248 (CSH).

WexTrust, an Illinois limited liability company, was formed by Byers in 2003. According to the company's website, Wextrust is a globally diversified private equity and specialty finance company, specializing in investment opportunities ranging from real estate to specialty finance and investment banking. Wextrust is headquartered in Chicago and maintains offices in New York, N.Y., Norfolk, V., Atlanta, Ga., Boca Raton, Fla., Nashville, Tenn., Tel Aviv, Israel; and Johannesburg, South Africa.

WEP is an Illinois limited liability company headquartered in Chicago, engaged in the business of buying real estate assets, generally though its partially-owned subsidiaries. According to WEP documents, WEP is the beneficial owner of approximately 120 entities formed for the purpose of owning equity interests in commercial and multi-family real estate assets.

WDG is an Illinois limited liability company headquartered in Chicago, in the business of developing real estate assets.

Wextrust Securities is a broker-dealer registered with the Commission and a Virginia limited liability company headquartered in Norfolk, Va. It employs thirty-six registered representatives and maintains branch offices in New York, N.Y., Norfolk, Chicago, Southfield, Mich., and Ramat Gan, Israel. It was formed in March 2005, registered with the Commission in March 2006, and has been a licensed broker dealer since that time.

Axela is an affiliate of WexTrust Capital. Axela, through its LLC subsidiaries, owns and operates Wextrust's hotel properties, including the Axela Baltimore Hotel and the Park View Hotel in Chicago, and provides asset management services to other Wextrust affiliated LLCs, such as Crowne-Phoenix Investors LLC.

The Complaint alleges that defendants violated and are violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Wextrust Securities violated Sections 15(b)(1), 15(b)(7) and 15(c)(1) of the Exchange Act and Rules 10b-3, 15b1-1, 15b3-1 and 15b7-1 promulgated thereunder. Shereshevsky violated Section 15(a) or alternatively, aided and abetted, Wextrust Securities' violations of Sections 15(b)(1), 15(b)(7) and 15(c)(1) of the Exchange Act and Rules 10b-3, 15b1-1, 15b3-1 and 15b7-1 promulgated thereunder. Byers aided and abetted Wextrust Securities' violations of Sections 15(b)(1), 15(b)(7) and 15(c)(1) of the Exchange Act and Rules 10b-3, 15b1-1, 15b3-1 and 15b7-1.

The Commission acknowledges the assistance of the United States Attorney for the Southern District of New York and the Federal Bureau of Investigation in connection with this matter. [SEC v. Steven Byers, Joseph Shereshevsky (a/k/a Joseph Heller and "Josie"), Wextrust Capital, LLC, Wextrust Equity Partners, LLC, Wextrust Development Group, LLC, Wextrust Securities, LLC and Axela Hospitality, LLC, 08 Civ. 07104 (SWK) (S.D.N.Y.)] (LR-20678)


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INVESTMENT COMPANY ACT RELEASES
Prudential Annuities Life Assurance Corporation, et al.
A notice has been issued giving interested persons until Sept. 2, 2008, to request a hearing on an application filed by Prudential Annuities Life Assurance Corporation (PALAC), Prudential Annuities Life Assurance Corporation Variable Account B (the Account), and Prudential Annuities Distributors, Inc. (PAD, and collectively with PALAC and the Account, the Applicants). Applicants seek an order under Section 6(c) of the 1940 Act exempting them from Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to permit, under specified circumstances, the recapture of certain credits previously applied to purchase payments made under (1) the Advanced Series XTra Credit Eight variable annuity contract (Contract), or (2) variable annuity contracts issued by PALAC in the future that are substantially similar in all material respects to the Contract and that are issued through the Account or any other separate account established in the future by PALAC (Future Account) that support variable annuity contracts. Applicants also requests that the order extend to any FINRA member broker-dealer controlling, controlled by, or under common control with PALAC, whether existing or created in the future, that serves as a distributor or principal underwriter of the Contract offered through the Account or any Future Account (Broker Dealers). In addition, Applicants request that the order extend to broker-dealers that are FINRA-registered and not affiliated with PALAC or the Broker-Dealers. (Rel. IC-28354- August 8)


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Advanced Series Trust, et al.
A notice has been issued giving interested persons until Sept. 2, 2008, to request a hearing on an application filed by Advanced Series Trust, et al., for an order under Section 6(c) of the Investment Company Act for an exemption from Rule 12d1-2(a) under the Act. The order would permit registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28355 - August 8)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by the New York Stock Exchange to extend until Oct. 1, 2008, the adoption of interim NYSE Rule 128 (Clearly Erroneous Executions) (SR-NYSE-2008-63) has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58323)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig081108.htm

[jimmenknee]

I have not Generic-- but I'll hunt around a little

[Stock]

Have you seen anything lately about broker/dealers getting fined for improper stock loans (meaning loaning stock to shorts)?

I remember reading about one B/D that loaned shares from cash accounts that got busted, but it has been a while.

[jimmenknee]

August 8, 2008 SEC News Digest
Issue 2008-154

ENFORCEMENT PROCEEDINGS
In the Matter of George J. Sandhu, Respondent
On August 7, the Commission issued an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 203(f) of the Investment Advisers Act (Order) against George J. Sandhu based on the entry of the injunction against him in SEC v. Universal Express, Inc., et al., Civil Action No. 1:04-cv-02322 (Nov. 26, 2007, USDC, SDNY). The Order finds that Sandhu, a resident of New York, was associated with an investment adviser, International Investment Group, LLC, prior to November 2001 and again after January 2003. The Order also finds that according to the Commission's complaint, during 2002, Sandhu wrote two letters to Universal Express, Inc. falsely representing that a mutual fund with which he was associated would invest $7,500,000 in the company's acquisitions, and provide an additional $50,000,000 in long-term financing. Contrary to these representations, the mutual fund had assets of approximately $4,000,000 to $5,000,000. Sandhu also sold shares of Universal Express for third-parties, when no registration statement was in effect. Sandhu was enjoined in the related civil case from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. [SEC v. Universal Express, Inc., et al., Civil Action No. 1:04-cv-02322, USDC, SDNY] (LR-18636, 20165).

Based on the above, the Order barred Sandhu from association with an investment adviser with the right to reapply in three years. Sandhu consented to the issuance of the Order without admitting or denying any of the findings in the Order, except with respect to the entry of the injunction in the related civil case, which he admitted. (Rel. IA-2768; File No. 3-12910)


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In the Matter of WarpRadio, Inc., et al.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to WellnessAmerica Online, Inc., and Wireless Frontier Internet, Inc. (Default Order), in the matter of WarpRadio, Inc., et al. The Order Instituting Proceedings alleged that WellnessAmerica Online, Inc. (n/k/a General Ventures, Inc.), and Wireless Frontier Internet, Inc., failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of these two Respondents, pursuant to Section 12(j) of the Securities Exchange Act of 1934. Administrative Proceeding No. 3-13086. (Rel. 34-58330; File No. 3-13086)


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SEC Sues Russian for Scheme to Intrude Into Online Accounts, Manipulate Market
The Commission today filed a complaint in the United States District Court for the District of Connecticut charging thirty-five year old Dmitriy Butko, a Russian resident, with fraudulently manipulating the prices of numerous stocks by using the Internet to intrude into the online brokerage accounts of unsuspecting customers at U.S. broker-dealers.

The complaint alleges that between Oct. 19, 2006 through Nov. 30, 2006, Butko, or others acting in concert, commandeered the online trading accounts of unwitting investors at various broker-dealers, liquidated existing equity positions and, using the resulting proceeds, purchased thinly traded stocks in order to create the appearance of trading activity and pump up the price of the stocks. The complaint further alleges that in five instances, Butko, in his own account, bought shares in the thinly traded issuers just prior to or at the same time that compromised accounts were made to buy shares, creating the false appearance of market activity. Shortly after the intrusions, Butko sold all of his shares at the inflated prices. In all but one of these instances, Butko realized a profit from his trading, netting a total profit of $60,362.

The Commission's action charges Butko with violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctive relief, disgorgement and civil monetary penalties.

The SEC's Office of Investor Education and Assistance has previously issued an investor alert, available on the SEC's website, which provides tips for avoiding becoming a victim of an online intrusion. See http://www.sec.gov/investor/pubs/onlinebrokerage.htm.

The Commission acknowledges the assistance of FINRA in this matter. [SEC v. Dmitriy Butko, Civil Action No. 3:08-CV-01201 (D. Conn.)] (LR-20675)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by Chicago Board Options Exchange (SR-CBOE-2008-78) relating to market-maker transaction fees has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. Rel. 34-58321)


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Order Granting Approval of a Proposed Rule Change; and Notice of Amendment No. 1 to Three Proposed Rule Changes, and Order Granting Accelerated Approval of Each
Pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, the Boston Stock Exchange filed Amendment No. 1 to a proposed rule change relating to the acquisition of BSE by The NASDAQ OMX Group (SR-BSE-2008-023) and Amendment No. 1 to a proposed rule change relating to a proposal to transfer BSE's ownership interest in Boston Options Exchange Group (SR-BSE-2008-025); and the Boston Stock Exchange Clearing Corporation filed Amendment No. 1 to a proposed rule change relating to amendment of its Articles of Organization and By-Laws in connection with the planned acquisition by NASDAQ OMX (SR-BSECC-2008-01). The Commission granted accelerated approval of each proposed rule change as modified by Amendment No. 1 thereto. The Commission also granted approval of a proposed rule change (SR-BSE-2008-02), as modified by Amendment No. 1 thereto, submitted by the Boston Stock Exchange, amending BSE's Certificate of Incorporation. Publication is expected in the Federal Register during the week of August 11. Rel. 34-58324)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

--------------------------------------------------------------------------------

RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig080808.htm

[jimmenknee]

August 7, 2008 SEC News Digest
Issue 2008-153

COMMISSION ANNOUNCEMENTS
Citigroup Agrees in Principle to Auction Rate Securities Settlement
Firm Will Provide Liquidity and Remediate Losses
The Securities and Exchange Commission's Division of Enforcement today announced a preliminary settlement in principle with Citigroup Global Markets, Inc. (Citi) including proposed charges and a plan that would give individual investors, small businesses, and charities all $7.5 billion of their money back from auction rate securities (ARS) they purchased from the firm. The agreement also would require Citi to use its best efforts to liquidate by the end of 2009 all of the approximately $12 billion worth of ARS the firm sold to retirement plans and other institutional investors.

The ARS market collapsed in mid-February 2008, leaving tens of thousands of Citi customers holding nearly $20 billion of these illiquid securities for an indefinite period of time. The conduct underlying the proposed charges stems from Citi's marketing of ARS to many of its customers as highly liquid investments, including as money market investments. The liquidity of these securities, however, was premised on Citi providing support bids for auctions it managed when there was not enough customer demand. When Citi stopped supporting auctions in February 2008, there were widespread auction failures. As a result, thousands of Citi customers were left holding illiquid securities.

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "Today's agreement in principle provides real relief to investors. In a short period of time, about 38,000 individual, small business, and charitable organization investor accounts will receive nearly $7.5 billion in liquidity, and Citi will begin the process of restoring liquidity to over 2,600 institutional investors who hold approximately $12 billion in auction rate securities. This settlement in principle is an outstanding example of federal and state regulatory cooperation for the benefit of investors and markets."

The terms of the agreement in principle, which are subject to finalization, review and approval by the Commission:

Citi will be permanently enjoined from violating the provisions of Section 15(c) of the Exchange Act, and Rule 15c1-2 thereunder, which prohibit the use of manipulative or deceptive devices by broker-dealers.

Citi will liquidate at par all ARS from its retail customers, which include all natural persons, charities, and small businesses, no later than three months from today.

Citi will make whole any losses sustained by customers who purchased ARS before Feb. 12, 2008, and sold such securities after that date at a loss.

Citi will use its best efforts to liquidate ARS from its institutional customers by the end of 2009.

Until Citi actually provides for the liquidation of the securities on the schedule set forth above, Citi will provide no-cost loans to customers that will remain outstanding until the ARS are repurchased, and will reimburse customers for any interest costs incurred under any prior loan programs the firm provided to its ARS customers.

Citi will not liquidate its own inventory of a particular ARS before it liquidates its customers' holding in that security.

To the extent that a customer has incurred consequential damages beyond the loss of liquidity in the customer's holdings of ARS (which should be restored pursuant to the settlement terms above), Citi will participate in a special arbitration process that the customer may elect, and that will be overseen by FINRA, whereby Citi will not contest liability for its misrepresentations and omissions concerning the ARS, but may challenge the existence or amount of any consequential damages; the arbitration claim will be heard by a single, non-industry arbitrator.

This arbitration process will be voluntary on the part of the customer and if a customer elects not to take advantage of these special procedures, a customer may pursue all other arbitration or legal or equitable remedies available through any other administrative or judicial process available to the customer.

Citi will provide notice to all customers of the settlement terms.

Citi will establish a telephone assistance line, with appropriate staffing, to respond to questions from customers concerning the terms of the settlement.

Citi faces the prospect of a financial penalty to the SEC after it has completed its obligations under the settlement agreement. Determinations as to the amount of the penalty, if any, will take into account, among other things, an assessment of whether Citi has satisfactorily completed its obligations under the settlement, and the costs incurred by Citi in meeting those obligations, including penalties incurred and the cost of remediation.

The Commission notes the substantial assistance and cooperation from the New York Attorney General, the Financial Industry Regulatory Authority (FINRA), the North American Securities Administrators Association (NASAA), and Texas securities authorities.

The Commission's investigation is continuing as to individuals and other entities that participate in the auction rate securities market.

For more information, contact:

Fredric Firestone
Associate Director, SEC's Division of Enforcement
202-551-4711

Kenneth R. Lench
Assistant Director, SEC's Division of Enforcement
202-551-4938

(Press Rel. 2008-168)


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SEC Announces Two New Anti-Money Laundering Compliance Initiatives
The Securities and Exchange Commission staff today unveiled a new one-stop online reference site to assist mutual funds in their anti-money laundering (AML) compliance efforts, and launched a new centralized phone line specifically for securities firms to report the filing of a Suspicious Activity Report (SAR) that may require immediate attention by the Commission.

The AML Source Tool for Mutual Funds, originally developed for use by SEC examiners in the Office of Compliance Inspections and Examinations (OCIE), provides links to key AML laws, rules and related guidance to help mutual funds maintain their AML compliance programs as required under law.

"Last year, we made our AML Source Tool for Broker-Dealers available to the public, and it has been a popular resource for securities firms and their AML compliance staff," said Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations. "While we initially developed these resources for our own SEC examiners, they are invaluable reference tools for industry compliance staff as well. This AML Source Tool for Mutual Funds puts all mutual fund AML requirements in one easy-to-reference location, making it easy for mutual funds to understand their AML compliance obligations in their ongoing efforts to prevent money laundering."

OCIE along with the SEC's Division of Enforcement created the SEC SAR Alert Message Line to centralize calls made to the Commission about SAR filings. In 2001, the USA PATRIOT Act expanded the scope of the Bank Secrecy Act (BSA). As a result, broker-dealers and mutual funds became subject to regulations requiring them to file SARs. As provided in the SAR rules, in situations involving violations that require immediate attention, firms must immediately telephone an appropriate law enforcement authority in addition to filing a SAR. Additionally, firms wishing to voluntarily report suspicious transactions that may relate to terrorist activity can call the U.S. Treasury Department's Financial Crimes Enforcement Network (FinCEN) hotline at 1-866-556-3974.

The SEC SAR Alert Message Line phone number is 202-551-SARS (7277). This number should only be used when securities firms have filed a SAR that may require immediate attention by the Commission. Calling the SEC SAR Alert Message Line does not alleviate a firm's obligation to file a SAR or notify an appropriate law enforcement authority, such as a local office of either the Internal Revenue Service Criminal Investigation Division or the FBI. General questions on SARs and other BSA filing requirements may be directed to FinCEN's Regulatory Helpline at 1-800-949-2732.

