Erik R. Sirri, Director of Division of Trading and Markets, to Leave SEC
The Securities and Exchange Commission announced today that Erik R. Sirri, Director of the SEC's Division of Trading and Markets, plans to leave the agency at the end of April and return to academia.
Since coming to the SEC in September 2006, Mr. Sirri has overseen the Commission's programs related to securities exchanges, brokers, dealers, clearing agencies, transfer agents, and credit rating agencies. He also worked closely with the financial agencies of the President's Working Group on Financial Markets both on policy issues and in coordinating responses to the recent market crisis.
"The SEC has benefited greatly from Erik's leadership skills, deep understanding of the financial markets, and his ability to apply economic principles to advance investor protection and improve the capital markets," said SEC Chairman Mary Schapiro. "During recent financial troubles, Erik was a calm voice who provided thoughtful advice to the Commission. The nation's investors and capital markets have benefited from his wisdom and good judgment. While I respect Erik's decision to reenter private life and rejoin his family in Massachusetts, I am grateful for his gift of public service."
Mr. Sirri said, "I am honored to have worked with the staff of the Division of Trading and Markets. I would particularly like to thank Chairman Schapiro and the other Commissioners for the opportunity to serve them as Director of Trading and Markets. It is an experience that I will never forget, and for which I will always be grateful."
As Director, Mr. Sirri led numerous regulatory and policy initiatives, including those related to the Commission's new authority over credit ratings agencies and the recent establishment of oversight of counterparties credit default swaps. Mr. Sirri also oversaw implementation of disclosure rules for municipal securities and the Commission's broker financials responsibility rules for brokers, as well as rules related to share delivery requirements under Regulation SHO.
Before joining the SEC, Mr. Sirri was a finance professor at Harvard Business School and Babson College. He had served as Chief Economist of the SEC from 1996 to 1999. He has a B.S. in Astronomy from California Institute of Technology, an M.B.A. from University of California, Irvine, and a Ph.D. in Finance from University of California, Los Angeles. (Press Rel. 2009-70)
Roundtable to Examine Oversight of Credit Rating Agencies - Wednesday, April 15, 2009 - 10:00 a.m.
The Roundtable to examine oversight of credit rating agencies will consist of an open discussion regarding the oversight of credit rating agencies and related issues, such as conflicts of interest, competition, and transparency. Roundtable participants will include leaders from credit rating agencies, investor organizations, financial services associations, and academia.
The Roundtable will take place in the Auditorium of the Commission's headquarters at 100 F Street, NE, Washington, D.C. The Roundtable will be open to the public with seating on a first-come, first-served basis. Doors will open at 9:30 a.m. Visitors will be subject to security checks.
For further information, please contact: The Office of the Secretary at (202) 551-5400.
In the Matter of Arthur S. Redler
On March 30, the Securities and Exchange Commission issued an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 against Arthur S. Redler.
The Order finds that from October 2004 through September 2006, Redler was a registered representative of Newbridge Securities Corp., a registered broker-dealer headquartered in Fort Lauderdale, Florida. The Order further finds that on September 28, 2006, Redler pleaded guilty to one count of securities fraud in violation of Title 15 United States Code SS 78j(b) and 78ff and 17 C.F.R. 240.10b-5, and aiding and abetting in violation of Title 18 United States Code S 2, before the United States District Court for the Southern District of New York, in United States v. Arthur Redler, Crim. Information No. 1:06-CR-878 (LBS).
The Order also finds that the one count criminal information to which Redler pleaded guilty alleged, inter alia, that from at least in or about October 2004 through at least in or about November 2005, Redler defrauded investors by artificially manipulating the market for the stock of Millennium National Events, Inc., which is a penny stock, and that in engaging in the foregoing conduct, Redler posted bids and conducted trades in Millennium's stock at artificially inflated prices to create the false appearance in the marketplace that there was actual market demand for Millennium's stock at those inflated prices, by the use of the means and instrumentalities of interstate commerce, the mails, and the facilities of national securities exchanges.
Based on the above, the Order bars Redler from association with any broker or dealer and from participating in any offering of a penny stock, including: acting as a promoter, finder, consultant, agent or other person who engages in activities with a broker, dealer or issuer for purposes of the issuance or trading in any penny stock, or inducing or attempting to induce the purchase or sale of any penny stock. Redler consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the conviction. (Rel. 34-59649; File No. 3-13242)
Court Permanently Enjoins Pinchus Gold in Fraudulent Sale of Securities
On March 30, the United States District Court for the Southern District of New York entered a partial consent judgment against defendant Pinchus Gold, of Brooklyn, New York, in an action filed in February by the Securities and Exchange Commission. Without admitting or denying the allegations of the Commission's complaint, Gold consented to the entry of a judgment by the Hon. Jed S. Rakoff.
This judgment permanently enjoins Gold from further violation of the antifraud and registration provisions of the federal securities laws. The judgment further provides that Gold will disgorge his ill-gotten gains and prejudgment interest in an amount to be determined by the Court, and that Gold will be subject to a civil penalty in an amount to be determined by the Court.
