Securities and Exchange Commission Suspends Trading in the Securities of Seven 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. 28, 2010, and terminating at 11:59 p.m. EST on Feb. 10, 2010.
The Commission temporarily suspended trading in the securities of these seven 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. 34-61435)
Commission Institutes Administrative Proceedings Against Dan Wise, aka Danny Wise
On Jan. 27, 2010, the Commission an Order Instituting Public Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940 and Notice of Hearing against Dan Wise, aka Danny Wise an individual residing in Scottsdale, Arizona. Wise was formerly the president and/or manager of the Wise Companies. Wise became licensed as a CPA in California in 1983 and in Arizona in 1994. His Arizona CPA license was revoked on Dec. 10, 2008.
The Order was based on the entry of a judgment of permanent injunction by a U.S. District Court against Wise and certain related entity defendants in a civil action entitled: SEC v. Whispering Winds Properties, LLC, LM Beagle Properties, LLC, Karlena, Inc. Axis International, Inc. and Dan Wise aka Danny Wise, Civil Action No. 09-cv-00676-PHX-ROS filed in the U.S. District Court for the District of Arizona, Phoenix Division.
Based on the allegations in the Complaint and Defendants' failure to answer or otherwise respond to the Complaint, the District Court entered Permanent Injunctions against Wise and each of the Entity Defendants enjoining them from future violations of Section 17(a) of the Securities Act, as well as violations of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, 17 C.F.R. S 240.10b-5. The Judgment was in the form of a bifurcated judgment with appropriate amount of disgorgement, prejudgment interest and/or civil penalty to be set by the Court at a later date. The District Court also continued its prior Orders freezing assets, preventing the destruction of documents and ordering accountings.
According to the Order, the Complaint alleged that in approximately July 2001, Wise, an accountant, began soliciting his clients to invest money with him. Wise represented to investors that their funds would be used to invest in short-term, high-interest loans that would be fully collateralized by second trust deeds or other collateral. Wise promised investors high annual returns, ranging from 12 to 22 percent. Wise assured investors that they could obtain the repayment of their principal on short notice, from 24 to 48 hours.
The Complaint further stated that from approximately July 2001 through January 2009, Wise and the Entity Defendants raised approximately $67 million from approximately 125 investors in several states. Wise commingled investor funds in at least 30 different bank accounts held in his name, or the names of the Entity Defendants, along with other companies he controlled. The representations made by Wise to his clients regarding their investments were false. The notes were not fully collateralized and Wise did not pay the high returns promised. Nor did he return investors moneys on short notice as promised.
A hearing will be scheduled before an Administrative Law Judge to determine whether the Division's allegations in the Order are true, to provide respondent an opportunity to dispute the allegations, and to determine what sanctions, if any, are appropriate and in the public interest. The Commission directed that an administrative law judge issue an initial decision in this matter within 210 days from the date of service of the Order pursuant to Rule 360(a)(2) of the Commission's Rules of Practice.
For further information see LR-20987 (April 6, 2009), Exchange Act Release No. 59703. (Rel. IA-2978; File No. 3-13766)
Commission Orders Hearings on Registration Suspension or Revocation Against Eight Companies for Failure to Make Required Periodic Filings
In conjunction with this 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 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 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. 34-61436; File No. 3-12111)
SEC Alleges Anti-Fraud Violations by Tsukuda-America and John W. Petros
The Securities and Exchange Commission filed a civil injunctive action on Jan. 26, 2010, against Tsukuda-America Inc., an Indiana corporation, and John W. Petros, 50, of Richardson, Texas, alleging anti-fraud violations in Tsukuda's $600,000 offering of common stock. Petros, the sole officer, director and shareholder of Tsukuda, prepared and submitted to the Commission a registration statement containing a forged audit report and consent, according to the complaint.
The complaint seeks civil money penalties and a permanent injunction against future violations of Section 17(a) of the Securities Act of 1933 by Tsukuda and Petros. The complaint also seeks officer-and-director and penny-stock bars against Petros, and also a bar against Petros filing any other registration or offering statements with the Commission.
The complaint further alleges that Tsukuda's registration statement also names a transfer agent with which it has no relationship, and includes reports from an attorney and geologist who do not exist. The complaint also alleges that Petros caused four other issuers to file registration or offering statements with the Commission that contained false and misleading statements, and bogus documents.
In a related action, the Commission instituted administrative proceedings against Tsukuda on Jan. 26, 2010, seeking to suspend the effectiveness of its registration statement, based on the inclusion of the forged audit report and consent. [SEC v. Tsukuda-America Inc. et al, Case No. 3:10-CV-00136-M , USDC ND TX. (Dallas Division)] (LR-21396A; AAE Rel. 3111A)
Accelerated Approval of Proposed Rule Change
The Commission issued notice of Amendment No. 1 and approved on an accelerated basis a proposed rule change, as modified by Amendment No. 1 thereto, submitted by BATS Exchange (SR-BATS-2009-031), pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to establish rules governing the trading of options on the BATS Options Exchange. Publication is expected in the Federal Register during the week of February 1. (Rel. 34-61419)
Proposed Rule Changes
New York Stock Exchange filed a proposed rule change (SR-NYSE-2010-03) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 amending the rule governing the issuance of trading licenses. Publication is expected in the Federal Register during the week of February 1. (Rel. 34-61424)
The NASDAQ OMX PHLX filed a proposed rule change (SR-Phlx-2010-05) relating to professional orders. Publication is expected in the Federal Register during the week of February 1. (Rel. 34-61426)
Approval of Proposed Rule Change
The Commission has approved a proposed rule change (SR-OCC-2009-18) filed by The Options Clearing Corporation under Section 19(b)(1) of the Exchange Act to allow members to deposit customer fully paid or excess margin securities to the extent permitted by no-action relief or interpretive guidance from the Commission or interpretive guidance from a Self-Regulatory Organization. Publication is expected in the Federal Register during the week of February 1. (Rel. 34-61425)
Immediate Effectiveness of Proposed Rule Change
A proposed rule change (SR-ISE-2010-08) filed by International Securities Exchange to allow all SPY and IWM options series to quote in penny increments 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 February 1. (Rel. 34-61430)
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