The SEC staff appreciates the assistance received from the staff of FinCEN and the Office of Foreign Assets Control (OFAC). (Press Rel. 2008-170)


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ENFORCEMENT PROCEEDINGS
In the Matter of Martin A. Armstrong
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940 and Notice of Hearing against Martin A. Armstrong. The Division of Enforcement (Division) alleges that on July 22, 2008, a final judgment and order on consent was entered against Armstrong, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Martin A. Armstrong, et al., Civil Action Number 99 Civ. 9667, in the United States District Court for the Southern District of New York. The Division further alleges in the Order that the Commission's complaint alleged that, Armstrong, together with the entities he controlled, perpetrated a massive fraud by raising millions of dollars by fraudulently offering and selling promissory notes issued by subsidiaries of the entities he controlled to Japanese corporations. In offering and selling those notes, Armstrong represented that the issuers would deposit the proceeds of the note sales into segregated accounts, and use those proceeds to purchase conservative investments, such as securities issued by the United States Treasury. However, Armstrong lost hundreds of millions of dollars through risky currency and commodities trading, commingled investor funds, used investor funds to conceal trading losses, and arranged for the mailing of letter that materially overstated the net asset value of the accounts purportedly underlying investors' notes.

The Division alleges in the Order that on Jan. 7, 2000, the district court issued an order requiring Armstrong to turnover certain enumerated items, including rare coins, gold bullion bars and coins and various antiquities, to the court appointed Receiver. Armstrong failed to comply with the order, and accordingly the district court found him in contempt on January 14, 2000 and ordered him confined to coerce compliance with the turnover order. The turnover order was affirmed by the Second Circuit on Nov. 27, 2006, Armstrong v. Guccione, 470 F.3d 89. Armstrong never complied and on April 27, 2007, the district court determined that the turnover order no longer had coercive effect.

The Division also alleges in the Order that on Aug. 17, 2006, Armstrong pled guilty to one count of conspiracy to commit securities fraud, wire fraud and commodities fraud in violation of 18 U.S.C. Section 371 before the United States District Court for the Southern District of New York, in U.S. v. Martin A. Armstrong, 99 CR 00997. On April 10, 2007, Armstrong was sentenced to serve 60 months in federal prison and ordered to pay restitution of $80,000,001. The count of the indictment to which Armstrong pled guilty alleged that Armstrong defrauded investors and obtained money and property by means of materially false and misleading statements, that he used the United States mails to send false account statements, and that he caused commercial interstate carriers to deliver investors' checks to him.

In these proceedings, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondent to determine whether the allegations of the Division contained in the Order are true. The judge in the proceeding will then determine what, if any, remedial action is appropriate in the public interest against Respondent pursuant to Section 203(f) of the Advisers Act. The Commission ordered that the Administrative Law Judge in these proceedings issue an initial decision not later than 210 days from the date of service of the order instituting proceedings. (Rel. IA-2767A; File No. 3-13121)


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In the Matter of Finance 500, Inc.
On August 7, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Pursuant to Section 8A of the Securities Act of 1933 and Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order as to Finance 500, Inc. (Order). The Order finds that, from October 2002 through August 2005, Finance 500, Inc. (Finance 500) willfully violated Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act) by selling a massive number of shares in unregistered offerings under so-called employee stock option programs implemented by thirty-five microcap issuers.

The Order finds that the employee stock option programs, for which Finance 500 administered the brokerage aspects through one of its registered representatives, functioned as public distributions of securities in which the issuers used their employees as conduits to raise millions of dollars in capital without complying with the registration requirements of the federal securities laws. The Order further finds that the issuers improperly registered the shares underlying the options on Form S-8 registration statements and then received at least 85% of the shares' sales proceeds. Form S-8 statements may be used to register shares issued to compensate employees and consultants and have abbreviated disclosure requirements as compared to statements registering shares used to raise capital.

The Order finds that the employee stock option programs, as implemented, had the following characteristics that, taken together, virtually ensured that the options would be exercised, and the underlying shares simultaneously sold, to the public at or near the time the options were granted: (1) the options' exercise price, which was typically set at 85% of the sale proceeds from the options' underlying shares, floated with the market value of an issuer's stock at the time of exercise, (2) the options vested immediately, meaning that the options could be exercised at any time after the date of grant, and (3) a cashless exercise method was used so that the exercise price was remitted to the issuers from the underlying shares' sales proceeds. Additionally, the great majority of employees communicated standing orders to Finance 500 to exercise their options immediately. The Order finds that the near-immediate sale of shares underlying the options resulted in millions and, in some cases, billions of shares in each issuer's stock being sold to the public, severely diluting the ownership interests of existing shareholders. The Order also finds that, by administering the brokerage aspects of the ESIP programs, Finance 500 encountered red flags indicating that the issuers' employees were underwriters to unregistered offerings, which should have prompted Finance 500 to inquire further as to the true nature of the sales.

Based on the above, the Order censures Finance 500, orders it to cease and desist from committing or causing violations of Sections 5(a) and 5(c) of the Securities Act and to pay disgorgement of $271,484 and prejudgment interest of $74,015. Finance 500 consented to the issuance of the Order without admitting or denying any of the Commission's findings. (Rels. 33-8950; 34-58325; File No. 3-13122)


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In the Matter of Alexander & Wade, Inc. and James Y. Lee
On August 7, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 (Order) against Alexander & Wade, Inc. (AWI) and James Y. Lee.

In the Order, the Division of Enforcement alleges that, from mid-2002 through mid-2005, AWI and Lee caused violations of Sections 5(a) and 5(c) of the Securities Act of 1933 by introducing several microcap issuers to so-called employee stock option programs that enabled the issuers to raise millions of dollars in capital without providing the disclosures and rights afforded to investors by the registration requirements. The Division alleges that the programs essentially functioned as public offerings in that the issuers used their employees as conduits to offer shares to the public to raise capital. The Division further alleges that, under the advice and guidance of AWI and Lee, the issuers improperly registered the shares underlying their employee stock options on Form S-8 registration statements and then received at least 85% of the sale proceeds from the underlying shares as payment for the options' exercise price. Form S-8 statements may be used to register shares issued to compensate employees and consultants and have abbreviated disclosure requirements as compared to statements registering shares used to raise capital.

The Division alleges that the employee stock option programs, as designed and implemented, had features that, taken together, virtually guaranteed that the options would be exercised, and the underlying shares simultaneously sold, to the public at or near the time the options were granted: (1) the options' exercise price, which was typically set at 85% of the sale proceeds from the options' underlying shares, floated with the market value of an issuer's stock at the time of exercise, (2) the options vested immediately, meaning that no conditions needed to be met before the options could be exercised, and (3) a cashless exercise method was used so that the exercise price was remitted to the issuers from the underlying shares' sales proceeds. Other than opening brokerage accounts and signing blank authorizations, the issuers' employees typically did not make any decisions regarding the options' exercise or the sale of the underlying shares during the course of the employee stock options programs. The near-immediate sale of shares underlying the options, the Division alleges, resulted in millions and, in some cases, billions of shares in each issuer's stock being sold to the public, severely diluting the ownership interests of existing shareholders. The Division finally asserts that, by introducing the issuers to the programs, helping them implement the programs and advising them on the programs' administration, AWI and Lee knew, or should have known, that their conduct was contributing to the issuers' registration violations.

A hearing will be held by an Administrative Law Judge to determine whether the allegations in the Order are true, to provide respondents an opportunity to establish any defenses to the allegations and to determine what, if any, remedial actions are appropriate. The Order requires the Administrative Law Judge to issue an initial decision within 300 days from the date of service of the Order. (Rel. 33-8951; File No. 3-13123)


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SEC Settles Civil Injunctive Action Against Former Executive of Massachusetts Public Company
The Commission announced today that a final judgment by consent was entered by the United States District Court of the District of Massachusetts against Howard Richman, the former head of regulatory affairs of Biopure Corporation, in a previously-filed action alleging misleading public statements about the company's efforts to obtain FDA approval for its primary product, Hemopure, a synthetic blood product. The final judgment against Richman, age 56, of Houston, Texas entered on August 6, 2008, permanently enjoins Richman from violating the antifraud and other provisions of the federal securities laws, permanently bars Richman from serving as an officer or director of any public company and orders him to pay a $150,000 civil penalty.

The Commission's Complaint, filed Sept. 14, 2005, alleges that, beginning in April 2003, Biopure received negative information from the FDA regarding its efforts to obtain FDA approval of its synthetic blood product Hemopure but failed to disclose the information, or falsely described it as positive developments. Specifically, the Complaint alleges that in April 2003, the FDA placed a clinical hold barring Biopure from conducting clinical trials of Hemopure in trauma settings such as emergency rooms, because of safety concerns about Hemopure. The Complaint further alleges that, during the next eight months, Richman and other Biopure employees concealed the imposition of the clinical hold while making public statements about Biopure's plans to obtain approval for trauma uses of Hemopure. In addition, according to the Complaint, in July 2003 the FDA informed Biopure that it had not approved Biopure's application for use of Hemopure in orthopedic surgery, and instead conveyed serious concerns about whether the materials Biopure had submitted in support of its application were reliable and questioning the safety of Hemopure. According to the Complaint, Biopure, however, issued public statements beginning on August 1, 2003 describing the FDA's communication as good news, causing its stock price to increase by over 20%. The Complaint alleges that Richman and other Biopure employees continued to make misleading statements until December 2003. During this period, Biopure raised over $35 million from investors. The Complaint further alleges that as the true status of Biopure's efforts to obtain FDA approval gradually became public, through a series of incomplete and misleading disclosures between late October and the end of December 2003, the company's stock price plummeted almost 66% from its August 1 price.

To settle the Commission's charges, Richman consented, without admitting or denying the allegations of the Complaint, to the entry of a final judgment permanently enjoining him from committing future violations of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b 5 thereunder and from aiding and abetting future violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11 and 13a-13 thereunder. The final judgment also permanently bars Richman from serving as an officer or director of any public company and imposes a civil penalty in the amount of $150,000.

Biopure and three others previously settled SEC charges concerning the same conduct. For further information, see Litigation Release No. 19825 (September 12, 2006) (SEC Settles Civil Injunctive Action Against Biopure Corporation and Its General Counsel), Litigation Release No. 19651 (April 11, 2006) (SEC Settles with Former Biopure Executive), Litigation Release No. 19376 (September 14, 2005) (Biopure and others charged by the Commission) and Litigation Release No. 20010 (February 21, 2007)(SEC Settles Civil Injunctive Action Against Former CEO of Biopure Corporation). [SEC v. Biopure Corporation, et al., Civil Action No. 05-11853-PBS (D. Mass.)] (LR-20672)


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SEC Charges Six Microcap Companies, Four Officers and Four Sham Consultants for Improperly Raising Capital by Abusing Form S-8
On August 6, the Commission filed two separate complaints in the U.S. District Court for the Central District of California against six microcap companies, four officers and four sham consultants for engaging in unregistered public offerings that dumped billions of shares on the market through so-called employee stock option and consulting programs.

In SEC v. Angel Acquisition Corp., et al., the Commission alleges that five companies - NW Tech Capital, Inc. (NW Tech), Marshall Holdings International, Inc. (Marshall Holdings), Angel Acquisition Corp. (AAC), Winsted Holdings, Inc. (Winsted Holdings) and Zann Corp. - violated Sections 5(a) and 5(c) of the Securities Act of 1933 (Securities Act) when they improperly registered shares issued under their employee stock option programs on Form S-8 registration statements and then received at least 85% of the proceeds from the shares' sales as payment for the options' exercise price. The Commission also alleges that Marshall Holdings' officers, Richard A. Bailey and Florian R. Ternes, and Winsted Holdings' former officer, Mark T. Ellis, violated Section 5 when they implemented and administered their companies' employee stock option programs. Form S-8 statements may be used to register shares issued to compensate employees and consultants and have abbreviated disclosure requirements as compared to statements registering shares used to raise capital. According to the complaints, however, the programs functioned as public offerings in which the companies used their employees as conduits to the market so that they could raise capital without complying with the registration provisions.

The complaints further allege that the companies' programs had features that, taken together, virtually guaranteed that the options would be exercised and the underlying shares simultaneously sold to the public at or near the time the options were granted. First, the options' exercise price, which was typically set at 85% of the sale proceeds from the options' underlying shares, floated with the market value of a company's stock at the time of exercise. Second, the options vested immediately, meaning that no conditions needed to be met before the options could be exercised. Third, a cashless exercise method was used so that the exercise price was paid from the sale proceeds of the underlying shares rather than directly by the employees. Other than opening brokerage accounts and signing blank letters of authorization, the companies' employees made no decisions regarding the options' exercise or the sale of the underlying shares during the course of the programs. The complaint seeks injunctive relief and disgorgement plus prejudgment interest. It also seeks civil penalties against Marshall Holdings, Bailey, Ternes and Ellis.

In SEC v. Global Materials & Services, Inc., et al., the Commission alleges that, Global Materials & Services, Inc. (Global Materials), and its former officer, Stephen J. Owens, violated Sections 5(a), 5(c) and 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder when they issued shares registered on Form S-8 to sham consultants, who then kicked back over 60% of the shares' sales proceeds to Owens and Owens' other businesses. The Commission also alleges that William Woo, Eric Ko, ASMAC Financial, Inc. and Edify Capital Group, Inc. aided and abetted Global Materials' fraud and violated the registration provisions in their role as sham consultants. Finally, the Commission asserts that Global Materials violated the registration provisions by implementing an employee stock option program similar to the programs described in the first complaint. The Commission seeks injunctive relief, disgorgement with prejudgment interest and, with the exception of Global Materials, civil penalties. Additionally, against Owens, it seeks an officer and director bar pursuant to Section 20(e) of the Securities Act and Section 21(d)(2) of the Exchange Act and a penny stock bar pursuant to Section 21(d)(6) of the Exchange Act. Finally, the Commission names Flinn Springs Inn, Inc. as a relief defendant and seeks to disgorge the money it received under the fraudulent kickback scheme.

NW Tech, AAC, Winsted Holdings, Zann Corp., and Global Materials have agreed to settle the charges, without admitting or denying the allegations in the complaints, by consenting to the entry of final judgments permanently enjoining them from future violations of the registration provisions and, with respect to Global Materials, the antifraud provisions and ordering them to pay disgorgement plus prejudgment interest with waiver based on inability to pay. The settlements are subject to court approval. [SEC v. Angel Acquisition Corp., et al, Case No. SACV 08-880 JVS (ANx) (C.D. Cal.); SEC v. Global Materials & Services, Inc., et al., Case No. SACV 08-881 DOC (RNBx) (C.D. Cal.)] (LR-20673)


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SEC Settles Fraud Charges with Offshore Entity in Scheme that Drove the Stock Price of Cameron International, Inc. from Pennies to $90 Per Share
On August 6, the Honorable Paul A. Crotty, U.S. District Judge for the Southern District of New York, entered a Final Judgment as to defendant Socius Holdings, Ltd. (Socius) in SEC v. Peter S. Jessop, et al., permanently enjoining Socius from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. Socius consented to the entry of the judgment without admitting or denying the allegations of the Commission's complaint. Pursuant to the Final Judgment, Socius will pay disgorgement in the amount of $1,237,342, plus prejudgment interest thereon in the amount of $123,481, and a civil penalty of $125,000.

The Commission's complaint alleges that from August through November 2005, Socius, an entity incorporated in the British Virgin Islands and operating out of Geneva, Switzerland, in concert with other related individuals and entities, manipulated the stock price of Cameron International, Inc. (Cameron) through a series of coordinated wash sales and matched orders designed to create the illusion of an active and rising market in Cameron and induce others to buy Cameron shares at inflated prices. The complaint further alleges that during this period, the defendants' trading comprised the majority, and on some days all, of the retail buying and selling of Cameron's stock. Moreover, the complaint alleges that the defendants' coordinated trades drove Cameron's share price from less than $1 per share to $90 per share in approximately a two month period.

