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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2009-166
August 28, 2009

COMMISSION ANNOUNCEMENTS

SEC Orders Suspension of Trading in the Stock of Brooke Corporation

On August 28, the Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 of trading of the securities of Brooke Corporation of Overland Park, Kan., at 9:30 a.m. EDT, on Aug. 28, 2009, and terminating at 11:59 p.m. EDT, on Sept. 11, 2009.

The Commission temporarily suspended trading in the securities of Brooke because of questions that have been raised about the accuracy and adequacy of publicly disseminated information because it has not filed any periodic reports with the Commission since the period ended June 30, 2008.

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 Brooke'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 brokers, dealers or other persons have any information which may relate to this matter, they should contact the Denver Regional Office of the Securities and Exchange Commission at (303) 844-1000. (Rel. 34-60579)


Commission Meetings

Closed Meeting - Thursday, September 3, 2009 - 2:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, September 3, 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

Revocation of Registration of Securities of Aleritas Capital Corp.

On August 28, the Commission revoked the registration of the securities of Aleritas Capital Corp. of Overland Park, Kan., registered with the Commission pursuant to Section 12 of the Securities Exchange Act of 1934, on Aug. 28, 2009, pursuant to Section 12(j) of the Exchange Act.

In its Order Instituting Proceedings Pursuant to Section 12(j) of the Securities Exchange Act of 1934, Making Findings, and Revoking Registration of Securities, the Commission found that Aleritas has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder, while its securities were registered with the Commission, in that Aleritas has not filed an Annual Report on Form 10-K for its fiscal year ending Dec. 31, 2008, or periodic or quarterly reports on Form 10-Q, for any fiscal period subsequent to its fiscal quarter ending June 30, 2008.

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 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 pursuant to the preceding sentence.

Without admitting or denying the findings in the Order, Aleritas consented to the entry of an order finding that it had failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder, and revoking the registration of each class of Aleritas' securities registered with the Commission pursuant to Section 12 of the Exchange Act. (Rel. 34-60580; File No. 3-13602)


In the Matter of Brooke Corporation and Brooke Capital Corporation

On August 28, the Commission issued an Order Instituting Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934 against Brooke Corporation (Brooke) and Brooke Capital Corporation (Brooke Capital).

In the Order, the Division of Enforcement alleges that Brooke and Brooke Capital are delinquent in their periodic filings, having not filed any annual or quarterly reports for periods subsequent to the fiscal quarter ended June 30, 2008. As a result, the Division of Enforcement alleges that Brooke and Brooke Capital have failed to comply with Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1 and 13a-13 thereunder.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Brooke and Brooke Capital an opportunity to respond to these allegations, and to determine whether it is appropriate to suspend for a period not exceeding 12 months or to revoke the registration of the securities of Brooke and Brooke Capital. The Order directs the administrative law judge to issue an initial decision within 120 days from the date of service of the Order. (Rel. 34-60581; File No. 3-13603)


SEC Charges Las Vegas-Based CPA and His Accounting Firm with Fraud

On August 27, the Commission charged a Las Vegas-based CPA and his public accounting firm with securities fraud for issuing false audit reports that failed to comply with Public Company Accounting Oversight Board (PCAOB) Standards and were often the product of high school graduates hired with little or no education or experience in accounting or auditing. The Commission's lawsuit, filed in federal district court in Las Vegas, Nev., names Michael J. Moore, CPA, age 55, of Las Vegas and Moore & Associates Chartered (M&A), a Nevada corporation headquartered in Las Vegas. Moore and M&A have agreed to settle the charges without admitting or denying the allegations.

According to the SEC's complaint, Moore and M&A issued audit reports for more than 300 clients who consist of primarily shell or developmental stage companies with public stock quoted on the OTCBB or the Pink Sheets. The SEC alleges that Moore and M&A violated numerous auditing standards, including a failure to hire employees with adequate technical training and proficiency. The SEC further alleges that Moore and M&A did not adequately plan and supervise the audits, failed to exercise due professional care, and did not obtain sufficient competent evidence. Despite the audit failures, M&A issued and Moore signed audit reports falsely stating that the audits were conducted in accordance with PCAOB Standards. By issuing and signing these false audit reports, Moore and M&A violated the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Regulation S-X Rule 2-02(b)(1).

The SEC's complaint also alleges that Moore and M&A violated Sections 10A(a)(1) and10A(b)(1) of the Exchange Act by failing to include audit procedures designed to detect and report likely illegal acts. The complaint further alleges that Moore and M&A improperly modified audit documentation in violation of Regulation S-X Rule 2-06.

