SEC To Hold National Seminar for Chief Compliance Officers
The Securities and Exchange Commission today announced the opening of registration for its CCOutreach National Seminar to help chief compliance officers (CCOs) at investment advisers, investment companies, and broker-dealers enhance their compliance programs for the protection of investors.
The event will be held on Jan. 26, 2010, at the SEC's Washington D.C. headquarters, and will include panel discussions to analyze compliance issues being faced by investment advisers, mutual funds, and broker-dealers. This will mark the first time that the CCOutreach programs for investment advisers and for broker-dealers will be combined into one National Seminar, as the events were held separately in past years.
"We look forward to a constructive dialogue with CCOs of both broker-dealer and investment advisory firms as we seek to achieve our common goal of investor-oriented compliance and oversight," said SEC Chairman Mary Schapiro.
Panel discussion topics at this year's National Seminar for CCOs include the challenges faced in turbulent markets, administering compliance and annual reviews, and oversight of the trading process. Panelists will include representatives from the SEC's Division of Trading and Markets, Division of Investment Management, and Office of Compliance Inspections and Examinations as well as CCOs and representatives from the Financial Industry Regulatory Authority (FINRA).
The National Seminar agenda and registration information is available at: http://www.sec.gov/info/cco/ccons2010.htm.
This CCOutreach event is sponsored jointly by the agency's Division of Investment Management, Division of Trading and Markets, and the Office of Compliance Inspections and Examinations. The Seminar will take place from 8:30 a.m. to 5:30 p.m. ET, and attendance is limited to 500 people. Adviser, mutual fund, and broker-dealer CCOs will be given priority on a first-come, first-served basis. The seminar also will be webcast at www.sec.gov. (Press Rel. 2009-239)
Chief Litigation Counsel Luis R. Mejia Leaving SEC
The Securities and Exchange Commission announced today that Luis R. Mejia, Chief Litigation Counsel of the Division of Enforcement, will leave the Commission. He will join the law firm of DLA Piper as a partner in the firm's Washington, D.C., office in December.
As Chief Litigation Counsel since 2005, Mr. Mejia led the Commission's nationwide litigation program. Under Mr. Mejia's leadership, the Commission successfully litigated a number of important cases in all Commission program areas, including financial fraud, insider trading, hedge funds, and market manipulation.
"Lou has been a superb advocate who utilized his superior courtroom skills to stand up for investors and bring wrongdoers to justice," said SEC Chairman Mary Schapiro. "The SEC appreciates the leadership Lou has provided for our litigation team and the key role he has played in enforcing the nation's securities laws."
Robert Khuzami, Director of the SEC's Division of Enforcement, said, "Litigation success requires having not just the facts on your side, but also a command of the securities laws, mastery of the legal process and passion for the work. Lou combined all those traits and more. He has served the agency and the investing public well, and we wish him every success."
Mr. Mejia said, "It has been an honor to work with the dedicated professionals of the Commission who work tirelessly to protect investors. I am especially proud of our trial attorneys and litigation staff across the country. Their performance during a challenging period for the Commission has been extraordinary. I am grateful for the opportunity to have been part of the Commission's substantial enforcement efforts."
During Mr. Mejia's tenure, the SEC trial unit won 80 percent of the Commission's trials in federal district courts nationwide. These cases include:
Prior to his appointment as the SEC's Chief Litigation Counsel, Mr. Mejia was an Assistant Chief Litigation Counsel and prosecuted a number of significant enforcement cases. In 2002, Mr. Mejia was the lead trial counsel in the Commission's successful jury trial against Scott K. Ginsburg, the former chairman and CEO of Evergreen Media Corporation. The jury found Ginsburg liable for insider trading and he was ordered to pay a $1 million civil penalty. Mr. Mejia was also the lead litigation counsel for the Commission in all Enron matters and helped recover more than $400 million for aggrieved investors.