On Nov. 7, 2005, the Commission suspended trading in shares of Cameron due to a lack of current and accurate information concerning a possible change in ownership of the company and questions regarding the dramatic rise in its share price. On Dec. 1, 2005, the United Stated District Court for the Southern District of New York entered a temporary restraining order freezing a U.S. brokerage account titled in the name of Socius that held the proceeds from Socius' trading of Cameron stock. Pursuant to an order entered by the Court on Aug. 6, 2008, the Final Judgment will be satisfied with the funds from the frozen Socius account.

For more information, see Release No. 34-52743 (Nov. 7, 2005); Litigation Release No. 19481 (Dec. 2, 2005). [SEC v. Peter S. Jessop, et al., Civil Action No. 05-CV-10115 (PAC) (S.D.N.Y.,)] (LR-20674)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
The National Securities Clearing Corporation filed a proposed rule change (SR-NSCC-2008-06), which became effective upon filing pursuant to Section 19(b)(3)(A) of the Exchange Act, that enhances the NSCC Equity Options Service by extending similar processing to bond options transactions. The enhanced service will be called the "NSCC Equity Options and Bond Options Service." Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58300)

A proposed rule change (SR-NASDAQ-2008-063) filed by the NASDAQ Stock Market to modify the rules governing the requirements for market maker quotations on the NASDAQ Options Market has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58305)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2008-79) related to the Automated Improvement Mechanism has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58307)

A proposed rule change (SR-CBOE-2008-81) filed by the Chicago Board Options Exchange relating to Temporary Membership Status and Interim Trading Permit access fees has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58315)


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Proposed Rule Changes
A proposed rule change (SR-FINRA-2008-027) has been filed by the Financial Industry Regulatory Authority regarding a proposal to adopt FINRA Rule 3220 (Influencing or Rewarding Employees of Others) and FINRA Rule 2070 (Transactions Involving FINRA Employees) in the consolidated FINRA rulebook. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58308)

The National Securities Clearing Corporation filed a proposed rule change (SR-NSCC-2008-07) under Section 19(b)(1) of the Exchange Act to enhance processing of exchange-traded funds. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58314)


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Approval of Proposed Rule Change
The Commission published notice of filing of Amendment No. 1 and granted accelerated approval of a proposed rule change (SR-NYSEArca-2008-63), as modified by Amendment No. 1 thereto, submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to list and trade shares of the MacroShares Medical Inflation Trusts. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58312)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig080708.htm

[jimmenknee]

August 6, 2008 SEC News Digest
Issue 2008-152

COMMISSION ANNOUNCEMENTS
Closed Meeting - August 5, 2008 - 5:00 p.m.
The Commission held a closed meeting on August 5, 2008, at 5:00 p.m. The subject matter of the closed meeting was: institution and settlement of injunctive actions; and other matters related to enforcement proceedings.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at [phone].


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ENFORCEMENT PROCEEDINGS
In the Matter of Kent D. Nelson
On August 1, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, and Section 203(f) of the Investment Advisers Act of 1940 and Notice of Hearing (Order) against Kent D. Nelson (Nelson).

In the Order, the Division of Enforcement (Division) alleges that on Sept. 14, 2005, Nelson, a registered representative and investment adviser in San Diego, California, pleaded guilty to one count of mail fraud in violation of Title 18 United States Code, Section 1341, in the criminal action entitled United States v. Kent Nelson, Criminal Information No. 05-2021 JP, in the United States District Court for the District of New Mexico. The information to which Nelson pleaded guilty alleged that, from December 1999 through March 2005, Nelson paid substantial amounts of money to corruptly influence the Treasurer of the State of New Mexico to award securities work to Nelson, and used the United States mail to pay kickbacks to the Treasurer of the State of New Mexico. The Division further alleges that on May 8, 2007 Nelson pleaded guilty and was convicted on state racketeering charges in the State of New Mexico based on the same facts, and that on Jan. 3, 2006, the California Corporations Commissioner issued an order barring Nelson from affiliation with an investment adviser.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Nelson an opportunity to respond to these allegations, and to determine what sanctions, if any, are appropriate and in the public interest. The Order directs the administrative law judge to issue an initial decision within 210 days from the date of service of the Order. (Rel. IA-2765; 34-58287; File No. 3-13112)


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In the Matter of Ernst & Young LLP, John F. Ferraro, CPA, and Michael G. Lutze, CPA
On August 5, the Commission issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Sections 4C and 21C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order against Ernst & Young LLP, John F. Ferraro, CPA and Michael G. Lutze, CPA. The Order finds that E&Y had a direct business relationship with an outside director of three of its audit clients during a 19-month period that impaired its independence as those clients' auditor. The Order finds that Respondent Ferraro caused E&Y to enter into the independence-impairing relationship despite knowing that the director was then serving on the boards of two companies that Ferraro knew to be audit clients of the firm. In addition, the Order finds that Respondent Lutze, in responding to a question from one of the audit clients concerning E&Y's independence, failed to fully inform the client about an email he had received concerning the business relationship. The Order finds, as a result of this conduct, that E&Y, Ferraro and Lutze each engaged in improper professional conduct pursuant to Exchange Act Section 4C and Rule 102(e) of the Commission's Rules of Practice; that E&Y violated (and that Ferraro was a cause of E&Y's violation of) Rule 2-02(b) of Regulation S-X; and that E&Y caused all three audit clients to violate (and that Ferraro was a cause of two of those clients' violations of) Exchange Act Sections 13(a) and 14(a), and Exchange Act Rules 13a-1 and 14a-3.

Based on the above, the Order censures E&Y, Ferraro and Lutze; requires E&Y to disgorge $2,381,965 in audit fees plus $537,022.79 in prejudgment interest; requires Ferraro to cease and desist from causing any violations and any future violations of Rule 2-02 of Regulation S-X, and from causing any violations and any future violations of Sections 13(a) and 14(a) of the Securities Exchange Act of 1934, and Rules 13a-1 and 14a-3 thereunder; and denies Lutze the privilege of appearing or practicing before the Commission as an accountant, but allows him to request reinstatement after one year. (Rel. 34-58309; AAE Rel. 2858; File No. 3-13114)


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In the Matter of Mark C. Thompson
On August 6, the Commission issued an Order Instituting Cease and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order against Mark C. Thompson. The Order finds that, while serving as an outside director of three different public companies, Thompson had a direct business relationship with those companies' outside auditor. The Order further finds, among other things, that Thompson failed to fully disclose the business relationship to the three companies on his Director and Officer questionnaires and in the context of board votes concerning proxy solicitations. The Order finds that, as a result of his conduct, Thompson was a cause of two of the companies' violations of Exchange Act Sections 13(a) and 14(a) and Rules 13a-1 and 14a-3 thereunder, and was a cause of all three companies' violations of Exchange Act Section 14(a) and Rule 14a-9 thereunder.

Based on the above, the Order requires Thompson to cease and desist from causing any violations and any future violations of Sections 13(a) and 14(a) of the Securities Exchange Act of 1934, and Rules 13a-1, 14a-3 and 14a-9 thereunder; and requires Thompson to disgorge $100,662.33 in director compensation plus $23,254.94 in prejudgment interest. (Rel. 34-58310; AAE Rel. 2859; File No. 3-13115)


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In the Matter of Timothy L. Bradshaw
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Timothy L. Bradshaw (Bradshaw). In the Order, the Division of Enforcement alleges that Bradshaw was permanently enjoined from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, based on the entry, on July 10, 2008, of an order by the United States District Court for the Northern District of Georgia in the civil action entitled Securities and Exchange Commission v. Scott B. Hollenbeck, Timothy L. Bradshaw and Steven K. Gilley, Civil Action Number 1:05-CV-1272-WBH.

The Commission's complaint alleged that Mobile Billboards of America, Inc. (MBA) sold more than $60 million of the billboard frame investments. The investments consisted of mobile billboard frames that were purportedly mounted on the sides of trucks to hold advertising posters. Outdoor Media Industries (Outdoor Media), a division of International Payphone controlled by the promoters of MBA, leased the billboards back from investors for seven years for monthly payments equivalent to 13.49% annually. Reserve Guaranty, another entity controlled by the MBA promoters, purportedly operated as a sinking fund and issued investors certificates that purportedly guaranteed funding for MBA's commitment to buy back the billboards at the full purchase price at the end of the seven-year lease. The complaint alleged that the investment program operated as a Ponzi scheme because the collective business did not generate sufficient advertising revenue to make monthly lease payments to investors and, instead, relied on new investor money. The complaint further alleged that MBA's sales materials made false claims about the number of billboards that were operational and misrepresented the value of assets contributed to Reserve Guaranty. The complaint also alleged that the investment contracts were sold through a network of independent sales agents. The complaint further alleged that Bradshaw was one of the top three sales agents for MBA and that by himself he sold more than $5.3 million of the Mobile Billboard investments and through sales agents that he directed, another $16 million worth of investments were sold. The complaint further alleged that Bradshaw knew that MBA was using a portion of the purchase price investors paid for the billboards to make the first year of lease payments to investors even though that fact was not disclosed to investors. The complaint further alleges that Bradshaw operated as a broker-dealer.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Bradshaw an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions against Bradshaw are appropriate and in the public interest pursuant to the Exchange Act.

The Commission directed that an Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58313; File No. 3-13116)


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In the Matter of Scott B. Hollenbeck
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Scott B. Hollenbeck (Hollenbeck). In the Order, the Division of Enforcement alleges that Hollenbeck was permanently enjoined from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, based on the entry, on July 10, 2008, of an order by the United States District Court for the Northern District of Georgia in the civil action entitled Securities and Exchange Commission v. Scott B. Hollenbeck, Timothy L. Bradshaw and Steven K. Gilley, Civil Action Number 1:05-CV-1272-WBH.

The Commission's complaint alleged that Mobile Billboards of America, Inc. (MBA) sold more than $60 million of the billboard frame investments. The investments consisted of mobile billboard frames that were purportedly mounted on the sides of trucks to hold advertising posters. Outdoor Media Industries (Outdoor Media), a division of International Payphone controlled by the promoters of MBA, leased the billboards back from investors for seven years for monthly payments equivalent to 13.49% annually. Reserve Guaranty, another entity controlled by the MBA promoters, purportedly operated as a sinking fund and issued investors certificates that purportedly guaranteed funding for MBA's commitment to buy back the billboards at the full purchase price at the end of the seven-year lease. The complaint alleged that the investment program operated as a Ponzi scheme because the collective business did not generate sufficient advertising revenue to make monthly lease payments to investors and, instead, relied on new investor money. The complaint further alleged that MBA's sales materials made false claims about the number of billboards that were operational and misrepresented the value of assets contributed to Reserve Guaranty. The complaint also alleged that the investment contracts were sold through a network of independent sales agents. The complaint also alleged that the investment contracts were sold through a network of independent sales agents. The complaint further alleged that Hollenbeck was one of the top three sales agents for MBA and that by himself he sold more than $11 million of the Mobile Billboard investments. The complaint further alleged that Hollenbeck provided a forged surety bond to investors. The surety bond falsely stated that the individual investor was insured against loss up to the value of the Mobile Billboards investment purchased by each investor. The complaint further alleges that Hollenbeck operated as a broker-dealer.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Hollenbeck an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions against Hollenbeck are appropriate and in the public interest pursuant to the Exchange Act.

The Commission directed that an Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58316; File No. 3-13117)


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In the Matter of Peter In Cho
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Peter In Cho (Cho).

In the Order, the Division of Enforcement alleges that on July 27, 2007, Cho pled guilty to 16 counts of wire fraud under 18 U.S.C. §§ 1343 and 1346 before the United States District Court for the Northern District of Illinois, in United States v. Cho, et al., Crim. Indictment No. 1:04-CR-166. The Division of Enforcement alleges that from 1991 to 1998, Cho worked for John Dawson & Associates, Inc. (JDAI), a broker-dealer registered with the Commission, as JDAI's Chief Executive Officer and as a registered representative. The Division of Enforcement alleges that the counts of the criminal indictment to which Respondent pled guilty alleged, inter alia, that Respondent devised, intended to devise, and participated in a scheme to defraud in which Respondent and others caused and directed: (1) fraudulent and fictitious stock and options trading in firm and customer accounts; (2) inventory "parking" in customer and firm accounts in order to conceal excessive or losing stock and options inventory positions; (3) inventory "kiting" between the "Average Price Account" and firm proprietary accounts in order to satisfy margin requirements and artificially inflate buying power in firm proprietary accounts; (4) fraudulent "trade allocations" by creating, assigning, and/or transferring profitable securities and options trades to certain firm, employee, and customer accounts, and losing trades to other accounts; and (5) the misappropriation and conversion of customer and firm funds.

The Division of Enforcement further alleges that on March 21, 2008, a judgment in the criminal case was entered against Cho. The Division of Enforcement alleges that Cho was sentenced to a term of imprisonment of 65 months, ordered to pay restitution in the amount of $6,336,236 and placed on 3 years probation following his release from prison.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest.

The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58317; File No. 3-13118)


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In the Matter of Simon Chong
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against Simon Chong (Chong).

The Order finds that on July 27, 2007, Chong pled guilty to six counts of wire fraud under 18 U.S.C. §§ 1343 and 1346 before the United States District Court for the Northern District of Illinois, in United States v. Cho, et al., Crim. Indictment No. 1:04-CR-166. The Order finds that Chong was employed from 1991 to 1998 at John Dawson & Associates, Inc. (JDAI), a broker-dealer registered with the Commission, as JDAI's Chief Operating Officer and as a registered representative. The Order finds that the counts of the criminal indictment to which Chong pled guilty alleged, inter alia, that Chong, for the purpose of executing a scheme to defraud, reallocated favorable trades from certain JDAI proprietary firm accounts to his father's account at JDAI. The Order finds that the criminal superseding information alleged, inter alia, that these after-the-fact trade allocations either profited Chong's father's account or served to avoid losses in his account.

The Order also finds that on March 21, 2008, a judgment in the criminal case was entered against Chong. The Order finds that Chong was sentenced to a term of imprisonment of 48 months, ordered to pay restitution in the amount of $2,929,701 and placed on 3 years probation following his release from prison.

Based on the above, the Order bars Chong from association with any broker or dealer. Chong consented to the issuance of the Order. (Rel. 34-58318; File No. 3-13119)


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In the Matter of Marc Willis
On August 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Marc Willis (Willis).

In the Order, the Division of Enforcement alleges that on Aug. 10, 2007, Willis pled guilty to one count of wire fraud under 18 U.S.C. §§ 1343 and 1346 before the United States District Court for the Northern District of Illinois, in United States v. Cho, et al., Crim. Indictment No. 1:04-CR-166. The Division of Enforcement alleges that Willis was employed from 1993 to 1998 at John Dawson & Associates, Inc. (JDAI), a broker-dealer registered with the Commission, as JDAI's Chief Compliance Officer. The count of the criminal superseding information to which Willis pled guilty alleged, inter alia, that Willis, for the purpose of executing a scheme to defraud, consented to the favorable reallocation of trades from certain JDAI accounts to accounts in the name of his mother and brother at JDAI. The Division of Enforcement also alleges that the count of the superseding information to which Willis pled guilty alleged that Willis knew that these favorable trades were not initiated or authorized by his mother or brother and that these trades were allocated after-the-fact to his mother's and brother's trading accounts as a means of transferring funds to them at the expense of the firm and/or other customers to which the profits should have legitimately been allocated.

The Division of Enforcement further alleges that on March 27, 2008, a judgment in the criminal case was entered against Willis. The Division of Enforcement alleges that Willis was sentenced to imprisonment of 10 days, ordered to pay $7,758 in restitution, ordered to perform 1,000 hours of community service and placed on 4 years probation.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest.

