SEC News Digest

COMMISSION ANNOUNCEMENTS

Commission Meeting

Closed Meeting - Thursday, August 27, 2009 - 2:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, August 27, 2009 will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; and other matters relating 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 Samuel A. Fishman, Esq.

On August 20, the Securities and Exchange Commission issued an Order of Forthwith Suspension Pursuant to Rule 102(e)(2) of the Commission's Rules of Practice suspending Samuel A. Fishman, Esq. from appearing or practicing before the Commission. The Commission's order finds that on June 29, 2009, the United States District Court for the Southern District of New York entered a judgment convicting Fishman of mail fraud and sentencing him to 15 months incarceration, a $10,000 fine, and three years of supervised release. The Commission further found that on Feb. 26, 2009, the First Judicial Department of the New York Supreme Court Appellate Division issued an order directing that Fishman be struck from New York's roll of attorneys and counselors-at-law. Fishman, who has regularly appeared and practiced before the Commission, entered a plea of guilty to one count of mail fraud, admitting that he engaged in a fraudulent scheme to charge his law firm and its clients hundreds of thousands of dollars for personal and non-existent business expenses. (Rel. 34-60545; File No. 3-13593)

Commission Revokes Registration of Securities of Riverside Group, Inc. for Failure to Make Required Periodic Filings

On August 21, the Commission revoked the registration of each class of registered securities of Riverside Group, Inc. 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, Riverside 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 finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of Riverside's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against Riverside in In the Matter of RDM Sports Group, Inc., et al., Administrative Proceeding File No. 3-13556.

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 RDM Sports Group, Inc., et al., Administrative Proceeding File No. 3-13556, Rel. 34-60340, July 20, 2009. (Rel. 34-60553; File No. 3-13556)

In the Matter of Albert J. Rasch, Jr., Esq.

On August 21, the Securities and Exchange Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice Making Findings, and Imposing Remedial Sanctions against Albert J. Rasch, Jr., Esq. The Order finds that on July 31, 2009, a final judgment was entered against Rasch, permanently enjoining him from future violations of 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, in the civil action entitled Securities and Exchange Commission v. Albert J. Rasch, Jr., et al., Civil Action Number 1:09-CV-1190, in the United States District Court for the Northern District of Georgia. This final judgment also ordered Rasch to pay disgorgement, a $20,000 civil monetary penalty, and pre- and post-judgment interest, and barred him for five years from participating in an offering of a penny stock.

The Commission's Order further finds that from at least February 2007 through at least November 2007, Rasch, an attorney licensed to practice in the State of California since 1999 and a registered representative associated since 1990 with a broker-dealer registered with the Commission, issued a series of legal opinions for the benefit of certain shareholders of Mobile Ready Entertainment Corp., opining as to whether such shareholders could sell shares of Mobile Ready acquired in unregistered offerings and bearing restrictive legends into the public market, absent registration, pursuant to Securities Act Rule 144. The Commission's complaint in the underlying civil action alleged, among other things, that the Rule 144 legal opinions provided by Rasch to shareholders of Mobile Ready contained false and misleading statements of material fact, cited to nonexistent documents, and concluded without basis that more than 20 million shares acquired in unregistered offerings and bearing restrictive legends could be sold into the public market absent registration.

Based on the above, the Order bars Rasch from association with any broker or dealer, with the right to reapply for association after five years, and suspends Rasch from appearing or practicing before the Commission as an attorney for five years. Rasch consented to the issuance of the Order without admitting or denying any of the findings of the Order, except he admitted to the entry of the final judgment in the civil action. (Rel. 34-60557; File No. 3-13595)

In the Matter of Kathleen R. Novinger, Esq.

On August 21, the Securities and Exchange Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice Making Findings, and Imposing Remedial Sanctions against Kathleen R. Novinger. The Order finds that on July 31, 2009, a final judgment was entered against Novinger, permanently enjoining her from future violations of 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, in the civil action entitled Securities and Exchange Commission v. Albert J. Rasch, Jr., et al., Civil Action Number 1:09-CV-1190, in the United States District Court for the Northern District of Georgia. This final judgment also ordered Novinger to pay a $10,000 civil monetary penalty, with post-judgment interest, and barred her for five years from participating in an offering of a penny stock.

