Report on Administrative Proceedings
The Report on Administrative Proceedings for the Period Oct. 1, 2009 through March 31, 2010 has been issued, giving summary statistical information on the Commission's administrative proceedings caseload. The report is published in the SEC Docket and appears on the Commission's website. (Rel. 34-61986)
In the Matter of LaserSight, Inc.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Ten Respondents (Default Order) in LaserSight, Inc., Administrative Proceeding No. 3-13817. The Order Instituting Proceedings (OIP) alleged that eleven 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 ten Respondents. It revokes the registrations of each class of registered securities of LaserSight, Inc., LifeCo Investment Group, Inc., LifeOne, Inc., LifeF/X, Inc., Lincorp Holdings, Inc., The Lionshare Group, Inc., Lite King Corp., Livent, Inc., The Loewen Group, Inc., and Lorelei Corp. pursuant to Section 12(j) of the Securities Exchange Act of 1934.
The Division of Enforcement has requested the Commission to dismiss the proceeding as to Loehmann's, Inc., the eleventh Respondent named in the OIP. (Rel. 34-61985; File No. 3-13817)
In the Matter of Ronald S. Bloomfield, Robert Gorgia, Victor Labi, John Earl Martin, Sr., and Eugene Miller
On April 27, 2010, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 against Ronald S. Bloomfield, Robert Gorgia, Victor Labi, John Earl Martin, Sr., and Eugene Miller.
In the Order, the Division of Enforcement alleges that while associated with Leeb Brokerage Services, Inc., registered representatives Bloomfield, Martin, and Labi failed to conduct a "reasonable inquiry" before allowing their customers to sell stock to the public in violation of the registration provisions of the federal securities laws; Leeb supervisors Miller and Gorgia failed reasonably to supervise with respect to such conduct; and all of the individuals aided and abetted and caused their firm's failure to file Suspicious Activity Reports (SARs).
The Division alleges that the Leeb representatives ignored obvious red flags indicating that their customers were violating securities laws by engaging in illegal distributions of securities through their Leeb accounts. One group of customer accounts was affiliated with an individual who had previously been involved in a pump-and-dump scheme, and with a stock promoter who routinely received shares in compensation for promotional services for penny stock companies. The accounts earned more than $20 million in proceeds while repeatedly depositing privately obtained shares and then selling them to the public, raising the constant specter that Leeb was facilitating "scalping." Another Leeb customer wired more than $30 million in penny stock proceeds to a bank in Liechtenstein, a tax haven.
The Division alleges that, as a result of the conduct described above: (i) Bloomfield, Labi and Martin willfully violated Sections 5(a) and 5(c) of the Securities Act; (ii) Gorgia and Miller failed reasonably to supervise Bloomfield, Labi and Martin, within the meaning of Sections 15(b)(4) and 15(b)(6) of the Exchange Act, with a view to preventing and detecting their willful violations of the federal securities laws; and (iii) Bloomfield, Gorgia, Labi, Martin and Miller willfully aided and abetted and caused violations of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder.
A hearing will be scheduled before an administrative law judge to determine whether the allegations of the Division contained in the Order are true, to provide Respondents an opportunity to respond to such allegations, and to determine what, if any, remedial action is appropriate in the public interest. As directed by the Commission, the Administrative Law Judge shall issue an initial decision in this matter not later than 300 days from the date of service of the Order. (Rels. 33-9121; 34-61988; File No. 3-13871)
Jury Finds Defendant Carl W. Jasper Liable In Fraudulent Stock Option Backdating Scheme
On April 23, 2010, a federal district court jury found Carl W. Jasper, former Chief Financial Officer of Sunnyvale, Calif.-based Maxim Integrated Products, liable for securities fraud and other charges. The SEC sued Jasper (along with Maxim and its former CEO) in 2007, Securities and Exchange Commission v. Carl W. Jasper, Case No. CV-07-6122 JW (N.D.Cal.), alleging that Jasper engaged in a scheme to backdate stock option grants to company personnel, allowing the company to conceal hundreds of millions of dollars of compensation costs and report dramatically inflated income to investors.
Following an eight-day trial in U.S. District Court in San Jose, Calif., the eight-member jury found Jasper liable for, among other violations, fraud, lying to auditors, and aiding Maxim's failure to maintain accurate books and records. The jury found for Jasper on certain remaining claims, including proxy rule violations.
U.S. District Judge James Ware will determine remedies and sanctions at a later date. The SEC's complaint seeks, among other things, disgorgement and repayment of bonuses, monetary penalties, and a bar from serving as an officer or director of a public company.
The SEC previously settled its charges against Maxim and former CEO John Gifford, with Gifford (since deceased) paying over $800,000 in disgorgement, interest and penalties (LR-20381). [SEC v. Carl W. Jasper, Case No. CV-07-6122 JW (N.D.Cal.)] (LR-21507)
INVESTMENT COMPANY ACT RELEASES
Claymore Exchange-Traded Fund Trust 3, et al.
A notice has been issued giving interested persons until May 17, 2010, to request a hearing on an application filed by Claymore Exchange-Traded Fund Trust 3, et al., for an order to permit: (a) series of certain actively managed open-end management investment companies to issue shares (Shares) redeemable in large aggregations only (Creation Units); (b) secondary market transactions in Shares to occur at negotiated market prices; (c) certain series to pay redemption proceeds under certain circumstances more than seven days from the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Shares. (Rel. IC-29256 - April 23)
Medallion Financial Corp.
An order has been issued on an application filed by Medallion Financial Corp. (Medallion) under Section 6(c) of the Investment Company Act for an exemption from Sections 23(a), 23(b) and 63 of the Act, and under Sections 57(a)(4) and 57(i) of the Act and Rule 17d-1 under the Act authorizing certain joint transactions otherwise prohibited by Section 57(a)(4) of the Act. The order permits Medallion to issue restricted shares of its common stock to its officers and employees under the terms of its equity incentive compensation plan. (Rel. IC-29258 - April 26)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NASDAQ OMX PHLX relating to fees and rebates for adding and removing liquidity (SR-Phlx-2010-61) 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 April 26. (Rel. 34-61961)
A proposed rule change filed by NASDAQ OMX PHLX relating to routing fees (SR-Phlx-2010-62) 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 April 26. (Rel. 34-61971)
A proposed rule change filed by International Securities Exchange relating to fee changes (SR-ISE-2010-32) 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 April 26. (Rel. 34-61972)
A proposed rule change filed by NYSE Arca amending Rule 6.4 and adopting Rule 6.4A (SR-NYSEArca-2010-30) 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 April 26. (Rel. 34-61977)
A proposed rule change filed by NYSE Amex amending Rule 903 and adopting Rule 903A (SR-NYSEAmex-2010-39) 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 April 26. (Rel. 34-61978)
A proposed rule change filed by The NASDAQ Stock Market (SR-NASDAQ-2010-051) concerning Intermarket Option Linkage 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 April 26. (Rel. 34-61981)
SECURITIES ACT REGISTRATIONS
RECENT 8K FILINGS