U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

SEC News Digest

Issue 2009-243
December 22, 2009

COMMISSION ANNOUNCEMENTS

SEC Proposes Rule Amendments to Facilitate Access to Capital Markets

The Securities and Exchange Commission today announced that it has proposed amendments to Rule 163 under the Securities Act to further facilitate the ability of certain large companies to communicate with broader groups of potential investors and gauge the level of interest in the market for their securities offerings.

The proposed amendments would apply to companies that are "well-known seasoned issuers" (WKSIs) and would allow them to authorize an underwriter or dealer to communicate with potential investors on their behalf about potential securities offerings prior to filing registration statements for such offerings. Under the current Rule 163, only WKSIs are permitted to communicate directly with potential investors before filing a registration statement.

A WKSI is an issuer that is current and timely in its Exchange Act reports for at least one year and has either $700 million of publicly-held shares or has issued $1 billion of non-convertible securities, other than common equity, in registered offerings for cash in the preceding three years.

As proposed, an underwriter or dealer could act as an agent or representative of a WKSI if the following conditions are satisfied:

  • The underwriter or dealer receives written authorization from the WKSI to act as its agent or representative before making any communication on its behalf.
  • The WKSI authorizes or approves any written or oral communication before it is made by an authorized underwriter or dealer.
  • Any authorized underwriter or dealer that has made any authorized communication on behalf of the issuer in reliance on Rule 163 is identified in any prospectus contained in the registration statement that is filed for the offering to which the communication relates.

All other current requirements of Rule 163 would continue to apply, including that all communications made by or on behalf of the WKSI in reliance on the rule would be subject to Regulation FD (Fair Disclosure).

Public comments on the rule amendments proposed today must be received by the Commission within 30 days after publication in the Federal Register.

The full text of the proposed amendments is available on the SEC's Web site. (Rels. 33-9098; File No. S7-30-09; Press Rel. 2009-273)


SEC Issues Notice of Proposed Distribution Plan and Opportunity for Comment in the Matter of Cornerstone Capital Management, Inc. and Laura Jean Kent

The Securities and Exchange Commission announced today that it has given notice pursuant to Rule 1103 of the Securities and Exchange Commission's Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. 201.1103, that the Division of Enforcement has filed a proposed plan (Distribution Plan) for the distribution of monies in the matter of Cornerstone Capital Management, Inc. and Laura Jean Kent.

The Distribution Plan provides for distribution of the disgorgement of $335,758.00 to be paid by Laura Jean Kent and Cornerstone Capital Management, Inc., plus any accumulated interest, less any federal, state, or local taxes on the interest. The proposed plan provides for distribution of the monies on a pro rata basis to investors who paid investment management fees in Cornerstone Capital Management, Inc.'s (1) Precious Metals and Mining and Promissory Note Programs from February 2003 through December 2007, (2) Costa Rican Currency Exchange Program from December 2002 through December 2007, (3) the Indemnity Bond Bridge Program from December 2005 through December 2007, and (4) the Cogeneration Project Financing Program from June 2005 through December 2007. Each claimant shall receive a pro rata share of the Distribution Fund calculated by the Plan Administrator.

A copy of the Distribution Plan may be obtained by submitting a written request to Robert L. Mitchell, Esq., Trial Counsel, United States Securities and Exchange Commission, 44 Montgomery Street, Suite 2600, San Francisco, CA 94104. Interested parties may also print a copy of the proposed Distribution Plan from the Commission's public website, http://www.sec.gov. Any person or entity wishing to comment on the Distribution Plan must do so in writing by submitting their comments within 30 days of the date of the notice (i) to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090; or (ii) via the Commission's Internet comment form (www.sec.gov/litigation/admin.shtml); or (iii) by sending an e-mail to rule-comments@sec.gov. Comments submitted by e-mail or via the Commission's web site should include the Administrative Proceeding File Number (Admin. Proc. File No. 3-13199) in the subject line. Comments received will be publicly available. Persons should submit only information that they wish to make publicly available. (Rel. 34-61208; File No. 3-13199)


