SEC Suspends Trading in Six 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 May 6, 2008, and terminating at 11:59 p.m. EDT on May 19, 2008:
The Commission temporarily suspended trading in the securities of these six 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 six 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 this company.
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 this company that has 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 (202) 551-5720. 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 (202) 551-5466, or by e-mail at DelinquentFilings@sec.gov. (Rel. 34-57779)
Commissioner Atkins Announces Intention to Leave SEC
Securities and Exchange Commissioner Paul Atkins announced today that he intends to leave the SEC following the end of his term. Appointed by President Bush in August 2002 for the first of two terms, he plans to stay until his successor is appointed and takes office.
Commissioner Atkins has been a champion of protecting investors. Among other things, he has emphasized investor education and increased enforcement efforts against those who steal from investors through Ponzi schemes, boiler room operations, market manipulations, and Internet and other frauds designed to steal the savings of unsuspecting investors. In particular, Commissioner Atkins was instrumental in the creation of the SEC's Microcap Fraud Working Group. He also has personally conducted more than 40 town hall meetings with U.S. military personnel on bases in the U.S. and abroad, students, retirees, and investor and small business organizations, often using his own multi-media presentation that weaves movie clips, statistics, and anecdotes to discuss the principles of careful, long-term investing.
During his almost six years in office, Commissioner Atkins has advocated greater transparency and cost-benefit analysis in the SEC rulemaking process. He has championed rulemaking designed to make disclosure documents for mutual funds and corporations more straightforward and user-friendly, foreign investment more accessible to U.S. investors seeking to diversify their portfolios, and raising capital easier for small businesses.
A believer in a balanced approach to regulation, he has scrutinized attempts to interject additional regulatory costs that are borne by investors without corresponding benefits. Among other things, he was a strong advocate for curtailing the excesses of the now-repealed Audit Standard 2, which implemented the internal-control documentation requirement of Section 404 of the Sarbanes-Oxley Act of 2002.
Commissioner Atkins has reached out to foreign regulators, companies, and investors to understand their unique perspectives, to address their concerns, and to foster cooperative enforcement efforts for the protection of investors worldwide. During his tenure as a commissioner, he has traveled to Europe, Asia, Africa, Canada, Mexico, and South America. His efforts have led to significantly increased cooperation with foreign regulators and financial organizations and to a rationalization of SEC regulations so that they coordinate effectively with rules of other countries. These efforts have helped to encourage foreign companies to invest, as well as list their securities, in the United States.
Commissioner Atkins's efforts for greater transparency have extended beyond rulemaking. He has advocated enhanced due process protections and uniformity in the enforcement program, and he has emphasized a more efficient allocation of inspection and examination resources. He believes that the SEC must become more responsive to investors, companies, and regulated entities alike, including streamlining internal SEC processes to reach decisions on new products more efficiently and with more accountability.
"Over the course of two decades, Commissioner Atkins has worked energetically to ensure that the administration of the nation's securities laws is fair, efficient, and transparent," said SEC Chairman Christopher Cox. "He has worked with five Chairmen to advance the causes of investor protection and the improvement of our capital markets. At a time when the men and women of our armed services are being called upon to make extraordinary sacrifices, Paul Atkins has led the agency's investor education initiatives at military bases across the country and around the world. And as a result of his exceptional devotion to ensuring that the costs of regulation are kept in line with its benefits, the implementation of Sarbanes-Oxley Section 404 has been rationalized with benefits for investors and companies alike. It has been an honor and a privilege to serve with him on the Commission, and to have the benefit of his years of wisdom, his sense of humor, and his friendship. The SEC and the nation's investors owe him a deep debt of gratitude for the many years of his life that he has devoted to public service."
Commissioner Atkins said, "I have had the honor of serving at the SEC during some of the most challenging times for the agency and the capital markets. I started in the wake of the Enron and WorldCom scandals and the enactment of Sarbanes-Oxley, which imposed a very demanding rulemaking timeline on the SEC. With the hard work of my colleagues on the Commission and the talented staff, we were able to address those problems. We are once again in difficult times, and I am confident that the dedicated men and women at the SEC will be able to overcome the current challenges."
Commissioner Atkins leaves with almost 10 years of service with the agency. He served from 1990-94 on the staffs of two former SEC chairmen, Richard C. Breeden and Arthur Levitt, ultimately as chief of staff and counselor, respectively. (Press Rel. 2008-78)
Commission Orders Hearings on Registration Suspension or Revocation Against Six Companies for Failure to Make Required Periodic Filings
In conjunction with this 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 six companies for failure to make required periodic filings with the Commission:
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 in the alternative, 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. 34-57780; File No. 3-13036)
SEC v. Robert F. Gruder and Stinger Systems, Inc.
The Commission announced today that on May 1, 2008, the Honorable Willis B. Hunt, United States District Judge for the Northern District of Georgia, entered a Final Judgment as to Defendant Stinger Systems, Inc. (Stinger). Stinger was enjoined from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Stinger consented to the entry of the final judgment without admitting or denying any of the allegations of the Commission's complaint.