Prior to joining the Commission in 1999, Mr. Mejia was a partner at the law firm of Akin, Gump, Strauss, Hauer & Feld in Washington, D.C. Mr. Mejia received his undergraduate degree from San Diego State University and his law degree from George Washington University. (Press Rel. 2009-240)
RULES AND RELATED MATTERS
Semiannual Regulatory Flexibility Agenda
The Commission has authorized the publication of its Fall 2009 Regulatory Flexibility Act Agenda. The agenda is a general announcement to the public intended to provide advance notice of rulemaking actions. The agenda, which will not be available to the public until its publication, has been submitted by the Commission to the Regulatory Information Service Center for inclusion in the Unified Agenda of Federal Regulations scheduled for publication in the Federal Register in October 2009. Public comments regarding the agenda and the individual agenda entries are due by Dec. 31, 2009. (Rels. 33-9082, 34-60955, IA-2947, IC-28992, File No. S7-26-09)
In the Matter of Value America, Inc., et al.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Five Respondents (Default Order) in Value America, Inc., Administrative Proceeding No. 3-13649. The Order Instituting Proceedings alleged that six Respondents failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission (Commission). The Default Order finds these allegations to be true as to five Respondents and revokes the registrations of each class of registered securities of Value America, Inc., VDS Enterprises, Inc., Viasource Communications, Inc., Viatech Communications Group, Inc., and VideoFlicks.com, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934.
The Commission has previously accepted an Offer of Settlement from Versent Corp., the sixth Respondent in the proceeding. (Rel. 34-60964; File No. 3-13649)
SEC Obtains Jury Verdict Finding Stock Broker Liable for Insider Trading in the Securities of Aviall, Inc.
On Nov. 5, 2009, after less than an hour of deliberation, a jury found Gregory Carl Gunn, a registered representative of a broker-dealer, liable for insider trading in the securities of Aviall, Inc. The jury verdict followed three days of trial before Senior District Judge Joe A. Fish, in the United States District Court for the Northern District of Texas, Dallas Division.
The SEC sued five defendants -- Robert Wayne Tedder, Joseph Wayne Tedder, Phillip Brian Gunn, Brian Patrick Carr and Gregory Carl Gunn - for illegally trading in Aviall securities ahead of Aviall's May 1, 2006 announcement of a merger with The Boeing Company. The complaint alleged that two Aviall employees, Robert Tedder and Brian Carr, learned Aviall's impending acquisition by Boeing in the course of their employment at Aviall's Dallas headquarters. The complaint alleged that Robert Tedder then tipped his father, Joseph Wayne Tedder, and a business associate, Phillip Gunn with this information. Phillip Gunn thereafter passed this information to his brother, Gregory Gunn.
Only Gregory Gunn went to trial. The other four defendants offered to settle before trial. The Court severed the claims against Gregory Gunn so that the Commission could proceed against him.
At trial, the Commission established that, between April 17 and April 28, 2006, Gregory Gunn liquidated his account of blue-chip stocks and purchased shares of Aviall common stock and Aviall call option contracts while in possession of non-public information about Boeing's acquisition of Aviall. On the day of the merger announcement, Aviall's common stock closing price of $46.96 was nearly 25% higher than the preceding day's closing price of $37.70. Gregory Gunn sold all his Aviall securities on the day of the merger announcement. As a result of his unlawful trading in Aviall common stock and call options, Gregory Gunn reaped illicit profits of $108,587.87.
The Commission thanks the Philadelphia Stock Exchange for its cooperation in this matter.
For more information, see the original litigation release announcing the filing of the complaint: http://www.sec.gov/litigation/litreleases/2008/lr20623.htm. [SEC v. Robert Wayne Tedder, et al., Civil Action No. 3:08-CV-1013-G, United States District Court for the Northern District of Texas (Dallas) (LR-21286)
SEC v. Joseph A. Fontanetta, et al.
The Securities and Exchange Commission announced that on Sept. 24, 2009, following a ten day trial, including three days of deliberation, the jury in the Commission's civil action against Joseph A. Fontanetta pending in the United States District Court for the Southern District of New York informed the court that it was deadlocked and was unable to reach a verdict. The Court declared a mistrial and set a re-trial date of Nov. 16, 2009. On Nov. 2, 2009, the Commission and the Defendant entered into joint stipulation resulting in the dismissal of the case.
