SEC News Digest

COMMISSION ANNOUCEMENTS

SEC Suspends Trading in the Securities of GenX 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 GenX Corporation (GenX) at 9:30 a.m. EDT on July 2, 2009, and terminating at 11:59 p.m. EDT July 16, 2009.

The Commission temporarily suspended trading in the securities of GenX because of questions that have been raised about the accuracy and adequacy of publicly disseminated information appearing in stock promotional materials, and elsewhere, concerning among other things, the company's purported partnerships and other relationships with certain individuals and entities.

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 GenX'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. (Rel. 34-60227)

Office of the Chief Accountant Names Academic Fellows

The Securities and Exchange Commission's Office of the Chief Accountant today announced the selection of Jack Krogstad and Nancy Mangold as Academic Accounting Fellows for one-year terms beginning this summer.

Academic Accounting Fellows serve as research resources for SEC staff by interpreting and communicating research materials as they relate to the agency. In addition, Academic Accounting Fellows have been assigned to ongoing projects in the Chief Accountant's office that include rulemaking, serving as a liaison with the professional accounting standards-setting bodies, and consulting with registrants on accounting, auditing, independence and reporting matters.

"The perspective of fellows from academia is a great benefit to our Office of the Chief Accountant, but more importantly their work benefits U.S. investors," said James Kroeker, the SEC's Acting Chief Accountant.

Mr. Krogstad holds the Union Pacific Endowed Chair in Accountancy at Creighton University in Omaha, Neb. He received his B.S. in Accounting from Union College in Lincoln, Neb., and his MBA and Ph.D. from the University of Nebraska at Lincoln. He also has held academic positions at the University of Texas at Austin, Kansas State University, the University of Michigan at Ann Arbor, and the University of Illinois at Urbana-Champaign.

Mr. Krogstad has published extensively in the field of auditing and has been professionally active throughout his academic career. He was the Director of Research for the National Commission on Fraudulent Financial Reporting and served as Chairperson of the Auditing Section of the American Accounting Association as well as Editor of the Section's journal, Auditing: A Journal of Practice & Theory. He has frequently consulted as an expert witness in litigation involving accounting and auditing issues and served as a consultant to the American Institute of CPAs in its development of the computerized CPA examination. Mr. Krogstad presently is on the Board of Trustees of Union College and is the Chairperson of the World Auditing Board of the Seventh-Day Adventist Church. He teaches undergraduate and graduate auditing and strategic management courses at Creighton University.

Ms. Mangold is a Professor of Accounting at the California State University, East Bay. She earned her Ph.D. and MBA from the University of California, Berkeley and her B.A. from the National Taiwan University. She is a Certified Treasury Professional (CTP). Ms. Mangold teaches both undergraduate and graduate financial accounting. She has taught executive MBA students in Austria, China, Singapore, and the U.S., and has trained high-ranking executives and government officials in China. Her research focuses on the effect of cross-border mergers and acquisitions in China on shareholder wealth; listing premiums for Chinese company IPOs in the U.S., Hong Kong, and on China's domestic exchanges; and earnings management issues related to Chinese company IPOs.

Ms. Mangold received two Best Paper Awards for her papers on Chinese mergers and acquisitions in 2008 and 2009. Her recent work has been published in the International Journal of Global Business and Economics and the Journal of International Business and Economics. Ms. Mangold was appointed by the World Bank as a consultant to the People's Bank of China (equivalent to Federal Reserve Bank) for a project on China's Deposit Insurance System and to China's Ministry of Finance for a project on accounting for derivatives.

Mr. Krogstad and Ms. Mangold will replace the current Academic Accounting Fellows. Donal Byard will return to Baruch College with the City University of New York, Susan Krische will return to the University of Illinois at Urbana-Champaign, and Roger Martin will return to the University of Virginia. (Press Rel. 2009-149)

Lorin L. Reisner to Join SEC Enforcement Division

The Securities and Exchange Commission today announced that Lorin L. Reisner, a former federal prosecutor and current litigation partner at Debevoise & Plimpton LLP, will join the Division of Enforcement as Deputy Director in early August.

"Lorin has demonstrated throughout his career the characteristics critical to protecting the nation's investors - a remarkable legal talent, exemplary work ethic, and a genuine commitment to prosecuting wrongdoers and protecting the public," said Rob Khuzami, Director of the SEC's Division of Enforcement. "I am delighted he has agreed to join the talented staff of the Division of Enforcement."

Mr. Reisner, 47, has been a litigation partner at Debevoise & Plimpton, a leading international law firm, since 1996. His practice has emphasized white collar criminal matters, internal investigations, securities and commercial litigation, media and intellectual property litigation.

Mr. Reisner previously served as an Assistant United States Attorney for the Southern District of New York from 1990 to 1994, where he investigated and prosecuted financial crimes, public corruption, organized crime, narcotics and firearms offenses. His extensive trial and appellate experience included successfully prosecuting murder-racketeering, fraud, bribery, theft, armed narcotics trafficking and other criminal activity. Mr. Reisner worked closely with and received commendations from numerous law enforcement organizations including the Federal Bureau of Investigation and the U.S. Customs Service. While at the U.S. Attorney's Office, he received the Director's Award for Superior Performance as an Assistant United States Attorney.

