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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2009-245
December 24, 2009

COMMISSION ANNOUNCEMENTS

SEC Suspends Trading in the Securities of GH3 International, Inc.

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 in the securities of GH3 International, Inc. at 9:30 a.m. EST on Dec. 24, 2009, and terminating at 11:59 p.m. EST on Jan. 8, 2010.

The Commission temporarily suspended trading in the securities of GH3 International, Inc. because of questions that have arisen concerning the adequacy of publicly available information concerning the entity's corporate and operational status and its financial condition.

The Commission cautions broker-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.

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 GH3 International, Inc.'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 broker-dealer or other person has any information which may relate to this matter, Brian O. Quinn, Branch Chief, Division of Enforcement, should be telephoned at 202-551-4982. (Rel. 34-61239)


ENFORCEMENT PROCEEDINGS

Commission Permanently Disqualifies Attorney Chris G. Gunderson from Appearing or Practicing Before the Commission Following the Entry of a Permanent Injunction

The Commission has permanently disqualified Chris G. Gunderson, an attorney and former general counsel for Universal Express, Inc., a Nevada corporation, from appearing or practicing before it pursuant to Rule of Practice 102(e). The Commission found that Gunderson had been permanently enjoined by the United States District Court for the Southern District of New York for issuing and distributing unregistered shares of Universal Express, Inc., in violation of Section 5 of the Securities Act of 1933, and for creating and disseminating materially misleading press releases concerning Universal Express, Inc.'s business operations, in violation of Securities Act Section 17(a) and Section 10(b) and Rule 10b 5 of the Securities Exchange Act of 1934. The Commission further found that it was in the public interest and necessary to preserve the integrity of its registration and disclosure processes to permanently disqualify Gunderson from practice before the Commission. (Rel. 34-61234; File No. 3-12653)


SEC Obtains Judgment Against Former Golden Apple Oil and Gas, Inc., President Jay Budd

On Dec. 21, 2009, the United States District Court for the Southern District of New York entered a Judgment against former Golden Apple Oil and Gas, Inc. (Golden Apple) president Jay Budd. Without admitting or denying the allegations in the Commission's Complaint, Budd consented to entry of the Judgment, which prohibits Budd from acting as an officer or director of a public company, permanently bars Budd from participating in an offering of penny stock, and permanently enjoins Budd from violating Sections 5 and 17(a) of the Securities Act, 15 U.S.C. SS 77e and 77q(a), Section 10(b) of the Exchange Act, 15 U.S.C. S 78j(b), and Rule 10b-5, 17 C.F.R. S 240.10b-5 thereunder. The Judgment also orders Budd to pay disgorgement with prejudgment interest and a civil penalty in amounts to be determined by the Court upon the Commission's motion.

The Commission commenced this action by filing its Complaint on Aug. 31, 2009. The Complaint alleges that Budd and others committed securities law violations in connection with a fraudulent scheme to artificially inflate the market for Golden Apple stock. The litigation is continuing with respect to the remaining defendants. For further information see LR-21193A. [SEC v. Golden Apple Oil and Gas, Inc., et al., Civil Action No. 09 CV 7580 (HB) (SDNY)] (LR-21351)


SEC Secures Settlement with Ohio Investment Adviser Who Defrauded Elderly Clients

The Securities and Exchange Commission announced today that Julie M. Jarvis, of Columbus, Ohio, and her financial advisory firm, Crossroads Financial Planning, Inc., have agreed to settle the Commission's pending civil action against them. The Commission's complaint, filed in the United States District Court for the Southern District of Ohio on April 8, 2009, alleged that Jarvis, the owner of Crossroads, misappropriated at least $2.3 million from two elderly clients between June 2000 and March 2009. After the filing of the complaint, evidence obtained during the SEC's ongoing litigation revealed additional misappropriations by Jarvis in the amount of approximately $360,000.

Under today's announced settlement, Jarvis and Crossroads admitted to the allegations in the SEC's complaint and consented to the entry of permanent injunctions against each of them based on their violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. The final judgment will also enjoin Crossroads from violating Section 204 of the Advisers Act and Rule 204-2 thereunder, and Jarvis with aiding and abetting those violations. The proposed settlements are subject to the Court's approval.

In a related criminal proceeding, on Oct. 14, 2009, the United States District Court for the Southern District of Ohio sentenced Jarvis to 66 months incarceration based upon her plea of guilty to criminal charges stemming from the same conduct alleged in the Commission's complaint. The Court also ordered her to pay restitution in the amount of $2,663,681.44.