SEC Issues Notice of Proposed Plan of Distribution and Opportunity for Comment in Conseco Variable Annuity Market Timing Case

The Commission announced today that it has given notice, pursuant to Rule 1103 of the Securities and Exchange Commission's Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. 201.1103, that the Division of Enforcement has filed a proposed plan (Distribution Plan) for the distribution of the Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 in the matter of CIHC, Inc., Conseco Services, LLC, and Conseco Equity Sales, Inc., Admin. Proc. File No. 3-11578. The Fair Fund is comprised of the $15,000,000 paid by $15,000,000 paid by subsidiaries of public insurance company Conseco, Inc. (CIHC, Conseco Services, and CES), plus accumulated interest, less any federal, state, or local taxes on the interest. The Distribution Plan provides for distribution of the Fair Fund to provide restitution for losses caused by Respondents' permitting market timing in Conseco variable annuities despite prospectus disclosures from December 1999 through October 2002. Interested parties may print a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov. Interested parties may also obtain a written copy of the Distribution Plan by submitting a written request to George S. Canellos, Regional Director, United States Securities and Exchange Commission, 3 World Financial Center, Room 400, New York, NY 10281. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, within 30 days of the date of the notice: by sending a letter to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090; by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or by sending an e-mail to rule-comments@sec.gov. Comments submitted by email or via the Commission's website should include "Administrative Proceeding File Number 3-11578" in the subject line. Comments received will be available to the public. Persons should only submit information that they wish to make publicly available.

For more information, see Securities Act of 1933 Release No. 8455, Securities Exchange Act Release No. 50165, Investment Company Act of 1940 Release No. 26526 and Press Release No. 2004-109 (Aug. 9, 2004). (Rel. 34-61209; File No. 3-11578)


SEC Issues Notice of Proposed Plan of Distribution and Opportunity for Comment in Inviva and Jefferson National Variable Annuity Market Timing Case

The Commission announced today that it has given notice, pursuant to Rule 1103 of the Securities and Exchange Commission's Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. 201.1103, that the Division of Enforcement has filed a proposed plan (Distribution Plan) for the distribution of the Fair Fund pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002 in the matter of Inviva, Inc. and Jefferson National Life Insurance Company, Admin. Proc. File No. 3-11579. The Fair Fund is comprised of the $5,000,000 paid by Inviva and Jefferson National, plus accumulated interest, less any federal, state, or local taxes on the interest. The Distribution Plan provides for distribution of the Fair Fund to eligible investment company portfolios identified in the plan that were harmed by the actions of certain market timers that Respondents permitted to market time Jefferson National variable annuities despite prospectus disclosures between October 2002 and September 2003. Interested parties may print a copy of the Distribution Plan from the Commission's public website, http://www.sec.gov. Interested parties may also obtain a written copy of the Distribution Plan by submitting a written request to George S. Canellos, Regional Director, United States Securities and Exchange Commission, 3 World Financial Center, Room 400, New York, NY 10281. All persons who desire to comment on the Distribution Plan may submit their comments, in writing, within 30 of the date of the notice: by sending a letter to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090; by using the Commission's Internet comment form (http://www.sec.gov/litigation/admin.shtml); or by sending an e-mail to rule-comments@sec.gov. Comments submitted by email or via the Commission's website should include "Administrative Proceeding File Number 3-11579" in the subject line. Comments received will be available to the public. Persons should only submit information that they wish to make publicly available.

For more information, see Securities Act of 1933 Release No. 8456, Securities Exchange Act Release No. 50166, Investment Company Act of 1940 Release No. 26527 and Press Release No. 2004-109 (Aug. 9, 2004). (Rel. 34-61210; File No. 3-11579)


Change in the Meeting: Additional Item

The following item was added to the Thursday, Dec. 17, 2009 Closed Meeting agenda: a matter involving confidential, privileged, commercial, or financial information.

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.