To settle the Commission's charges, Moore and M&A consented to the entry of a final judgment permanently enjoining them from future violations of Sections 10(b), 10A(a)(1), and 10A(b)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Regulation S-X Rules 2-02(b)(1) and 2-06 and ordering them to disgorge $179,750 plus prejudgment interest of $10,151.59. Moore separately agreed to pay a $130,000 penalty. Moore and M&A also consented to the entry of an administrative order that makes findings and suspends them from appearing or practicing before the Commission as an accountant pursuant to Rule 102(e)(3) of the Commission's Rules of Practice. [SEC v. Michael J. Moore and Moore & Associates Chartered, Civil Action No. 2:09-cv-01637, USDC, D. Nev.] (LR-21189A)


INVESTMENT COMPANY ACT RELEASES

Highland Capital Management, L.P., et al.

A notice has been issued giving interested persons until Sept. 21, 2009, to request a hearing on an application filed by Highland Capital Management, L.P., et al. for an order under Section 6(c) of the Investment Company Act for an exemption from Sections 18(c) and 18(i) of the Act, under Sections 6(c) and 23(c)(3) of the Act for an exemption from Rule 23c-3 under the Act, and an order pursuant to Section 17(d) and Rule 17d-1 under the Act. The order would permit certain registered closed-end management investment companies to issue multiple classes of shares and to impose asset-based distribution fees and early withdrawal charges. (Rel. IC-28888 - August 27)


Rafferty Asset Management, LLC, et al.

A notice has been issued giving interested persons until Sept. 21, 2009, to request a hearing on an application filed by Rafferty Asset Management, LLC, et al., for an order to amend a prior order that permits: (a) series of an open-end management investment company to issue shares (ETS) redeemable in large aggregations only (Creation Units); (b) secondary market transactions in ETS to occur at negotiated prices; (c) dealers to sell ETS to purchasers in the secondary market unaccompanied by a prospectus, when prospectus delivery is not required by the Securities Act of 1933; (d) certain series to pay redemption proceeds, under certain circumstances, more than seven days after the tender of ETS for redemption; and (e) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units (Prior Order).

Applicants seek to amend the Prior Order to: (a) provide greater operational flexibility to the existing and future series of the Direxion Shares ETF Trust (Funds); (b) expand the category of Funds designed to correspond to the return of an underlying securities index (Underlying Index) to include Funds that seek to match the performance of an Underlying Index primarily focused on United States equity securities that apply a strategy referred to as 130/30 (130/30 Funds); (c) supersede the definition of Leveraged Funds and Inverse Funds in the application on which the Prior Order was issued (Prior Application); (d) delete the relief granted in the Prior Order from section 24(d) of the Act and revise the Prior Application accordingly; and (e) amend the terms and conditions of the Prior Application with respect to certain disclosure requirements. (Rel. IC-28889 - August 27)


Jackson National Life Insurance Company, et al.

A notice has been issued giving interested persons until Sept. 21, 2009, to request a hearing on an application by Jackson National Life Insurance Company (Jackson National), Jackson National Separate Account - I, and Jackson National Life Distributors LLC (collectively, Applicants). Applicants seek an order under Section 6 (c) of the Investment Company Act to exempt certain transactions from the provisions of Sections 2(a)(32), 22(c), and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to the extent necessary to permit the recapture, under specified circumstances, of certain contract enhancements applied to purchase payments made under deferred variable annuity contracts issued by Jackson National. (Rel. IC-28890 - August 27)


DNP Select Income Fund Inc., et al.

A notice has been issued giving interested persons until Sept. 21, 2009, to request a hearing on an application filed by DNP Select Income Fund Inc., et al. for an order 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 October 31, 2010. The Order would permit 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 and/or remarketed preferred stock issued prior to Feb. 1, 2008, that are outstanding at the time such post-Order debt is issued or incurred. The Order also would permit 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-28891 - August 27)


Nuveen Tax-Advantaged Total Return Strategy Fund, et al.

An order has been issued on an application filed by Nuveen Tax-Advantaged Total Return Strategy Fund, 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 Feb. 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-28893 - August 28)


SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by The NASDAQ Stock Market to eliminate Flash Orders (SR-NASDAQ-2009-079) 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 August 31. (Rel. 34-60570)

A proposed rule change filed by NASDAQ OMX BX to eliminate Flash and Cancel Orders (SR-BX-2009-051) 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 August 31. (Rel. 34-60571)

A proposed rule change (SR-CBOE-2009-060) filed by the Chicago Board Options Exchange related to Hybrid quote locks 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 August 31. (Rel. 34-60572)

A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-86) extending the length of time that exchange systems transmit odd-lot order-by-order information to the DMM unit algorithm prior to the opening transaction from Aug. 31, 2009, to Oct. 31, 2009, has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 31. (Rel. 34-60573)

A proposed rule change filed by NYSE Amex LLC (SR-NYSEAmex-2009-58) extending the length of time that exchange systems transmit odd-lot order-by-order information to the DMM unit algorithm prior to the opening transaction from Aug. 31, 2009, to Oct. 31, 2009, has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 31. (Rel. 34-60574)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2009/dig082809.htm


Modified: 08/28/2009