The Commission's complaint alleged that Gold and others made material misrepresentations to the transfer agent for Forest Resources Management Corp. in order to obtain millions of restricted shares without the required restricted legend. A registration statement was never in effect for the shares issued to Gold and his nominees. Gold and his nominees then sold these unlegended shares on the open market, falsely holding them out to the investing public as free-trading shares, when in fact they were restricted stock. Gold received nearly $600,000 from the improper sale of these shares.
The litigation is continuing against the remaining defendants.
For further information, see Litigation Release No. 20878 (Feb. 2, 2009). [SEC v. Forest Resources Management Corp., et al., Civil Action 09 Civ. 903 (JSR) (SDNY)] (LR-20980)
SEC Charges Seattle-Area Firm in Multi-Million Dollar Scam Targeting Religious Community and Charitable Investors
The Securities and Exchange Commission today charged John H. Min of Tacoma, Wash., and his company Dime Financial Group LLC for raising more than $6 million in a fraudulent investment scheme that targeted churches, church members and senior citizens. The SEC alleges that Min misled some investors into believing their money would support Third World charitable causes while in fact spending the funds on his own lavish lifestyle and on failed high-risk investments.
According to the SEC's complaint, Min associated himself with a tight-knit religious and philanthropic community in the Pacific Northwest, creating a not-for-profit entity to attract charitable investors who believed that their investments would support certain Third Word aid groups, such as a charity supporting Bolivian widows and orphans. Min lured other investors by telling them that his trading expertise allowed him to make annual returns as high as 800 percent, and by touting Dime as a safe, low-risk investment for retirees' savings. The SEC alleges that Min and Dime deceived more than 60 investors since 2005 into buying interests in Dime's purportedly prosperous investment program.
"This case serves as an unfortunate reminder that investors need to be wary of possible fraud schemes even when the person offering the investment appears to be part of a humanitarian, religious or other community of trust," said Marc Fagel, Director of the SEC's San Francisco Regional Office.
According to the SEC's complaint, filed in federal court in Seattle, Min told investors that he would use their money to trade in the foreign currency exchange (Forex) market. The SEC alleges that Min instead misappropriated about $1.4 million of investors' funds to finance a lavish lifestyle that included a $70,000 Mercedes, expensive vacations, and private school tuition for his children. Min also illicitly used investor funds to bankroll a failed film venture about evangelical churches, and to pay expenses relating to the operation of the fraud. When Min did actually invest the funds, his trading record was abysmal. He lost more than $5 million on the Forex market, according to the SEC's complaint.
To conceal the fraud, Min sent investors false account statements reporting high returns, while he was actually depleting the entire investment pool through theft and trading losses. Min lied about his and Dime's credentials by, among other things, falsely telling investors that Dime was supervised by an "Advisory Board" populated by accomplished individuals.
The SEC's complaint charges Min and Dime with violating the antifraud and registration provisions of the federal securities laws, and seeks civil injunctions, the return of ill-gotten gains, and financial penalties. Separately, the U.S. Attorney's Office for the Western District of Washington (USAO) today unsealed an indictment charging Min with criminal violations based on the same misconduct.
The SEC acknowledges the assistance of the USAO, the Federal Bureau of Investigation, and the Commodity Futures Trading Commission. [SEC v. John Hyun Joon Min and Dime Financial Group LLC, Case No. C09-0422-JCC (W.D. Wash.)] (LR-20981)
INVESTMENT COMPANY ACT RELEASES
Forward Funds, et al.
An order has been issued on an application filed by Forward Funds, et al. under Section 17(d) of the Investment Company Act and Rule 17d-1 under the Act. The order permits certain registered open-end investment companies in the same group of investment companies to enter into a special servicing agreement. (Rel. IC-28682 - March 30)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NYSE Arca (SR-NYSEArca-2009-26) amending the Option Trading Rules in order to extend the Penny Pilot Program 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 March 30. (Rel. 34-59628)
A proposed rule change filed by NASDAQ OMX BX (SR-BX-2009-017) to extend the Penny Pilot Program on the Boston Options Exchange Facility 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 March 30. (Rel. 34-59629)
A proposed rule change filed by NASDAQ OMX PHLX (SR-Phlx-2009-25) relating to an extension of the Penny Pilot Program 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 March 30. (Rel. 34-59631)
A proposed rule change filed by NASDAQ OMX PHLX relating to permit fees (SR-Phlx-2009-26) 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 March 30. (Rel. 34-59641)
JOINT INDUSTRY PLAN RELEASES
Notice of Filing of a Proposed National Market System Plan Relating to Options Order Protection and Locked and Crossed Markets
The Chicago Board Options Exchange, International Securities Exchange, the NASDAQ Stock Market, NASDAQ OMX BX, NASDAQ OMX PHLX, NYSE Amex, and NYSE Arca have submitted a proposed Options Order Protection and Locked/Crossed Market Plan pursuant to Rule 608 of Regulation NMS under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of March 30. (Rel. 34-59647)
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