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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2008-32
February 15, 2008


SEC Makes Analyzing Corporate Performance Easier For Investors

A Whole New Way to Look at Financial Data

Securities and Exchange Commission Chairman Christopher Cox today announced the launch of the "Financial Explorer" on the SEC Web site to help investors quickly and easily analyze the financial results of public companies. Financial Explorer paints the picture of corporate financial performance with diagrams and charts, using financial information provided to the SEC as "interactive data" in eXtensible Business Reporting Language (XBRL).

SEC Financial Explorer home page
Link to Financial Explorer

At the click of a mouse, Financial Explorer lets investors automatically generate financial ratios, graphs, and charts depicting important information from financial statements. Information including earnings, expenses, cash flows, assets, and liabilities can be analyzed and compared across competing public companies.

The software takes the work out of manipulating the data by entirely eliminating tasks such as copying and pasting rows of revenues and expenses into a spreadsheet. That frees investors to focus on their investments' financial results through visual representations that make the numbers easier to understand. Investors can use Financial Explorer by visiting www.sec.gov/xbrl.

"XBRL is fast becoming the universal language for the exchange of business information and it is the future of financial reporting," said Chairman Cox. "With Financial Explorer or another XBRL viewer, investors will be able to quickly make sense of financial statements. In the near future, potentially millions of people will be able to analyze and compare financial statements and make better-informed investment decisions. That's a big benefit to ordinary investors."

David Blaszkowsky, Director of the SEC's Office of Interactive Disclosure, encouraged investors to try out the new software. "Financial Explorer will help investors analyze investment choices much quicker. I encourage both companies and investors to visit the SEC Web site, try the software, and get a first-hand glimpse of the future of financial analysis, especially for the retail investor."

Financial Explorer is open source, meaning that its source code is free to the public, and technology and financial experts can update and enhance the software. As interactive data becomes more commonplace, investors, analysts, and others working in the financial industry may develop hundreds of Web-based applications that help investors garner insights about financial results through creative ways of analyzing and presenting the information.

In addition to Financial Explorer, the SEC currently offers investors two other online viewers - the Executive Compensation viewer and the Interactive Financial Report viewer, also available at www.sec.gov/xbrl. The Executive Compensation viewer enables investors to instantly compare what 500 of the largest U.S. companies are paying their top executives. The Interactive Financial Report viewer also helps investors gather, analyze, and compare key financial disclosures filed voluntarily by public companies using XBRL. To date, there have been 307 such filings from 74 companies. Under the SEC's interactive data filing program, companies may continue to file XBRL data voluntarily, pending anticipated Commission rulemaking.

Unlike most free Internet tools that use adjusted or aggregated data and include disclaimers warning investors not to rely on the information for investment decisions, XBRL data can give investors nearly real-time access to the complete and actual data companies report under U.S. Generally Accepted Accounting Principles. The SEC's interactive data initiative is designed to make financial information more accessible, more understandable, and more useful to investors. It enables public companies and mutual funds to submit information in a standardized, tagged format to facilitate analysis and comparisons. For more information, contact XBRLprogram@sec.gov. (Press Rel. 2008-22)

Commission Meetings

Closed Meeting - Thursday, February 21, 2008 - 10:45 a.m.

The subject matter of the closed meeting scheduled for Thursday, February 21, 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 claims; and a Litigation matter.

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 (202) 551-5400.


In the Matter of AXM Pharma, Inc.

On February 14, the Commission issued an Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing a Cease-and-Desist Order Pursuant to Section 21C of the Securities Exchange Act of 1934 (Order) against AXM Pharma, Inc. (AXM). The Order finds that AXM fraudulently recognized approximately $2.8 million in revenues on a series of sales to a distributor in Asia for the quarter ended June 30, 2005. The sales failed to meet several of the fundamental criteria for revenue recognition under Generally Accepted Accounting Principles. None of the $2.8 million from these product "sales" should have been recognized as revenue in the second quarter of 2005 because the Asian distributor had the right to return the goods and did not have to pay AXM Pharma until after reselling the goods. Moreover, $1.9 million of the goods also did not meet the criteria for revenue recognition because AXM had not delivered the product by the close of the quarter.

The Order also finds that, as a result of the inclusion of this improperly recognized revenue, AXM reported revenues of over $3.2 million for the quarter, overstating its revenue by over 970 percent, and reported net income for the quarter of approximately $179,000, instead of a net loss of approximately $1.46 million.

