U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

SEC News Digest

Issue 2009-104
June 2, 2009

COMMISSION ANNOUNCEMENTS

SEC Suspends Trading in the Securities of Patriot Energy Corporation

The Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act), of trading of the securities of Patriot Energy Corporation (Patriot Energy) at 9:30 a.m. on June 2, 2009, and terminating at 11:59 p.m. on June 15, 2009.

The Commission temporarily suspended trading in the securities of Patriot Energy because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, contracts entered into by Patriot Energy and a tender offer for Patriot Energy's outstanding shares.

The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.

Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker or dealer has any questions as to whether or not it has complied with the rule, it should not enter any quotation but immediately contact the staff in the Division of Trading and Markets, Office of Interpretation and Guidance, at (202) 551-5777. If any broker or dealer is uncertain as to what is required by Rule 15c2-11, it should refrain from entering quotations relating to Patriot Energy's securities until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation that is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, David R. Herman, Senior Counsel, Division of Enforcement, should be telephoned at (202) 551-4588. (Rel. 34-60023)


George S. Canellos Named Regional Director of SEC New York Regional Office

The Securities and Exchange Commission Chairman Mary Schapiro today announced the appointment of George S. Canellos as Regional Director of the SEC's New York Regional Office, where he will oversee the enforcement and examination operations.

Mr. Canellos will join the SEC from the law firm of Milbank, Tweed, Hadley & McCloy, where he has been a partner in the Litigation Group of the firm's New York office since 2003. From 1994 through 2002, Mr. Canellos was a criminal prosecutor with the U.S. Department of Justice in the U.S. Attorney's Office for the Southern District of New York. He served as Chief of the Major Crimes Unit where he supervised teams of prosecutors responsible for investigating and prosecuting large-scale financial crimes such as bank, insurance and tax fraud, foreign corrupt practices, money laundering, and many other forms of investment fraud.

"George Canellos exemplifies precisely the kind of high caliber professional we are trying to recruit to join our talented New York office staff," said Chairman Schapiro. "I am confident that his role in helping the Commission provide rigorous oversight of Wall Street will advance our efforts to restore investor confidence."

While working in the U.S. Attorney's Office, Mr. Canellos also served as Senior Trial Counsel of the Securities and Commodities Fraud Task Force, and was responsible for the prosecution of many individuals and corporations for accounting fraud, investment advisory fraud, insider trading and other violations of the federal securities laws.

Mr. Canellos also served as Deputy Chief Appellate Attorney, one of five supervisors in charge of overseeing the briefing and argument of all criminal appeals before the U.S. Court of Appeals for the Second Circuit.

"George is a remarkably gifted lawyer who has proven throughout his career to possess excellent judgment, superior leadership skills, and an absolute dedication to the twin ideals of aggressive but fair law enforcement," said Rob Khuzami, Director of the SEC's Division of Enforcement. "He is a great candidate to lead the talented staff of the SEC's New York Regional Office."

Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, said, "George Canellos brings outstanding experience as a prosecutor and his knowledge of the regulated industry to lead the New York office. Investors in the region will be well-served by his appointment."

Mr. Canellos said, "As a federal prosecutor in New York, I had the privilege to work with examiners and lawyers in the SEC's New York office and appreciated their dedication, skill, and commitment to the public interest. I am very excited to return to public service and lead the office at this extremely challenging time."

Mr. Canellos began his legal career in 1989 as a litigation associate at Wachtell Lipton Rosen & Katz, a New York law firm specializing in securities regulation and corporate control controversies. Mr. Canellos, 44, earned his B.A. degree, magna cum laude, from Harvard College in 1986 and his J.D. from Columbia University School of Law in 1989.

Mr. Canellos is expected to join the SEC's staff in July, succeeding James Clarkson, who has served as the Acting Regional Director on an interim basis since October 2008 and will now return to his post as the Director of Regional Office Operations in the SEC's Division of Enforcement in Washington, D.C. (Press Rel. 2009-125)


ENFORCEMENT PROCEEDINGS

In the Matter of Stanley Johnson

On May 29, the Commission issued an Order Instituting Administrative Proceeding Pursuant to Section 15(b) of the Securities Exchange Act of 1934, and Notice of Hearing (Order) against Stanley Johnson (Johnson), based on the entry of a permanent injunction against Johnson in the civil action entitled SEC v. Advance Body Imaging, LP, et al., Civil Action No. 07-CV-1140-DOC (JTLx), in the U.S. District Court for the Central District of California.

In the Order, the Division of Enforcement alleges that on May 15, 2009, the U.S. District Court for the Central District of California entered a Revised Judgment of Permanent Injunction and other relief against Johnson, permanently enjoining him from future violations of Sections 5 and 17(a) of the Securities Act of 1934, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering him to pay disgorgement, prejudgment interest, and civil penalties.

