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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2008-247
December 23, 2008

COMMISSION ANNOUNCEMENTS

SEC Approves Exemptions to Allow Central Counterparty for Credit Default Swaps

The Securities and Exchange Commission today approved temporary exemptions allowing LCH.Clearnet Ltd. to operate as a central counterparty for credit default swaps. Today's action is an important step in stabilizing financial markets by reducing counterparty risk and helping to promote efficiency in the credit default swap market.

"Today's announcement is an important step in our efforts to add transparency and structure to the opaque and unregulated multi-trillion dollar credit default swaps market," said SEC Chairman Christopher Cox. "These conditional exemptions will allow a central counterparty to be quickly up and running, while protecting investors through regulatory oversight. Although more needs to be done in this area legislatively, these actions will shine much-needed light on credit default swaps trading."

The Commission developed these temporary exemptions in close consultation with the Board of Governors of the Federal Reserve System (FRB), the Federal Reserve Bank of New York, the Commodity Futures Trading Commission (CFTC), and the U.K. Financial Services Authority.

The President's Working Group on Financial Markets has stated that the implementation of central counterparty services for credit default swaps was a top priority. In furtherance of this goal, the Commission, the FRB and the CFTC signed a Memorandum of Understanding in November 2008 that establishes a framework for consultation and information sharing on issues related to central counterparties for credit default swaps.

The temporary exemptions will facilitate central counterparties such as LCH.Clearnet and certain of their participants to implement centralized clearing quickly, while providing the Commission time to review their operations and evaluate whether registrations or permanent exemptions should be granted in the future. The conditions that apply to the exemptions are designed to provide that key investor protections and important elements of Commission oversight apply, while taking into account that applying all the particulars of the securities laws could have the unintended consequence of deterring the prompt establishment and use of a central counterparty.

Well-regulated central counterparties should help promote stability in financial markets by reducing the counterparty risks posed by the default or financial distress of a major market participant. This, in turn, should reduce the potential for disruption in financial markets attributable to credit default swaps. They should also promote operational efficiencies and transparency, which are lacking currently in the over-the-counter market for credit default swaps.

Erik R. Sirri, Director of the SEC's Division of Trading and Markets, said, "These temporary and conditional exemptions are the best way to facilitate the prompt establishment of a central counterparty for CDS transactions. Their limited duration will allow the Commission and its staff to gain more direct experience with the development of the centrally cleared CDS market, while the conditions to the exemptions will give the Commission the ability to oversee the CDS market after the central counterparty becomes operational."

To assist in its consideration of any further action that may be needed in this area, the Commission is soliciting public comment on all aspects of these exemptions. (Press Rel. 2008-303)


RULES AND RELATED MATTERS

Temporary Conditional Exemption Pursuant to Section 36 of the Exchange Act

The Commission granted the International Securities Exchange a temporary exemption, subject to certain conditions, under Section 36 of the Exchange Act from the rule filing procedures of Section 19(b) of the Exchange Act in connection with the acquisition by ISE Holdings, Inc., of an equity interest in Direct Edge Holdings, LLC. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59133)


Approval of Proposed Plan for Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2

The Commission approved and declared effective a proposed plan for allocation of regulatory responsibilities pursuant to Rule 17d-2 under the Securities Exchange Act of 1934 (File No. 4-574) submitted by the International Securities Exchange and the Financial Industry Regulatory Authority. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59134)


Proposed Amendment to Existing Regulation Concerning Records Services, Fee Schedule

The Commission is soliciting comments on a proposed amendment to its regulation governing the fees for records services. The Commission's schedule of fees for records services will be updated using a formula for the calculation of fees under the Freedom of Information Act (FOIA) and language that directs FOIA requesters to the Commission's Web site. Using a formula, instead of set rates, will allow the Commission to charge fees that reflect its allowable direct costs.