Mr. Reisner served as a law clerk for the Honorable Milton Pollack of the U.S. District Court for the Southern District of New York. He received his J.D. from Harvard Law School and his undergraduate degree from Brandeis University. (Press Rel. 2009-150)

Commission Meetings

Closed Meeting - Thursday, July 9, 2009 - 1:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, July 9, 2009, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; regulatory matter regarding financial institutions; and other matters related to enforcement proceedings.

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.

ENFORCEMENT PROCEEDINGS

In the Matter of Robert D. Graham, Esq.

On July 1, the Commission issued an Order of Forthwith Suspension Pursuant to Rule 102(e)(2) of the Commission's Rules of Practice (Order) against Robert D. Graham, Esq. (Graham) based on a judgment of criminal conviction entered against him in United States v. Robert D. Graham, et al, No. 06 CR 137 (CFD). The Order forthwith suspends Graham from appearing or practicing before the Commission effective immediately.

On May 7, 2009, the United States District Court for the District of Connecticut entered a judgment of conviction against Graham, finding him guilty of sixteen felony counts, including 1 count of conspiracy to violate the Federal securities laws and to commit mail fraud, 7 counts of securities fraud, 5 counts of making false statements to the Commission, and 3 counts of mail fraud. The indictment charged Graham with engaging in a fraudulent scheme to help American International Group, Inc. (AIG) structure a sham reinsurance transaction in order to make it appear as if AIG had increased its loss reserves by $250 million in the fourth quarter of 2000 and by an additional $250 million in the first quarter of 2001. The court sentenced Graham to 12 months and 1 day imprisonment followed by 24 months of supervised release and ordered him to pay a fine of $100,000.

Graham has been a member of the Delaware Bar since 1973, but his license has been suspended since April 18, 2008, pending the results of the criminal action against him. Graham also has been a member of the Connecticut Bar since 1988, but his license has been on administrative suspension since May 22, 2007 for failure to pay that State's client security fund fee. Graham was a senior vice president and assistant general counsel at General Re Corporation, which he joined in 1986, until he retired in October 2005. (Rel. 34-60219; AAE Rel. 3004; File No. 3-13533)

Commission Revokes Registration of Securities of AFC Low Income Housing Partners-1 for Failure to Make Required Periodic Filings

On July 2, the Commission revoked the registration of each class of registered securities of AFC Low Income Housing Partners-1 (AFC) for failure to make required periodic filings with the Commission.

Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, AFC consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to AFC Low Income Housing Partners-1 finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of AFC's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against AFC in the Matter of Advanced Monitoring Systems, Inc., et al., Administrative Proceeding File No. 3-13475.

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Advanced Monitoring Systems, Inc., et al., Administrative Proceeding File No. 3-13475, Exchange Act Release No. 59950 (May 20, 2009). (Rel. 34-60228; File No. 3-13475)

Commission Revokes Registration of Securities of Hemisphere Development Corp. (n/k/a Hemisphere Energy Corp.) for Failure to Make Required Periodic Filings

On July 2, the Commission revoked the registration of each class of registered securities of Hemisphere Development Corp. (n/k/a Hemisphere Energy Corp.) (Hemisphere) for failure to make required periodic filings with the Commission.

Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, Hemisphere consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Hemisphere Development Corp. (n/k/a Hemisphere Energy Corp.) finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of Hemisphere's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against Hemisphere In the Matter of H-Entertainment, Inc., et al., Administrative Proceeding File No. 3-13503.

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

Delinquent Filers' Stock Registrations Revoked

The registrations of the registered securities of Falcon Entertainment Corp., Fanatics Only, Inc., Fidelity Leasing Income Fund, Finger Lakes Financial Corp., First Cincinnati, Inc., and First Mutual, Inc. (n/k/a First Community, 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. 34-60230; File No. 3-13518)

In the Matter of Consolidated Resources Group, Inc.

On July 2, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Order) against Consolidated Resources Group, Inc. (Consolidated). Consolidated is a Florida corporation headquartered in West Palm Beach, Florida. The purpose of the proceeding is to determine whether the registration of its securities should be suspended for a period not exceeding 12 months or revoked. In the Order, the Division of Enforcement (Division) alleges that Consolidated failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 13a-1 and 13a-13, by not filing an Annual Report on Form 10-KSB since the fiscal year ended May 31, 2001 or periodic or quarterly reports on Form 10-QSB since April 15, 2002, when it filed a Form 10-QSB for the quarterly period ended Feb. 28, 2002.

