SEC News Digest

COMMISSION ANNOUNCEMENTS

Commission Meetings

Following is a schedule of Commission meetings, which will be conducted under provisions of the Government in the Sunshine Act. Meetings will be scheduled according to the requirements of agenda items under consideration.

Open meetings will be held in the Auditorium, Room L-002 at the Commission's headquarters building, 100 F Street, N.E., Washington, D.C. Visitors are welcome at all open meetings, insofar as space is available. Persons wishing to photograph or videotape Commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting.

Any member of the public who requires auxiliary aids such as a sign language interpreter or material on tape to attend a public meeting should contact SECInterpreter@SEC.gov at least three business days in advance. For any other reasonable accommodation related disability contact DisabilityProgramOfficer or call 202-551-4158.

Open Meeting - Wednesday, July 30, 2008 - 10:00 a.m.

The subject matter of the open meeting will be:

1. The Commission will consider whether to publish an interpretive release to provide guidance regarding the use of company web sites under the Securities Exchange Act of 1934 and the antifraud provisions of the federal securities laws.
    
2. The Commission will consider whether to publish for comment a proposed rule change by the Municipal Securities Rulemaking Board to establish the continuing disclosure service of the MSRB's Electronic Municipal Market Access (EMMA) system. The Commission will also consider whether to propose amendments to Rule 15c2-12 under the Securities Exchange Act of 1934 to enhance the disclosure of information regarding municipal securities.
    
3. The Commission will consider whether to issue proposed guidance to investment company boards of directors to assist them in fulfilling their oversight responsibilities with respect to an investment adviser's trading of fund portfolio securities, including the use of fund brokerage commissions to purchase brokerage and research services.

Closed Meeting - Thursday, July 31, 2008 - 2:00 p.m.

The subject matter of the closed meeting scheduled for July 31, 2008, will be: formal orders of investigation; institution and settlement of injunctive actions; institution and settlement of administrative proceedings of an enforcement nature; resolution of litigation claims; and other matters related to enforcement proceedings.

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.

ENFORCEMENT PROCEEDINGS

Unregistered Investment Adviser Sanctioned

Diversified Financial Corporation (Diversified), an unregistered investment adviser, incorporated in the Cayman Islands by Dominique S. Alvieri (Alvieri), has been censured for the fraudulent conduct of its investment adviser business. The sanction was ordered in an administrative proceeding before an administrative law judge, following a court-ordered injunction against it. In March 2008, Diversified was enjoined from violating the antifraud provisions of the federal securities laws based on misconduct in its investment adviser business.

The misconduct that underlay the injunction included Diversified and Alvieri's fraudulently inducing advisory clients to invest at least $555,800 in shares of fictitious funds. To conceal the fraud, Diversified provided the clients with monthly account statements that falsely reported that the fictitious funds were generating steady returns. Further, Alvieri misrepresented to the clients that he was the adviser to the fictitious funds and that, through them, would invest the clients' assets in publicly traded securities, when, in fact, Alvieri misappropriated the clients' monies. (Rel. IA-2758; File No. 3-13026)

Commission Revokes Registration of Securities of Warpradio.Com, Inc. for Failure to Make Required Periodic Filings

On July 25, the Commission revoked the registration of each class of registered securities of WarpRadio.com, Inc. (WarpRadio.com) 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, WarpRadio.com 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 WarpRadio.com, Inc. 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 WarpRadio.com's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against WarpRadio.com in the Matter of WarpRadio.com, Inc., et al., Administrative Proceeding File No. 3-13086.

