Steven B. Harris Appointed to Public Company Accounting Oversight Board
Securities and Exchange Commission Chairman Christopher Cox today announced that Steven B. Harris has been appointed to the Public Company Accounting Oversight Board (PCAOB).
Mr. Harris, a former long-time Senate Banking Committee official who played a key role in the legislation that created the PCAOB, was unanimously selected by the Commission to fill a recent vacancy on the Board. He will assume his position on June 9.
The PCAOB, established by the Sarbanes-Oxley Act of 2002, oversees the audits of the financial statements of public companies through registration, standard-setting, inspection and disciplinary programs. Under the Act, the SEC selects the PCAOB chairman and board members after consultation with the Department of Treasury and the Federal Reserve Board.
"Steve Harris's background as an expert in financial services regulation, together with his reputation as a thoughtful and knowledgeable champion of investors' interests, make him an excellent choice for this important position," said Chairman Cox. "His leadership of the Senate Banking Committee staff under former Chairman Paul Sarbanes, as well as his private sector experience, have well prepared him to serve as a PCAOB board member."
Mr. Harris said, "I am greatly honored by the confidence shown in me by the Securities and Exchange Commission and I look forward to working with my colleagues at the PCAOB to protect the interest of investors in U.S. markets."
Mr. Harris is currently Senior Vice President and Special Counsel for APCO Worldwide, where he advises clients on matters relating to financial transactions, corporate governance, crisis management, investigations, foreign investment, trade promotion, and government affairs.
Previously, Mr. Harris served as a Staff Director and Chief Counsel of the U.S. Senate Committee on Banking, Housing, and Urban Affairs, a position he held for more than 15 years. He also served as a Staff Director and Chief Counsel to the Securities Subcommittee. He worked on all of the legislation, investigations, and oversight conducted by the Committee from 1981 to 2007.
Mr. Harris was Counsel to Senator Donald W. Riegle, Jr. from 1979-1981. He served as Counsel to Congresswoman Barbara Jordan and as a representative to the National Commission for the Review of Antitrust Laws and Procedures from 1978 to 1979. He graduated with honors from Dartmouth College and earned an LL.B. from George Washington University. (Press Rel. 2008-107)
SEC to Host International Roundtable on Interactive Data
The Securities and Exchange Commission today announced the list of panelists scheduled to participate in the International Roundtable on Interactive Data for Public Financial Reporting scheduled for June 10, 2008, from 9:30 a.m. to 12:00 p.m. The Roundtable follows the issuance on May 30, 2008, of a proposed rule on Interactive Data to Improve Financial Reporting.
Financial reporting in interactive data format relies on computer "tags" that function like bar codes to identify each item on an income statement or balance sheet. With every number individually labeled, investors, analysts, financial journalists and others can easily use the information within spreadsheets and analytical software. The ease of producing analysis is expected to generate many free and low-cost new services to investors on the Internet once most companies' financial information is reported this way.
A number of countries already require public companies to provide their financial reports in interactive data. Others, including the United States, are proposing to require it. Still others are currently considering it. The Securities and Exchange Commission proposed on May 14, 2008, to require U.S. reporting companies to provide their financial statements and footnotes in interactive data starting, for large companies, with reporting periods ending on or after Dec. 15, 2008.
Securities and Exchange Commissioner Chairman Christopher Cox will open the Roundtable with welcoming remarks. Proposed topics to be discussed at the Roundtable include the experience in countries that have already adopted interactive data; the views of countries currently considering adopting interactive data; and the perspectives from analysts and users of financial information about how best to take advantage of the capabilities of interactive data.
Confirmed panelists and participants at this date include:
The panel will be moderated by Chicago Sun-Times personal finance columnist Terry Savage.
The Roundtable will take place in the Auditorium of the Commission's headquarters at 100 F Street, N.E., Washington, D.C. The Roundtable will be open to the public with seating on a first-come, first-served basis. Doors will open at 8:30 a.m. Visitors will be subject to security checks. Real time and archived Web casts will be accessible at http://www.sec.gov. The Roundtable Agenda and other materials related to the Roundtable, including written statements submitted by participants for public distribution, will be accessible at http://www.sec.gov/spotlight/xbrl/xbrl-meetings.shtml.