In the Order, the Division of Enforcement further alleges that Stanley Johnson is the CEO and majority owner of Advance Body Imaging, LP (Advance Body Imaging), a California limited partnership with its principal place of business in Orange, California, and the CEO and sole owner of Consulting Dynamics, Inc. (Consulting Dynamics), a Nevada corporation with its principal place of business in Orange, California; that Consulting Dynamics is the general partner of Advance Body Imaging; that through his control of Consulting Dynamics, Johnson controlled Advance Body Imaging; and that neither Johnson nor Consulting Dynamics is registered as a broker-dealer under the Exchange Act.

The Division of Enforcement further alleges in the Order that the Commission's complaint in the civil action alleged that from July 2004 through March 2007, Johnson, Consulting Dynamics, Advance Body Imaging (collectively, Defendants) and their sales agents offered and sold limited partnership units in Advance Body Imaging to more than 100 investors in at least 25 states, raising more than $3.1 million from those sales. The complaint also alleged that the Defendants and their sales agents, using investor lead lists purchased from lead list brokers, cold-called prospective investors using the telephone, and solicited them to purchase limited partnership units in Advance Body Imaging. In addition, the complaint alleged that in 2005 and 2006, the Defendants maintained a website, www.advancedactivecare.com, promoting Advance Body Imaging's purported diagnostic imaging services and the radiologists and cardiologists purportedly employed to administer those services, provided a telephone number for prospective investors to call for additional information regarding the opportunity to invest in Advance Body Imaging, and allowed prospective investors to provide Advance Body Imaging with their contact information. The complaint further alleged that the Defendants or their sales agents would then contact prospective investors by telephone and attempt to solicit their investment.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Johnson an opportunity to dispute the allegations, and to determine what, if any, remedial action is appropriate and in the public interest, pursuant to Section 15(b) of the Securities Exchange Act of 1934.

The Order requires that an Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-60003; File No. 3-13494).


In the Matter of Charles F. Lewis

An Administrative Law Judge has issued an Order Making Findings and Imposing Remedial Sanction by Default (Default Order) in Administrative Proceeding No. 3-13435, Charles F. Lewis. The Order Instituting Proceedings (OIP) alleged that Lewis participated in a fraudulent securities offering that defrauded at least six hundred investors of approximately $40 million. The OIP further stated that, on December 29, 2008, the U.S. District Court for the District of Colorado entered a judgment against Lewis, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) and Rule 10b-5 of the Exchange Act of 1934.

The Default Order finds the allegations of the OIP to be true. It concludes that, pursuant to Section 15(b)(6) of the Exchange Act, it is in the public interest to bar Lewis from association with any broker or dealer. (Rel. 34-60025; File No. 3-13435)


Douglas F. Samuels Sanctioned

Douglas F. Samuels has been barred from association with any broker or dealer. The sanction was ordered in an administrative proceeding before an administrative law judge, following his June 2008 conviction for wire fraud.

Samuels was previously employed as Chief Financial Officer at John Dawson & Associates, Inc., a broker-dealer. The wrongdoing underlying Samuels’s conviction related to trading in which, for the purpose of executing a scheme to defraud, he caused and directed fraudulent “trade allocations” by creating, assigning, and/or transferring profitable securities and options trades to certain firm, employee, and customer accounts, and losing trades to other accounts. (Rel. 34-60027; File No. 3-13433)


INVESTMENT COMPANY ACT RELEASES

Notices of Deregistration under the Investment Company Act

For the month of May 2009, a notice has been issued giving interested persons until June 23, 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:

  • Paradigm Funds Trust [File No. 811-21811]
  • Paradigm Multi Strategy Fund I, LLC [File No. 811-21808]
  • Nagle Funds [File No. 811-21826]
  • Buffalo Balanced Fund, Inc. [File No. 811-8364]
  • Buffalo Small Cap Fund, Inc. [File No. 811-8509]
  • Buffalo USA Global Fund, Inc. [File No. 811-8896]
  • Buffalo High Yield Fund, Inc. [File No. 811-8898]
  • Buffalo Large Cap Fund, Inc. [File No. 811-8900]
  • The GNMA Fund Investment Accumulation Program, Inc. [File No. 811-2788]
  • Sit Money Market Fund, Inc. [File No. 811-4032]
  • John Hancock Institutional Series Trust [File No. 811-8852]
  • Centurion Investment Trust [File No. 811-21959]
  • Ziegler Exchange Traded Trust [File No. 811-21827]
  • Legg Mason Permal Global Active Strategies Fund [File No. 811-22194]
  • Legg Mason Permal Global Active Strategies TEI Fund [File No. 811-22195]
  • Legg Mason Permal Global Active Strategies Master Fund [File No. 811-22196]
  • BlackRock Multi-Strategy Hedge Advantage [File No. 811-21760]
  • BlackRock Multi-Strategy Hedge Opportunities LLC [File No. 811-21537]
  • RIC Coinvestment Fund LP [File No. 811-21900]
  • Rand Capital SBIC, LP [File No. 811-21097]
  • Goldman Sachs Global Equity Long/Short Registered Fund, LLC [File No. 811-21375]
  • Goldman Sachs Global Relative Value Registered Fund, LLC [File No. 811-21377]
  • Goldman Sachs Global Event Driven Registered Fund, LLC [File No. 811-21378]
  • Goldman Sachs Global Tactical Trading Registered Fund, LLC [File No. 811-21379]
  • Man IP 220, LLC [File No. 811-21451]
  • Man Dual Absolute Return Fund [File No. 811-22070]
  • Pax World Growth Fund, Inc. [File No. 811-8097]
  • Pax World High Yield Fund, Inc. [File No. 811-9419]
  • Access Capital Strategies Community Investment Fund, Inc. [File No. 811-21889]
  • Separate Account VA-2NL of Transamerica Occidental Life Insurance Company [File No. 811-07232]
  • Separate Account VA-2NLNY of Transamerica Financial Life Insurance Company [File No. 811-07370]
  • Genworth Life & Annuity VA Separate Account 3 [File No. 811-21970]