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 WarpRadio.com, Inc., et al., Administrative Proceeding File No. 3-13086, Exchange Act Release No. 58077 (July 2, 2008). (Rel. 34-58222; File No. 3-13086)

In the Matter of Brian Fabrizzi

On July 24, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanction (Order) against Brian Fabrizzi, age 63 and a resident of Monroe Township, New Jersey. The Order finds that from 1997 to 2005, Fabrizzi was a securities lending representative associated with Van der Moolen Specialists USA, LLC (VDM), a broker-dealer registered with the Commission. The Order further finds that on Dec. 14, 2007, Fabrizzi pled guilty to one count of conspiracy to commit securities fraud and wire fraud in violation of Title 18 United States Code, Section 1349 before the United States District Court for the Eastern District of New York, in U.S. v. Brian Fabrizzi, Crim. Information No. 07-CR-710. The count of the criminal information to which Fabrizzi pled guilty alleged, inter alia, that Fabrizzi did knowingly and intentionally conspire to execute a scheme and artifice to defraud VDM of money and property in connection with securities of issuers with a class of securities registered under Section 12 of the Securities Exchange Act of 1934.

Based on the above, the Order bars Fabrizzi from association with any broker or dealer. Fabrizzi consented to the issuance of the Order without admitting or denying any of the Commission's findings, except he admits to the Commission's jurisdiction over him and the subject matter of the proceedings and his guilty plea on Dec. 14, 2007. (Rel. 34-58219; File No. 3-13095)

Insider Trader Jennifer Xujia Wang Barred from Association with any Broker, Dealer or Investment Adviser

On July 24, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions against Jennifer Xujia Wang, a former employee of Morgan Stanley & Co., Inc. The Order finds that on July 3, 2008, the District Court for the Southern District of New York entered a final judgment by consent against Wang permanently enjoining her from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

The Commission's Amended Complaint alleged that Wang and her husband, Rubin Chen a/k/a Ruben Chen a/k/a Ruopian Chen, obtained illegal profits of $727,733 by trading on the basis of material nonpublic information concerning various proposed corporate acquisition transactions. The Amended Complaint further alleged that Wang, in her position as a Vice President of Morgan Stanley & Co., Inc., was privy to material nonpublic information concerning each of the pending acquisitions, which she unlawfully disclosed to Chen.

On Sept. 5, 2007, Wang pled guilty to four felony counts, including one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, and three counts of insider trading, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2, and Title 18, United States Code, Section 2, before the United States District Court for the Southern District of New York, in U.S. v. Xujia Wang, et al., 07-CR-730. The counts of the criminal information to which Wang pled guilty are based largely on conduct included as part of the allegations in the Commission's Amended Complaint.

Based on the above, the Order bars Wang from association with any broker, dealer or investment adviser. Wang consented to the issuance of the Order without admitting or denying the findings in the Order, except as to the Commission's jurisdiction over her and the subject matter of these proceedings, and the findings contained in Section III.2 and III.4 of the Order, which are admitted.

For further information, please see Litigation Rel. Nos. 20112 (May 10, 2007) and 20636 (July 3, 2008). (Rels. 34-58220; IA-2759; File No. 3-13097)

Insider Trader Rubin Chen a/k/a Ruben Chen a/k/a Ruopian Chen Barred from Association with any Investment Adviser

On July 24, 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 against Rubin Chen a/k/a Ruben Chen a/k/a Ruopian Chen, a former employee of ING Investment Management Services, LLC. The Order finds that on July 3, 2008, the District Court for the Southern District of New York entered a final judgment by consent against Chen permanently enjoining him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

The Commission's Amended Complaint alleged Chen and his wife, Jennifer Xujia Wang, obtained illegal profits of $727,733 by trading on the basis of material nonpublic information concerning various proposed corporate acquisition transactions. The Amended Complaint further alleged that Wang, in her position as a Vice President of Morgan Stanley & Co., Inc., was privy to material nonpublic information concerning each of the pending acquisitions, which she unlawfully disclosed to Chen.

On Sept. 5, 2007, Chen pled guilty to four felony counts, including one count of conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371, and three counts of insider trading, in violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title 17, Code of Federal Regulations, Sections 240.10b-5 and 240.10b5-2, and Title 18, United States Code, Section 2, before the United States District Court for the Southern District of New York, in U.S. v. Xujia Wang, et al., 07-CR-730. The counts of the criminal information to which Chen pled guilty are based largely on conduct included as part of the allegations in the Commission's Amended Complaint.