The complaint, filed June 4, 2008, alleged that Fontanetta, the Chief Executive Officer and board member of a privately-held medical instrumentation company, tipped material nonpublic information about Animas' merger to Burr McKeehan, a retired podiatrist, two days prior to the merger announcement. The complaint also alleged that Fontanetta either misappropriated or unlawfully received the material nonpublic information from a fellow board member at his company who was the husband of an Animas executive and privy to the merger negotiations.
Without admitting or denying the allegations of the complaint, McKeehan consented to the entry of a final judgment, permanently enjoining him from violating the charged provisions, and ordering him to pay disgorgement of $183,018, plus prejudgment interest of $18,059, and a civil penalty of $183,018. [SEC v. Joseph A. Fontanetta et al., Civil Action No. 08 CV 5110 (S.D.N.Y.)] (LR-21287)
SEC v. Thomas B. Evans
The Securities and Exchange Commission announced today that, on Nov. 6, 2009, it filed a civil action in the United States District Court for the District of Colorado against Thomas B. Evans, a resident of Austin, Texas, alleging that he violated the antifraud provisions of the federal securities laws.
In its Complaint, the Commission alleges that, from April 2003 through August 2005, Defendant Thomas B. Evans raised more than $16 million from more than 100 investors through his offerings of interests issued by three Colorado limited partnerships that he controlled. Evans represented that he would use the funds raised by each of the limited partnerships to purchase and renovate apartment buildings in Texas. According to the Complaint, Evans used funds from each offering to pay for operational expenses of the other limited partnerships in direct violation of representations he made in offering materials. In quarterly statements, Evans also made numerous false statements about the status of renovations, apartment occupancy, and financial performance.
Evans agreed to settle the SEC's charges without admitting or denying the allegations in the Complaint. This settlement is subject to approval by the court. Evans agreed to be permanently enjoined from violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Evans also agreed to the entry of an order requiring him to pay a civil penalty of $120,000. [SEC v. Thomas B. Evans, Civil Action No., 09-CV-02617 (CMA-CBS) (D. Colo.)] (LR-21288)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change, as modified by Amendment Nos. 1 and 2, (SR-FINRA-2008-067) filed by the Financial Industry Regulatory Authority to adopt a new, consolidated set of financial responsibility rules. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60933)
Immediate Effectiveness of Proposed Rule Changes
The Commission issued notice of filing and immediate effectiveness of proposed rule change (SR-NYSEArca-2009-99) filed by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 amending its fee schedule. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60944)
The Commission issued notice of filing and immediate effectiveness of a proposed rule change (SR-NYSEArca-2009-97) filed by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 amending its schedule of fees and charges for exchange services. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60945)
A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-110) extending a temporary equity transaction fee for shares executed on the NYSE MatchPointSM system through January 31, 2010 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 November 9. (Rel. 34-60949)
A proposed rule change filed by NASDAQ OMX BX (SR-BX-2009-069) to add 75 classes to the Penny 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 November 9. (Rel. 34-60950)
A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2009-75) to clarify specialist obligations 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 November 9. (Rel. 34-60953)
A proposed rule change (SR-ISE-2009-93) filed by the International Securities Exchange relating to the extension of a pilot program for directed orders has become effective under Section 19(b)(3)(A) under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60956)
A proposed rule change (SR-BX-2009-070) filed by NASDAQ OMX BX to modify fees for members using the NASDAQ OMX BX Equities System 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 November 9. (Rel. 34-60958)
A proposed rule change (SR-NASDAQ-2009-096) filed by the NASDAQ Stock Market to modify fees for members using the NASDAQ Market Center 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 November 9. (Rel. 34-60959)
Approval of Proposed Rule Change
The Commission approved a proposed rule change (SR-CBOE-2009-070) filed by the Chicago Board Options Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 that establishes a participation entitlement for complex orders. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60957)
SECURITIES ACT REGISTRATIONS
RECENT 8K FILINGS