The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58319; File No. 3-13120)


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Prudential Financial, Inc. Settles Financial Reporting and Related Charges by SEC for Improperly Reporting Over $200 Million in Income as a Result of Purported Reinsurance Contracts
On August 6, the Commission filed a civil injunctive action in United States District Court for the District of New Jersey charging Prudential Financial, Inc., a leading provider of financial services, with violating the financial reporting, books-and-records, and internal control provisions of the Securities Exchange Act of 1934. Prudential has agreed to settle the case, without admitting or denying the Commission's allegations, by consenting to the entry of a permanent injunction.

The Commission's complaint, filed in federal court in Newark, alleges that from December 1997 through December 2002, Prudential's former property and casualty subsidiaries known as the Prupac companies (Prupac), entered into a series of so-called finite reinsurance contracts with General Reinsurance Corporation (Gen Re) that had no economic substance and no purpose other than to build up and then draw down on an off-balance sheet asset, or "bank," that Gen Re held for Prupac. According to the complaint, the contracts were shams, written to look like they met the requirements to qualify for reinsurance accounting; in fact, they were subject to an oral side agreement that effectively eliminated any risk to either party and made such accounting improper. Prupac built up the bank in 1997, 1998 and 1999 and then, in 2000, 2001 and 2002, drew down on the bank and improperly recorded the repayments as income. In 2001, Prudential became a public company and the inaccurate financial statements became a part of its annual, quarterly and current filings thereafter.

The complaint alleges that the improper accounting practices began in 1997, when Prudential and Gen Re negotiated a riskless reinsurance contract under which Prupac paid Gen Re $50 million. The contract was entered into in the final days of the coverage period, but backdated to appear as if it had been agreed to before the coverage period began. The understanding between the parties was that Gen Re would credit Prupac with interest at the one-year Treasury bill rate and also collect a fee on the money it held. It was further agreed that the relationship would be riskless: If Gen Re lost money in the early years of the relationship, when its exposure on the purported reinsurance contracts was greater than the amount in the bank, Prupac would make Gen Re whole. The parties kept track of where they stood in the relationship by means of a ledger, called an "Experience Account Balance," which showed payments made into the bank, less fees, plus interest, and less payments out.

From 1997 through 2000, Prupac built up the bank, depositing approximately $190 million of the $200 million it would eventually deposit with Gen Re in the form of premiums on reinsurance policies for which no reinsurance recoveries were triggered. In 2000, 2001, and 2002, Prupac drew down on the bank, structuring the purported reinsurance contracts to ensure it recovered virtually to the penny every payment it had made, plus interest, less Gen Re's fee. As a result of these recoveries, Prudential improperly reported additional pre-tax income of $97 million, $80 million and $41 million in 2000, 2001 and 2002, respectively.

The complaint alleges that the improper accounting practices within Prudential's Property and Casualty Insurance division resulted in an overstatement of Prudential's consolidated pre-tax income for 2000, 2001 and 2002 by $57 million or 9%, $75 million or 25%, and by $38 million or 146%, respectively. As a result of these improper accounting practices, Prudential filed annual, quarterly and current reports with the Commission that included financial statements that were inaccurate and misleading and violated the financial reporting, books-and-records, and internal controls provisions of the Exchange Act. Specifically, the complaint alleges that Prudential violated Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder.

Without admitting or denying the Commission's allegations, Prudential has agreed to settle the charges by consenting to a permanent injunction against further violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. [SEC v. Prudential Financial, Inc., 08 Civ. 3916 (PGS) (D.N.J.)] (LR-20670; AAE Rel. 2860)


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SEC Charges Former ABB Project Manager for Falsifying Company's Books and Records
The Commission announced today that it filed a settled civil action in the United States District Court for the District of Columbia against Ali Hozhabri, a former project manager for a subsidiary of ABB Ltd., charging him with violations of the books and records provisions of the Securities Exchange Act of 1934 (Exchange Act). ABB is a Swiss corporation, and its American Depository Receipts are registered with the Commission and trade on the New York Stock Exchange.

As alleged in the complaint, Hozhabri was a project manager for ABB Network Management (ABB NM), a division of a U.S. based ABB subsidiary, which provides products and services for managing power generation and transmission networks. The Commission alleges that, from 2002 through 2004, Hozhabri fraudulently submitted approximately $468,714 in cash and check disbursement requests to ABB NM for purported business expenses associated with projects in Brazil, Paraguay, and the United Arab Emirates. As alleged in the complaint, these purported expenses were phony, and inaccurately recorded as legitimate business expenses in ABB's books and records. The Commission further alleges that the funds disbursed by ABB NM as a result of these requests were not used to pay any business expenses, but rather were embezzled by Hozhabri and the former General Manager of ABB NM. According to the complaint, Hozhabri personally kept $234,357 of the embezzled funds.

The Commission alleges that Hozhabri violated Section 13(b)(5) of the Exchange Act, and Rule 13b2-1 thereunder, and aided and abetted violations of Section 13(b)(2)(A) of the Exchange Act. Without admitting or denying the allegations in the complaint, Hozhabri consented to the entry of a final judgment that permanently enjoins him from future violations of these provisions, and orders him to disgorge his ill-gotten gains of $234,357, which will be deemed satisfied by his payment of that amount in a pending criminal case by the U.S. Department of Justice. In that case, United States v. Hozhabri, Criminal Docket No. H-07-452(s) (SDTx), Hozhabri has pled guilty to conspiracy to commit wire fraud and is awaiting sentencing. [SEC v. Ali Hozhabri, Civil Action No. 08 CV 1359 (D.D.C.)] (LR-20671)


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INVESTMENT COMPANY ACT RELEASES
DNP Select Income Fund Inc., et al.
A notice has been issued giving interested persons until Aug. 25, 2008, to request a hearing on an application filed by DNP Select Income Fund Inc. (Fund) and Duff and Phelps Investment Management Co. under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act, and Rule 19b-1 under the Act. The order would permit certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28348 – July 31)


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ING Clarion Real Estate Income Fund, et al.
An order has been issued on an application filed by ING Clarion Real Estate Income Fund, et al. under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act and Rule 19b-1 under the Act. The order permits certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each year, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28352 - August 5)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-80) eliminating certain obsolete rules has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58266)

A proposed rule change filed by the NASDAQ Stock Market to modify Rule 7050 governing pricing for Nasdaq members using the NASDAQ Options Market ("NOM") (SR-NASDAQ-2008-066) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58279)

A proposed rule change filed by the NASDAQ Stock Market (SR-NASDAQ-2008-067) regarding letters of guarantee for options participants has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58282)

A proposed rule change (SR-ISE-2008-62) filed by the International Securities Exchange to amend Exchange rules related to the imposition of fines for minor rule violations has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58289)

A proposed rule change filed by NYSE Arca amending its Schedule of Fees and Charges for Exchange Services in order to revise certain transaction fees (SR-NYSEArca-2008-75) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58295)

A proposed rule change (SR-NYSE-2008-62) filed by the New York Stock Exchange to eliminate Sections 305 and 308 and the shareholder rights provisions of Section 314 of the Listed Company Manual, has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58303)

NYSE Arca filed a proposed rule change (SR-NYSEArca-2008-82) under Section 19(b)(1) of the Securities Exchange Act of 1934 in connection with the proposed acquisition of The Amex Membership Corporation. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58306)


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Approval of Proposed Rule Changes
The Commission approved a proposed rule change (SR-CBOE-2008-59) filed by the Chicago Board Options Exchange to amend CBOE Rule 8.7 related to the obligations of market-makers. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58281)

The Commission approved a proposed rule change (SR-CBOE-2008-30) submitted pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 by the Chicago Board Options Exchange relating to the Hybrid Opening System. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58296)

The Commission approved a proposed rule change (SR-NASDAQ-2008-055) submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the NASDAQ Stock Market regarding fees for orders routed via the Options Intermarket Linkage. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58298)


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Proposed Rule Changes
Pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, the Financial Industry Regulatory Authority has filed a proposed rule change (SR-FINRA-2008-040) to eliminate of the requirement to report yield to TRACE and for FINRA to calculate yield that will be disseminated by TRACE. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58283)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-70) amending rules governing membership in order to waive-in members in good standing of the American Stock Exchange as members and member organizations of the Exchange. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58290)

The Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2008-043), pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to establish a membership waive-in process and fee waiver for certain NYSE Alternext US LLC member organizations. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58291)

The Depository Trust Company filed a proposed rule change (SR-DTC-2008-07) pursuant to Section 19(b)(1) of the Act that will enhance its Profile Modification System in order to allow a "move all" instruction and to allow a second taxpayer identification number or social security number to be used to verify instructions the proposed rule change would also impose new participant fees to reimburse transfer agents for the cost of implementing and maintaining these Profile enhancements. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58292)

NYSE Arca has filed a proposed rule change (SR-NYSEArca-2008-78) to waive annual fees for securities transferring to NYSE Arca from NYSE Alternext US. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58297)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-68) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to enable the Exchange to determine that a company meets the Exchange's market value requirements by relying on a third-party valuation of the company. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58299)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-56) to amend Section 902.09 of the Listed Company Manual to establish fees for securities listed under Sections 703.21 and 703.22 of the Listed Company Manual and traded on NYSE Bonds and to waive fees for structured products transferred from the Amex to the NYSE. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58301)

The Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2008-039) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder that proposes changes to FINRA procedures relating to Regulation M by proposing new FINRA Rules 5190 and 6470, changes to NASD Rules 4200A, 4619A, and 6540, and to delete Incorporated NYSE Rule 392. FINRA also proposes to adopt current NASD Rule 2710 (Corporate Financing Rule - Underwriter Terms and Arrangements) except for paragraphs (b)(10) and (11) as FINRA Rule 5110 in the Consolidated FINRA Rulebook with technical changes to the rule text in the proposal. Publication is expected in the Federal Register during the week of August 11. (Rel. 34-58302)


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RECENT 8K FILINGS
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http://www.sec.gov/news/digest/2008/dig080608.htm

[jimmenknee]

August 5, 2008 SEC News Digest
Issue 2008-151

ENFORCEMENT PROCEEDINGS
In the Matter of Benguet Corp.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations as to Three Respondents (Default Order) in the matter of Benguet Corp., et al. The Order Instituting Proceedings alleged that Benguet Corp., Clean Systems Technology Group, Ltd., Lumenon Innovative Lightwave Technology, Inc., Symbiat, Inc., Uniroyal Technology Corp., and Value Holdings, Inc. (n/k/a Galea Life Sciences, Inc.), each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Commission.

On July 10 and July 17, 2008, the Commission accepted Offers of Settlement from Uniroyal Technology Corp. and Benguet Corp., respectively. On July 7, 2008, Value Holdings, Inc. (n/k/a Galea Life Sciences, Inc.), filed an Answer.

The Default Order finds these allegations to be true as to the remaining three Respondents. It revokes the registrations of each class of registered securities of Clean Systems Technology Group, Ltd., Lumenon Innovative Lightwave Technology, Inc., Symbiat, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-58304; File No. 3-13079)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Changes
American Stock Exchange filed a proposed rule change (SR-Amex-2008-62) under Section 19(b)(1) of the Securities Exchange Act of 1934 relating to the acquisition of Amex by NYSE Euronext. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58284)

New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-60) under Section 19(b)(1) of the Securities Exchange Act of 1934 in connection with the proposed acquisition of the Amex Membership Corporation. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58285)

American Stock Exchange filed a proposed rule change (SR-Amex-2008-64) under Section 19(b)(1) of the Securities Exchange Act of 1934 to adopt new rule 478T to set forth the temporary procedures that will apply to disciplinary proceedings pending as of the closing date of the acquisition of Amex by NYSE Euronext. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58286)


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RECENT 8K FILINGS
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http://www.sec.gov/news/digest/2008/dig080508.htm

[jimmenknee]

August 4, 2008 SEC News Digest
Issue 2008-150

COMMISSION ANNOUNCEMENTS
SEC Advisory Committee Makes Recommendations to Improve Financial Reporting For Investors
On August 1, Securities and Exchange Commission Chairman Christopher Cox received the final report of an SEC advisory committee containing 25 recommendations to make financial information more useful and understandable to investors.

Last year, Chairman Cox announced the creation of the SEC Advisory Committee on Improvements to Financial Reporting, comprised of members representing investors and other key constituencies in America's capital markets. Chairman Cox asked the Advisory Committee for recommendations on reducing unnecessary complexity in the U.S. financial reporting system and making financial reports clearer and more understandable to investors. Today, the chairman of the Advisory Committee, Robert C. Pozen, presented Chairman Cox with a final report containing recommendations that can be implemented by the SEC, the Financial Accounting Standards Board (FASB), and the Public Company Accounting Oversight Board (PCAOB).

Chairman Cox said, "I commend the Advisory Committee and Chairman Pozen for their work to make financial reporting less complex and more useful to investors. I have asked the Commission staff to immediately begin analyzing these recommendations, and to prepare regulatory actions based on them wherever appropriate."

Chairman Pozen said, "Our recommendations would make financial reports more useful to investors - with clearer guidelines, fewer exceptions and greater focus on really important information."

The SEC already has taken steps to benefit investors based on two earlier recommendations made by the Advisory Committee. On May 14, the Commission formally proposed using new technology to get important information to investors faster, more reliably, and at a lower cost by requiring all U.S. companies to provide financial information using interactive data beginning as early as next year. And on July 30, the SEC approved new guidance to public companies to address their concerns about how to comply with the securities laws while developing their Web sites to serve as an effective means for disseminating important information to investors.

The Committee's report provides practical proposals to improve financial reporting in five main areas:

Increasing the usefulness of information in SEC filings
Enhancing the accounting standards-setting process
Improving the substantive design of new standards
Delineating authoritative interpretive guidance
Clarifying guidance on financial restatements and accounting judgments
Among other things, the Committee noted in the first area that many individual investors find company filings with the SEC to be overly complex and detailed. The Committee recommended the inclusion of a short executive summary at the beginning of a company's annual report that would describe concisely the main aspects of its business and its key performance metrics.

In the second area, the Committee called for more investor participation in accounting standard setting by increasing investor representation on the FASB and Financial Accounting Foundation (FAF).

In the third area, the Committee noted that the underlying objectives of certain accounting standards are sometimes obscured by dense language, detailed rules, and numerous exemptions. The Committee recommended a different approach to the substantive design of standards. For example, the Committee called for improved rules on off-balance sheet accounting and fewer situations where alternative accounting standards exist for the same transaction. The Committee recommended that companies provide better disclosure to investors about what portion of their earnings constitutes cash or accrued income based on historic cost accounting and what portion represents unrealized gains or losses based on fair value estimates.

To reduce the proliferation of U.S. GAAP, the Committee said it strongly supports FASB's efforts to complete the codification of all authoritative accounting literature into one document. The Committee said that others such as audit firms may still publish their views on accounting issues, but they should be labeled as non-authoritative. In this fourth area, the Committee also called for a clearer delineation of functions on interpreting accounting standards - with the FASB taking the lead on broad issues and the SEC on registrant-specific issues.

In the fifth area, the Committee recommended increased correction of accounting errors and more disclosures about those corrections to investors. However, the Committee warned that the correction of every accounting error should not automatically result in a lengthy process of restating financial statements for several prior years. The Committee said that in the "dark period" during restatements when companies generally cease filing current financial reports, companies usually do not provide investors with much information. Thus, the Committee said it believes that restatements of prior years should be undertaken for the correction of accounting errors that are material to current investors.

FASB Chairman Robert Herz and PCAOB Chairman Mark Olson were official observers to the Advisory Committee and joined Chairman Cox and Chairman Pozen at the SEC today to release the final report. They have committed to continue working together with the SEC to increase the usefulness of the financial reporting system. (Press Rel. 2008-166)


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Troy Paredes Sworn in as SEC Commissioner
On August 1, Troy A. Paredes was sworn in as a Commissioner of the Securities and Exchange Commission by SEC Chairman Christopher Cox during a ceremony at the SEC's Washington D.C. headquarters.

