SEC Suspends Trading in American Motorcycle Corp. (F/K/A Scope Industries, Inc.) 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 issuer, commencing at 9:30 a.m. EDT on May 8, 2008, and terminating at 11:59 p.m. EDT on May 21, 2008:
The Commission temporarily suspended trading in the securities of the company due to a lack of current and accurate information about the company because it has not filed periodic reports with the Commission for over seven 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 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 this company 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 (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. 34-57797)
Change in the Meeting: Additional Item
The following matter will also be considered at the open meeting scheduled for Wednesday, May 14, 2008, at 10:00 a.m., in the Auditorium, Room L-002:Item 2:
The Commission will consider whether to propose amendments to provide for mutual fund risk/return summary information to be filed with the Commission in interactive data format.
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.
RULES AND RELATED MATTERS
Revisions to the Cross-Border Tender Offer, Exchange Offer, and Business Combination Rules and Beneficial Ownership Reporting Rules for Certain Foreign Institutions
On May 6, the Commission proposed amendments to the rules applicable to cross-border tender and exchange offers and other kinds of cross-border business combination transactions. The rule changes are intended to protect U.S. investors while facilitating and streamlining cross-border transactions, as securities markets become increasingly globalized. The Commission also proposed changes to the beneficial ownership reporting requirements for certain foreign institutional investors. If adopted, these rule revisions would allow some foreign institutions to file beneficial ownership reports on a shorter form, under the same circumstances as their U.S. institutional counterparts. In addition, the Commission issued guidance on several cross-border issues, including the exclusion of foreign target security holders from a tender offer subject to U.S. equal treatment requirements, the exclusion of U.S. target security holders in cross-border business combination transactions, and the use of certain transaction structures to provide cash to U.S. target security holders in cross-border exchange offers. For further information, contact Christina Chalk, Senior Special Counsel, or Tamara Brightwell, Senior Special Counsel, Division of Corporation Finance, at (202) 551-3440, or with respect to the proposed changes to Rule 14e-5, Elizabeth Sandoe, Branch Chief, Division of Trading and Markets, at (202) 551-5720. (Rels. 33-8917; 34-57781; File No. S7-10-08)
Commission Orders Hearings on Registration Revocation Against Six Delinquent Companies for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission today instituted public administrative proceedings against the following six 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:
In this Order, the Division of Enforcement (Division) alleges that the six 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 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. 34-57798; File No. 3-13038)
Delinquent Filers' Stock Registration Revoked
The registrations of the stock of Respondents Advanced Precision Technology, Inc. (n/k/a Exact Identification Corp.), Alta Gold Co., and Decisionlink, Inc., have been revoked. None had filed any annual or quarterly reports with the Securities and Exchange Commission for four or more years. 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. 34-57799; File No. 3-13014)
SEC Charges Marvell Technology Group for Stock Option Backdating
The Commission today charged a Silicon Valley semiconductor company and its co-founder for reporting false financial information to investors by improperly backdating stock option grants to employees.
The SEC's complaint against Marvell Technology Group, Ltd., and former chief operating officer Weili Dai alleges that Marvell provided potentially lucrative "in-the-money" options (granted at below-market prices) to employees. Rather than report compensation expenses to shareholders, as required at the time for these "in-the-money" options, Marvell backdated the options to dates with lower stock prices, and falsely represented that the options had been granted "at-the-money" (at market price) on earlier dates.
Marvell and Dai settled the SEC's charges without admitting or denying the allegations and will pay financial penalties of $10 million and $500,000, respectively.
According to the SEC's complaint, filed in federal district court in San Jose, the scheme allowed Marvell to overstate its income by $362 million from its fiscal years 2000 through 2006. The SEC alleges that Dai, acting as Marvell's "Stock Option Committee," routinely reviewed lists of Marvell's historical stock prices and picked the date with the lowest (or one of the lowest) stock prices since the previous grant date. This date would then be communicated to Marvell personnel as the date on which the Stock Option Committee had purportedly met and authorized the option grant. To make it appear that Marvell had actually granted the options on that date, Dai signed falsified minutes attesting to a meeting of the Committee on that earlier date.
