Securities and Exchange Commission Suspends Trading in the Securities of Eight Issuers for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EST on Jan. 21, 2010 and terminating at 11:59 p.m. EST on Feb. 3, 2010.
The Commission temporarily suspended trading in the securities of these eight issuers due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission in over two years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).
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 these companies.
Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of the subject companies unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at (202) 551-5720. 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, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at (202) 551-5466, or by e-mail at DelinquentFilings@sec.gov. (Rel. 34-61390)
Closed Meeting - Thursday, January 28, 2010 - 2:00 p.m.
The subject matter of the Closed Meeting scheduled for Thursday, January 28, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; 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.
Commission Orders Hearings on Registration Suspension or Revocation Against Eight Companies for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission also instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of eight companies for failure to make required periodic filings with the Commission:
In the Matter of Big Sky Energy Corp., et al., Administrative Proceeding File No. 3-13758.
In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.
In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 or 13a-16 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-61391; File No. 3-13758)
Update for Investors - Court Approves Application of Receiver for One Equity Companies to Establish Proof of Claims Notice and Procedure
The Securities and Exchange Commission announced today that, on Jan. 8, 2010, the Honorable Edmund A. Sargus, Jr., United States District Court Judge for the Southern District of Ohio, issued an Order approving the Court Appointed Receiver's Application to Establish Proof of Claims Notice and Procedure. Investors who believe they may have a claim against any of the entities subject to the receivership proceeding must follow the instructions in the Notice of Bar Date to File Claim and submit a completed Proof of Claim form to the Receiver. ELIGIBLE CLAIMANTS MUST SUBMIT THE PROOF OF CLAIM FORM TO THE RECEIVER NO LATER THAN MARCH 10, 2010.
On July 10, 2008, the Commission filed a civil action in the United States District Court for the Southern District of Ohio charging One Equity Corporation, Triangle Equities Group, Inc., Victory Management Group, Inc., Dafcan Finance, Inc. (collectively, the One Equity Companies), and others with operating a fraudulent stock-based loan program. On July 17, 2008, Judge Sargus ordered the appointment of attorney Frederick L. Ransier as Receiver over the One Equity Companies. [SEC v. One Equity Corp., et al., Civil Action No. 2:08-CV-667 (S.D. Ohio)] (LR-21385)
Daniel Braver, Former Boiler Room Salesman, Agrees to Settle Civil Fraud Charges
On Jan. 20, 2010, the Securities and Exchange Commission filed a civil injunctive action in United States District Court for the Southern District of New York charging Bernard Daniel Braver, an unregistered boiler room salesman, with violating the registration and antifraud provisions of the Securities Act of 1933 (Securities Act) and the Securities Exchange Act of 1934 (Exchange Act). Braver has agreed to settle the case, without admitting or denying the Commission's allegations.
The Commission's complaint, filed in federal court in Manhattan, alleges that from October 2006 to November 2007, Braver was a salesman at Rabinovich & Associates, LP, an unregistered investment company and broker-dealer (sometimes referred to hereafter as the Fund or the firm) that operated out of a storefront boiler room in Brooklyn, New York. The complaint further alleges that from at least November 2003 through November 2007, the Fund's principals, Alex Rabinovich and Joseph Lovaglio, and Braver and other salesmen, fraudulently raised at least $2,767,811 from at least 169 investors nationwide, including senior citizens and retirees, through the sale of limited partnership interests in the Fund and, in a few instances, other securities. Braver allegedly raised at least $157,000 of that, and received approximately $49,800 in salary and commissions in connection with his fraudulent offer and sale of interests in the Fund. The complaint further alleges that in soliciting investors, Braver misrepresented the Fund's track record and performance, falsely represented to investors and prospective investors that Rabinovich & Associates had a Wall Street address and touted Alex Rabinovich's purported trading acumen while failing to disclose that Rabinovich had been barred by the National Association of Securities Dealers (NASD) from associating with any NASD-member broker-dealer.
As a result of his conduct, the complaint alleges that Braver violated Sections 5(a), 5(c) and 17(a) of the Securities Act, Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5 thereunder.
Without admitting or denying the Commission's allegations, Braver has agreed to settle the charges by consenting to the entry of a final judgment permanently enjoining him from further violations of the foregoing provisions, and ordering him to pay disgorgement of $49,800 plus prejudgment interest thereon of $4,109.83, but waiving payment of those amounts and not imposing a civil penalty based upon Braver's sworn representations of his financial condition.