For further information contact: Melinda Hardy, Assistant General Counsel, (202) 551-5149. (Rel. 34-59150; File No. S7-33-08)


ENFORCEMENT PROCEEDINGS

In the Matter of William Edward Sears

On December 22, 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 Sanctions (Order) against William Edward Sears. The Order finds that on Dec. 4, 2008, a final judgment was entered by consent against Sears 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 the civil action entitled Securities and Exchange Commission v. William Edward Sears and Patricia Jean Sears-Million, Civil Action Number 105-1473 ST, in the United States District Court for the District of Oregon.

In the Order, the Commission finds that the Commission's complaint in the civil action alleged that from at least 1998 through 2003, Sears was a registered representative associated with Metropolitan Investment Securities, Inc. (MIS), which was then registered with the Commission as a broker-dealer. During that period, according to the complaint, Sears fraudulently induced his clients to invest in bonds and preferred stock issued by two companies that were related to MIS, Metropolitan Mortgage & Securities, Co. Inc. (Metropolitan) and Summit Securities, Inc. (Summit). As Sears knew, the Metropolitan and Summit securities were risky. Despite this, the complaint alleged, Sears caused many of his clients to invest from 50% to more than 90% of their limited savings and retirement funds in Metropolitan and Summit securities. To carry out the fraud, according to the complaint, Sears falsely told his clients that the securities had little or no risk and were as safe as bank certificates of deposit, and falsified information on his clients' brokerage records, in order to circumvent rules designed to limit an investor's exposure to high-risk securities.

Based on the above, the Order bars Sears from association with any broker or dealer. Sears consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that he admitted the entry of the injunction against him. (Rel. 34-59131; File No. 3-13316)


In the Matter of Patricia Jean Sears-Million

On December 22, 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 Sanctions (Order) against Patricia Jean Sears-Million. The Order finds that on Dec. 4, 2008, a final judgment was entered by consent against Sears-Million permanently enjoining her 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 the civil action entitled Securities and Exchange Commission v. William Edward Sears and Patricia Jean Sears-Million, Civil Action Number 105-1473 ST, in the United States District Court for the District of Oregon.

In the Order, the Commission finds that the Commission's complaint in the civil action alleged that from at least 1998 through 2003, Sears-Million was a registered representative associated with Metropolitan Investment Securities, Inc. (MIS), which was then registered with the Commission as a broker-dealer. During that period, according to the complaint, Sears-Million fraudulently induced her clients to invest in bonds and preferred stock issued by two companies that were related to MIS, Metropolitan Mortgage & Securities, Co. Inc. (Metropolitan) and Summit Securities, Inc. (Summit). As Sears-Million knew, the Metropolitan and Summit securities were risky. Despite this, the complaint alleged, Sears-Million caused many of her clients to invest from 50% to more than 90% of their limited savings and retirement funds in Metropolitan and Summit securities. To carry out the fraud, according to the complaint, Sears-Million falsely told her clients that the securities had little or no risk and were as safe as bank certificates of deposit, and falsified information on her clients' brokerage records, in order to circumvent rules designed to limit an investor's exposure to high-risk securities.

Based on the above, the Order bars Sears-Million from association with any broker or dealer. Sears-Million consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that she admitted the entry of the injunction against her. (Rel. 34-59132; File No. 3-13317)


Commission Remands to Law Judge Proceeding Against Salvatore F. Sodano

The Commission has remanded to an administrative law judge the Division of Enforcement's proceeding against Salvatore F. Sodano, the former chairman and chief executive officer of the American Stock Exchange. In making this determination, the Commission found that Section 19(h)(4) of the Securities Exchange Act of 1934 authorizes the Commission to censure former, as well as current, officers and directors of self-regulatory organizations. Because the Initial Decision in this proceeding did not address the underlying charges against Sodano, and no hearing was held, the Commission determined to remand the proceeding to the administrative law judge to conduct such a hearing. (Rel. 34-59141)


In the Matter of Ira Yohalem, CPA

On December 23, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (Order) against Ira Yohalem, CPA. The Order finds that Yohalem engaged in improper professional conduct by failing to maintain independence from an audit client. Yohalem was a partner and served as chairman of the executive committee of Yohalem Gillman & Co. (Yohalem Gillman), an accounting firm that audited and reviewed the financial statements of a Massachusetts-based public company (Company A) from at least 2000 through 2004. The Order finds that in 2001 and 2003, an officer, director, and significant shareholder of Company A made two investments totaling $160,000 in restaurants of which Yohalem was a managing partner. Further, the Order finds that as a result of receiving the investments, Yohalem failed to maintain independence under generally accepted auditing standards, ethics and independence standards, and Regulation S-X.