The Commission's Order further finds that from at least February 2007 through at least November 2007, Novinger, an attorney licensed to practice in the State of California since 1999, issued a series of legal opinions for the benefit of certain shareholders of Mobile Ready Entertainment Corp., opining as to whether such shareholders could sell shares of Mobile Ready acquired in unregistered offerings and bearing restrictive legends into the public market, absent registration, pursuant to Securities Act Rule 144. The Commission's complaint in the underlying civil action alleged, among other things, that the Rule 144 legal opinions provided by Novinger to shareholders of Mobile Ready contained false and misleading statements of material fact, cited to nonexistent documents, and concluded without basis that more than 20 million shares acquired in unregistered offerings and bearing restrictive legends could be sold into the public market absent registration.

Based on the above, the Order suspends Novinger from appearing or practicing before the Commission as an attorney for five years. Novinger consented to the issuance of the Order without admitting or denying any of the findings of the Order, except she admitted the entry of the final judgment in the civil action. (Rel. 34-60558; File No. 3-13596)

In the Matter of Knox H. Fuqua

On August 20, the Commission issued an Order barring Knox H. Fuqua from association with any investment adviser. Fuqua consented to the order, which was issued pursuant to Section 203(f) of the Investment Advisers Act, without admitting or denying its findings.

The Commission barred Fuqua based upon a United States District Court's order enjoining him from violating the antifraud and other provisions of the federal securities laws [SEC v. Knox H. Fuqua, et al., Civil Action No. 2:06-cv-0666, S.D. W.Va., Aug. 14, 2009]. The Commission's complaint in that action alleged, among other things, that Fuqua, a Charleston, West Virginia-based investment adviser, and his company, a Commission-registered investment adviser created and controlled by Fuqua, breached their fiduciary duties to their investment advisory clients. Fuqua and his company misappropriated their clients' funds, ignored their clients' instructions not to put their funds in high-risk investments, and materially misrepresented the nature and risk of the investments they made with their clients' money.

Fuqua used his clients' money to pay his personal and business expenses and to repay other clients whose money he had wrongfully taken. (See LR-19815) The final judgment of the federal court--on which the Commission's Order, pursuant to Section 203(f) of the Advisers Act, is based--permanently enjoined Fuqua from violating Section 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule10b-5, Section 17(a) of the Securities Act of 1933, and Section 206(1) and (2) of the Advisers Act; and ordered him to pay disgorgement of $151,439, prejudgment interest of $45,707 and a civil penalty of $50,000. (Rel. IA-2920; File No. 3-13594)

SEC Charges Florida Operator of Multi-Million Dollar Fraudulent Pyramid Scheme

On August 14, the Securities and Exchange Commission filed a complaint against Darrel West and Own My Travel, LLC, alleging that they raised over $6 million through a fraudulent pyramid scheme and lured investors with false promises of passive monthly income.

The SEC alleges that the defendants defrauded investors by offering and selling unregistered securities in the form of "Passport" memberships in a travel club that purportedly offered discount travel. According to the complaint, the defendants misrepresented Own My Travel as a legitimate multi-level marketing company when it was actually a fraudulent pyramid scheme premised on the sale of memberships and thus destined to collapse, leaving investors with substantial losses. The complaint also alleges that West and Own My Travel misled investors about Own My Travel's business structure and how it generated revenue, the future commissions investors would purportedly receive on a monthly basis, the risks associated with the Own My Travel investment, and West's failures running a similar predecessor company.

The SEC's complaint, filed in the United States District Court for the Middle District of Florida, alleges that West and Own My Travel 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 SEC seeks permanent injunctive relief against the defendants, disgorgement with prejudgment interest, and civil money penalties. The complaint also seeks disgorgement plus pre-judgment interest from the relief defendant, Professionally Assisted Marketing, Inc., a telemarketing company that the complaint alleges recruited new investors on behalf of existing Own My Travel investors. [SEC v. Darrel West, and Own My Travel, LLC, Case No. 6:09-CV-1419, M.D., Fla. Aug. 14, 2009] (LR-21182)

SELF-REGULATORY ORGANIZATIONS

Approval of Proposed Rule Change

The Commission approved a proposed rule change (SR-NASDAQ-2009-058) submitted by the NASDAQ Stock Market to modify port fees. Publication is expected in the Federal Register during the week of August 24. (Rel. 34-60546)

SECURITIES ACT REGISTRATIONS

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RECENT 8K FILINGS

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http://www.sec.gov/news/digest/2009/dig082109.htm