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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2008-138
July 17, 2008

ENFORCEMENT PROCEEDINGS

In the Matter of David A. Finnerty, et. al

The United States Securities and Exchange Commission (Commission) announced the issuance of two separate Orders Making Findings, Imposing Remedial Sanctions, And Imposing A Cease-And-Desist Order Pursuant To Section 8A Of The Securities Act of 1933 And Sections 15(b)(6), 21C And 11(b) Of The Securities Exchange Act of 1934 And Rule 11b-1 Thereunder As To Gerard T. Hayes and Warren E. Turk (the Hayes and Turk Orders respectively).

The Hayes Order

The Hayes Order finds that during the period from at least 1999 to approximately June 30, 2003, Gerard T. Hayes (Hayes), a former specialist on the New York Stock Exchange at Van der Moolen Specialists USA, LLC (Van der Moolen), knowingly or recklessly engaged in approximately 2,145 instances of interpositioning, locking in a riskless profit of approximately $143,454 for his firm's proprietary account at the expense of customer orders, and approximately 5,350 instances of trading ahead, causing approximately $528,103 in customer harm, and, in doing so, violated various New York Stock Exchange rules prohibiting such conduct, and willfully violated Section 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Section 11(b) of the Exchange Act and Rule 11b-1 thereunder.

Based on the above, the Hayes Order orders Hayes to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, and Sections 10(b) and 11(b) of the Exchange Act and Rules 10b-5 and 11b-1 thereunder, bars Hayes from association with any broker or dealer, and orders Hayes to pay a civil money penalty in the amount of $100,000. Hayes consented to the issuance of the Hayes Order without admitting or denying any of the findings therein.

The Turk Order

The Turk Order finds that during the period from at least 1999 through approximately June 30, 2003, Warren E. Turk (Turk), a former specialist on the New York Stock Exchange at Van der Moolen, engaged in approximately 697 instances of interpositioning, locking in a riskless profit of approximately $83,049 for his firm's proprietary account at the expense of customer orders, and approximately 4,199 instances of trading ahead, causing approximately $896,542 in customer harm, and, in doing so, violated various New York Stock Exchange rules prohibiting such conduct, and willfully violated Section 11(b) of the Exchange Act and Rule 11b-1 thereunder.

Based on the above, the Turk Order orders Turk to cease and desist from committing or causing any violations and any future violations of Section 11(b) of the Exchange Act and Rule 11b-1 thereunder, censures Turk pursuant to Section 15(b)(6) of the Exchange Act, and orders Turk to pay a civil money penalty in the amount of $75,000. Turk consented to the issuance of the Turk Order without admitting or denying any of the findings therein. (Rels. 33-8944; 34-58169; 34-58170; File No. 3-11893)


Commission Revokes Registration of Securities of Benguet Corp. For Failure to Make Required Periodic Filings

On July 17, 2008, the Commission revoked the registration of each class of registered securities of Benguet Corp. (Benguet) for failure to make required periodic filings with the Commission.

Without admitting or denying the findings in the order, except as to jurisdiction, which it admitted, Benguet consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Benguet Corp. finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of Benguet's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against Benguet in In the Matter of Benguet Corp., et al., Administrative Proceeding File No. 3-13079.

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

For further information, see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Benguet Corp., et al., Administrative Proceeding File No. 3-13079, Exchange Act Release No. 57999 (June 23, 2008). (Rel. 34-58177; File No. 3-13079)


In the Matter of Francis J. Saldutti

The United States Securities and Exchange Commission (Commission) announced the issuance of 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 Francis J. Saldutti (Saldutti). The Order finds that on June 27, 2008, the United States District Court for the Southern District of New York entered a final judgment against Saldutti permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder 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 Saldutti from association with any investment adviser. Saldutti consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. IA-2755; File No. 3-13090)


JOINT INDUSTRY PLANS

Notice of Filing of Proposed Amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information

