Trading Suspended in Securities of Petro America Corp.
The Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the Exchange Act), of trading of the securities in Petro America Corp. (Petro America) (trading symbol: PTRZ), of Kansas City, Kansas and Kansas City, Missouri, at 9:30 a.m. EDT on June 18, 2009, and terminating at 11:59 p.m. EDT on July 1, 2009.
The Commission temporarily suspended trading in the securities of Petro America because of questions regarding the accuracy and adequacy of assertions by Petro America concerning, among other things, the company's business operations and assets, including its purported oil trading and storage business and holdings, its purported millions of dollars in assets, and its securities issued and outstanding.
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 he has complied with the rule, he 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, he should refrain from entering quotations relating to Petro America's securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation which 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 that may relate to this matter, they should immediately communicate it to the Fort Worth Regional Office of the Securities and Exchange Commission, at 817/978-3821. (Rel. 34-60134)
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, June 24, 2009 - 10:00 a.m.
The subject matter of the Open Meeting will be:
The Commission will consider whether to propose amendments governing the operations of money market funds.
Change in the Meeting: Deletion of an Item
The following item will not be considered during the Closed Meeting on Friday, June 19, 2009, at 11:00 a.m.: formal order of investigation.
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.
SEC Charges Promoter and Firm With Operating Ponzi Scheme Targeting the African-American And Hispanic Communities
The Securities and Exchange Commission today filed a complaint in the United States District Court for the Central District of California against Horizon Property Holdings, L.C. (Horizon) and its principal, Cydney Sanchez. The SEC alleges that Sanchez, 59, of Los Angeles and Beverly Hills-based Horizon operated a $6 million real estate investment scheme that primarily targeted the African-American and Hispanic communities.
The SEC's complaint alleges that, in 2006 and 2007, Sanchez and Horizon recruited approximately 150 investors in California and several other states to participate in a purported foreclosure reinstatement program. According to the complaint, Sanchez claimed that investor funds were secured by a promissory note and an interest in real property and would be used to cure defaults on distressed properties. By promising returns of 40% in as little as 30 days, Sanchez raised approximately $6 million.
As the complaint alleges, however, investor money was not secured and was not used to rescue homeowners from foreclosure. The complaint alleges that Sanchez and Horizon were instead operating a Ponzi scheme that used approximately $3.7 million from new investors to pay principal and returns due to earlier investors. The complaint further alleges that Sanchez also misappropriated the remaining investor funds to finance unrelated and undisclosed real estate-related activities and pay her personal expenses (including over $500,000 for, among other things, airline tickets, clothing, jewelry, handbags, electronic equipment, furniture, and cars).
The SEC's complaint alleges that Sanchez and Horizon violated the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also alleges that Sanchez and Horizon violated the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. [SEC v. Horizon Property Holdings, L.C. and Cydney Sanchez, United States District Court for the Central District of California, Civil Action No. CV 09-04340 SVW (JCx)] (LR-21088)
SEC Settles Pending Civil Fraud Charges Against Joseph Hirko, Former Chairman and Chief Executive Officer of Enron Broadband Services
The Securities and Exchange Commission announced today that, on June 15, 2009, the U.S. District Court in Houston entered a final judgment in the Commission's pending civil action against Joseph Hirko, former Chairman and Chief Executive Officer of Enron Broadband Services (EBS). On May 1, 2003, the Commission charged Hirko and other EBS executives with securities fraud and insider trading. Without admitting or denying the allegations in the Commission's complaint, Hirko has now agreed to be permanently enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, to be permanently barred from serving as an officer or director of a public company, and to pay a $1 million civil money penalty.
The Commission settled this action in coordination with the Department of Justice, which entered into a plea agreement with Hirko on related charges in October 2008. In the criminal action, Hirko agreed to forfeit $7 million that, along with the Commission's disgorgement and civil penalties, will contribute over $8 million for the benefit of injured investors through the Commission's Enron Fair Fund.
As alleged in the Commission's complaint, Hirko and other EBS executives engaged in a fraudulent scheme to, among other things, make false or misleading statements about the technological prospects, performance, and financial condition of EBS. These statements were made at Enron's annual analyst conference and in multiple press releases during 2000. While aware of material non-public information concerning the true nature of EBS' technological and commercial condition, Hirko sold large amounts of Enron stock at inflated values and avoided substantial losses.
Hirko is scheduled to be sentenced in the U.S. District Court in Houston on September 28, 2009.
The Commission acknowledges the assistance of the U.S. Department of Justice. For further information, see Litigation Release No. 18122 (May 1, 2003). [SEC v. Joseph Hirko, et al., Civil Action No. H-03-0905 (S.D. Tex.)] (LR-21089; AAE Rel. 2993)
SEC Sues Comverse Technology, Inc. for Fraudulent Options Backdating and Earnings Management Schemes
The Securities and Exchange Commission today filed a settled civil action in the United States District Court for the Eastern District of New York against Comverse Technology, Inc. (Comverse) alleging that it engaged in two separate fraudulent schemes, during the course of more than a decade, to materially misstate its financial condition and performance metrics. According to the Complaint, as a result of its improper conduct, Comverse was able to portray itself as a company with steady, but measured growth, which regularly met analysts' earnings targets.