(Rel. IC-28751 - May 29)


Pacific Investment Management Company LLC and PIMCO ETF Trust

An order has been issued on an application filed by Pacific Investment Management LLC and PIMCO ETF Trust to permit (a) series of registered open-end management investment companies whose portfolios will consist of the component securities of certain domestic, global or international fixed income securities indices to issue shares that can be redeemed in large aggregations only, (b) secondary market transactions in shares of the series to occur at negotiated market prices, (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days after the tender of shares for redemption, (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of aggregations of shares, and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire shares of the series. (Rel. IC-28752 - June 1)


Cohen & Steers Advantage Income Realty Fund, Inc., et al.

An order (Order) has been issued on an application filed by Cohen & Steers Advantage Income Realty Fund, Inc., et al. (Funds) under Section 6(c) of the Investment Company Act for an exemption from sections 18(a)(1)(A) and (B) of the Act for a period from the date of the Order until Oct. 31, 2010. The Order permits each Fund to issue or incur debt subject to asset coverage of 200% that would be used to refinance the Fund's auction preferred shares issued prior to February 1, 2008 that are outstanding at the time such post-Order debt is issued or incurred. The Order also permits each Fund to declare dividends or any other distributions on, or purchase, capital stock during the term of the Order, provided that any such debt has asset coverage of at least 200% after deducting the amount of such transaction. (Rel. IC-28753 - June 1)


Flaherty & Crumrine Preferred Income Fund Incorporated, et al.

An order has been issued on an application filed by Flaherty & Crumrine Preferred Income Fund Incorporated, et al. (Funds) under section 6(c) of the Investment Company Act granting an exemption from sections 18(a)(1)(A) and (B) of the Act for a period from the date of the order until Oct. 31, 2010. The order permits each Fund to issue or incur debt that would be used to redeem the Fund's auction preferred shares issued prior to Feb. 1, 2008 that are outstanding at the time of such issuance or incurrence of debt (post-order debt), and to refinance such post-order debt, subject to the 200% asset coverage requirement ordinarily applicable to a senior security that is stock. The order also permits each Fund to declare dividends or any other distributions on, or purchase, capital stock during the exemption period, provided that any such post-order debt has asset coverage of at least 200% after deducting the amount of such transaction. (Rel. IC-28754 - June 1)


SELF-REGULATORY ORGANIZATIONS

Approval of Proposed Rule Changes

The Commission approved a proposed rule change submitted by the NYSE Arca (SR-NYSEArca-2009-32) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 implementing the NYSE Arca Realtime Reference Prices service on a permanent basis. Publication is expected in the Federal Register during the week of June 1. (Rel. 34-60002)

The Commission approved a proposed rule change filed by Financial Industry Regulatory Authority, as modified by Amendment No. 1 thereto (SR-FINRA-2009-016), under Section 19(b)(2) of the Securities Exchange Act of 1934, relating to the adoption of FINRA Rule 2080 (Obtaining an Order of Expungement of Customer Dispute Information from the Central Registration Depository (CRD System)), FINRA Rule 2310 (Direct Participation Programs), FINRA Rule 4551 (Requirements for Alternative Trading Systems to Record and Transmit Order and Execution Information for Security Futures) and FINRA Rule 2266 (SIPC Information) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of June 1. (Rel. 34-59987)


Immediate Effectiveness of Proposed Rule Change

A proposed rule change filed by BATS Exchange related to fees for use of the Exchange (SR-BATS-2009-016) 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 June 1. (Rel. 34-59990)

A proposed rule change filed by NASDAQ OMX BX relating to order routing (SR-BX-2009-026) 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 June 1. (Rel. 34-59999)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2009/dig060209.htm


Modified: 06/02/2009