Based on the above, the Order bars Ira Yohalem from appearing or practicing before the Commission as an accountant with the right to apply for reinstatement after one year. Ira Yohalem consented to the issuance of the Order without admitting or denying any of the findings. (Rel. 34-59155; AAE Rel. 2912; File No. 3-13318)


In the Matter of 2 I, Inc., 2-Infinity, Inc., 2TheMart.com, Inc., The 3DO Co., 5B Technologies Corp., 24 Hour Auction, Inc., and 1626 New York Associates Limited Partnership

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations as to Seven Respondents (Default Order) in 2 I, Inc., Administrative Proceeding No. 3-13294. The Order Instituting Proceedings alleged that 2 I, Inc., 2-Infinity, Inc., 2TheMart.com, Inc., The 3DO Co., 5B Technologies Corp., 24 Hour Auction, Inc., 1626 New York Associates Limited Partnership, and 2000 New Commerce, Inc., each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission.

The proceeding has ended as to Respondent 2000 New Commerce, Inc. 2 I, Inc., Exchange Act Release No. 59042 (Dec. 3, 2008).

The Default Order finds the allegations to be true as to the remaining seven Respondents. It revokes the registrations of each class of registered securities of 2 I, Inc., 2-Infinity, Inc., 2TheMart.com, Inc., The 3DO Co., 5B Technologies Corp., 24 Hour Auction, Inc., and 1626 New York Associates Limited Partnership, pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-59156; File No. 3-13294)


SEC Files Settled Enforcement Actions Against UnitedHealth Group Inc. and Former General Counsel in Stock Options Backdating Case

On December 22, the Commission filed a civil injunctive action against UnitedHealth Group Inc., a Minnetonka, Minnesota health insurance company, alleging that it engaged in a scheme to backdate stock options. Without admitting or denying the allegations, UnitedHealth agreed to settle to charges that it violated the reporting, books and records, and internal controls provisions of the federal securities laws.

In a separate complaint, the Commission charged former UnitedHealth General Counsel David J. Lubben with participating in the stock option backdating scheme. Without admitting or denying the allegations, Lubben consented to, among other things, an antifraud injunction, a $575,000 civil penalty, and a five-year officer and director bar.

The Commission alleges that between 1994 and 2005 UnitedHealth concealed more than $1 billion in stock option compensation by providing senior executives and other employees with "in-the-money" options while secretly backdating the grants to avoid reporting the expenses to investors.

According to the Commission's complaint, certain UnitedHealth officers used hindsight to pick advantageous grant dates for the company's nonqualified stock options that on many occasions coincided with, or were close to, dates of historically low annual and quarterly closing prices for UnitedHealth's common stock. Although pricing the options below current prices required the company to report a compensation expense under well-settled accounting principles, UnitedHealth avoided reporting the charges by creating inaccurate and misleading documents indicating that the options had been granted on the earlier date. The backdated grants resulted in materially misleading disclosures, with the company overstating its net income in fiscal years 1994 through 2005 by as much as $1.526 billion.

The Commission declined to charge the company with fraud or seek a monetary penalty, based on the company's extraordinary cooperation in the Commission's investigation, as well as its extensive remedial measures. UnitedHealth's cooperation included an independent internal investigation, the company's release in a Form 8-K of a report detailing the investigation's findings and conclusions, and the sharing of the facts uncovered in the internal investigation with the government. The company also took significant remedial actions in response to the findings of its internal investigation, including the implementation of new controls designed to prevent the recurrence of fraudulent conduct, removal of certain senior executives and board members, and the recoupment of nearly $1.8 billion in cash, options value and other benefits from several former and current officers, through, among other things, derivative litigation and the voluntary re-pricing and cancellation of retroactively-priced options.