Based on the above, the Order bars Chen from association with any investment adviser. Chen consented to the issuance of the Order without admitting or denying the findings in the Order except as to the Commission's jurisdiction over him and the subject matter of these proceedings, and the findings contained in Section III.2 and III.4 of the Order, which are admitted.

For further information, please see Litigation Rel. Nos. 20112 (May 10, 2007) and 20636 (July 3, 2008). (Rel. IA-2760; File No. 3-13098)

In the Matter of Newbridge Securities Corp., Guy S. Amico, Scott H. Goldstein, Eric M. Vallejo, and Daniel M. Kantrowitz

On July 25, the Commission issued an Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, and Sections 15(b) and 21C of the Securities Exchange Act of 1934 (Order) against Newbridge Securities Corp., Guy S. Amico, Scott H. Goldstein, Eric M. Vallejo, and Daniel M. Kantrowitz. The Division of Enforcement alleges in the Order that in 2003 and 2004, while associated as a registered representative with Newbridge, Kantrowitz used Newbridge's market making capacity to manipulate the shares of Roanoke Technology Corp. and Concorde America, Inc., respectively. The Order further alleges that Newbridge and Kantrowitz participated in the unregistered distribution of Roanoke securities.

The Order alleges that in October 2002 and December 2003, Newbridge was advised by the Commission's examination staff of supervisory failures at Newbridge's trading desk. The Order also alleges that, despite these warnings, Newbridge failed to develop and implement policies, procedures, and systems reasonably designed to prevent and detect Kantrowitz's manipulation of Roanoke and Concorde securities and his and Newbridge's participation in the Roanoke unregistered distribution. The Order further alleges that Newbridge, and Amico and Goldstein, Newbridge's president and chief executive officer, respectively, failed reasonably to supervise Kantrowitz in connection with his activities in Roanoke and Concorde. In addition, the Order alleges that Vallejo, Newbridge's head trader, failed reasonably to supervise Kantrowitz in connection with his manipulation of Roanoke and Concorde securities.

The Order also alleges that Newbridge violated the federal securities laws in connection with two initial public offerings when its registered representatives sent detailed emails concerning the offerings to customers during the "waiting period," the period after a registration statement is filed with the Commission but before the Commission declares it effective.

A hearing before an administrative law judge will be scheduled to determine whether the allegations in the Order are true, to provide respondents 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 300 days from the date of service of the Order. (Rels. 33-8946; 34-58223; File No. 3-13099)

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Seven Public Companies for Failure to Make Required Periodic Filings

On July 25, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of seven companies for failure to make required periodic filings with the Commission:

• The National Capital Companies, Inc. (NATC)
• National Environmental Controls, Inc. (NECT)
• National Real Estate Limited Partnership Income Properties
• National Real Estate Limited Partnership Income Properties II
• Navarone, Inc.
• NBG Radio Network, Inc. (NSBD)
• Net-Matrix Limited

In this Order, the Division of Enforcement (Division) alleges that the seven 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 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or 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. 34-58229; File No. 3-13100)

SELF-REGULATORY ORGANIZATIONS

Accelerated Approval of Proposed Rule Change

The Commission granted accelerated approval to a proposed rule change submitted by the Financial Industry Regulatory Authority (SR-FINRA-2008-035), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, relating to the addition of fees imposed for the Series 14 and Series 16 examinations to FINRA's fee schedule. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58215)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by International Securities Exchange (SR-ISE-2008-57) relating to fee waivers 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 28. (Rel. 34-58216)

A proposed rule change filed by National Stock Exchange (SR-NSX-2008-12) to provide for a Post Intermarket Sweep 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 July 28. (Rel. 34-58217)

A proposed rule change filed by the Philadelphia Stock Exchange (SR-Phlx-2008-57) relating to technical amendments to its Certificate of Incorporation and By-Laws 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 28. (Rel. 34-58218)

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