The ceremony was attended by his wife Laura Paredes, his parents Smiley and Hollie Paredes, his brother Randy Paredes, as well as other family members and friends. Other SEC commissioners and senior officials also attended.

Commissioner Paredes was appointed to the SEC by President George W. Bush on June 30, 2008. Prior to his appointment, Commissioner Paredes was teaching and researching in the areas of securities regulation and corporate governance as a professor at Washington University School of Law in St. Louis, Mo.

"Commissioner Paredes brings extensive knowledge of securities regulation and corporate governance that will be of enormous help to the Commission's work to safeguard investors, maintain orderly markets, and encourage capital formation," said SEC Chairman Christopher Cox. "I look forward to working with him and welcome his expertise as we move forward with a busy agenda at the SEC to help the American investor."

Commissioner Paredes said, "I am deeply honored and humbled by the opportunity to join the Commission and to do my part in helping to advance the Commission's vital mission of protecting investors, promoting capital formation, and ensuring that our country's securities markets function effectively. I look forward to working with Chairman Cox, my fellow commissioners, and the SEC's dedicated staff as we work together to serve the public interest at this very important time."

Commissioner Paredes has pursued numerous research interests during his time in academia, including such pertinent topics as executive compensation, hedge funds, the allocation of control within firms, the impact of psychology on corporate decision making and investor behavior, and the development of corporate governance and securities law systems in emerging markets. Commissioner Paredes has authored articles on these topics and is a co-author of a leading multi-volume securities regulation treatise.

Before joining Washington University's faculty in 2001, Commissioner Paredes practiced law, working on a variety of transactions and matters involving financings, mergers and acquisitions, and corporate governance.

Commissioner Paredes graduated from the University of California at Berkeley with a degree in economics in 1992, and graduated from Yale Law School in 1996. (Press Rel. 2008-167)


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ENFORCEMENT PROCEEDINGS
In the Matter of Gordon R. Moore
On August 1, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against Gordon R. Moore. The Order finds that on Jan. 8, 2008, Gordon R. Moore (Moore) pled guilty to one count each of three class three felonies in Denver District Court: securities fraud, theft, and computer crime. On Feb. 26, 2008, he was sentenced to two years probation and ordered to pay criminal restitution in the amount of his illegal commissions. The counts of the criminal indictment to which Moore pled guilty alleged, inter alia, that Moore fraudulently induced many investors, the majority of whom were current teachers in Colorado public schools, to consent to rollover their retirement investments from their Colorado Public Employees' Association 401(k) accounts into new 403(b) accounts during the period July 2004 through June 2007. Moore misrepresented the rollover rules to clients and induced them to sign documents which he later falsified. He fraudulently induced approximately $1,665,166 worth of direct customer rollovers into 403(b) accounts using this scheme.

Based on the above, the Order bars Moore from association with any broker, dealer, or investment adviser. Moore consented to the issuance of the Order without admitting or denying the findings therein, except that Moore admitted the fact of his guilty plea. (Rels. 34-58293; IA-2766; File No. 3-13113)


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SEC Charges Brent Lemons, Former Registered Representative From Tyler, Texas, With Fraud
The Commission today filed a civil action against Brent S. Lemons, a former registered representative from Tyler, Texas. The Commission's complaint, filed in the United States District Court for the Eastern District of Texas, Tyler Division, alleges that from about September 2004 through April 2007 Lemons misappropriated over $1.3 million in funds from at least three of his customers.

According to the Commission's complaint, Lemons managed the financial affairs for some of his customers and misused their trust to perpetrate his fraudulent scheme. The complaint alleges that Lemons had his customers sign bank and brokerage documents in blank, under the false pretense that he would use the documents to liquidate securities in their accounts and reinvest the proceeds in higher yielding securities. Lemons instead used the documents signed in blank to extract funds for his personal use from the accounts of his customers without their authorization. According to the complaint, the majority of the misappropriated funds appear to have been used to cover Lemons's gambling losses of approximately $1.4 million.

In its complaint, the Commission alleges that Lemons violated Section 10(b) of the Securities Act of 1934 and Rule 10b-5 there under. The Commission is seeking a permanent injunction, disgorgement plus prejudgment interest, and a civil money penalty against Lemons. [SEC v. Brent Lemons, Civil Action No. 6:08-cv-308, USDC, SDTX, Houston Division)] (LR-20669)


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INVESTMENT COMPANY ACT RELEASES
Van Eck Associates Corporation, et al.
A notice has been issued giving interested persons until August 22 to request a hearing on an application filed by Van Eck Associates Corporation, et al. Applicants request an order to amend a prior order that permits: (a) series of an open-end management investment company that are based on equity or fixed-income indexes for which no entity that creates, compiles, sponsors, or maintains the indexes is or will be an affiliated person, or an affiliated person of an affiliated person, of any applicant, or any sub-adviser or promoter to a series, to issue shares that can be redeemed only in large aggregations; (b) secondary market transactions in shares to occur at negotiated prices; (c) dealers to sell shares to purchasers in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of large aggregations of shares; (e) under specified limited circumstances, certain series to pay redemption proceeds more than seven days after the tender of shares; and (f) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire shares. The amended order would permit applicants to offer five new series based on equity securities indexes for which the investment adviser applicant may be deemed a sponsor. Rel. IC-28349 - July 31)


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Javelin Exchange-Traded Trust, et al.
A notice has been issued giving interested persons until August 25 to request a hearing on an application filed by Javelin Exchange-Traded Trust, et al., for an order to permit series of open-end management investment companies whose portfolios will consist of the securities of an equity securities index to issue shares that can be redeemed only in large aggregations and would trade in the secondary market at negotiated prices. The order would allow dealers to sell shares of the series in the secondary market unaccompanied by a prospectus when prospectus delivery is not required by the Securities Act of 1933, permit certain affiliated persons of the series to deposit securities into and receive securities from the series, and permit certain series to pay redemption proceeds more than seven days after the tender of shares for redemption under certain circumstances. The order also would permit certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire shares of the series. (Rel. IC-28350 - July 31)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Changes
The Financial Industry Regulatory Authority filed a proposed rule change and Amendment No. 1 thereto (SR-FINRA-2008-026) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt the FINRA Rule 0100 Series (General Standards) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of August 4.(Rel. 34-58245)

The NASDAQ Stock Market filed a proposed rule change and Amendment No. 2 thereto (SR-NASDAQ-2008-025) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, relating to the establishment of the Equity Value Indicator Cross. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58275)

NYSE Arca filed a proposed rule change under Rule 19b-4 (SR-NYSEArca-2008-79) to list and trade ELEMENTSSM linked to the CS/RT Emerging Infrastructure Total Return Index Powered by HOLT™ due 2023. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58276)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-61) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 amending NYSE Rule 104(e) (Dealings by Specialists) to modify the conditions governing the specialists' use of the price improvement trading message pursuant to NYSE Rule 104(b)(i)(H). Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58278)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the New York Stock Exchange to reduce the order flow sent to the Specialist Application Programmed Interface (SR-NYSE-2008-67) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58268)

A proposed rule change (SR-Amex-2008-61) filed by the American Stock Exchange to list and trade binary options on certain broad-based indexes has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58272)

A proposed rule change filed by the American Stock Exchange (SR-Amex-2008-59) to delete outdated sections of its delisting rules has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58277)


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SECURITIES ACT REGISTRATIONS
Latest Securities Act registrations (TXT)

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RECENT 8K FILINGS
Latest 8-K filings (TXT)


http://www.sec.gov/news/digest/2008/dig080408.htm

[jimmenknee]

Trading suspensions: MRKL -- Markland Technologies, Inc

8/27 - 9/10/08

34-58426: http://www.sec.gov/litigation/suspensions/2008/34-58426.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58426-o.pdf

[jimmenknee]

Thank you Generic Marked your post & added it to the iBox. Good info!

[Stock]

"E" Added To Stock Ticker Symbol

When a company that trades on the OTC Bulletin Board (OTCBB) becomes delinquent in its reporting obligations with the SEC (for example, it submits a required filing late or in an incomplete form), the letter “E” will be appended at the end of the company’s stock ticker symbol. After the “E” is added, the company is given 30 calendar days (60 calendar days for most foreign companies and domestic banks), known as the “grace period,” to become current in its reports. If the company files complete required reports during the grace period, the “E” will be removed. If the company fails to correct its deficiency, the company’s stock symbol will be removed from trading on the OTCBB.

In addition, repeated delinquencies by a company in filing complete periodic reports with the SEC or other applicable regulator, or removal of the company’s security from quotation on the OTCBB because of its failure to file required reports within the prescribed period, can result in the security becoming ineligible for quotation on the OTCBB for a one-year period.

Specifically, if an OTCBB-quoted company is delinquent in filing complete required annual and quarterly reports with the applicable regulator three times in the prior two-year period, quotations of a security on the OTCBB will be prohibited until the company has timely filed in complete form all required reports due in a one-year period. Further, if a security is removed from the OTCBB twice in the prior two-year period, the security is subject to removal from quotation on the OTCBB until the company has timely filed in complete form all required reports due in a one-year period. For more detailed information, please read FINRA Rule 6530.

Stock symbols for OTCBB securities may also have other fifth letters added to them, such as the letter “Q” (indicating that a company is in bankruptcy proceedings). You can view the complete list of fifth letters that may be attached to a company’s stock symbol on the OTCBB website. Stock symbol changes, as well as new issues, name changes, and deleted issues for OTCBB securities, appear on the OTCBB Daily List.

http://www.sec.gov/answers/eadded.htm

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Home | Previous Page Modified: 03/26/2008

[jimmenknee]

Trading suspensions: 8/20 - 9/3/08

ACMG -- Birman Managed Care, Inc. (n/k/a Alcar Chemical Group, Inc.)

CLTT -- Cluster Technology Corp.

CGPRQ -- Consolidated Growers and Processors, Inc.

GLNW -- Global Network, Inc.

MINT -- Micro-Integration Corp.

MIMF -- Monsoon International Manufacturing & Distribution, Inc.

MNTT -- Montt International Corp.

PYXP -- Pony Express U. S. A., Inc.

ISUM -- SUMmedia.com, Inc.

SFLW -- Sunflower USA, Ltd.

34-58389: http://www.sec.gov/litigation/suspensions/2008/34-58389.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58389-o.pdf

[jimmenknee]

Trading suspensions: 8/19 - 9/2/08

OCRI -- Ocean Resources, Inc.

OFLD -- Officeland, Inc.

AVRG -- Online Gaming Systems Ltd. (n/k/a Advanced Resources Group Ltd.

OCEIF -- Open EC Technologies, Inc.

OVMI -- OVM International Holding Corp.

34-58383: http://www.sec.gov/litigation/suspensions/2008/34-58383.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58383-o.pdf

[jimmenknee]

Trading suspensions: 8/19 - 9/2/08

ATOM -- Atomic Burrito, Inc.

ECCOQ -- Earthcare Co.

GCCP -- Global Concepts, Ltd.

NYBSQ -- New York Bagel Enterprises, Inc.

PBSI -- Precept Business Services, Inc.

OKWHQ -- Reorganized Sale OKWD, Inc.

BTOO -- Villageworld.com, Inc. (n/k/a Biometrics 2000 Corp.)

WWCO -- Wireless Webconnect!, Inc.

34-58381: http://www.sec.gov/litigation/suspensions/2008/34-58381.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58381-o.pdf

[jimmenknee]

Trading suspensions: 8/18 - 8/29/08

PGEXQ -- Pacific Gateway Exchange, Inc.

PALTQ -- Pallet Management Systems, Inc.

PNOIQ -- Panaco, Inc.

NLAI -- Paragon Financial Corp. (n/k/a NewMarket Latin America, Inc.)

PMCY -- Patriot Motorcycle Corp.

34-58371: http://www.sec.gov/litigation/suspensions/2008/34-58371.pdf

Order: http://www.sec.gov/litigation/suspensions/2008/34-58371-o.pdf

[jimmenknee]

August 1, 2008 SEC News Digest
Issue 2008-149

COMMISSION ANNOUNCEMENTS
Commission Reopens Comment Period on Proposal to Improve Mutual Fund Disclosure
On July 31, the Commission announced that it has reopened the public comment period on a proposal intended to improve mutual fund disclosure, in order to allow comments on the results of investor testing.

In November 2007, the Commission proposed rule amendments that would enable investors to view a concise, plain English summary of key facts about a mutual fund and published a prototype "summary prospectus." The proposal and the prototype "summary prospectus" are available on the Commission's Web site.

The Commission reopened the comment period for the rule proposal to provide all persons who are interested in this matter an opportunity to comment on the results of focus group testing and a telephone survey of investors. Comments on the proposal are due by Aug. 29, 2008. (Rels. 33-8949; IC-28346; File No. S7-28-07; Press Rel. 2008-163)


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SEC Announces Panelists, Agenda for August 4 Roundtable on Performance of IFRS, U.S. GAAP During Subprime Crisis
Securities and Exchange Commission today announced the panelists and agenda for its August 4 roundtable concerning the performance of International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S. GAAP) during the recent period of market turmoil.

SEC Chairman Christopher Cox will begin the roundtable with opening remarks at 1 p.m. ET, followed by brief introductory comments about IFRS by John Smith, a Board Member of the International Accounting Standards Board.

The roundtable will be organized as two panels. Expected panelists include investors, issuers, auditors, and others with experience in considering or evaluating company financial statements that are prepared in accordance with IFRS or U.S. GAAP during these current times.

Panel One: Financial Reporting in the Financial Services Industry Sector

Paul Boyle, UK Financial Reporting Council
Francisco Duque, TIAA-CREF
Trevor Harris, Morgan Stanley
Charlotte Jones, Deutsche Bank
Kenneth Marshall, Ernst & Young
Matthew Schroeder, Goldman Sachs
Panel Two: Financial Reporting in Other Industry Sectors

Christopher Craig, Grant Thornton
Ron Graziano, Credit Suisse
Roger Harrington, BP plc
Robert Laux, Microsoft
Jeffrey Mahoney, Council of Institutional Investors
Paul Munter, KPMG
Thomas Robinson, CFA Institute
In addition, the following individuals are scheduled to participate in both panel discussions as observers:

Leslie Seidman, Financial Accounting Standards Board
John Smith, International Accounting Standards Board
The roundtable will take place until approximately 5 p.m. ET at the SEC's headquarters, 100 F Street N.E., Washington, D.C. The roundtable will be open to the public with seating on a first-come, first-serve basis. Doors will open at 12:30 p.m. ET. Visitors will be subject to security checks.

Real-time audio and video webcasts as well as materials related to the roundtable will be available on the SEC Web site at www.sec.gov.


For additional information, please contact John Heine in the SEC's Office of Public Affairs at 202-551-4120 . (Press Rel. 2008-165)


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ENFORCEMENT PROCEEDINGS
In the Matter of Kevin Kelley
On July 31, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Kevin Kelley (Kelley). The Order finds that on May 19, 2008, the United States District Court for the Southern District of New York entered a final judgment against Kelley permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act in a matter entitled Securities and Exchange Commission v. Northshore Asset Management LLC, et al. 05 Civ. 2192.

Based on the permanent injunction, the Order bars Kelley from association with any investment adviser. Kelley consented to the issuance of the Order without admitting or denying most of the findings in the Order. (Rel. IA-2764; File No. 3-13110)


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In the Matter of James B. Kinney, CMA
On July 31, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (Order) against James B. Kinney, CMA, who was the Vice President of Finance for the Wireless business unit of Nortel Networks Corporation. The Order finds that on May 2, 2008, a final judgment was entered against Kinney, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 (the Securities Act), Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (the Exchange Act), and Exchange Act Rules 10b-5 and 13b2-1, and from aiding and abetting future violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13 in the civil action entitled SEC v. Frank A. Dunn, et al., Civil Action Number 07-CV-8851 (LAP), in the United States District Court for the Southern District of New York. Kinney was also ordered in that final judgment to pay $52,000 in disgorgement of ill-gotten gains, $16,481 in prejudgment interest, and a $75,000 civil money penalty.

