Here you go.
Here are the extracts from FCCN's filings done on Jan. 22/07 by Mr. Peacock.
I used the term "illegal". Maybe it is not completely synonymous with ther term used by the SEC of "Violated" but it is pretty close. I apologize for the discrpancy.
EXTRACTS
During the year ended June 30, 2005, the Company received a communication from the Enforcement Division of the Commission which indicated that the Commission was of the opinion that the Company had committed several 1940 Act infractions, including the issuance of convertible debentures that violated Section 61 of the 1940 Act and the issuance of preferred stock that violated Section 18 of the 1940 Act (See below for a detailed review of potential 1940 Act violations). The possibility of these and other violations called into question whether the Company would be able to return to full compliance with the 1940 Act.
Since electing to be regulated as a BDC, the Company has engaged in multiple transactions that either violated or potentially violated the Investment Company Act of 1940. Some of these violations have been corrected; however, some violations are either irreversible or else would be cost prohibitive to correct. The following violations have been noted:
The Company previously issued Series C preferred stock which contained provisions that violated Sections 18 and 61 of the 1940 Act. During 2006, the Company reverse split the preferred stock in tandem with a reverse split of the common stock; however, the stock remains in violation of Section 61 of the Act by virtue of its conversion feature and Section 18 by virtue of its voting rights. When originally issued, the Company believed that the Preferred securities issued were fully compliant with the 1940 Act. The Company has attempted unsuccessfully to restructure the Preferred Stock in a manner that would be compliant with the 1940 Act.
The Company previously issued convertible debentures that were in violation of Section 61 of the 1940 Act in that the debentures were convertible at rates less than fair market on the date of grant and were issued without shareholder approval. The Company believed that the nature and features of the convertible debentures were such that the instruments would not be governed by Section 61; however, the Commission subsequently determined that Section 61 did apply and that the debentures did not comply