A hearing will be scheduled to take evidence on the Division's allegations, to afford Consolidated the opportunity to establish defenses to the allegations, and to determine whether the registration of Consolidated's securities should be suspended for a period not exceeding 12 months or revoked. The Commission ordered that the Administrative Law Judge in these proceedings issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-60231; File No. 3-13534)

SEC Charges Orlando, Florida Resident in Connection with Fraudulent Pyramid Scheme

The Securities and Exchange Commission filed a civil injunctive action on July 1, 2009, against James H. Park of Orlando, Florida for his alleged role in a fraudulent pyramid scheme operated by Wealth Pools International, Inc, which raised at least $132 million from more than 10,000 investors. Wealth Pools purported to sell a language tutorial DVD through a world-wide network of Associate members, but the Commission alleged it was actually a fraudulent pyramid scheme based on the sale of memberships and destined to collapse. On Dec. 6, 2007, the Commission obtained a temporary injunction and the appointment of a receiver over Wealth Pools, bringing the scheme to a halt.

Among other things, the SEC's complaint alleges that Park illegally operated as an unregistered broker-dealer and solicited investors for Wealth Pools while making fraudulent misrepresentations and material omissions.

The SEC's complaint, filed in the United States District Court for the Middle District of Florida, charges Park with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and aiding and abetting Wealth Pools's violations of Section 10(b) and Rule 10b-5. The SEC seeks a permanent injunction, disgorgement, and civil money penalties. [SEC v. James H. Park, Civil Action No. 6:09-CV-1137-ORL-19-GJK] (LR-21115)

INVESTMENT COMPANY ACT RELEASES

WisdomTree Asset Management, Inc. and WisdomTree Trust

A notice has been issued giving interested persons until July 23, 2009, to request a hearing on an application filed by WisdomTree Asset Management, Inc. and WisdomTree Trust for an order under Section 6(c) of the Investment Company Act for an exemption from Rule 12d1-2(a) under the Act. The order would permit funds of funds relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-28804 - June 29)

Federated Core Trust III, et al.

A notice has been issued giving interested persons until July 24, 2009, to request a hearing on an application filed by Federated Core Trust III, et al. for an order granting an exemption from Section 22(e) of the Investment Company Act and Rule 22c-1 under the Act. The order would permit a series of a registered open-end management investment company whose outstanding securities are owned exclusively by persons who are qualified purchasers, as defined in the Act, to operate as an extended payment fund. (Rel. IC-28806 - June 30)

SELF-REGULATORY ORGANIZATIONS

Proposed Rule Changes

The NASDAQ Stock Market filed a proposed rule change (SR-NASDAQ-2009-056) pursuant Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder to adopt rules to implement the Options Order Protection and Locked/Crossed Market Plan. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60186)

The Chicago Board Options Exchange (SR-CBOE-2009-040) filed a proposed rule change pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder regarding a new Options Market Linkage Structure. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60187)

NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., filed a proposed rule change (SR-NYSEArca-2009-55) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder to list and trade shares of the Dent Tactical ETF. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60195)

The Commission has published notice of a proposed rule change (SR-FINRA-2009-042) filed by the Financial Industry Regulatory Authority relating to the outside business activities of registered persons. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60199)

NASDAQ OMX PHLX filed a proposed rule change (SR-Phlx-2009-54) under Section 19(b)(1) of the Securities Exchange Act of 1934 relating to fees for the top of PHLX Options (TOPO) data feed. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60202)

Immediate Effectiveness of Proposed Rule Changes

The Commission issued notice of immediate effectiveness of a proposed rule change (SR-NYSEArca-2009-58) filed by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 amending NYSE Arca Equities Rule 7.31. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60191)

A proposed rule change filed by the New York Stock Exchange (SR-NYSE-2009-62) extending the moratorium related to the qualification and registration of Registered Competitive Market Makers pursuant to NYSE Rule 107A and Competitive Traders pursuant to NYSE Rule 110 to the earlier of the approval of SR-NYSE-2009-08 or July 24, 2009 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 July 6. (Rel. 34-60197)

A proposed rule change filed by the NYSE Amex (SR-NYSEAmex-2009-34) amending its schedule of fees and charges for exchange services 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 July 6. (Rel. 34-60206)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2009-041) relating to an extension of Linkage Fee 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 July 6. (Rel. 34-60207)

Accelerated Approval of Proposed Rule Changes

The NASDAQ OMX BX filed, and the Commission has granted accelerated approval of a proposed rule change to amend the Fee Schedule of the Boston Options Exchange Facility (SR-BX-2009-034) under Rule 19b-4 of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60198)

The Commission noticed and granted accelerated approval to a proposed rule change (SR-NASDAQ-2009-062) submitted by The NASDAQ Stock Market pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to extend the pilot program for NASDAQ Last Sale Data Feeds. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60201)

Order of Summary Abrogation

The Commission, pursuant to Section 19(b)(3)(C) of the Securities Exchange Act of 1934, has issued an order of summary abrogation of a proposed rule change (SR-NASDAQ-2009-053) submitted by The NASDAQ Stock Market to reduce certain transaction fees for members that trade equities on NASDAQ provided that they also make markets in options on the NASDAQ OMX PHLX, Inc. options exchange. Publication is expected in the Federal Register during the week of July 6. (Rel. 34-60203)

RECENT 8K FILINGS

• Latest 8-K filings (TXT)

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