Without admitting or denying the allegations of the Commission's Complaint, Comverse has consented to the entry of a final judgment permanently enjoining it from violating the antifraud, reporting, record-keeping, and internal controls provisions of the federal securities laws. Specifically, the proposed final judgment would permanently enjoin Comverse from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, and 14a-9. In accepting the company's settlement offer, the Commission considered, among other things, Comverse's extensive cooperation in the Commission's investigation.
The settlement is subject to the approval of the United States District Court for the Eastern District of New York.
The Commission previously charged former Comverse Chairman and CEO Jacob "Kobi" Alexander, former Comverse Chief Financial Officer David Kreinberg, and former Comverse General Counsel William F. Sorin. Kreinberg and Sorin each settled with the Commission. The Commission today also announced the filing of settled civil charges against Ulticom, Inc., a majority owned subsidiary of Comverse whose stock is also publicly traded, for fraudulent options backdating and earnings management practices. For further information, see Litigation Release Nos. 19796 (Aug. 9, 2006), 19878 (Oct. 24, 2006), 19964 (Jan. 10, 2007), and 21090 (June 18, 2009). [SEC v. Comverse Technology, Inc., United States District Court for the Eastern District of New York, Civil Action No. 09-CV-02588-DRH-AKT (E.D.N.Y.)] (LR-21090; AAE Rel. 2994)
SEC Sues Ulticom and Former Ulticom Executive for Fraudulent Options Backdating and Earnings Management Schemes
The Securities and Exchange Commission today filed settled civil charges against Ulticom, Inc. and a former executive, Lisa M. Roberts, for two separate fraudulent schemes, involving improper options backdating practices and certain improper accounting practices. The Commission's Complaint against Ulticom alleges the misconduct began in 1996, when Ulticom was a wholly-owned subsidiary of Comverse Technology, Inc. (Comverse), and continued after Ulticom became a publicly-traded company, while still majority-owned by Comverse, in 2000.
Without admitting or denying the allegations of the Commission's Complaint, both Ulticom and Roberts have consented to the entry of final judgments permanently enjoining them from violating the antifraud, reporting, record-keeping, and internal controls, and other provisions of the federal securities laws. Specifically, the proposed final judgment against Ulticom would permanently enjoin it from violating Section 17(a) of the Securities Act of 1933 (Securities Act), Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Securities Exchange Act of 1934 (Exchange Act), and Exchange Act Rules 13a-1, 13a-11, 13a-13, and 14a-9. In accepting the settlement offer, the Commission considered, among other things, Ulticom's extensive cooperation in the Commission's investigation.
The proposed final judgment against Roberts would permanently enjoin her from violating Section 17(a) of the Securities Act; Sections 10(b) and 13(b)(5) of the Exchange Act; Exchange Act Rules 10b-5, 13b2-1, and 13b2-2; and for aiding and abetting Ulticom's violations of Exchange Act Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) and Exchange Act Rules 13a-1, 13a-11, 13a-13, and 14a-9. In addition, Roberts has agreed to pay a $25,000 civil monetary penalty and has consented to an order that would prohibit her from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act. As part of her settlement with the Commission, and following the entry of the proposed final judgment, Roberts has consented to the entry of an administrative order, pursuant to Rule 102(e)(3) of the Commission's Rules of Practice, suspending her from appearing or practicing before the Commission as an accountant, with the right to reapply after five years.
The settlements are subject to the approval of the United States District Court for the Eastern District of New York.
The Commission today also announced the filing of settled civil charges against Comverse for fraudulent options backdating and improper accounting practices, including earnings management. For further information, see Litigation Release Nos. 19796 (Aug. 9, 2006), 19878 (Oct. 24, 2006), 19964 (Jan. 10, 2007), and 21091 (June 18, 2009).
The Commission previously charged former Comverse Chairman and CEO Jacob "Kobi" Alexander, former Comverse Chief Financial Officer David Kreinberg, and former Comverse General Counsel William F. Sorin. Kreinberg and Sorin later reached independent settlements with the Commission. [SEC v. Ulticom, Inc., United States District Court for the Eastern District of New York, Civil Action No. 09-CV-02589-JS-ARL (E.D.N.Y.); SEC v. Lisa M. Roberts, United States District Court for the Eastern District of New York, Civil Action No. 09-CV-02590-LDW-AKT (E.D.N.Y.)] (LR-21091; AAE Rel. 2995)
INVESTMENT COMPANY ACT RELEASES
Main Street Capital Corporation, et al.
An order has been issued on an application filed by Main Street Capital Corporation (Company), Main Street Mezzanine Fund, LP, Main Street Capital Partners, LLC and Main Street Mezzanine Management, LLC, under Section 23(c)(3) of the Investment Company Act for an exemption from Section 23(c) of the Act. The order amends a prior order that permits the Company to issue restricted shares of its common stock under the terms of its employee and director compensation plan (Plan). The amended order permits the Company, pursuant to the Plan, to engage in certain transactions that may constitute purchases by the Company of its own securities within the meaning of Section 23(c) of the Act. (Rel. IC-28768 - June 16)
Approval of Proposed Rule Change
The Commission granted approval to a proposed rule change filed by the Municipal Securities Rulemaking Board (SR-MSRB-2009-05) under Section 19(b)(2) of the Securities Exchange Act of 1934, Relating to the Subscription Service for Continuing Disclosure Documents Through the Electronic Municipal Market Access System (EMMAŽ). Publication is expected in the Federal Register during the week of June 15. (Rel. 34-60121)
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