In a separate complaint, the Commission charged former UnitedHealth General Counsel David J. Lubben with participating in the stock option backdating scheme. According to the Commission's complaint, Lubben or others acting at his direction created false or misleading company records indicating that the grants had occurred on dates when the company's stock price had been at a low. Lubben personally received numerous backdated grants of options, representing as many as 3.8 million shares of UnitedHealth stock on a split adjusted basis. He exercised approximately 1.8 million of those options for approximately $1.1 million in gains attributable to improper backdating.

Without admitting or denying the allegations of the Commission's complaint, Lubben consented to the entry of an order permanently enjoining him from violating or aiding and abetting violations of the antifraud, reporting, record-keeping, internal controls, proxy statement, and securities ownership reporting provisions of the federal securities laws, and barring him from serving as an officer or director of a public company for a period of five years. Lubben will disgorge ill-gotten gains of $1,403,310 with $347,211 in prejudgment interest and pay a $575,000 civil penalty.

Under the terms of the settlement, Lubben's disgorgement and prejudgment interest would be deemed satisfied by his voluntary repricing of his UnitedHealth stock options, which reduced the value of those options by approximately $2.7 million, and his payment of approximately $630,000 in pending settlements to resolve derivative and shareholder lawsuits related to options backdating filed against Lubben in state and federal courts in Minnesota.

In addition, Lubben agreed to resolve a separate administrative proceeding against him by consenting to a Commission order that suspends him from appearing or practicing before the Commission as an attorney for three years.

The Commission's settlements with UnitedHealth and Lubben in the civil actions are subject to the approval of the U.S. District Court for the District of Minnesota.

In December 2007, the Commission announced a record $468 million settled enforcement action against William W. McGuire, M.D., the former Chief Executive Officer and Chairman of the Board of UnitedHealth. The settlement, which is pending before U.S. District Judge James M. Rosenbaum, was the first with an individual to deprive corporate executives of their stock sale profits and bonuses earned while their companies were misleading investors pursuant to the "clawback" provision (Section 304) of the Sarbanes-Oxley Act. McGuire consented to anti-fraud and other injunctions; disgorgement plus prejudgment interest of approximately $12.7 million; a $7 million civil penalty (the largest penalty against an individual in a stock option backdating case); and reimbursement to UnitedHealth under Section 304 of the Sarbanes-Oxley Act of approximately $448 million in cash bonuses, profits from the exercise and sale of UnitedHealth stock and unexercised UnitedHealth options. McGuire also agreed to be barred from serving as an officer or director of a public company for ten years. Litigation Release No. 20387 (Dec. 6, 2007).

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York and the U.S. Postal Inspection Service. The Commission's investigation is continuing. [SEC v. UnitedHealth Group Inc., Case No. 08-CV-6455 JRT/JJG (D. Minn. filed Dec. 22, 2008); SEC v. David J. Lubben, Case No. 08-CV-6454 PJS/FLN (D. Minn. filed Dec. 22, 2008)] (LR- 20836)


Court Appoints Receiver in SEC Fraud Action Against Oil and Gas Promoter

On December 22, the Commission filed a civil action in Dallas federal court against Star Exploration, Inc. and its principal, James T. Gurgainers. The Commission alleges that the defendants conducted fraudulent oil and gas securities offerings between December 2005 and May 2008, raising over $12 million from over 160 investors nationwide. Upon the Commission's request, the court appointed a receiver over the assets acquired with investor funds.

Specifically, the Commission alleges that, among other things, Gurgainers solicited investors for completion funds for dry holes, failed to use investor funds as offering materials represented, and improperly pooled and commingled investor funds from different ventures contrary to offering materials. The complaint further alleges that Gurgainers used offering proceeds from one entity to pay other entities' expenses and diverted at least $700,000 for his personal use.