The Commission previously brought an action against, Rabinovich & Associates, Alex Rabinovich and Lovaglio, SEC v. Rabinovich & Associates, LP, Alex Rabinovich and Joseph Lovaglio, 07 Civ. 10547 (GEL) (S.D.N.Y.) [LR-20372 (Nov.27, 2007)] (the Rabinovich case). In addition, Alex Rabinovich pleaded guilty to criminal charges arising out of the conduct alleged in the Commission's complaint in the Rabinovich case. United States v. Alex Rabinovich, Crim. Information No. 1:08-Cr-220 (DC) (S.D.N.Y.). [LR-20637 (July 8, 2008)]. [SEC v. Bernard Daniel Braver, 10 Civ. 0469 (PAC)(S.D.N.Y.)] (LR-21386)
SEC Charges Texas Consulting Firm and Its Managing Partner in Pump and Dump Scheme
On Jan. 20, 2010, the Securities and Exchange Commission sued Summit Advisory Partners, LLC and its managing partner, Robert Feeback, for directing and providing essential services in a scheme to "pump and dump" the stock of various penny stock companies in Texas. According to the complaint, the actions of Feeback and Summit allowed three stock promoters - Ryan Reynolds, Jason Wynn and Carlton Fleming - to purchase millions of shares of stock for pennies per share, hype the companies through promotional mailers and other advertising, and illicitly sell their shares to the public for millions of dollars in profits. The Commission alleges that because the shares were not registered, public investors were deprived of full and fair disclosures necessary to make an informed decision to purchase the stock.
According to the complaint, Feeback and Summit served as necessary participants in the scheme by introducing the penny stock companies - My Vintage Baby, Inc., Alchemy Creative, Inc. and Beverage Creations, Inc. - to Reynolds, Wynn and Fleming, assisting the companies in obtaining necessary legal services and documents, and steering the public relations effort to promote the companies once public trading began.
The SEC alleges that by the above-mentioned conduct, Summit Advisory Partners, LLC and Feeback violated the registration provisions of the Securities laws, Sections 5(a) and (c) of the Securities Act of 1933. The SEC is seeking permanent injunctions, civil penalties, disgorgement of ill-gotten gains and penny stock bars. Ryan Reynolds is a defendant in three actions filed by the SEC: Securities and Exchange Commission v. Offill, et al. No. 3:07-cv-1643-D, SEC v. Reynolds, et al. No 3:08- cv-438, and SEC v. Reynolds, et al., No. 3:08-cv-01687-M, each in the U.S. District Court for the Northern District of Texas. Wynn and Fleming are defendants in SEC v. Reynolds, et al. No 3:08- cv-438. [SEC v. Robert Feeback, et al., Case No. 3:10-cv-104] (LR-21387)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSEArca-2009-114), submitted by NYSE Arca relating to the listing of Grail McDonnell Fixed Income ETFs. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61365)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NYSE Arca amending Rule 9.1 Sharing in Accounts, Extent Permissible (SR-NYSEArca-2010-02) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61370)
A proposed rule change filed by NASDAQ OMX PHLX to extend its sponsored access pilot program (SR-Phlx-2010-04) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61372)
A proposed rule change (SR-BX-2010-003) filed by NASDAQ OMX BX to amend Rule 2810 to reflect changes to a corresponding FINRA rule has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61373)
A proposed rule change filed by NASDAQ OMX PHLX relating to routing fees (SR-Phlx-2010-01) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61374)
A proposed rule change filed by NYSE Arca (SR-NYSEArca-2010-01) amending its fee schedule has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61378)
A proposed rule change (SR-ISE-2010-03), filed by the International Securities Exchange relating to fee changes has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61387)
Approval of Proposed Rule Change
The Commission approved a proposed rule change filed by the Municipal Securities Rulemaking Board (SR-MSRB-2009-18) pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934, consisting of amendments to Rule G-37 (Political Contributions and Prohibitions on Municipal Securities Business) and Rule G-8 (Books and Records to be Made by Brokers, Dealers and Municipal Securities Dealers). Publication in the Federal Register is expected during the week of January 18. (Rel. 34-61381)
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