In addition to financial penalties, Marvell consented to a permanent injunction against violations of the antifraud and other provisions of the federal securities laws. Dai, of Los Altos Hills, Calif., consented to an order barring her from serving as an officer or director of a public company for five years. [SEC v. Marvell Technology Group, Ltd. and Weili Dai, Case No. CV 08-2367-HRL (N.D. Cal.] (LR-20559)
Final Judgments by Default Entered Against Alfred Peeper, Oriental New Investments, Ltd., and Orienstar Finance, Ltd. in Two Market Manipulation Cases
The Commission announced today that a federal district court in New York recently entered final judgments by default against three parties, each of which was involved in two related stock manipulation schemes. On April 15, 2008, and March 11, 2008, the court entered the judgments against defendant Alfred Peeper and relief defendants Oriental New Investments, Ltd. (ONI), and Orienstar Finance, Ltd. (OFL) in two civil enforcement actions brought by the Commission. In its complaints, the Commission charged that Peeper, ONI, and OFL were involved in complex schemes to manipulate the common stocks of AbsoluteFuture.com (AFTI) and Wamex Holdings, Inc. (WAMX), respectively. According to the complaints, the manipulation schemes occurred from July 1999 through June 2000 and employed false and misleading press releases and manipulative trading techniques. Among other things, the judgments ordered Peeper, ONI, and OFL to disgorge trading profits totaling $12,869,543 and to pay prejudgment interest totaling $8,017,919.48.
The Commission's complaint in SEC v. Wamex Holdings, Inc., et al. was filed on October 11, 2001, and named 22 defendants, including Peeper, and four relief defendants, including ONI and OFL. The April 15, 2008 judgment against Peeper permanently enjoins him from violating the antifraud provisions of the federal securities laws - namely, 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. The court also ordered that Peeper, ONI, and OFL are jointly and severally liable to pay disgorgement totaling $9,096,298, representing their trading profits in the WAMX scheme, plus prejudgment interest of $5,667,130.92, for a total of $14,763,428.92. In addition, Peeper was ordered to a pay civil money penalty of $110,000 and was permanently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. Previously, in October 2002, July 2004, and March 2007, the Commission obtained default judgments in the WAMX litigation against 20 of the 21 other defendants and both of the other relief defendants. The litigation is continuing as to the remaining party, defendant Eugene Geiger.
The Commission's complaint in SEC v. Absolutefuture.com, et al. also was filed on October 11, 2001, and named 12 defendants, including Peeper, and four relief defendants, including ONI and OFL. The March 11, 2008, judgment against Peeper permanently enjoins him from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The court also ordered that Peeper, ONI, and OFL are jointly and severally liable to pay disgorgement totaling $3,773,245, representing their trading profits in the AFTI scheme, plus prejudgment interest of $2,350,788.56, for a total of $6,124,033.48. In addition, Peeper was ordered to pay a civil money penalty of $110,000. Previously, in January 2003, February 2003, and October 2004, the Commission obtained default judgments in the AFTI litigation against 10 of the 11 other defendants and one of the two other relief defendants. The litigation is continuing as to the remaining parties, defendant Eugene Geiger and relief defendant VJV, Inc.
The Commission alleged in its complaints that Peeper, a financier residing in Spain, participated in the schemes by purchasing large blocks of AFTI and WAMX stock at undisclosed discounts through trades prearranged with co-defendant Edward A. Durante. According to the complaints, relief defendants ONI and OFL, which are Hong Kong corporations with offices in Switzerland and Spain, were unjustly enriched by Peeper's illegal trading of AFTI and WAMX stock in their brokerage accounts, which he controlled. The complaints alleged that the transactions were manipulative in nature because they were misleadingly reported to the market and created a false impression of the trading volume and the demand for AFTI and WAMX shares. Overall, the manipulation schemes increased AFTI's stock price from a low of $0.21 per share in December 1999 to a high of $6.00 per share in March 2000, and increased WAMX's stock price from a low of $1.375 per share in December 1999 to a high of $19.50 per share in February 2000. [SEC v. Wamex Holdings, Inc, et al., Civil Action No. 01-CV-9056 (DAB) (S.D.N.Y.); SEC v. Absolutefuture.com, et al., Civil Action No. 01-CV-9058 (DAB) (S.D.N.Y.)] (LR-20560)
In the Matter of Quogue Capital LLC and Wayne P. Rothbaum
On May 8, 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 Quogue Capital LLC and Wayne P. Rothbaum. The Order finds that on four occasions from February 2005 to November 2005, Quogue and Rothbaum violated Rule 105 of Regulation M in connection with purchases of securities in public offerings made by, respectively, Bioenvision, Inc., Geron Corporation, Cotherix, Inc. and Point Therapeutics, Inc. On each such occasion, Quogue, at Rothbaum's direction, sold securities short within five business days before the pricing of public offerings and then covered the short positions with securities purchased in the offering. Quogue's profits from the prohibited trading totaled $782,902.