The Commission welcomes feedback regarding the proposed rule on Interactive Data to Improve Financial Reporting and any of the topics to be addressed at the Roundtable, including those raised in the questions below. The proposed rule may be accessed on our website (http://www.sec.gov/rules/proposed/2008/33-8924.pdf). The information that is submitted will become part of the public record. Submissions to the Commission may be provided by any of the following methods:
All submissions should refer to File Number S7-11-08. To help process and review submissions more efficiently, please use only one method. The Commission will post all submissions on its Web site (http://www.sec.gov/rules/proposed.shtml).
Please note that all submissions received will be posted without change; the SEC does not edit personal identifying information from submissions. Only information desired to be shared publicly should be submitted.
Questions for Panelists
In the Matter of Amit Mathur
On June 4, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940 and Notice of Hearing (Order) against Amit Mathur. The Division of Enforcement alleges in the Order that on May 16, 2008, Mathur was found guilty of 20 counts of mail and wire fraud in violation of Title 18 United States Code, Sections 1341, 1342 and 1343 before the United States District Court for the District of Massachusetts, in United States v. Amit Mathur, Case No. 4:06-CR-40034FDS. Further, the counts of the criminal indictment to which Mathur was found guilty alleged that while acting as an investment adviser Mathur engaged in a scheme to defraud that, among other things, involved the misappropriation of millions of dollars of investor funds and misrepresentations concerning the nature and performance of investments made on behalf of investors.
A hearing before an administrative law judge will be scheduled to determine whether the allegations in the order are true, to provide Mathur an opportunity to establish any defenses to these allegations, and to determine what, if any, remedial action is appropriate in the public interest. The Order directed the Administrative Law Judge to issue an initial decision within 210 days from the date of service of the Order. (Rel. IA-2739; File No. 3-13053).
In the Matter of Douglas Ballew
On June 4, 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 Douglas Ballew (Ballew). 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 Ballew 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 above, the Order bars Ballew from association with any investment adviser. Ballew consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. IA-2740; File No. 3-13056)
In the Matter of Robert Durant
On June 4, the issued an Order Instituting Administrative Proceedings Pursuant to 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanction (Order) against Robert Durant, age 42 and a resident of Milford, Connecticut. The Order finds that from 1994 to 2003, Durant was a securities lending representative associated with JP Morgan Chase Bank (Chase), a banking corporation organized under the laws of the State of New York. In 2003, Durant was also seeking employment with a broker-dealer and in July 2003, Durant briefly worked at Nandra Group, Inc., a broker-dealer formerly registered with the Commission. The Order further finds that on April 15, 2008, the Commission filed a complaint against Durant and others in the United States District Court for the Eastern District of New York alleging that they violated the antifraud provisions of the federal securities laws, SEC v. Robert Durant, et. al., 08-cv-1539. The Commission's complaint alleges, among other things, that during the course of Durant's employment with Chase, he knowingly engaged in a scheme to defraud broker-dealers and others in connection with the lending and borrowing of securities. The Order further finds that on May 21, 2008, the court entered a partial final consent judgment against Durant which inter alia, permanently enjoined 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.
Based on the above, the Order bars Durant from association with any broker or dealer. Durant consented to the issuance of the Order without admitting or denying any of the Commission's findings, except the filing of the Commission's complaint on April 15, 2008 and the court's entry of the partial final consent judgment on May 21, 2008. (Rel. 34-57919; File No. 3-13057)
SEC Files Settled Insider Trading Action Against Jeffrey P. Myers
The Commission announced today that it has filed a complaint in the United States District Court for the Southern District of New York against Jeffrey P. Myers, an attorney who resides in Cranberry Township, Pennsylvania. The Commission's complaint alleges that he engaged in unlawful insider trading. In particular, Myers unlawfully purchased 1,000 shares of the common stock of NSD Bancorp, Inc. (NSD Bancorp) in advance of an October 15, 2004, public announcement of a merger between NSD Bancorp and F.N.B. Corporation (FNB) and after being tipped about the merger by a member of NSD Bancorp's Board of Directors (the Insider). Following the announcement, NSD Bancorp's share price increased $12.68 or 52 percent, from $24.02 to $36.70. Myers sold all 1,000 shares of his stock between January 2005 and February 2005 for a profit of $10,939.