According to the Order, the Commission finds that the Commission's complaint alleged that, from the second half of 2002 through January 2003, Kinney determined that his business unit held tens of millions of dollars in excess reserves, and that he did not release those excess reserves as required under U.S. Generally Accepted Accounting Principles (GAAP), but instead used them for earnings management purposes. The complaint also alleged that, in early January 2003, during the 2002 year-end closing process, Kinney and other finance executives improperly established additional excess reserves in order to lower Nortel's consolidated earnings and bring it in line with internal and market expectations. As alleged, his efforts, in conjunction with those of other finance executives, helped erase Nortel's pro forma profit for the fourth quarter of 2002 and caused it to report a loss instead. The complaint also alleged that, in the first and second quarters of 2003, Kinney and other finance executives improperly released hundreds of millions of dollars in excess reserves as part of a company-wide effort to inflate consolidated earnings and pay bonuses. According to the complaint, these efforts turned Nortel's first quarter 2003 loss into a reported profit under U.S. GAAP, largely erased Nortel's second quarter loss and generated a pro forma profit in the second quarter.

Based on the above, the Order suspends Kinney from appearing or practicing before the Commission as an accountant, with a right to apply for reinstatement after five years from the date of the Order. Kinney consented to the issuance of the Order without admitting or denying any of the findings of the Order. (Rel. 34-58273; AAE Rel. 2855; File No. 3-13111)


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In the Matter of National Fruit and Vegetable Technology Corp.
An Administrative Law Judge has issued a Default Order in National Fruit and Vegetable Technology Corp. finding that National Record Mart Inc., National Sorbents, Inc., Nations Flooring, Inc., Netcare Health Group, Inc., and Netgain Development, Inc., all with securities registered with the Commission, failed to file required periodic reports. As a consequence, the Administrative Law Judge, acting pursuant to Section 12(j) of the Securities Exchange Act of 1934, revoked the registration of each class of securities of the five Respondents. (Rel. 34-58274; File No. 3-13080)


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Jeffrey Bacsik, CPA, Reinstated to Appear and Practice before the Commission as an Accountant
Pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice, Jeffrey Bacsik, CPA, has applied for and been granted reinstatement of his privilege to appear and practice before the Commission as an accountant. Mr. Bacsik was denied the privilege of appearing or practicing before the Commission on Dec. 27, 2001. His reinstatement is effective immediately. (Rel. 34-58280; AAE Rel. 2856; File No. 3-10664)


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Court Permanently Enjoins Coppell, Texas Resident Mark Meyer and His Company Mark Meyer & Associates, Inc. from Violating Certain Antifraud and Registration Provisions
The Commission announced that on July 28, Judge Elaine Bucklo of the United States District Court for the Northern District of Illinois entered an order permanently enjoining Mark G. Meyer (Meyer) of Coppell, Texas and Mark Meyer & Associates, Inc. (Meyer & Associates), Meyer's business, from violating certain of the antifraud and registration provisions of the federal securities laws. The order, entered with Meyer and Meyer & Associates' consent, permanently enjoins them from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 10b-10 promulgated thereunder, and enjoins Meyer from aiding and abetting violations of Rule 10b-10 of the Exchange Act.

The SEC's complaint in this matter charges that Michael E. Kelly and 25 other defendants, including Meyer and Meyer & Associates, participated in a massive fraud on U.S. investors that involved the offer and sale of securities in the form of Universal Lease investments. Universal Leases were structured as timeshares in several hotels in Cancun, Mexico, coupled with a pre-arranged rental agreement that promised investors a high, fixed rate of return. The SEC's complaint alleges that from 1999 until 2005, Kelly and others, including Meyer and Meyer & Associates, raised at least $428 million through the Universal Lease scheme from investors throughout the United States, with more than $136 million of the funds invested coming from IRA accounts. The SEC further alleges that a nationwide network of unregistered salespeople who sold the Universal Leases, including Meyer and Meyer & Associates, collected undisclosed commissions totaling more than $72 million. The SEC also alleges that Kelly and others ran the scheme from Cancun, Mexico, through a number of foreign entities in Mexico and Panama. According to the SEC's complaint, Kelly and others told investors that Universal Leases would generate guaranteed income through the leasing of investor timeshares by a large, independent leasing agent. In fact, the complaint alleges the leasing agent was a small Panamanian travel agency controlled by Kelly and for most of the scheme its payments to investors came from accounts funded by money raised from new investors. Further, the complaint alleges that Kelly and others, including Meyer and Meyer & Associates, failed to disclose key facts about the Universal Lease investments, including the risks of the investments and that more than $72 million in investor funds were used to pay commissions as high as 27% to the selling brokers. The SEC continues to pursue its claims against Meyer and Meyer & Associates for disgorgement and civil penalties. The SEC's action against the remaining defendants is also pending.

For additional information, see Litigation Release Nos. 20267 (Sept. 5, 2007), 20573 (May 14, 2008), 20578 (May 15, 2008); 20579 (May 15, 2008). [SEC v. Michael E. Kelly, et al., Case No. 1:07-CV-4979 in the United States District Court for the Northern District of Illinois] (LR-20664)


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SEC Action Alleges Registration and Anti-Fraud Violations in Distribution of Software Company Stock
The Commission filed a civil injunctive action on July 29, alleging that six individuals, including a Houston, Texas attorney and a Las Vegas, Nevada attorney, violated the federal securities laws in their unregistered, nonexempt distribution of more than 10.8 million shares of the common stock of a Houston, Texas software development company. The complaint further alleges that from late 2005 through April 2007, the six individuals, and one relief defendant, collectively reaped proceeds exceeding $3.91 million from their illegal, over the counter sales of the common stock of the software company.

Named in the Commission's complaint for violations of the registration provisions of the Securities Act are Robert L. Sonfield, 76, a Houston attorney; Donald C. Bradley, 76, of Las Vegas; Jeffrey W. Bradley, 48, of Las Vegas; Jason Landess, 62, a Las Vegas attorney; Marc Lane, 46, believed to reside in Cadiz, Spain; and Roger Brewer, 52, believed to reside in Penzance, England. The complaint further alleges that Sonfield violated the anti-fraud provisions of the Exchange Act, and aided and abetted disclosure violations by the software company, by causing the company to fail to disclose that Sonfield and others controlled virtually all the "free trading," "public float" of the company's common stock. The complaint also names Alexanderia Blankenship, 46, of Houston, Texas, who is personally associated with Sonfield, as a relief defendant, to secure the return of stock sales proceeds transferred to her. [SEC v. Robert L. Sonfield, Donald C. Bradley, Jeffrey W. Bradley, Jason Landess, Marc Lane and Roger Brewer, Defendants, and Alexanderia K. Blankenship, Relief Defendant, Civil Action No. 4:08-cv-02351, (S.D. Texas, Houston Division] (LR-20665)


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SEC v. Paul G. Merklinger, et al.
On July 31, the Honorable Gerald E. Rosen of the United States District Court for the Eastern District of Michigan issued an order of preliminary injunction and asset freeze against Paul G. Merklinger (Merklinger) of Novi, Michigan, and Encore Associated Leasing, LLC (Encore Leasing), a company formed, owned and controlled by Merklinger, and issued an asset freeze against Merklinger's son, Brian Merklinger, a relief defendant. Previously, on July 24, 2008, Judge Rosen issued an order temporarily prohibiting Merklinger and Encore Leasing from attempting to offer securities or other investments and from transferring any assets. That order was issued under seal by the court and that seal has now been lifted.

According to the SEC's complaint, from September 2006 to July 2007, Merklinger raised at least $7.2 million from five investors through the sale of investments in his purported tire recycling business. The investments consisted of an interest in a tire shredding truck that Encore Leasing would lease from the investor and purportedly use in its business operations, and a $10,000 warrant for a 1% interest in Encore Leasing. Merklinger told investors that a working prototype of the shredding truck existed and that their trucks would be in operation shortly. He promised that Encore Leasing would pay the investors $15,000 in monthly leasing fees and investment interest, and that after five years, the investors could expect returns of up to 372% and the warrant would be worth at least $1.2 million. However, as alleged in the SEC's complaint, there was no working prototype, no reasonable basis for Merklinger's income and return figures, and the investors never received a dime from their investment. Instead, Merklinger used more than $950,000 of investor funds for his own personal benefit, including payments for rent, back taxes and the purchase of luxury automobiles and watercraft and extravagant landscaping and furnishings for his home. He also, as alleged in the SEC's complaint, spent or transferred more than $172,000 for the benefit of his son, Brian Merklinger, and used more than $134,000 to make payments to investors in one of his other companies. Further, Merklinger failed to disclose to investors that he had been barred from participating in Ontario, Canada's securities markets for ten years in connection with a prior investment scheme.

The SEC's complaint charges Merklinger and Encore Leasing with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and seeks permanent injunctive relief, disgorgement, and civil penalties. The SEC further seeks disgorgement of all investor funds or assets acquired with investor funds from Relief Defendant Brian Merklinger. [SEC v. Paul G. Merklinger, et al, Case No. 08 CV 13184, United States District Court for the Eastern District of Michigan] (LR-20666)



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SEC v. Jason R. Hyatt, Jay D. Johnson, and Hyatt Johnson Capital, LLC
The Commission announced that on July 25, the Honorable George W. Lindberg of the United States District Court for the Northern District of Illinois entered an Agreed Order Making Findings of Contempt of the Court's April 18, 2008 Asset Freeze Order by Jason R. Hyatt and Heidi E. Hyatt (the Contempt Order). The Contempt Order found that Jason Hyatt and his wife Heidi Hyatt were in contempt of an order that the Honorable William J. Hibbler, acting as emergency judge, entered on April 18, 2008 freezing all of the assets of Jason Hyatt (the Asset Freeze Order).

The Asset Freeze Order had been entered as part of the emergency remedies the Commission sought and obtained when it filed a civil injunctive complaint on April 18, 2008, alleging that from approximately 2003 through 2007, Defendants Hyatt, Johnson, and Hyatt Johnson Capital, LLC, while acting as unregistered broker-dealers and investment advisers, misappropriated at least $5.4 million in investor funds. The Complaint alleged that, as a result of their conduct, the Defendants violated Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.

On April 19, 2008, the Commission filed a Motion to Show Cause (Contempt Motion) against Jason Hyatt and Heidi Hyatt. The Commission's Contempt Motion alleged that, after Jason Hyatt received notice of the Asset Freeze Order, Heidi Hyatt withdrew at least $57,000 in cash from Jason Hyatt's bank account in three separate visits to two different branches of a bank over an approximately one-hour period. In connection with the Contempt Motion the Commission stated in a pre-hearing status report that, shortly after Jason Hyatt learned of the Asset Freeze Order, thirteen telephone calls took place between him and Heidi Hyatt. While the Contempt Motion was pending, the Court ordered Jason Hyatt to return substantially all of the cash to his bank account.

The Commission also announced that on June 12, 2008, the Special June 2007 Grand Jury for the Northern District of Illinois returned an eleven-count indictment for Jason Hyatt. U.S. v. Jason R. Hyatt, Criminal Action No. 1:08-cr-0469 (N.D. Ill.) (Kocoras, J.). This indictment included various counts of wire fraud (18 USC 1343), bank fraud (18 USC 1014), engaging in monetary transactions in property derived from specified unlawful activity (18 USC 1957(a)), filing a false income tax return (26 USC 7206(1)), willful failure to file a tax return (26 USC 7203), and tax evasion (26 USC 7201). [SEC v. Jason R. Hyatt, Jay Johnson and Hyatt Johnson Capital, LLC, Civil Action No. 1:08-CV-2224 (N.D. Ill.)(Lindberg, J.)] (LR-20667)


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SEC Charges Former CEO and Former Director and Interim CFO of SeraCare Life Sciences with Financial Fraud
On July 31, the Commission filed securities fraud charges against Michael F. Crowley, Jr., the former chief executive officer of SeraCare Life Sciences, Inc., and Jerry L. Burdick, a former member of SeraCare's board of directors and the former interim chief financial officer, for their roles in financial fraud at SeraCare during 2005.

The SEC's complaint against Crowley, filed in federal district court in San Diego, alleges that Crowley, age 40, of San Diego, failed to disclose material information in SeraCare's Form 10-Q and earnings release for the first quarter of its fiscal year 2005 and during an earnings call with investors. Specifically, the complaint alleges that Crowley learned the day before these disclosures were made that a bill and hold sale representing almost 11% of SeraCare's quarterly net income before taxes had been cancelled by a major customer. In spite of this knowledge, Crowley failed to disclose the cancelled sale in any of SeraCare's first quarter disclosures, including the quarterly report that Crowley signed and certified, an earnings release, and an investor conference call.

The SEC also filed a separate complaint against Burdick, age 68, of Westlake Village, Calif., alleging that in SeraCare's second and third quarters of 2005, Burdick improperly released general inventory reserves that he had created following a major acquisition by SeraCare in 2004. As a result, SeraCare's net income before taxes was artificially inflated in the second and third quarters by 20% and 17%, respectively, and misstated in the corresponding quarterly reports filed by SeraCare that Burdick prepared and/or certified. The complaint further alleges that Burdick also caused misrepresentations to SeraCare's outside auditors by creating a backdated letter that was given to the auditors in order to recognize revenue on an almost $1 million sale before the close of the 2005 fiscal year. Finally, the Commission's complaint alleges that Burdick misled SeraCare's auditors by providing them an increased inventory valuation without any documented or verifiable support.

Crowley and Burdick each agreed to settle the SEC's charges without admitting or denying the allegations in the complaint. Crowley agreed to pay a civil penalty of $25,000 and will be permanently enjoined from violations of Section 17(a)(2) and (3) of the Securities Act of 1933 (Securities Act) and Rule 13a-14 of the Securities Exchange Act of 1934 (Exchange Act), and aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. Burdick agreed to pay a civil penalty of $25,000 and also agreed to be permanently enjoined from violations of Section 17(a)(2) and (3) of the Securities Act and Rules 13a-14, 13b2-1, and 13b2-2 of the Exchange Act, and aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder. Burdick, a certified public accountant, also agreed to a one year suspension from appearing or practicing before the Commission as an accountant under Rule 102(e) of the Commission's Rules of Practice. [SEC v. Michael F. Crowley, Jr., United States District Court for the Southern District of California, Civil Action No. 08-CV-1388 J (RBB); SEC v. v. Jerry L. Burdick, United States District Court for the Southern District of California, Civil Action No. 08-CV-1390 JAH (JMA)] (LR-20668; AAE Rel. 2857)


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INVESTMENT COMPANY ACT RELEASES
Goldman Sachs Trust, et al.
A notice has been issued giving interested persons until August 25 to request a hearing on an application filed by Goldman Sachs Trust, et al., under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act. The order would permit certain registered open-end management investment companies to acquire shares of other registered open-end management investment companies and unit investment trusts that are within and outside the same group of investment companies. (Rel. IC-28347 - July 31)


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SELF-REGULATORY ORGANIZATIONS
Proposed Rule Changes
The Depository Trust Company filed a proposed rule change (SR-DTC-2008-05) under Section 19(b)(1) of the Securities Exchange Act of 1934. The proposed rule change would establish a new disincentive fee relating to DTC's Money Market Instrument procedures. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58252)

The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-58) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to make permanent a pilot program under which the Exchange excludes from its earnings standard gains or losses from extinguishment of debt prior to maturity. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58254)

The American Stock Exchange filed a proposed rule change (SR-Amex-2008-63), pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, relating to the relocation of equities trading after the acquisition of the Exchange by NYSE Euronext. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58265)


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Accelerated Approval of Proposed Rule Change
The Options Clearing Corporation filed a proposed rule change (SR-OCC-2008-12) under Section 19(b)(1) of the Securities Exchange Act of 1934. The proposed rule change, which the Commission approved on an accelerated basis, will amend OCC Rule 705 to add shares of money market funds as a form of collateral that may be deposited and recognized with respect to cross-margin accounts. In addition, the proposed rule change revises the cross-margining agreement between OCC and the Chicago Mercantile Exchange, Inc., to reflect the allowance of money market fund shares as acceptable collateral. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58258)


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Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NYSE-2008-66) filed by the New York Stock Exchange to make permanent the portfolio margin pilot program has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58261)

A proposed rule change (SR-CBOE-2008-74) filed by the Chicago Board Options Exchange to make amendments to the portfolio margining rules has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58262)

A proposed rule change (SR-FINRA-2008-042) filed by the Financial Industry Regulatory Authority relating to amendments to portfolio margin has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58263)

A proposed rule change filed by the International Securities Exchange to amend Rule 2009 to permit the listing and trading of additional index options series that do not meet current Rule 2009 requirements, if such options series are listed and traded on at least one other national securities exchange (SR-ISE-2008-59) has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58267)

A proposed rule change (SR-NYSE-2008-65) filed by the New York Stock Exchange to make amendments to the portfolio margining rules has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58269)


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July 31, 2008 SEC News Digest
Issue 2008-148

COMMISSION ANNOUNCEMENTS
Luis A. Aguilar Sworn in as SEC Commissioner

Luis Aguilar (left) is sworn in
as SEC Commissioner Today, Luis A. Aguilar was sworn in as a Commissioner of the Securities and Exchange Commission.