RULES AND RELATED MATTERS

Temporary Conditional Exemption Pursuant to Section 36 of the Exchange Act

The Commission extended a temporary exemption granted to the International Securities Exchange subject to certain conditions, under Section 36 of the Exchange Act from the rule filing procedures of Section 19(b) of the Exchange Act in connection with the ISE Holdings, Inc.'s equity interest in Direct Edge Holdings, LLC. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61174)


ENFORCEMENT PROCEEDINGS

In the Matter of James C. Dawson

An Administrative Law Judge issued an Initial Decision in James C. Dawson, Admin. Proc. 3-13579 (Dec. 18, 2009), finding that it is in the public interest to bar James C. Dawson from association with any investment adviser, pursuant to Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act). From 2003 through 2005, Dawson was the sole general partner of, and investment adviser to, Victoria Investors, L.P. (Victoria Investors), an unregistered hedge fund and limited partnership with assets of approximately $13 million, and approximately twenty individual and institutional investors. During this time period, Dawson secretly allocated profitable trades to his personal account and unprofitable trades to investors in Victoria Investors. On July 24, 2009, the United States District Court for the Southern District of New York enjoined Dawson from future violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), Exchange Act Rule 10b-5, and Sections 206(1) and 206(2) of the Advisers Act; ordered Dawson to disgorge $303,472, plus pre-judgment interest of $102,975; and ordered him to pay a $100,000 civil penalty. SEC v. Dawson, No. 08-CV-7841 (PGG). (Initial Decision No. 392; File No. 3-13579)


In the Matter of Applied Minerals, Inc. (Formerly Known as Atlas Mining Company)

On Dec. 22, 2009, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (Order) against Applied Minerals, Inc. (formerly known as Atlas Mining Company). The Order finds that Applied Minerals, a publicly-traded mining company, engaged in repeated violations of the federal securities laws by issuing unregistered shares of its stock, by failing to implement adequate internal controls, and by making inaccurate and untimely financial filings.

Based on the above, the Order requires that Applied Minerals cease and desist from committing or causing any violations and any future violations of Sections 5(a) and 5(c) of the Securities Act, and Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. Applied Minerals consented to the issuance of the Order without admitting or denying the findings. (Rel. 33-9100; 34-61213; File No. 3-13728)


SEC Charges Idaho Mining Company and Former CEO With Illegal Stock Scheme

The Securities and Exchange Commission today filed settled charges against an Idaho mining company and its former CEO for improperly financing their struggling operations through the illegal distribution of millions of shares of stock to investors.

According to the SEC, Atlas Mining Company, a publicly-traded company, and former CEO, Chairman and President William Jacobson, used various means to sell stock in contravention of the federal securities laws, and concealed the improper sales by filing false documents with the SEC.

The SEC's complaint, filed in federal district court in Idaho, alleges that, from 2002 to 2005, Jacobson caused Osburn, Idaho-based Atlas Mining to sell millions of shares of stock to the public while evading the disclosure and registration requirements of the federal securities laws. Among other things, the SEC alleges that Jacobson issued stock to family members and companies he controlled, who then resold the stock to the public and funneled the money back to the company. Similarly, the SEC alleges that when a 2003 public offering failed to raise sufficient funds before expiring, Jacobson unlawfully "parked" nearly 10 million shares with various friends, family members and affiliates so they could be sold at a later date. According to the SEC, these improprieties allowed Atlas Mining to raise financing without providing complete and timely information to investors as required by law.

The SEC further charges that Jacobson caused Atlas Mining to make false statements in its SEC filings concerning the improper stock sales, coupled with additional financial irregularities.

The SEC's complaint charges Jacobson with violations of the antifraud and registration provisions of the federal securities laws, as well as reporting, internal control and certification provisions. Without admitting or denying the Commission's allegations, Jacobson consented to settle the charges and agreed to a permanent injunction against future violations of the federal securities laws, a $50,000 penalty, an order barring him from serving as an officer or director of any issuer for a period of five years, and an order barring him from participating in any offering of penny stock for a period of five years.