The Commission notes the assistance and cooperation from the United States Attorney's Office for the Southern District of Ohio and the Federal Bureau of Investigation. [SEC v. Crossroads Financial Planning, Inc., and Julie M. Jarvis, Case No. 2:09-cv-269 (MRA) (ALM) (SDOH)] (LR-21352)


SEC Obtains Preliminary Injunction Over Limited Partnership Managed By Culver City Adviser

The Securities and Exchange Commission today announced that it obtained a preliminary injunction against Heath M. Biddlecome (Biddlecome), age 41, of Carpentaria, California, his firm California Wealth Management Group, doing business as IFC Advisory (IFC), of Culver City, California, a fund created by Biddlecome, Homestead Properties, L.P. (Homestead), the general partner of the fund, Homestead Limited L.L.C., and William C. Tak, age 43, of Newport Beach, California, to halt the continuing false disclosures being made by Homestead, Biddlecome, and Tak. The Honorable Cormac J. Carney, United States District Judge for the Central District of California, also granted additional relief that the Commission sought including orders freezing assets, and appointing Robb Evans & Associates LLC as permanent receiver over Homestead.

The Commission's complaint, filed November 12, in federal court in Los Angeles, alleges that Biddlecome established Homestead to invest in mobile home park communities. Rather than investing all of the investors' moneys as represented, Biddlecome, without ever informing investors, transferred $4.5 million of the partnership's moneys to a brokerage account and engaged in day-trading, including trading options, trading on margin, and engaging in short sales. The complaint alleges that this risky day-trading strategy has resulted in erratic performance, alternating between six figure trading losses to profits in various months; in September and October 2009 alone, the account value declined $1.9 million. The complaint also alleges that the defendants falsely claimed that a brokerage firm would sell the partnership interests and an accounting firm would audit the partnership's books yearly. In addition, although investors were told distributions would be made quarterly out of net profits and certain investors received distributions, Homestead suffered losses for two years.

The Commission's complaint charges the defendants with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Rule 10b-5 thereunder, Sections 15(a) and 17(a) of the Securities Exchange Act of 1934, and Sections 204, 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940, and Rule 206(4)-8 thereunder, and names as relief defendants two entities controlled by Biddlecome, Homestead Northland MHC, LLC and Jackson MHC, L.L.C. The Commission alleges that the relief defendants received ill-gotten gains as a result of Biddlecome's conduct.

On Nov. 16, 2009, the Honorable Cormac J. Carney, United States District Judge, granted the Commission's application for a temporary restraining order against the defendants and issued orders freezing Homestead's assets and prohibiting the destruction of documents. The Judge also appointed Robb Evans & Associates LLC as the temporary receiver over Homestead. The Commission also seeks permanent injunctions, disgorgement, and civil penalties against the defendants.

For further information, see Litigation Release No. 21304 (Nov.18, 2009). [SEC v. Homestead Properties, L.P., et al., Case No. SACV 09-01331 (CJC) (C.D. Cal.] (LR-21353)


INVESTMENT COMPANY ACT RELEASES

Members Mutual Funds, et al.

An order has been issued on an application filed by Members Mutual Funds, et al. for an exemption from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order permits the applicants to enter into and materially amend subadvisory agreements without shareholder approval. (Rel. IC-29096 - December 22)


Strategic Funds, Inc., et al.

An order has been issued on an application filed by Strategic Funds, Inc., et al. exempting applicants from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order permits the applicants to enter into and materially amend subadvisory agreements without shareholder approval and grants relief from certain disclosure requirements. (Rel. IC-29097 - December 23)


SELF-REGULATORY ORGANIZATIONS

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-CBOE-2009-078), as modified by Amendment No. 1 thereto submitted by the Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, relating to professional account holders. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61198)

The Commission approved a proposed rule change (SR-Phlx-2009-84) submitted under Rule 19b-4 by NASDAQ OMX PHLX to amend rules relating to conduct of business on the Exchange. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61207)

The Commission approved a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2009-95) relating to listing and trading of shares of the ETFS Platinum Trust. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61219)

The Commission approved a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2009-94) relating to listing and trading of shares of the ETFS Palladium Trust. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61220)

The Commission approved a proposed rule change, as modified by Amendment No. 1 thereto (SR-NYSE-2009-111), submitted by the New York Stock Exchange, pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend Rule 123C to modify the procedures for its closing process and make conforming changes to Rules 13 and 15. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61233)


Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by The NASDAQ Stock Market to amend IM-1002-1 to reflect changes to a corresponding FINRA rule (SR-NASDAQ-2009-105) 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 28. (Rel. 34-61205)