Appointed by President George W. Bush on June 30, 2008, Commissioner Aguilar was sworn in by his longtime friend and law school colleague, Chief Judge Matthew O. Simmons of the Superior Court of the Clayton, Ga., Judicial Circuit, during a ceremony held at the SEC's Atlanta Regional Office where he once worked.

Prior to being appointed to the Commission, Aguilar worked as a partner in the Atlanta office of international law firm McKenna Long & Aldridge LLP, where among other things he focused on corporate governance, public and private offerings, mutual funds, investment advisers and broker-dealers, and other aspects of federal and state securities laws and regulations. Commissioner Aguilar served as a staff attorney during his previous tenure at the SEC from April 1979 to January 1982.

SEC Chairman Christopher Cox said, "The wealth of talent and experience that Commissioner Aguilar brings to the Commission will be invaluable as we move forward with our busy agenda to further enhance investor protections, facilitate capital formation in our economy, and improve financial markets regulation. It is a pleasure to welcome him back to the SEC."

Commissioner Aguilar said, "It is a great privilege to work once again with the SEC, where I began my legal career. I am honored to have this opportunity to serve the investing public and capital markets. I view this as a wonderful challenge and I look forward to fulfilling my responsibilities. I recognize the important trust I hold."

Commissioner Aguilar also has demonstrated a remarkable commitment to community service, devoting countless hours to numerous charitable causes. In 2007, he received the Justice Robert Benham Award for Community Service from the Chief Justice's Commission on Professionalism of the Supreme Court of Georgia. He also was named one of the "100 Influential" Hispanics in the U.S. in 2006 by Hispanic Business Magazine, and was named the Latino Attorney of the Year for 2005 by the Hispanic National Bar Association.

Commissioner Aguilar received his B.S. from Georgia Southern University in 1976, and his J.D. from the University of Georgia School of Law in 1979. He also received a master of laws degree in taxation from Emory University in 1985. (Press Rel. 2008-161)


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Zoe-Vonna Palmrose to Return to USC Professorship, Completing SEC Service as Deputy Chief Accountant
The Securities and Exchange Commission announced today that Dr. Zoe-Vonna Palmrose will return to the University of Southern California as a Professor of Accounting in the Marshall School of Business and Leventhal School of Accounting, concluding her two years of successful public service as the agency's Deputy Chief Accountant for Professional Practice.

As Deputy Chief Accountant, Dr. Palmrose played a key role in nearly all aspects of the Commission's work related to overseeing the activities of the Public Company Accounting Oversight Board (PCAOB), managing the resolution of audit independence issues and ethical matters, monitoring audit and independence standard-setting internationally, and observing the Department of Treasury's Advisory Committee on the Auditing Profession.

"I am personally very grateful to Dr. Palmrose for dedicating her energies and expertise to the cause of investor protection, and to USC for supporting her in doing so," said SEC Chairman Christopher Cox. "Her extensive experience and groundbreaking work in the accounting and academic worlds enabled her to bring an exceptionally informed perspective to our Office of the Chief Accountant. As expected, she has done a remarkable job in leading our national effort to ensure that public companies adhere to internal controls and provide their investors with quality financial information that they can rely on and understand. Her service to our nation during these past two years has been outstanding."

Dr. Palmrose said, "I am very proud of all that the Professional Practice Group has accomplished over the last two years, including the group's efforts to improve the implementation of SOX Section 404. It has been a special privilege to work with the Commission and its outstanding staff. I am very grateful to Chairman Cox for having had this opportunity to serve investors in our markets."

Next week, at the American Accounting Association's annual convention in Anaheim, California, Dr. Palmrose will deliver the AAA Presidential Scholar's Address: "Science, Politics, and Accounting: A View from the Potomac."

Prior to serving as a Deputy Chief Accountant at the SEC, Dr. Palmrose was the PricewaterhouseCoopers Professor of Auditing at the University of Southern California. Prior to joining USC, she was on the faculty at the University of California at Berkeley.

Dr. Palmrose has published and spoken extensively on a variety of issues related to the quality of financial reporting and auditing, including restatements, regulation of the profession, and audit litigation. Her public service also includes membership on the Public Oversight Board's Panel on Audit Effectiveness, the American Institute of Certified Public Accountants' Auditing Standards Board Fraud Task Force, and the AICPA Antifraud Program and Controls Task Force.

Dr. Palmrose received her B.S. from Oregon State University, and her MBA and Ph.D. from the University of Washington. She has worked in public accounting and private industry. (Press Rel. 2008-162)


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SEC Suspends Trading in the Stock of Global Diamond Exchange, Inc.
Today, the Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the "Exchange Act"), of trading in the securities of Global Diamond Exchange, Inc., at 9:30 a.m. EDT, July 31, 2008, through 11:59 p.m. EDT, on August 13, 2008.

The Commission temporarily suspended trading in these securities because there is a lack of current and accurate information concerning its securities. Questions have arisen concerning the company's current business operations, control of the company, and the company's reliance on Rule 504 of Regulation D of the Securities Act of 1933 in conducting a distribution of its securities.

The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.

Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker or dealer has any questions as to whether or not it has complied with the rule, it should not enter any quotations but immediately contact the staff in the Division of Trading and Markets, Office of Interpretation and Guidance, at [phone] . If any broker or dealer is uncertain as to what is required by Rule 15c2-11, it should refrain from entering quotations relating to the securities of Global Diamond Exchange, Inc. until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider prompt enforcement action. (Rel. 34-58271)


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ENFORCEMENT PROCEEDINGS
In the Matter of Lexington Resources, Inc., Grant Atkins and Gordon Brent Pierce
The Commission announced the issuance of an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 (Order) against Lexington Resources, Inc. (Lexington), based in Las Vegas, NV; Lexington CEO and Chairman Grant Atkins (Atkins), 48, of Vancouver, Canada; and Gordon Brent Pierce (Pierce), 51, also of Vancouver, Canada.

The Division of Enforcement alleges in the Order that Lexington and Atkins issued over 5 million shares of Lexington stock to Pierce and Pierce's business associates, who then commenced a massive spam and newsletter campaign to promote the stock, more than doubling Lexington's stock price and allowing Pierce to net millions of dollars when he sold his shares to the public. According to the allegations, these parties failed to register their stock sales, avoiding the public disclosures and other investor protections of the federal securities laws. Instead, the Order alleges, Lexington improperly relied on a short-form registration statement, Form S-8, which is reserved for certain employees and consultants and expressly prohibits use by stock promoters.

The Division of Enforcement alleges that Lexington, Atkins and Pierce violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, and that Pierce violated the stock ownership reporting provisions of Sections 13(d) and 16(a) of the Securities Exchange Act of 1934 and Rules 13d-1, 13d-2 and 16a-3 thereunder.

An administrative hearing will be scheduled to determine whether the allegations in the Order are true, and to provide Lexington, Atkins and Pierce an opportunity to establish any defenses to the allegations. The proceedings also will determine whether remedial actions are appropriate. As directed by the Commission, the administrative law judge shall issue an initial decision in this matter no later than 300 days from the date of service of the Order. (Rel. 33-8948; 34-58270; File No. 3-13109)


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Final Judgment Setting Disgorgement and Civil Penalty Entered Against Defendants Donald E. Secunda, Larry Webman, and Melvin Webamn
The Commission announced that on May 2, 2008, the United States District Court for the Southern District of Florida entered a Final Judgment Setting Disgorgement and Civil Penalty against Defendants Donald Secunda, Larry Webman, and Melvin Webman. The Final Judgment orders Secunda to pay disgorgement in the amount of $392,259.15 plus prejudgment interest of $10,529.98, orders Larry Webman to pay disgorgement of $273,500 plus prejudgment interest of $11,049.40, and orders Melvin Webman to pay disgorgement of $459,918.13 plus prejudgment interest of $18,580.69. The Final Judgment also orders Secunda to pay a civil penalty of $80,000, and Larry and Melvin Webman are each ordered to pay a $120,000 civil penalty.

The Court previously entered Judgments of Permanent Injunction and other Relief by consent, against Secunda and Larry and Melvin Webman. [SEC v. U.S. Gas & Electric, Inc., et al., Civil Action No. 06-22440-CIV-LENARD, SDFL] (LR-20661)


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Stock Trader Recieves 36 Month Sentence for Orchestrating Wash Sales and Matched Orders in Spam-Fueled Pump-and-Dump Schemes
The Commission today announced that on July 25, 2008, Lawrence Kaplan was sentenced by the Hon. Gerald Bruce Lee of the Eastern District of Virginia to 36 months of incarceration for conspiracy to commit securities fraud, with 12 months to be served in community confinement. Kaplan was also ordered to pay restitution to the victims of his crime in the amount of $7,333,384.21.

On July 25, 2007, Kaplan pleaded guilty to one count of conspiracy to commit securities fraud. The criminal case was prosecuted by the U.S. Attorney's Office for the Eastern District of Virginia. In a related case, on September 17, 2007, the Commission filed a complaint in U.S. District Court for the Eastern District of Virginia, alleging that, over the past four years Kaplan and Mesa, Arizona-based recidivist securities law violator Michael Saquella, a.k.a., Michael Paloma, conducted an elaborate market manipulation scheme that involved unlawfully taking public seven microcap companies, artificially inflating their share prices, and dumping millions of shares into the public market. On March 14, 2008, Saquella was sentenced to serve ten years in federal prison for orchestrating the scheme.

According to the Commission's complaint, Saquella repeatedly circumvented the registration requirements of the federal securities laws in order to obtain large blocks of purportedly free trading shares. With the "free trading shares" in hand, Saquella and Kaplan coordinated wash sales and matched orders to artificially inflate the price of each issuer's stock while also creating the appearance of an active trading market. Saquella then coordinated the dissemination of millions of false and/or misleading blast fax and spam e-mails touting the companies' shares. Kaplan realized profits of some $677,632 by dumping shares of the microcap issuers into the public market at prices artificially inflated by his manipulative trading as well as the spam campaigns. The Commission alleged that Saquella carried out versions of this scheme using the shares of Courtside Products, Inc., Latin Heat Entertainment, Inc., Xtreme Technologies, Inc., PokerBook Gaming Corp., Commanche Properties, Inc., TKO Holdings Ltd. and Motion DNA Corp.

In the Commission's action, Kaplan consented to the entry of a final judgment (1) permanently enjoining him from violating Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (2) imposing a penny stock bar against him; and (3) directing that he disgorge $677,632 in unlawful profits, plus prejudgment interest of $121,127. (LR-20662)


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Federal Judge Permanently Enjoins Three Defendants and Three Penny Stock Issuers in Pump and Dump Price Manipulation Scheme
The Commission announced that on July 16, 2008, the Honorable Dean D. Pregerson, United States District Judge for the Central District of California, entered final judgments against defendants Stephen Luscko, age 40, formerly of Sarasota, Florida; Gregory Neu, age 32, formerly of Miami, Florida; Justin Medlin, age 27, formerly of San Diego, and China Score, Inc., a Las Vegas based business. The judgments permanently enjoin defendants Neu, Luscko, and China Score from committing future violations of the securities registration provisions of the federal securities laws, and the judgments as to Luscko, Neu, and Medlin enjoin them from committing future violations of the securities antifraud provisions of the federal securities laws. The judgments also bar Luscko, Neu, and Medlin from participating in any penny stock offering, and enjoin Luscko and Neu from conducting unregistered securities offerings. Luscko, Neu, Medlin, and China Score each consented to the entry of the judgment against them without admitting or denying any of the allegations in the Commission's complaint.

Additionally, the Court entered final judgments against defendants Emerging Holdings, Inc. and Massclick, Inc., permanently enjoining both companies from committing future violations of the securities registration provisions of the federal securities laws. On October 26, 2007, the Clerk of the Court entered the defaults of both Emerging Holdings and Massclick upon their failure to answer or otherwise respond to the Commission's complaint. Finally, the Court dismissed relief defendant Marc Primo Pulisci from the Commission's action. The final judgments entered by the Court effectively concluded the litigation in this matter.

The Commission's complaint, filed on April 27, 2007, alleged that, between March and August 2004, the defendants artificially inflated the stock price and trading volume of certain companies whose stock traded on the over-the-counter market. The complaint alleged that defendants Luscko and Neu formed four companies, including defendants Emerging Holdings, Massclick and China Score, as well as another entity that is now defunct, and then recruited friends and business associates to act as company officers. According to the complaint, Luscko and Neu arranged for these companies to transfer millions of shares of stock to their own or their friends' brokerage accounts in a series of sham transactions designed to bypass Commission regulations that required the shares to be restricted from being resold into the open market. The complaint also alleged that Luscko and Neu drafted false and misleading spam e-mails that were edited by defendant Medlin. Further, the complaint alleged that Medlin embarked on a weekend spam e-mail campaign, bombarding the investing public with millions of spam e-mails that generated significant investor interest and resulted in rapid increases in the companies' stock price and volume. The Commission further alleged that, having "pumped" up the companies' stock prices, Luscko and Neu then, directly or through their friends, "dumped" their shares into the open market, and the companies' stock prices declined rapidly thereafter. As a result of trades made in these four stocks, Luscko, Neu, and Medlin netted $6.5 million.

The Court permanently enjoined Luscko, Neu, Emerging Holdings, Massclick, and China Score from violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. Luscko, Neu, and Medlin were also enjoined from violating the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Finally, Medlin was enjoined from violating the anti-touting provisions of Section 17(b) of the Securities Act.