Based on the above, the Order requires Quogue and Rothbaum to cease and desist from committing or causing any violations and any future violations of Rule 105 of Regulation M under the Exchange Act and jointly and severally to pay disgorgement of $782,902 and prejudgment interest of $161,154 to the United States Treasury. Quogue and Rothbaum consented to the issuance of the Order without admitting or denying any of the findings in the Order. In connection with the same conduct, Quogue and Rothbaum have also agreed to consent to the entry of a district court judgment ordering Quogue and Rothbaum, jointly and severally, to pay a civil monetary penalty of $390,000 in a settled civil action to be filed by the Commission. For further information, please see Litigation Release No. 20561. (Rel. 34-57804; File No. 3-13039); [SEC v. Quogue Capital LLC and Wayne P. Rothbaum, Civ. Action No. 08-4339-JGK (SDNY)] (LR-20561)
Approval of Proposed Rule Changes
The Commission approved a proposed rule change (SR-NASD-2007-031) filed by the National Association of Securities Dealers to amend NASD Rule 7001E to increase the percentage of market data revenue shared with NASD/NYSE TRF participants. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57763)
The Commission approved a proposed rule change filed by the National Association of Securities Dealers (SR-NASD-2007-043) to amend NASD Rule 7001C to increase the percentage of market data revenue shared with NASD/NSX TRF participants. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57764)
The Commission approved a proposed rule change (SR-FINRA-2007-041) filed by Financial Industry Regulatory Authority to amend NASD Rule 7001B to adjust the percentage of market data revenue shared with NASD/Nasdaq TRF participants. Publication is expected in the Federal Register during the week of May 5. (Rel. 34-57765)
The Commission approved a proposed rule change (SR-FINRA-2007-039) filed by the Financial Industry Regulatory Authority to establish an exemption for certain Regulation NMS-compliant Intermarket Sweep Orders from the requirements in IM-2110-2 (Trading Ahead of Customer Limit Order) and Rule 2111 (Trading Ahead of Customer Market Orders). Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57784)
The Commission has approved a proposed rule change filed by the New York Stock Exchange (SR-NYSE-2008-17) to adopt new initial and continued listing standards to list special purpose acquisition companies, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57785)
The Commission has issued an order approving a proposed rule change, as modified by Amendment No. 1, filed by the National Association of Securities Dealers (n/k/a Financial Industry Regulatory Authority, Inc.) (SR-NASD-2007-052) relating to amendments to the NASD Rule 9700 Series to streamline the procedural rules applicable to general grievances related to FINRA automated systems. Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57786)
The Commission approved a proposed rule change (SR-Amex-2008-34) submitted under Section 19(b)(1) of the Securities Exchange Act of 1934 by the American Stock Exchange to give retroactive effect to its revenue sharing program for ETF quoting participants. Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57794)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NYSE Arca (SR-NYSEArca-2008-45), through its wholly owned subsidiary, NYSE Arca Equities, Inc., to list and trade shares of the iShare MSCI Emerging Markets Eastern Europe Index Fund 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 12. (Rel. 34-57778)
A proposed rule change filed by the International Securities Exchange regarding the Block, Facilitation and Solicited Order Mechanisms (SR-ISE-2008-33) 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 12. (Rel. 34-57790)
A proposed rule change filed by the New York Stock Exchange (SR-NYSE-2008-36) to expand the Reserve Order pilot program currently operating in 100 securities traded on the exchange to include all equity securities traded on the exchange 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 12. (Rel. 34-57792)
A proposed rule change (SR-CBOE-2008-52) filed by the Chicago Board Options Exchange relating to the temporary membership status access fee 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 12. (Rel. 34-57793)
Proposed Rule Changes
The Boston Stock Exchange Clearing Corporation filed a proposed rule change (SR-BSECC-2008-01) under Section 19(b)(2) of the Securities Exchange Act that would amend its Articles of Organization and its By-Laws to reflect the planned acquisition of BSECC by The NASDAQ OMX Group Inc. and to update the By-Laws in certain other respects. Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57782)
The NASDAQ Stock Market filed a proposed rule change (SR-NASDAQ-2008-037) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to modify Nasdaq's continued listing requirements to replace round lot shareholders. Publication is expected in the Federal Register during the week of May 12. (Rel. 34-57795)
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