Paul Beswick Named Deputy Chief Accountant for Professional Practice in SEC Office of the Chief Accountant
On September 3, the Commission announced the appointment of Paul A. Beswick as Deputy Chief Accountant for Professional Practice in the agency's Office of the Chief Accountant. Previously, Mr. Beswick served as a senior advisor to the SEC's Chief Accountant.
As Deputy Chief Accountant, Mr. Beswick will play a key role in nearly all aspects of the Commission's work related to overseeing the activities of the Public Company Accounting Oversight Board (PCAOB), managing the resolution of audit independence issues and ethical matters, and monitoring audit and independence standard-setting internationally.
"The SEC and America's investors will benefit from Paul's diverse background, experience and commitment to high quality audits and financial reporting," said Conrad Hewitt, SEC Chief Accountant.
Mr. Beswick added, "I am honored by this opportunity, and look forward to continuing to work with my dedicated and talented colleagues in the Office of Chief Accountant on behalf of the investing public."
Prior to joining the SEC staff, Mr. Beswick was a Partner with Ernst & Young LLP, where he worked in the firm's Professional Practice and Risk Management Group. Mr. Beswick previously served as a practice fellow at the Financial Accounting Standards Board (FASB) from July 2005 through June 2007.
Mr. Beswick is a graduate of Miami University in Oxford, Ohio. (Press Rel. 2008-188)
RULES AND RELATED MATTERS
Exemption from Rule Filing Requirements of Section 19(b)
The Commission issued an order granting application for exemption pursuant to Section 36(a) of the Securities Exchange Act of 1934 by the Philadelphia Stock Exchange, Inc., n/k/a NASDAQ OMX PHLX, Inc., from the rule filing requirements of Section 19(b) of the Exchange Act with respect to certain rules incorporated by reference. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58454)
Delinquent Filers' Stock Registrations Revoked
The registrations of the stock of Respondents Waycool3D, Inc., and World Callnet, Inc., have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. 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. 34-58459; File No. 3-13133)
SEC Charges Former CEO of Kellogg, Brown & Root, Inc. With Foreign Bribery
On September 3, the Commission announced that it charged former KBR executive Albert Jackson Stanley with violating the anti-bribery provisions of the Foreign Corrupt Practices Act (FCPA) and related provisions of the federal securities laws. The Commission alleges that over a ten-year period, Stanley and others participated in a scheme to bribe Nigerian government officials in order to obtain construction contracts worth more than $6 billion. The contracts were awarded to a four-company joint venture of which The M.W. Kellogg Company, and later KBR, was a member.
The Commission alleges that beginning as early as 1994, Stanley and other members of the joint venture determined that it was necessary to pay bribes to individuals within the Nigerian government in order to obtain contracts to build liquefied natural gas facilities (LNG Trains) in Bonny Island, Nigeria. Stanley and others met with high-ranking Nigerian government officials and their representatives on at least four occasions to arrange the bribe payments. To conceal the illicit payments, Stanley and others approved entering into sham contracts with two "agents" to funnel money to the Nigerian officials. Thereafter, as the joint venture was paid for its work building the LNG Trains, the joint venture paid the agents over $180 million. In turn, substantial payments were made to various Nigerian government officials.
Without admitting or denying the allegations in the complaint, Stanley has consented to the entry of a final judgment that permanently enjoins him from violating the anti-bribery, record-keeping and internal control provisions of Securities Exchange Act of 1934 (Sections 30A and 13(b)(5) and Rule 13b2-1). Stanley has also agreed to cooperate with the SEC's ongoing investigation. The proposed settlement with Stanley is subject to the court's approval. [SEC v. Albert Jackson Stanley, 08-CV-02680, S.D. Tex. (Houston)] (LR-20700; AAE Rel. 2871)
Jason R. Hyatt, Jay D. Johnson, and Hyatt Johnson Capital, LLC
The Commission announced that on September 3, the Honorable George W. Lindberg of the United States District Court for the Northern District of Illinois entered an Order Making Findings of Contempt (the contempt order) by BCI Aircraft Leasing, Inc. (BCI) and Brian Hollnagel (Hollnagel) for their failure to properly respond to subpoenas issued by the SEC. On Aug. 28, 2008, the SEC filed a Motion to Show Cause, alleging that BCI failed to provide responsive documents in a timely manner, and that Hollnagel had falsely claimed to not have any responsive documents in his possession or control. As part of the contempt order, the Court ordered that BCI and Hollnagel fully respond to the SEC's subpoenas by noon on Friday, Sept. 5, 2008, and that BCI and Hollnagel would each be fined $1,000 per day afterwards if they do not fully respond by that time. The Court also ordered that BCI and Hollnagel pay costs and reasonable attorney fees incurred by the SEC in its repeated attempts to obtain documents responsive to the subpoenas.