Simultaneously with the filing of the complaint, and without admitting or denying the Commission's allegations, Myers consented to the entry of a final judgment, subject to the Court's approval: permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder; and ordering Myers to pay disgorgement of his trading profits, plus prejudgment interest thereon, totaling $13,705, and a one-time civil penalty of $10,939.
The Commission's complaint further alleges that Myers knew the Insider was a member of NSD Bancorp's Board of Directors. Because of his position as a Director, by Sept. 15, 2004, the Insider knew that at least four companies had submitted indications of interest in acquiring NSD Bancorp and that FNB had specifically offered $40 per share. The complaint further alleges that on Sept. 16, 2004, Myers and the Insider, who were engaged in several joint business ventures unrelated to NSD Bancorp, met to discuss their business. During this meeting, the Insider provided Myers with material, nonpublic information concerning NSD Bancorp's merger negotiations. On Sept. 17, 2004, Myers, who had no prior history of trading in the securities of NSD Bancorp, purchased 1,000 shares of NSD Bancorp's stock on the basis of the material, nonpublic information provided to him by the Insider. The Insider later died of natural causes. As a result of this conduct, the complaint alleges that Myers violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority with respect to this matter. [SEC v. Jeffrey P. Myers, Civil Action No. 08-CV-5109 (S.D.N.Y.)] (LR-20610)
SEC Charges Burr B. Mckeehan and Joseph A. Fontanetta With Insider Trading in Connection With Animas Corporation's Announcement of Merger With Johnson & Johnson
McKeehan Agrees to Pay Disgorgement and Civil Penalties Totaling $384,095
The Commission today announced the filing of a civil action in the United States District Court for the Southern District of New York against Burr B. McKeehan, of Monarch Beach, California, and Joseph A. Fontanetta, of Paramus, New Jersey, for engaging in unlawful insider trading in the securities of Animas Corporation (Animas) before a Dec. 16, 2005 merger announcement with Johnson & Johnson. Animas, which was headquartered in West Chester, Pennsylvania, designed, manufactured and sold products and services for patients with insulin-requiring diabetes. Its common stock was traded on the NASDAQ National Market System until February 2006, when the merger with Johnson & Johnson became effective.
The complaint alleges that Fontanetta, the Chief Executive Officer and board member of a privately-held medical instrumentation company, tipped material nonpublic information about Animas' merger to McKeehan, a retired podiatrist, two days prior to the merger announcement. The complaint also alleges that Fontanetta either misappropriated or unlawfully received the material nonpublic information from a fellow board member at his company who was the husband of an Animas executive and privy to the merger negotiations.
The complaint further alleges that, during a Dec. 14, 2005 telephone call, Fontanetta unlawfully tipped McKeehan about the Animas merger. Specifically, he told McKeehan that Animas was going to be sold soon and that McKeehan would be making some money soon as a result. Six minutes after this telephone call, McKeehan began purchasing Animas stock. In total, on December 14 and 15, 2005, McKeehan purchased 30,000 shares of Animas stock. On Dec. 16, 2005, the day of the merger announcement, Animas common stock closed at $24.03 per share, an increase of 32 percent over the previous day. As a result of his unlawful trading, McKeehan realized potential profits of $183,018.
The Commission's complaint alleges that by their conduct, the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement by McKeehan of his unlawful trading profits, together with prejudgment interest, and civil monetary penalties from McKeehan and Fontanetta.
Without admitting or denying the allegations of the complaint, McKeehan has consented to the entry of a final judgment, subject to the Court's approval, permanently enjoining him from violating the charged provisions, and ordering him to pay disgorgement of $183,018, plus prejudgment interest of $18,059, and a civil penalty of $183,018. [SEC v. Joseph A. Fontanetta, et al., Civil Action No. (S.D.N.Y.)](LR-20611)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the Philadelphia Stock Exchange relating to disclaimer of warranties and the listing of $2.50 strikes for options on the SIG KCI Coal Index™ (SR-Phlx-2008-40) 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 June 9. (Rel. 34-57899)
A proposed rule change filed by the American Stock Exchange relating to exchange-traded note transaction fees (SR Amex-2008-45) has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934 and Rule 19b-4(f)(2) thereunder. Publication is expected in the Federal Register during the week of June 9. (Rel. 34-57902)
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