A proposed rule change (SR-NYSEArca-2009-111) filed by NYSE Arca amending Rule 7.31 to establish the "Market to Limit" order type 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 28. (Rel. 34-61206)

A proposed rule change filed by NYSE Amex amending its Fee Schedule (SR-NYSEAmex-2009-90) 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 28. (Rel. 34-61218)

A proposed rule change filed by the National Stock Exchange (SR-NSX-2009-08) to amend NSX Rule 11 governing round lots, odd lots and mixed lots 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 28. (Rel. 34-61221)

A proposed rule change filed by The NASDAQ Stock Market (SR-NASDAQ-2009-110) to amend IM-2110-7 to reflect changes to the corresponding FINRA Rule 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 28. (Rel. 34-61224)

A proposed rule change filed by the International Securities Exchange (SR-ISE-2009-104) relating to conforming ISE Rule 622 with comparable NASD Rule 11870 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 28. (Rel. 34-61225)

A proposed rule change filed by NASDAQ OMX BX (SR-BX-2009-083) relating to the Fee Schedule of the Boston Options Exchange Facility 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 28. (Rel. 34-61229)

A proposed rule change filed by the Financial Industry Regulatory Authority (SR-FINRA-2009-092) to extend the date by which eligible registrants must complete a firm-element continuing education program to qualify to engage in a security futures business 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 28. (Rel. 34-61231)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2009-094) to increase the session fee for the Regulatory Element of Continuing Education requirements 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 28. (Rel. 34-61232)


Proposed Rule Changes

The Commission issued notice of a proposed rule change submitted by Financial Industry Regulatory Authority (SR-FINRA-2009-087) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to repeal NASD Rules 2760 and 2780, Incorporated NYSE Rules 2B and 411, and the Interpretation to Incorporated NYSE Rule 411(a)(ii)(5) as part of the process of developing the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61211)

The Commission noticed a proposed rule change (SR-FINRA-2009-073) submitted by the Financial Industry Regulatory Authority (f/k/a National Association of Securities Dealers, Inc. (NASD)) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 related to the hearing location rules of the Codes of Arbitration Procedure for customer and industry disputes. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61217)

The Commission issued notice of filing of a proposed rule change (SR-NYSEArca-2009-110) submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, amending Rule 5.3. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61222)

The Commission issued notice of filing of a proposed rule change (SR-NYSEAmex-2009-86) submitted by NYSE Amex pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, amending Commentary .10 to Rule 915 and Commentary .11 to Rule 916. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61223)

The Commission issued notice of filing of a proposed rule change (SR-NYSEArca-2009-114) submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, relating to the listing of Grail McDonnell Fixed Income ETFs. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61227)

The Commission issued notice of filing of a proposed rule change (SR-ISE-2009-106) submitted by the International Securities Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to list and trade options on the ETFS Gold Trust and the ETFS Silver Trust. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61228)


Accelerated Approval of Proposed Rule Changes

The Fixed Income Clearing Corporation filed a proposed rule change (SR-FICC-2009-10) under Section 19(b)(1) of the Exchange Act to consider nominating for election to its Board of Directors candidates that are not participants of its clearing agency subsidiaries. The Commission has approved the proposed rule change on an accelerated basis. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61214)

The National Securities Clearing Corporation filed a proposed rule change (SR-NSCC-2009-10) under Section 19(b)(1) of the Exchange Act to consider nominating for election to its Board of Directors candidates that are not participants of its clearing agency subsidiaries. The Commission has approved the proposed rule change on an accelerated basis. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61215)

The Depository Trust Company filed a proposed rule change (SR-DTC-2009-16) under Section 19(b)(1) of the Exchange Act to consider nominating for election to its Board of Directors candidates that are not participants of its clearing agency subsidiaries. The Commission has approved the proposed rule change on an accelerated basis. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61216)


JOINT INDUSTRY PLANS

Order Approving the Thirteenth Charges Amendment to the Second Restatement of the Consolidated Tape Association Plan And Seventh Charges Amendment to the Restated Consolidated Quotation Plan

The Commission approved amendments to the CTA and CQ Plans (SR-CTA/CQ-2009-02) to delete classification charges from the schedules of Network A and Network B computer input charges and replace the current combined Network A/Network B high speed line access charges with separate high speed line access charges for Network A and Network B. Publication is expected in the Federal Register during the week of December 28. (Rel. 34-61226)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2009/dig122409.htm


Modified: 12/24/2009