The Commission alleges that each defendant violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks against each defendant a permanent injunction, disgorgement of ill-gotten gains (plus prejudgment interest), and a civil penalty. The Commission also names the following Gurgainers-controlled entities as relief-defendants: Star Georgetown 1 Joint Venture, Star Mineral Royalty 1-A, LP, Star Mineral Royalty 1-B, LP, Star Discovery, LP, Star Hamilton 2 Joint Venture, Lagniappe Oil & Gas Leases, LLC, Star Exploration Leasing, LLC, Discovery Drilling, LLC, Discovery Rigs, LLC, Terra Ferma Operating, LLC, Star Financial International, LLP, and 1 AP.com, Inc. [SEC v. Star Exploration, Inc. and James T. Gurgainers, Civil Action No. 3-08-CV-2248-O, United States District Court; Northern District of Texas; Dallas Division)] (LR-20837)


SEC Sues Three Stock Promoters and Their Minnesota-Based Entities for Registration and Fraud Violations

The Commission announced today that on December 22, it added charges against stock promoters Ryan Reynolds, Jason Wynn and Carlton Fleming alleging that they illegally underwrote multiple unregistered public stock offerings in 2007 and early 2008. Previously, on March 13, 2008, the Commission obtained a temporary restraining order against Reynolds, Wynn, Fleming, and their respective entities, Bellatalia LP, Wynn Industries, LLC, and Thomas Wade Investments, LLC for engaging in illegal distributions of Beverage Creations, Inc. stock in violation of Section 5 of the Securities Act of 1933. The Commission also charged Wynn, Wynn Industries and Beverage Creations with fraud.

In its amended complaint, the Commission alleges that Reynolds, Wynn, Fleming, and additional companies under their control purchased stock from ConnectAJet.com, Inc., My Vintage Baby, Inc. and Alchemy Creative, Inc. for pennies per share and immediately began liquidating those shares in the public market at prices grossly inflated by their own promotional activities. The amended complaint adds as defendants Lugano Funds LLC, Wynn Holdings, LLC and Regus Investment Group, LLC, which are companies owned or controlled by Reynolds, Wynn and Fleming, respectively.

In addition, the Commission alleges that Jason Wynn and companies under his control created artificial demand for the stock of ConnectAJet.com, Inc., My Vintage Baby, Inc. and Alchemy Creative, Inc. through various ad campaigns, misleading promotional mailers and spam emails.

The Commissions' lawsuit also names as defendants Beverage Creations, Inc. Chief Executive Officer Robert Wieden and former Chief Operating Officer Patrick Dado. According to the amended complaint, in a press release on February 21, 2008, Wieden and Dado falsely disclaimed any relationship between Beverage Creations, Inc. and Jason Wynn or companies under his control, even though Beverage Creations, Inc. had sold more than 3 million shares of stock to Wynn Industries, LLC and had other relationships with Jason Wynn.

The Commission alleges that, by these activities, all defendants violated Section 5 of the Securities Act, and Wynn, Wynn Holdings, Wynn Industries, Beverage Creations, Inc., Wieden and Dado violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission is seeking permanent injunctions and civil penalties against all defendants and disgorgement of ill-gotten gains from Reynolds, Wynn, Fleming, Lugano Funds, LLC, Wynn Holdings, LLC and Regus Investment Funds, LLC. Ryan Reynolds is a defendant in two other actions filed by the Commission: Securities and Exchange Commission v. Offill, et al. No. 3:07cv-1643-D and SEC v. Reynolds, et al., No. 3:08-cv-01687-M, both in the U.S. District Court for the Northern District of Texas. [SEC v. Ryan M. Reynolds, et al., Case No. 3-08 CV-438-B (N.D. Tex.)] (LR-20838)


INVESTMENT COMPANY ACT RELEASES

Orders of Deregistration Under the Investment Company Act

Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:

