U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

SEC News Digest

Issue 2008-137
July 16, 2008

COMMISSION ANNOUNCEMENTS

SEC Enhances Investor Protections Against Naked Short Selling

On July 15, the Securities and Exchange Commission issued an emergency order to enhance investor protections against "naked" short selling in the securities of Fannie Mae, Freddie Mac, and primary dealers at commercial and investment banks.

The SEC's order will require that anyone effecting a short sale in these securities arrange beforehand to borrow the securities and deliver them at settlement. The order will take effect at 12:01 a.m. ET on Monday, July 21. In addition to this emergency order, the SEC will undertake a rulemaking to address these issues across the entire market.

"The SEC's mission to protect investors, maintain orderly markets, and promote capital formation is more important now than it has ever been," said SEC Chairman Christopher Cox. "Today's Commission action aims to stop unlawful manipulation through 'naked' short selling that threatens the stability of financial institutions. We will continue our vigorous commitment to investors by working within the SEC and in close cooperation with our regulatory counterparts to promote the continued health and vibrancy of our markets."

The Commission's emergency order, pursuant to its authority under Section 12(k)(2) of the Securities Exchange Act of 1934, will be effective at 12:01 a.m. ET on July 21, 2008 and will terminate at 11:59 p.m. ET on July 29, 2008. The Commission may extend the order to continue it in effect thereafter if the Commission determines that the continuation of the order is necessary in the public interest and for the protection of investors, but for no more than 30 calendar days in total duration.

The securities identified in the Commission's order:

Company Ticker Symbol(s)
BNP Paribas Securities Corp. BNPQF or BNPQY
Bank of America Corporation BAC
Barclays PLC BCS
Citigroup Inc. C
Credit Suisse Group CS
Daiwa Securities Group Inc. DSECY
Deutsche Bank Group AG DB
Allianz SE AZ
Goldman, Sachs Group Inc GS
Royal Bank ADS RBS
HSBC Holdings PLC ADS HBC and HSI
J. P. Morgan Chase & Co. JP
Lehman Brothers Holdings Inc. LEH
Merrill Lynch & Co., Inc. MER
Mizuho Financial Group, Inc. MFG
Morgan Stanley MS
UBS AG UBS
Freddie Mac FRE
Fannie Mae FNM

(Press Rel. 2008-143)


ENFORCEMENT PROCEEDINGS

Delinquent Filers' Stock Registrations Revoked

The registrations of the stock of Kakkimon Acquisitions Corp. and Kevco, Inc., have been revoked. Neither had filed any annual or quarterly reports with the Securities and Exchange Commission for six 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. 34-58163; File No. 3-13075)


Delinquent Filers' Stock Registrations Revoked

The registrations of the stock of Struthers, Inc. (n/k/a Global Marine, Ltd.), Sun Vacation Properties Corp., and Sunshine Mining & Refining Co. have been revoked. None had filed any annual or quarterly reports with the Securities and Exchange Commission for any period ended subsequent to 2003. 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. 34-58167; File No. 3-13061)


SEC Files Two Market Manipulation Enforcement Actions With a Common Defendant

Cases Each Include a Settlement with Mark B. Lindberg; Sniffex Case Includes Other Defendants

The Commission filed two separate market manipulation enforcement cases: one filed today involving Homeland Safety International, Inc. (originally incorporated as Sniffex, Inc.), a Nevada corporation with a principal place of business in Irving, Texas (Sniffex), and the other filed yesterday involving three issuers - National Storm Management Group, Inc., a Nevada corporation with its principal place of business in Glen Ellyn, Illinois (NLST); Deep Rock Oil and Gas, Inc., a Nevada corporation with its principal place of business in Tulsa, Oklahoma (DPRK); and Global Beverages Solutions (GBVS), a Nevada corporation with its principal place of business in Tulsa, Oklahoma. The companies traded over the counter under the symbols SNFX (now HSFI), NLST, DPRK and GBVS, respectively. Mark B. Lindberg, 40, of Coppell, Texas, was charged in both cases and has settled them without admitting or denying the allegations in the two complaints. In the Sniffex complaint, the Commission also named Sniffex; its President Paul B. Johnson, 60, of Colleyville, Texas; Petar D. Mihaylov, 28, of Pazardjik, Bulgaria; Yuri P. Markov, 50, of Sofia, Bulgaria; Nicholas V. Klausgaard, 22 of Denmark; and Ilona V. Klausgaard, 49, of Denmark as defendants.

Allegations in the Sniffex Complaint

The Commission's complaint filed in the Northern District of Texas alleges that from October 2004 through April 2006, defendants Mihaylov and Markov acquired control of Sniffex - and carried out a $32 million pump-and-dump fraud scheme in concert with the other defendants.

The Commission's complaint charges Sniffex, Lindberg, Mihaylov, Markov, and Johnson with violations of the securities-registration provisions and the anti-fraud provisions of the federal securities laws, specifically Sections 5(a), 5(c), and 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, and charges the Klausgaards with violations of the securities-registration provisions, Sections 5(a) and 5(c) of the Securities Act. The Commission seeks the following relief from Mihaylov, Markov, Johnson, and the Klausgaards: permanent injunctions against future violations of the federal securities laws, disgorgement plus prejudgment interest, civil monetary penalties, penny-stock bars, and accountings. Lindberg, without admitting or denying any allegations in the complaint, has agreed to a permanent injunction, an officer-and-director bar, and a penny-stock bar.

Allegations in the National Storm, Deep Rock, and Global Beverage Complaint

The Commission's complaint filed in the Northern District of Oklahoma alleges that defendant Lindberg and other members of a Shell Creation Group (SCG) manipulated at least three penny stocks from 2004 through 2006, including NLST, DPRK, and GBVS.

The Commission's complaint charges Lindberg with violations of the securities-registration provisions and the anti-fraud provisions of the federal securities laws, specifically Sections 5(a), 5(c), and 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act and Rule 10b-5. Lindberg, without admitting or denying any allegations in the complaint, has agreed to a permanent injunction, an officer-and-director bar, and a penny-stock bar.

Acknowledgements

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Northern District of Oklahoma, the Federal Bureau of Investigation; the Internal Revenue Service; the U.S. Postal Inspection Service; and FINRA.

The Commission's investigations in these matters are ongoing. [SEC v. Homeland Safety International, Inc. F/K/A Sniffex, Inc.; Mark B. Lindberg, Petar D. Mihaylov, Yuri Markov, Paul B. Johnson, and Nicholas V. Klausgaard and Ilona V. Klausgaard, Civil Action No. 3:08 CV 11970 (N.D. Tex.); SEC v. Mark B. Lindberg, Civil Action No. 08 CV 402 CVE SAJ (N.D. Okla.)] (LR-20645)


SELF-REGULATORY ORGANIZATIONS

Approval of Proposed Rule Change

The Commission approved a proposed rule change (SR-NASDAQ-2008-031) filed by the NASDAQ Stock Market under Section 19(b)(1) of the Exchange Act. The approved rule change requires foreign private issuers be eligible to participate in the Direct Registration System administered by a clearing agency registered under Section 17A of the Act unless the laws or regulations of the issuer's home country prohibit compliance with the rule. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58125)


Immediate Effectiveness of Proposed Rule Change

A proposed rule change filed by the Chicago Board Options Exchange to delete references to Hybrid 2.0 Platform and Hybrid 2.0 Option Classes (SR-CBOE-2008-67) 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 July 21. (Rel. 34-58153)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2008/dig071608.htm


Modified: 07/16/2008