In a related criminal action, the U.S. Department of Justice and the U.S. Attorney for the Eastern District of Virginia previously filed charges against Luscko, Neu, and Medlin, all of whom pled guilty to conspiring to commit securities fraud and e-mail fraud. Neu was sentenced to five years' imprisonment and three years' supervised release. Luscko was sentenced to five years' imprisonment and two years' supervised release. Medlin was sentenced to six years' imprisonment and three years' supervised release. The criminal authorities have seized approximately $3,700,000 from bank accounts associated with Luscko, Neu, and Medlin. [SEC v. Stephen Luskco, Gregory Neu, Justin Medlin, Emerging Holdings, Inc., Massclick, Inc., And China Score, Inc., Case No. SACV 07-2783 DDP (AGRx) (C.D. Cal.)] (LR-20663)


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STANDARDS SETTING BOARDS
The Commission is publishing for public comment the Public Company Accounting Oversight Board's proposed new Auditing Standard No. 6, Evaluating Consistency of Financial Statements, and Conforming Amendments. Publication of the proposed rule is expected in the Federal Register during the week of August 4th. The comment period will end 21 days after the proposed rule is published in the Federal Register. (Rel. 34-58259)


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SELF-REGULATORY ORGANIZATIONS
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by the Philadelphia Stock Exchange, (SR-Phlx-2008-55) relating to an extension of pilot programs in connection with Linkage P/A orders has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58234)

A proposed rule change (SR-ISE-2008-61) filed by the International Securities Exchange relating to non-customer options orders has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58237)

A proposed rule change (SR-CBOE-2008-73) filed by the Chicago Board Options Exchange to make permanent the customer portfolio margin program has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58243)

A proposed rule change filed by the New York Stock Exchange to eliminate the exceptional messaging fee (SR-NYSE-2008-64) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58246)

A proposed rule change (SR-FINRA-2008-041) filed by the Financial Industry Regulatory Authority relating to making the portfolio margin pilot permanent has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 4. (Rel. No. 34-58251)


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Proposed Rule Change
The New York Stock Exchange has filed a proposed rule change (SR-NYSE-2008-59) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to reduce the period within which companies must issue a press release after the Exchange notifies them that they are noncompliant with Exchange listing requirements. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58235)

The Financial Industry Regulatory Authority has filed a proposed rule change and Amendment No. 1 thereto (SR-FINRA-2008-029) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, to repeal NASD Rule 1130 and Incorporated NYSE Rules 405A, 440F, 440G and 477 as part of the process of developing the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58244)

The New York Stock Exchange has filed a proposed rule change (SR-NYSE-2008-57) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to adopt on a permanent basis a pilot program which allows the Exchange to adjust the earnings of companies for purposes of its earnings standard by reversing the income statement effects of changes in fair value of financial instruments extinguished at the time of listing. Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58253)

The Commission issued a notice of filing of a proposed rule change by the Municipal Securities Rulemaking Board pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, relating to the Establishment of a Continuing Disclosure Service of the Electronic Municipal Market Access System (EMMA) (SR-MSRB-2008-05). Publication is expected in the Federal Register during the week of August 4. (Rel. 34-58256)


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July 30, 2008 SEC News Digest
Issue 2008-147

COMMISSION ANNOUNCEMENTS
SEC Provides Guidance to Open Up Use of Corporate Web Sites for Disclosures to Investors
The Securities and Exchange Commission today voted unanimously to provide new guidance to public companies about how to comply with the securities laws while developing their Web sites to serve as an effective means for disseminating important information to investors.

Issued in the form of an interpretive release, the SEC's guidance provides helpful information for companies considering providing investors with interactive content on their Web sites, as well as summary information and links to third-party information. The SEC's guidance addresses a recommendation made by the SEC's Advisory Committee on Improvements to Financial Reporting in its February 2008 Progress Report for the Commission to provide clarity on issues and questions that arise in connection with SEC rules against selective disclosure of material nonpublic information.

The Internet has changed significantly since 2000, when the SEC last issued extensive guidance on the use of Web sites and electronic media.

"The last time the SEC issued guidance in this area, the idea of 'social networks' hadn't yet been developed, and creating a social network where shareholders could meet and exchange views was barely imaginable," said SEC Chairman Christopher Cox. "Ongoing developments in technology have increased both the markets' and investors' demand for more timely company disclosure on the Web, and in turn, raised new securities law issues for public companies to consider. The guidance issued today clarifies the rules of the road so investors can gain - quickly and in a cost-effective manner - the benefits of Internet disclosure of the latest information on the companies they own or are considering buying."

Chairman Cox added, "I'd especially like to thank the Advisory Committee on Improvements to Financial Reporting, led by Chairman Bob Pozen, for encouraging the Commission to focus its attention on this important issue."

John W. White, Director of the Division of Corporation Finance, said, "The Commission has long recognized the vital role of the Internet and electronic communications in company disclosures to investors and the markets. I believe this guidance, which will assist companies in their compliance with the federal securities laws, will encourage further disclosures on company Web sites. Special thanks to the Advisory Committee on Improvements to Financial Reporting for their work on this matter."

The SEC's guidance is divided into four parts:

The guidance clarifies how information posted on a company Web site can be considered "public" and provides guidance to help companies comply with public disclosure requirements under Regulation FD.

The guidance clarifies the liability framework for certain types of electronic disclosure, including how companies can provide access to historical or archived data without it being considered reissued or republished every time it is accessed. It provides guidance on how companies can link to third-party information or Web sites without having to "adopt" that content for liability purposes. It provides guidance on the appropriate use of summary information in the context of the securities laws' antifraud provisions. It also clarifies that the antifraud provisions apply to statements made by the company (or by a person acting on behalf of the company) in blogs and electronic shareholder forums, and companies cannot require investors to waive protections under the federal securities laws as a condition to enter or participate in a blog or electronic shareholder forum.

The guidance clarifies that information posted on company Web sites would not generally be subject to rules under the Sarbanes-Oxley Act relating to a company's "disclosure controls and procedures."

The guidance clarifies that information need not satisfy a "printer-friendly" standard, unless other rules explicitly require it, that could restrict creative Web enhancements that incorporate interactive and dynamic design features.
The SEC's interpretive release will be effective upon its publication in the Federal Register. (Press Rel. 2008-158)


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SEC, MSRB Propose "Giant Step Forward" for Municipal Bond Investors
The Securities and Exchange Commission today voted unanimously to propose measures that would for the first time enable investors to easily access complete financial information about municipal bonds for free on the Internet.

Currently, retail investors in municipal securities usually cannot get ongoing disclosure information about their securities without paying significant fees and waiting for the documents to come in paper form by mail or fax. Issuers of municipal bonds submit their disclosures, such as annual financial data and information about material events including downgrades or notices of default, to a variety of for-profit information repositories that then sell it to the public. This severely limits its availability to retail investors.

The rule amendments proposed by the SEC would designate the Municipal Securities Rulemaking Board (MSRB) as the central repository for ongoing disclosures by municipal issuers. Under a separate MSRB-proposed rule change, its Electronic Municipal Market Access (EMMA) system would make these disclosures available to investors for free on the Internet in the same way the SEC's EDGAR system does for corporate disclosures.

"These proposals would bring dramatic improvements in disclosure to investors in municipal securities," said SEC Chairman Christopher Cox. "Retail investors - who own two-thirds of municipal securities - will soon have the same one-stop, cost-free, instant electronic access to disclosure documents about municipal bonds that they've long had for corporate stocks and bonds. This is a giant step forward for municipal bond investors."

MSRB Chair Frank Chin added, "The centralized collection and dissemination by the MSRB of ongoing financial documents will allow fair and equal access to information about municipal issuers and their bonds. EMMA will give investors an efficient and easy way to get key data about issuers as soon as it becomes available."

Public comment on the SEC's proposed amendments to Rule 15c2-12 under the Securities Exchange Act of 1934, as well as public comment on the MSRB's proposed rule change should be received by the Commission no later than 45 days after their respective publication in the Federal Register. (Press Rel. 2008-159)


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SEC Proposes Guidance to Fund Boards Regarding Oversight of Investment Adviser Trading of Portfolio Securities and Use of Soft Dollars
The Commission today voted unanimously to issue proposed guidance to boards of directors of registered investment companies to assist them in fulfilling their oversight responsibilities with respect to investment advisers trading of fund portfolio securities. The proposed guidance follows the interpretive guidance issued by the Commission in 2006, which, among other things, clarified the scope of the safe harbor provided to investment advisers that use soft dollars to purchase brokerage and research services under Section 28(e) of the Securities Exchange Act of 1934.

The proposed guidance focuses on the board's oversight of investment advisers' obligation to seek best execution when it trades a fund's securities. In this regard, the guidance addresses the board's oversight of the conflicts of interest that arise with respect to an adviser's trading practices, including those associated with an adviser's use of soft dollars.

The proposed guidance does not impose any new requirements on fund directors or investment advisers. Rather, it proposes a flexible framework for directors to work within when conducting their oversight of an adviser's trading activities. Specifically, the guidance suggests the information that a fund board should request from an investment adviser to enable the directors to determine that the adviser is managing any conflicts and using fund assets in the best interests of the fund.


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RULES AND RELATED MATTERS
Proposed Amendments to Rule 15c2-12
On Jul. 30, the Commission proposed amendments to Rule 15c2-12, under the Securities Exchange Act of 1934, relating to municipal securities disclosure. The Commission invites public comment on the proposed amendments. For further information, contact Martha Haines, Assistant Director, [phone] , Mary Simpkins, Senior Special Counsel, [phone] , Cyndi Rodriguez, Special Counsel, [phone] , or Rahman Harrison, Special Counsel, [phone] , Division of Trading & Markets, Commission, 100 F Street, NE, Washington, DC 20549-6628. (Rel. 34-58255; File No. S7-21-08)


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ENFORCEMENT PROCEEDINGS
Commission Orders Hearings on Registration Revocation Against Five Delinquent Companies for Failure to Make Required Periodic Filings
On July 29, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of five companies for failure to make required periodic filings with the Commission:

Karting International, Inc. (KTNL)
KDGsports.com, Inc.
Keystone Mortgage Fund
Keystone Mortgage Fund II
KwikWeb.com, Inc. (KWEB)
In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-58247; File No. 3-13105)


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Commission Revokes Registration of Securities of K-2 Logistics.Com, Inc. for Failure to Make Required Periodic Filings
On July 30, the Commission revoked the registration of each class of registered securities of K-2 Logistics.Com, Inc. (K-2 Logistics.Com) for failure to make required periodic filings with the Commission.

Without admitting or denying the findings in the order, except as to jurisdiction, which it admitted, K-2 Logistics.Com consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to National Fruit and Vegetable Technology Corp. finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of National Fruit's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against National Fruit in In the Matter of K-2 Logistics.Com, Inc., et al., Administrative Proceeding File No. 3-13075.

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of K-2 Logistics.Com, Inc., et al., Administrative Proceeding File No. 3-13075, Exchange Act Release No. 57989 (June 19, 2008). (Rel. 34-58249; File No. 3-13075)


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SEC Orders E*Trade Brokerage Firms to Comply with Anti-Money Laundering Rule
The Commission today announced a settled enforcement action concerning requirements resulting from the USA PATRIOT Act against E*Trade Clearing LLC and E*Trade Securities LLC (collectively, hereinafter "E*Trade") for documenting Customer Identification Programs (CIP) that did not reflect their actual practices, which included repeatedly failing to verify the identities of more than 65,000 of its customers. Verification of customer identities is crucial to the detection and prevention of money laundering and terrorist financing efforts conducted through U.S. financial institutions.

The CIP rule generally requires a broker-dealer to establish, document and maintain procedures for identifying customers and verifying their identities. The SEC's Order finds that E*Trade established, documented and maintained a CIP that specified that it would verify all accountholders in a joint account; however, during a 20-month period, E*Trade failed to follow the verification procedures set forth in its CIP. The Order finds that E*Trade did not verify the identities of secondary accountholders in newly opened joint accounts. Consequently, the Order finds that E*Trade's documented procedures differed materially from its actual procedures.

The SEC's Order specifically finds that, from October 2003 to June 2005, E*Trade did not verify the identities of 65,442 secondary accountholders in joint accounts as required by the CIP rule and its own procedures. The Order further finds that E*Trade's compliance failure was systemic, resulting from lack of a cohesive organizational structure, lack of adequate management oversight, and miscommunications among personnel in several E*Trade business groups.

Without admitting or denying any of the findings, E*Trade consented to the issuance of an order instituting administrative and cease and desist proceedings for violations of Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder. E*Trade also agreed to a censure, to pay civil money penalties totaling $1 million, and to retain a qualified independent compliance consultant to verify the adequacy of its CIP rule compliance program.

In advance of settling this matter, E*Trade stated that it submitted the secondary accountholder information on joint accounts originally missed to its third party vendor for verification. According to E*Trade, the verification process did not identify any joint accounts that should not have been opened. (Rel. 34-58250; File No. 3-13106)


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In the Matter of Pax World Management Corp.
On July 30, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(e) and 203(k) of the Investment Advisers Act of 1940 and Sections 9(b) and 9(f) of the Investment Company Act of 1940 against Pax World Management Corp. The Order finds that Pax World, an investment adviser registered with the Commission, acted contrary to representations it made to investors and to the boards of the mutual funds it advised (the Pax World Funds) that it complied with various socially responsible investing (SRI) restrictions, including, among other things, that it would not purchase for the Funds securities issued by companies that derived revenue from the manufacture of weapons, alcohol, tobacco or gambling products.

Specifically, the Order finds that Pax World acted contrary to these representations and violated the Funds' SRI restrictions from 2001 through 2005 when it purchased for the Pax World Growth and High Yield Funds ten securities that these Funds' SRI restrictions prohibited them from buying, including securities of companies that: (1) derived revenue from the manufacture of alcohol and/or gambling products; (2) derived more than 5% of their revenue from contracts with the U.S. Department of Defense; and (3) failed to satisfy the Funds' environmental or labor standards. During this period, Pax World also failed to consistently follow its own SRI-related policies and procedures with respect to these two funds that required that all securities be screened by Pax World's Social Research Department prior to purchase to ensure compliance with the SRI disclosures. In addition, during this period, Pax World did not consistently adhere to other SRI-related policies and procedures, including continuously monitoring fund holdings. As a result of conduct during the period from 2001 through 2005, the Pax World Funds held at least one prohibited security at all times from 2001 through early 2006.

Based on the above, the Order censures Pax World, requires it to cease and desist from committing or causing violations of Section 206(2) of the Advisers Act, and Sections 13(a)(3) and 34(b) of the Investment Company Act, and orders Pax World to pay a civil penalty in the amount of $500,000. Pax World consented to the issuance of the Order without admitting or denying the Order's findings. (Rel. IA-2761; IC-28344; File No. 3-13107)


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Former Refco CEO Phillip R. Bennett Settles SEC Fraud Action
The Commission announced that on July 29, 2008, a final judgment by consent was entered by the United States District Court for the Southern District of New York against Phillip R. Bennett, the former Chairman and Chief Executive Officer of Refco Inc., in a civil injunctive action brought by the Commission. The Commission's complaint alleged that Bennett orchestrated a fraud that periodically concealed hundreds of millions of dollars owed to Refco Inc. and its corporate predecessor, Refco Group Ltd. (together, Refco), by a private entity that Bennett controlled. The complaint also alleged that Bennett directed practices that artificially inflated Refco Inc.'s reported financial results. The final judgment, to which Bennett consented without admitting or denying the Commission's allegations, permanently enjoins Bennett from violating antifraud, record keeping, periodic reporting, internal controls, and certification provisions of the federal securities laws and bars him from serving as an officer or director of a public company.

On July 30, the Commission also issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Phillip R. Bennett. The Order finds that Bennett was enjoined from future violations of the federal securities laws pursuant to the final judgment entered by the district court in the Commission's civil injunctive action. While engaged in the misconduct alleged in the civil injunctive action, the Order finds that Bennett held controlling interests in Refco Securities LLC, a broker-dealer registered with the Commission, and in Forstmann-Leff Associates LLC and FLA Asset Management LLC, both of which were registered as investment advisers with the Commission. The Order bars Bennett from association with any broker, dealer, or investment adviser. Bennett consented to the issuance of the Order, without admitting or denying the Commission's findings except as to entry of the injunction. [SEC v. Phillip R. Bennett, Civil Action No. 08-cv-1631 (GEL), USDC, SDNY] (LR-20660; AAE Rel. 2853); Administrative Proceeding - (Rel. 34-58257; IA-2762; AAE Rel. 2854; File No. 3-13108)


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