In a separate administrative proceeding, Atlas Mining, now known as Applied Minerals, Inc., consented to the entry of a cease-and-desist order barring violations of certain registration and reporting provisions of the federal securities laws. [SEC v. William Jacobson, Case No. 2:09-cv-00669-EJL (D. Idaho) (LR-21345)


INVESTMENT COMPANY ACT RELEASES

Orders of Deregistration Under the Investment Company Act

Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:

  • Nicholas-Applegate Fund, Inc. [File No. 811-5019] (Order: Rel No. IC-29071)
  • BlackRock Insured Municipal 2008Term Trust, Inc. [File No. 811-6721] (Order: Rel No. IC-29072)
  • BlackRock California Insured Municipal 2008 Term Trust,Inc. [File No. 811-7090] (Order: Rel No. IC-29073)
  • BlackRock Florida Insured Municipal 2008 Term Trust, Inc. [File No. 811-7092] (Order: Rel No. IC-29074)
  • BlackRock New York Insured Municipal 2008 Term Trust, Inc. [File No. 811-7094] (Order: Rel No. IC-29075)
  • The Kensington Funds [File No. 811-21316] (Order: Rel No. IC-29076)
  • Oppenheimer International Value Trust [File No. 811-21369] (Order: Rel No. IC-29077)
  • Janus Adviser Series [File No. 811-9885] (Order: Rel No. IC-29078)
  • Allianz RCM Global EcoTrends SM Fund [File No. 811-21975] (Order: Rel No. IC-29079)
  • First Trust Tax-Advantaged Preferred Income Fund [File No. 811-21876] (Order: Rel No. IC-29080)
  • PIMCO Municipal Advantage Fund Inc. [File No. 811-7532] (Order: Rel No. IC-29081)
  • Post/Claymore High Yield Fund [File No. 811-21696] (Order: Rel No. IC-29082)
  • Claymore Municipal High Income Fund [File No. 811-21706] (Order: Rel No. IC-29083)
  • Claymore S&P Equity Long/Short Index Fund [File No. 811-21747] (Order: Rel No. IC-29084)
  • Dreman/Claymore Enhanced Opportunity Fund [File No. 811-22042] (Order: Rel No. IC-29085)
  • Government Securities Delaware LLC [File No. 811-10181] (Order: Rel No. IC-29086)
  • Credit Suisse Global Fixed Income Fund, Inc. [File No. 811-6143] (Order: Rel No. IC-29087)
  • Credit Suisse Institutional Fund, Inc. [File No. 811-6670]
  • (Order: Rel No. IC-29088)
  • Credit Suisse Global Small Cap Fund, Inc. [File No. 811-7715] (Order: Rel No. IC-29089)
  • Credit Suisse International Focus Fund, Inc. [File No. 811-8459] (Order: Rel No. IC-29090)
  • DeGreen Emerging Market Managers Fund [File No. 811-22249] (Order: Rel No. IC-29091)

Investools Inc., et al.

The Commission has issued a temporary order to Investools Inc., et al. (Investools) under Section 9(c) of the Investment Company Act with respect to an injunction issued by the U.S. District Court for the District of Columbia on Dec. 16, 2009. The temporary order exempts applicants and companies of which Investools is or becomes an affiliated person from the provisions of Section 9(a) of the Act until the Commission takes final action on an application for a permanent order. The Commission also has issued a notice giving interested persons until Jan. 11, 2010, to request a hearing on the application filed by applicants for a permanent order under Section 9(c) of the Act. (Rel. IC-29093 - December 16)


Cash Account Trust, et al.

A notice has been issued giving interested persons until Jan. 11, 2010, to request a hearing on an application filed by Cash Account Trust, et al. for an order exempting them from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order would permit the applicants to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements. (Rel. IC-29094 - December 16)


Notices of Deregistration under the Investment Company Act

For the month of December 2009, a notice has been issued giving interested persons until Jan. 12, 2010, to request a hearing on any of the following applications for an order under Section 8(f) of the Investment Company Act declaring that the applicant has ceased to be an investment company:

  • ING Clarion Real Estate Income Fund [File No. 811-21404]
  • BGT Subsidiary Inc. [File No. 811-8949]
  • BNN Subsidiary Inc. [File No. 811-7719]
  • BBT Subsidiary Inc. [File No. 811-7721]
  • Keystone America Hartwell Emerging Growth Fund, Inc. [File No. 811-1633]
  • Master Reserves Trust [File No. 811-2597]
  • Keystone Mid Cap Growth Fund (S-3) [File No. 811-100]
  • B.B. Funds [File No. 811-7921]
  • Prospect Street Income Shares Inc. [File No. 811-2365]
  • DWS Investment Portfolios [File No. 811-7774]
  • DWS International Equity Portfolio [File No. 811-6702]
  • Treasury Money Portfolio [File No. 811-6072]
  • Paul Revere Variable Annuity Contract Accumulation Fund [File No. 811-01356]

(Rel. IC-29095 - December 18)


SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

The Options Clearing Corporation filed a proposed rule change (SR-OCC-2009-19) under Section 19(b)(3)(A)(iii) of the Securities Exchange Act, which became effective upon filing, that allows a proposed alternate settlement procedure for physically-settled Treasury Futures traded by ELX Futures L.P. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61170)

The Commission issued notice of filing and immediate effectiveness of a proposed rule change (SR-OC-2009-03), as modified by Amendment No. 1, filed by OneChicago under Rule 19b-7 of the Securities Exchange Act of 1934, which modifies OneChicago's listing standards in conformance with a joint order issued by the commission and the Commodity Futures Trading Commission. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61172)

A proposed rule change filed by Chicago Stock Exchange modifying the definition of Cross and Cross with Size order types (SR-CHX-2009-16) 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 December 21. (Rel. 34-61173)

A proposed rule change filed by New York Stock Exchange Amending NYSE Rules 312 and 321 and Adopt New Rules 2262 and 2269 Filed by the Financial Industry Regulatory Authority (SR-NYSE-2009-125) has become immediately 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 December 21. (Rel. 34-61176)

A proposed rule change filed by NYSE Amex Amending Rules 312- and 321- NYSE Amex Equities and Adopt New Rules 2262- and 2269- NYSE Amex Equities filed by the Financial Industry Regulatory Authority (SR-NYSEAmex-2009-89) has become immediately 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 December 21. (Rel. 34-61179)

A proposed rule change (SR-BX-2009-081) filed by NASDAQ OMX BX to update Rule 1160 to reflect the availability of the FINRA Contact System to BX members that are not also members of FINRA 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 December 21. (Rel. 34-61197)

A proposed rule change (SR-Phlx-2009-103), filed by NASDAQ OMX PHLX to codify certain provisions of the Options Listing Procedure Plan into Phlx's rules 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 December 21. (Rel. 34-61202)

A proposed rule change (SR-NASDAQ-2009-108) filed by NASDAQ Stock Market to codify certain provisions of the Options Listing Procedure Plan into Nasdaq's rules 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 December 21. (Rel. 34-61203)

A proposed rule change filed by the NASDAQ OMX BX to amend IM-1002-1 to reflect changes to a corresponding FINRA rule (SR-BX-2009-079) 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 December 21. (Rel. 34-61204)


Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-NYSE-2009-105) filed by the New York Stock Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 that allows the NYSE to designate NYSE Arca, as the NYSE's alternative trading facility in the event of an emergency. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61177)

The Commission approved a proposed rule change (SR-NYSEArca-2009-90) filed by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 that allows NYSE Arca to act as the alternative trading facility of the New York Stock Exchange in the event of an emergency. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61178)

Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2009-087) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to establish a pilot program to modify FLEX exercise settlement values and minimum value sizes. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61183)


Proposed Rule Change

The Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2009-089) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, to establish FINRA Rule 6490 (Processing of Company-Related Actions), to Clarify the Scope of FINRA's Authority When Processing Documents Related to Announcements for Company-Related Actions for Non-Exchange Listed Securities and to Implement Fees for Such Services. Publication is expected in the Federal Register during the week of December 21. (Rel. 34-61189)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2009/dig122209.htm


Modified: 12/22/2009