Based on the above, the Order directs AXM to cease and desist from committing or causing any violations and any future 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-11, and 13a-13 thereunder. AXM Pharma consented to the issuance of the Order without admitting or denying the Commission's findings, other than as to the Commission's jurisdiction over it. (Rel. 34-57330; AAE Rel. 2784; File No. 3-12955)

In the Matter of Kangsan Kim

An Administrative Law Judge has issued an Order Making Findings and Imposing Remedial Sanctions by Default (Default Order) in Kangsan Kim, Administrative Proceeding No. 3-12835. The Order Instituting Proceedings alleged that, on March 6, 2007, Respondent Kangsan Kim (Kim) pled guilty, in the U.S. District Court for the Central District of California, to conduct that included knowingly and intentionally devising, participating in, and executing a scheme to defraud investors, and obtaining money from investors by making false and fraudulent representations and concealing material facts. Kim was sentenced, in part, to a prison term of fifty-two months followed and ordered to make restitution in the amount of approximately $3.8 million.

The Default Order finds these allegations to be true and concludes that, pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, it is in the public interest to bar Kangsan Kim from associating with any broker or dealer and any investment adviser. (Rel. 34-57334; IA-2705; File No. 3-12835)

SEC Charges Three Individuals Associated With Mutual Benefits Corp. Fraud

The Commission announced today that it filed complaints against Defendants Ameer Khan, Raquel Kohler and Stephen Ziegler in the United States District Court for the Southern District of Florida charging them with violations of the federal securities laws arising from their involvement in Mutual Benefits Corp.'s (Mutual Benefits) offering fraud which raised more than $1 billion from approximately 30,000 investors. Khan served as the titular president and sole shareholder of Viatical Services, Inc., a purportedly independent company that claimed to track policies sold to Mutual Benefits' investors. Kohler was the former chief financial officer of Mutual Benefits and is a licensed certified public accountant. Ziegler served as Mutual Benefits' regulatory counsel.

The Commission's complaints charge Khan and Kohler with violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and further charge Kahn with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933.

The Commission's complaint against Ziegler charges him with aiding and abetting Mutual Benefits' violations of Section 10(b) and Rule 10b-5 under the Exchange Act. The Commission seeks permanent injunctive relief against all three defendants. Khan and Kohler have consented to the entry of Final Judgments providing for full injunctive relief.

In addition to the civil actions against the defendants, on Feb. 15, 2008, the Commission also issued Orders of Suspension pursuant to Rule 102(e)(2) of the Commission's Rules of Practice forthwith suspending Kohler and Ziegler from appearing or practicing before the Commission, based on the entries of a felony conviction against each of them. (Kohler - Rel. 34-57337, AAE Rel. 2786, File No. 3-12958); (Ziegler - Rel. 34-57338, File No. 3-12959)

In The Matter Of Peter J. Dawson

On February 15, 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 against Peter J. Dawson. The Order finds that Dawson was the president and sole shareholder of BMG Advisory Services Ltd., an investment adviser previously registered with New York State, and sole officer and shareholder of Ethan Thomas Co., Inc., a private New York corporation. The Order finds that on December 13, 2007, Dawson pled guilty to two counts of Grand Larceny in violation of Section 155.40(1) of the New York Penal Law and one count of Scheme to Defraud in violation of Section 190.65(1) of the New York Penal Law in People v. Peter Dawson, Docket No. 31496/06. The counts to which Dawson pled guilty alleged, inter alia, that Dawson defrauded investors and obtained money and property by means of materially false and misleading statements. Based on Dawson's guilty plea, the Order bars Dawson from association with any investment adviser. Dawson 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 him and the subject matter of these proceedings, and his guilty plea in the criminal matter. (Rel. IA-2706; File No. 3-12960)

Jeffrey M. Yonkers, CPA Reinstated to Appear and Practice Before the Commission as an Accountant Responsible for the Preparation or Review of Financial Statements Required to be Filed with the Commission

Pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice, Jeffrey M. Yonkers, CPA has applied for and been granted reinstatement of his privilege to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission. Mr. Yonkers was suspended from appearing or practicing before the Commission on July 27, 2001. His reinstatement is effective immediately. (Rel. 34-57339; AAE Rel. 2787; File No. 3-10354)


The Tigers Revenue Trust and VTL Associates, LLC

An order has been issued on an application filed by the TIGERS Revenue Trust and VTL Associates, LLC. The order permits: (a) series of registered open-end management investment companies 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 the series' 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; and (e) 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-28151- February 13)


Proposed Rule Changes

The Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2008-03) relating to complex orders. Publication is expected in the Federal Register during the week of February 18. (Rel. 34-57326)

The Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2008-08) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 regarding CBOE Rules 6.45A and 6.45B. Publication is expected in the Federal Register during the week of February 18. (Rel. 34-57332)





Modified: 02/15/2008