  • Smith Barney Money Funds, Inc. [File No. 811-2490]
    [Rel. No. IC-28539]
  • Smith Barney Municipal Money Market Fund, Inc. [File No. 811-3112]
    [Rel. No. IC-28540]
  • Legg Mason Partners Small Cap Core Fund, Inc. [File No. 811-5928]
    [Rel. No. IC-28541]
  • Highland Capital Multi-Strategy Fund [File No. 811-22073]
    [Rel. No. IC-28542]
  • Legg Mason Partners Variable Portfolios V [File No. 811-7893]
    [Rel. No. IC-28543]
  • Legg Mason Partners Variable Portfolios I, Inc. [File No.  811-8443]
    [Rel. No. IC-28544]
  • Legg Mason Partners Variable Portfolios III, Inc. [File No. 811-8372]
    [Rel. No. IC-28545]
  • Everest Funds [File No. 811-10057]
    [Rel. No. IC-28546]
  • Excelsior Funds, Inc. [File No. 811-4088]
    [Rel. No. IC-28547]
  • Excelsior Tax-Exempt Funds, Inc. [File No. 811-4101]
    [Rel. No. IC-28548]
  • Excelsior Funds Trust [File No. 811-8490]
    [Rel. No. IC-28549]
  • Legg Mason Partners Funds Trust [File No. 811-5034]
    [Rel. No. IC-28550]
  • Legg Mason Partners Lifestyle Series, Inc. [File No. 811-7435]
    [Rel. No. IC-28551]
  • Legg Mason Partners Arizona Municipals Fund, Inc. [File No. 811-5066]
    [Rel. No. IC-28552]
  • Legg Mason Partners World Funds, Inc. [File No. 811-6290]
    [Rel. No. IC-28553]
  • Smith Barney Institutional Cash Management Fund, Inc. [File No. 811-9012]
    [Rel. No. IC-28554]
  • Western Asset Zenix Income Fund Inc. [File No. 811-5484]
    [Rel. No. IC-28555]
  • VLC Trust [File No. 811-4788]
    [Rel. No. IC-28556]
  • Liquid Reserves Portfolio [File No. 811-5813]
    [Rel. No. IC-28557]
  • Tax Free Reserves Portfolio [File No. 811-6118]
    [Rel. No. IC-28558]
  • US Treasury Reserves Portfolio [File No. 811-6277]
    [Rel. No. IC-28559]
  • MuniHoldings New York Fund, Inc. [File No. 811-21628]
    [Rel. No. IC-28560]
  • Enhanced Government Fund II, Inc. [File No. 811-21830]
    [Rel. No. IC-28561]
  • Turnaround Investment Trust [File No. 811-21275]
    [Rel. No. IC-28562]
  • Citigroup Alternative Investments Trust [File No. 811-21854]
    [Rel. No. IC-28563]
  • Phoenix Multi-Portfolio Fund [File No. 811-5436]
    [Rel. No. IC-28564]
  • StateShares, Inc. [File No. 811-22000]
    [Rel. No. IC-28565]
  • Western Asset Funds II, Inc. [File No. 811-6088]
    [Rel. No. IC-28566]

Notices of Deregistration Under the Investment Company Act

For the month of December, 2008, a notice has been issued giving interested persons until Jan. 13, 2009, to request a hearing on any of the following applications for an order under Section 8(f) of the Investment Company Act declaring that the applicant has ceased to be an investment company:

  • BlackRock Technology Fund, Inc. [File No. 811-8721]
  • MuniDividend Insured Fund, Inc. [File No. 811-21062]
  • MuniHoldings Fund III, Inc. [File No. 811-21626]
  • MuniHoldings California Fund, Inc. [File No. 811-21627]
  • BlackRock Enhanced Equity Yield Fund, Inc. [File No. 811-21722]
  • BlackRock Enhanced Equity Yield & Premium Fund, Inc. [File No. 811-21755]
  • Mezzacappa Partners, LLC [File No. 811-21752]
  • Ameristock ETF Trust [File No. 811-21941]
  • Fortis Growth Fund Inc. [File No. 811-848]
  • Fortis Income Portfolios Inc. [File No. 811-2341]
  • Fortis Money Portfolios Inc. [File No. 811-2943]
  • Fortis Tax-Free Portfolios Inc. [File No. 811-3498]
  • Fortis Advantage Portfolios Inc. [File No. 811-5355]
  • Fortis Worldwide Portfolios Inc. [File No. 811-6297]
  • Enterprise Accumulation Trust [File No. 811-5543]
  • Variable Investment Trust [File No. 811-8392]
  • The American Separate Account 5 [File No. 811-10409]