The Options Price Reporting Authority filed with the Securities and Exchange Commission a notice of filing of a proposed Plan amendment, as modified by Amendment No. 1 thereto, pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder (SR-OPRA-2008-02), to adopt amend OPRA's Vendor Agreement and Related Documents and Adopt a New Policy. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58173)


SELF-REGULATORY ORGANIZATIONS

Accelerated Approval of Proposed Rule Change

The Commission has noticed and granted accelerated approval to a proposed rule change submitted by the Financial Industry Regulatory Authority (SR-FINRA-2008-034), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, relating to the elimination of certain fee references in the Incorporated NYSE Rules. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58149)


Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by the NASDAQ Stock Market to modify fees for members using the NASDAQ Options Market (SR-NASDAQ-2008-059) 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 July 21. (Rel. 34-58152)

A proposed rule change filed by the NYSE Arca to trade 14 Funds of the Commodities and Currency Trust pursuant to unlisted trading privileges (SR-NYSEArca-2008-73) 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 July 21. (Rel. 34-58162)

A proposed rule change filed by International Securities Exchange (SR-ISE-2008-56) relating fee waivers 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. 34-58164)


Approval of Proposed Rule Changes

The Commission granted approval of proposed rule change File No. SR-FICC-2007-05 filed by the Fixed Income Clearing Corporation under Section 19(b)(1) of the Exchange Act that allows FICC to (i) restructure the Government Securities Division (GSD) and the Mortgage-Backed Securities Division (MBSD) rules related to fines, clearing fund consequences imposed on members for rule violations, and certain aspects of the internal watch list, and (ii) harmonize its rules with similar rules of FICC's affiliates, The Depository Trust Company (DTC) and the National Securities Clearing Corporation (NSCC). Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58156)

The Commission granted approval to a proposed rule change, as modified by Amendment No. 1, filed by the Municipal Securities Rulemaking Board (SR-MSRB-2008-03) under Section 19(b)(2) of the Securities Exchange Act of 1934, relating to Rule G-11, on New Issue Syndicate Practices, and Rule G-12, on Uniform Practice. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58154)

The Commission approved a proposed rule change [File No. SR-DTC-2007-05] submitted under Rule 19b-4 by the Depository Trust Company that amends DTC's fine structure relating to participants not providing financial information and notice of significant corporate changes to DTC in a timely manner. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58157)

The Commission has approved a proposed rule change (SR-NSCC-2007-07) filed by the National Securities Clearing Corporation under Section 19(b)(1) of the Exchange Act that would restructure its rules relating to fines and harmonize them with similar rules of its affiliates. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58160)

The Commission granted approval to a proposed rule change (SR-Amex-2008-39), as modified by Amendment No. 1 thereto, submitted by the American Stock Exchange relating to the listing and trading of Trust Issued Receipts that directly hold investments in certain financial instruments and to permit the listing and trading of shares of fourteen funds of the Commodities and Currency Trust. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58161)

The Commission has approved a proposed rule change, as modified by Amendment No. 1 thereto, submitted by the Philadelphia Stock Exchange (SR-Phlx-2008-12) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to an exemption from examination requirements for Off-Floor Traders. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58175)

A proposed rule change (SR-CBOE-2008-40), as Modified by Amendment No. 1 thereto, filed by the Chicago Board Options Exchange to provide for the issuance of ITPs has been approved pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58178)


Proposed Rule Changes

The Depository Trust Company filed a proposed rule change (File No. SR-DTC-2008-03) under Section 19(b)(1) of the Exchange Act that would establish a fee relating to DTC's settlement procedures for the maturity of Money Market Instruments with unknown rates. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58165)

A proposed rule change (SR-Phlx-2008-53) has been filed by the Philadelphia Stock Exchange regarding a proposal to amend Phlx Rules 1024 (Conduct of Accounts for Options Trading), 1025 (Supervision of Accounts), 1027 (Discretionary Accounts), and 1049 (Communications to Customers) that govern a Phlx member's conduct of doing business with the public. Publication is expected in the Federal Register during the week of July 21. (Rel. 34-58168)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2008/dig071708.htm


Modified: 07/17/2008