The complaint, filed on Jan. 28, 2008, alleged that from October 2004 through March 2005, Stinger and its president, Robert F. Gruder, made a series of fraudulent material misrepresentations and omissions regarding Stinger's "flagship" stun gun product. According to the complaint, the misrepresentations consisted of press releases and direct mailings to thousands of law enforcement officers and agencies, suggesting that Stinger was manufacturing, selling and shipping its stun gun. In fact, the product was still in the development phase. The complaint further alleged that the misrepresentations consisted of statements on the Stinger's website and/or in industry publications that indicated Stinger's stock was trading on NASDAQ, when in fact it was not. The complaint also alleged that Stinger and Gruder misrepresented that the Bureau of Alcohol, Tobacco and Firearms (ATF) certified Stinger's stun gun, even though the ATF offered no such certification. According to the complaint, these misrepresentations caused a spike in the trading volume and price for Stinger's shares once it began publicly trading in November 2004.
Stinger is a Nevada corporation based in Tampa, Florida. [SEC v. Robert F. Gruder and Stinger Systems, Inc., Civil Action No. 1:08-CV-0294-WBH (N.D. Ga)] (LR-20555)
In the Matter of ITXC Corp.
The Commission announced today that on April 18, 2008, the Honorable Garrett E. Brown Jr., Chief Judge of the United States District Court for the District of New Jersey, entered final judgments against Steven J. Ott and Roger Michael Young, in SEC v. Steven J. Ott and Roger Michael Young, Civil Action No. 06-4195 (GEB) (D.N.J.), and against Yaw Osei Amoako, in SEC v. Yaw Osei Amoako, Civil Action No. 05-4284 (GEB) (D.N.J.). The final judgments resolve the Commission's claims against the defendants, including claims in the Commission's amended complaint against Amoako filed in April 2008. The Commission charged Ott, Young and Amoako, former executives of ITXC Corp., with violations of the anti-bribery and books and records provisions of the Foreign Corrupt Practices Act of 1977 (FCPA), for their respective roles in a scheme to bribe senior officials of government-owned telephone companies in Nigeria, Rwanda and Senegal. Prior to its acquisition by Teleglobe International Holdings Ltd. on May 31, 2004, ITXC was a publicly-held international telecommunications carrier based in Princeton, New Jersey.
The complaints alleged that Ott, ITXC's former Vice President for Global Sales, Young, ITXC's former Managing Director for the Middle East and Africa, and Amoako, ITXC's former Regional Director for Sales in Africa, negotiated and/or approved bribes that ITXC paid to foreign officials in Nigeria, Rwanda and Senegal, in order to obtain contracts necessary for ITXC to transmit telephone calls to individuals and businesses in those countries. As alleged in the complaints, the defendants were responsible for $267,468.95 in bribes that ITXC paid between August 2001 and May 2004. According to the complaints, ITXC made $11,509,733 in net profits from the improperly obtained contracts. The amended complaint against Amoako further alleged that he improperly received approximately $150,000 through embezzlement and a kickback in connection with the bribery scheme.
Without admitting or denying the allegations in the complaints, Ott, Young and Amoako each consented to the entry of a final judgment that permanently enjoins them from violating Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act), Rule 13b2-1 thereunder, and from aiding and abetting violations of Exchange Act Section 13(b)(2)(A) and, with respect to Ott and Young, violations of Exchange Act Section 13(b)(2)(B). The final judgment against Amoako also orders him to pay $188,453 in disgorgement and prejudgment interest.
In parallel criminal proceedings brought by the Department of Justice, Ott, Young and Amoako each pled guilty to felony charges of conspiring to violate the FCPA and the Travel Act. The Court sentenced Amoako to a prison term of 18 months and imposed a $7,500 fine. The sentencing of Ott and Young is pending. SEC v. Steven J. Ott and Roger Michael Young, Civil Action No. 06-4195 (GEB) (D.N.J.); SEC v. Yaw Osei Amoako, Civil Action No. 05-4284 (GEB) (D.N.J.)] (LR-20556)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NYSEArca-2008-44) filed by the NYSE Arca amending NYSE Arca Rule 6.62 to include an Opening Only Order 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 May 5. (Rel. 34-57759)
The Commission issued notice of immediate effectiveness of a proposed rule change (SR-FINRA-2008-015) filed by the Financial Industry Regulatory Authority to delay the effective date of certain FINRA rule changes approved in SR-NASD-2004-183. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57769)
A proposed rule change filed by the American Stock Exchange extending the roll-out of the Amex Book Clerk program (SR-Amex-2008-37) 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 May 5. (Rel. 34-57770)
A proposed rule change filed by NYSE Arca to amend the Schedule of Fees and Charges for Exchange Services (SR-NYSEArca-2008-43) 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 May 5. (Rel. 34-57776)
Accelerated Approval of Proposed Rule Changes
The Commission granted accelerated approval to, a proposed rule change (SR-NASDAQ-2008-038) submitted by the NASDAQ Stock Market pursuant to Rule 19b-4 of the Securities Exchange Act of 1934 to trade shares of certain PowerShares Actively Managed Exchange-Traded Funds pursuant to unlisted trading privileges. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57771)
The Commission approved a proposed rule change (SR-FINRA-2007-035) filed by the Financial Industry Regulatory Authority relating to options supervision requirements to eliminate the requirement for separate designations of Senior Registered Options Principal and Compliance Registered Options Principal and require a member to integrate the responsibility for supervision of its public customer options business into its overall supervisory and compliance program on an accelerated basis pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57775)
Approval of Proposed Rule Change
The Commission approved a proposed rule change, as modified by Amendment No. 1, filed by the International Securities Exchange (SR-ISE-2008-25) relating to the rescission of the "No MPM" order type. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57777)
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