(Rel. IC-28567 - December 19)


SELF-REGULATORY ORGANIZATIONS

Proposed Rule Changes

National Securities Clearing Corporation filed a proposed rule change (File No. SR-NSCC-2008-08) pursuant to Section 19(b)(1) of the Act that would amend its rules to add an agreement that requires NSCC fund members to have taken reasonable steps to validate the accuracy of the data they submit to the Mutual Fund Profile Service database. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59105)

NYSE Arca filed a proposed rule change (SR-NYSEArca-2008-134) under Section 19(b)(1) of the Securities Exchange Act of 1934 to amend the sanctioning guidelines. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59117)

The Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2008-061) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt FINRA Rule 5240 (Anti-Intimidation/Coordination) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59119)


Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-FINRA-2008-063) filed by the Financial Industry Regulatory Authority to adopt Rule 12805 of the NASD Code of Arbitration Procedure for Customer Disputes (Customer Code) and Rule 13805 of the NASD Code of Arbitration Procedure for Industry Disputes (Industry Code) as FINRA rules into a new consolidated rulebook 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 December 22. (Rel. 34-59108)

A proposed rule change filed by New York Stock Exchange (SR-NYSE-2008-125) that reduces the annual trading floor regulatory fee allocated among the designated market maker firms and eliminates it thereafter 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 December 22. (Rel. 34-59112)

A proposed rule change filed by BATS Exchange (SR-BATS-2008-013) to change the name of BATS Holdings 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 December 22. (Rel. 34-59114)

A proposed rule change (SR-NYSE-2008-129) filed by the New York Stock Exchange to establish the minimum price variation of $0.01 for orders and quotations in bonds admitted to dealings on NYSE 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 December 22. (Rel. 34-59118)

A proposed rule change (SR-NYSEALTR-2008-13) filed by NYSE Alternext US to establish the minimum price variation of $0.01 for orders and quotations in bonds admitted to dealings on NYSE Alternext 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 December 22. (Rel. 34-59120)

A proposed rule change filed by the Chicago Board Options Exchange to extend the duration of the Hybrid rule pertaining to orders represented in open outcry (SR-CBOE-2008-126) 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 December 22. (Rel. 34-59121)

A proposed rule change (SR-NYSE-2008-128) filed by the New York Stock Exchange to amend the requirements of Section 203.01 of the Listed Company Manual with respect to Annual Reports 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 December 22. (Rel. 34-59123)

A proposed rule change (SR-FINRA-2008-060) filed by Financial Industry Regulatory Authority relating to trade reporting of transfers of securities subject to an asset purchase agreement 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 December 22. (Rel. 34-59126)

A proposed rule change filed by the International Securities Exchange (SR-ISE-2008-94) relating to fee changes 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 December 22. (Rel. 34-59127)

A proposed rule change filed by the Boston Stock Exchange (SR-BSE-2008-57) to list options on the Mini-Nasdaq-100 Index at $1 strike price intervals 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 December 22. (Rel. 34-59129)


Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-ISE-2008-85), as modified by Amendment No. 1, filed by the International Securities Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 relating to the purchase by International Securities Exchange Holdings, Inc., of an ownership interest in Direct Edge Holdings, Inc. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59135)

The Commission approved a proposed rule change (SR-FICC-2007-04) submitted under Rule 19b-4 by the Fixed Income Clearing Corporation that would amend FICC's Government Securities Division's and Mortgage Backed Securities Division's rules concerning applicant and member disqualification criteria. Publication is expected in the Federal Register during the week of December 22. (Rel. 34-59111)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2008/dig122308.htm


Modified: 12/23/2008