On April 18, 2008, the SEC filed a civil injunctive complaint alleging that Defendants Jason Hyatt, Jay Johnson, and Hyatt Johnson Capital, LLC, from approximately 2003 through 2007, while acting as unregistered broker-dealers and investment advisers, misappropriated at least $5.4 million in investor funds purportedly raised to invest in securities offered by BCI. The complaint also alleged that the Defendants made certain false assurances to investors regarding the legitimacy of the BCI securities, without having any reasonable basis for such assurances. The complaint alleged that, as a result of their conduct, the Defendants violated Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder.
Previously, on Aug. 13, 2007, the SEC filed a civil injunctive complaint alleging that Hollnagel and BCI, from 1999 through 2006, raised at least $82 million from approximately 120 investors through the fraudulent offer and sale of securities issued by BCI. SEC v. Brian N. Hollnagel and BCI Aircraft Leasing, Inc., Civil Action No. 07 C 4538 (N.D. Ill.) (Bucklo, J.). The SEC's complaint alleges that, as a result of their conduct, Hollnagel and BCI violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. [SEC v. Jason R. Hyatt, Jay Johnson and Hyatt Johnson Capital, LLC, Civil Action No. 1:08-cv-2224 (N.D. Ill.) (Lindberg, J.)] (LR-20701)
INVESTMENT COMPANY ACT RELEASES
Prudential Annuities Life Assurance Corporation, et al.
An order has been issued under Section 6(c) of the Investment Company Act to Prudential Annuities Life Assurance Corporation (PALAC), Prudential Annuities Life Assurance Corporation Variable Account B (Account), and Prudential Annuities Distributors, Inc. (PAD, and collectively with PALAC and the Account, the Applicants) providing exemptions from Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the 1940 Act and Rule 22c-1 thereunder, to permit, under specified circumstances, the recapture of certain credits previously applied to purchase payments made under (1) the Advanced Series XTra Credit Eight variable annuity contract (Contract), or (2) variable annuity contracts issued by PALAC in the future that are substantially similar in all material respects to the Contract and that are issued through the Account or any other separate account established in the future by PALAC (Future Account) that supports variable annuity contracts. The order extends to any FINRA member broker-dealer that serves as a distributor or principal underwriter of the Contract offered through the Account or any Future Account. (Rel. IC-28373 - September 3)
Advanced Series Trust, et al.
An order has been issued on an application filed by Advanced Series Trust, et al., under Section 6(c) of the Investment Company Act, for an exemption from Rule 12d1-2(a) under the Act. The order permits registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28374 - September 3)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSE-2008-79) submitted by the New York Stock Exchange to reduce the monthly fee for NYSE Realtime Reference Prices. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58443)
Immediate Effectiveness of Proposed Rule Change
A proposed rule change (SR-BSE-2008-43) filed by the Boston Stock Exchange regarding transfer of ownership of MX US 2, Inc. 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 September 8. (Rel. 34-58445)
Proposed Rule Change
The New York Stock Exchange filed a proposed rule change (SR-NYSE-2008-78) to allow NYSE Alternext US LLC to participate in the compensation fund established by the NYSE to reimburse claimants for losses associated with NYSE-operated system failures. Publication is expected in the Federal Register during the week of September 8. (Rel. 34-58450)
SECURITIES ACT REGISTRATIONS
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