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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2010-86
May 11, 2010

COMMISSION ANNOUNCEMENT

SEC, CFTC Announce Creation of Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues

Securities and Exchange Commission Chairman Mary Schapiro and Commodity Futures Trading Commission Chairman Gary Gensler today announced the formation of a joint committee that will address emerging regulatory issues. The establishment of the Joint CFTC-SEC Advisory Committee on Emerging Regulatory Issues was one of the 20 recommendations included in the agencies' harmonization report issued last year.

The joint committee will develop recommendations on emerging and ongoing issues relating to both agencies. The first item on the committee's agenda is conducting a review of last Thursday's market events and making recommendations related to market structure issues that may have contributed to the volatility, as well as disparate trading conventions and rules across various markets.

To orient the Committee's work, the staff of the SEC and CFTC will provide to the Committee on Monday their joint preliminary findings regarding last Thursday's market events.

"As last week's events remind us, our markets are increasingly interrelated and interdependent so we need to appreciate how events in one arena can potentially impact investors and markets elsewhere," said Chairman Schapiro. "The Joint Committee will serve an essential role in addressing that challenge."

"It is important that we hear from this prominent panel of market practitioners, academics and former regulators about emerging risks in our markets," Chairman Gensler said. "It is critical that the CFTC and SEC hear from the panel together because our markets are so intertwined. I am particularly interested in the Committee's first focus: advising on courses of action in response to the lessons learned from the market events of May 6."

The Committee's charter provides for a broad scope of interest, including:

  1. Identifying of emerging regulatory risks.
  2. Assessing and quantifying of the impact of such risks and their implications for investors and market participants.
  3. Furthering the SEC's and CFTC's efforts on regulatory harmonization.

Chairman Schapiro and Chairman Gensler will serve as co-chairs of the Joint Committee.

Members of the Joint Committee include (additional members to join in coming days):

  • Brooksley Born, Former Chair of the CFTC
  • Jack Brennan, Former Chief Executive Officer and Chairman, Vanguard
  • Robert Engle, Michael Armellino Professor of Finance at the NYU Stern School of Business
  • Richard Ketchum, Chairman and Chief Executive Officer, FINRA
  • Maureen O'Hara, Professor of Management, Professor of Finance, Cornell University
  • Susan Phillips, Dean and Professor of Finance, The George Washington University School of Business
  • David Ruder, Former Chair of the SEC

(Press Rel. 2010-75)


ENFORCEMENT PROCEEDINGS

In the Matter of Christine M. Zamorsky

An Administrative Law Judge has issued an Order Making Findings and Imposing Sanction by Default as to Two Respondents (Default Order) in Administrative Proceeding No. 3-13795, Christine M. Zamorsky. The Order Instituting Proceedings (OIP) alleged that, on Feb. 2, 2010, and March 31, 2009, the U.S. District Court for the District of Colorado entered final judgment against Christine M. Zamorsky (a/k/a Christine M. Thompson), Jeffrey M. Zamorsky, and Jesse Anthony Aguilar. According to the OIP, the injunction bars all three Respondents from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder.

The Default Order finds the allegations to be true as to Christine M. Zamorsky and Jesse Anthony Aguilar. It concludes that, pursuant to Section 15(b) of the Securities Exchange Act of 1934, it is in the public interest to bar these two Respondents from association with any broker or dealer. The proceeding remains ongoing as to Jeffrey M. Zamorsky, the third Respondent named in the OIP. (Rel. 34-62070; File No. 3-13795)


In the Matter of Leonard J. Adams

On May 11, 2010, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist (the Order) against Leonard J. Adams. The Order finds that Adams violated Rule 105 of Regulation M in connection with at least 94 offerings between March 2006 and December 2008, resulting in gains of $331,387. The Order further finds that Adams engaged in a strategy of participating in numerous secondary offerings of stock in public companies in order to improve his access to initial public offerings underwritten by the same broker-dealers through which he participated in the secondary offerings. At all relevant times through Oct. 9, 2007, Rule 105 prohibited covering a short sale with securities obtained in a public offering when the short sale occurred during a restricted period, generally five business days before the pricing of the offering. Since Oct. 9, 2007, Rule 105 prohibits any person effecting a short sale during the restricted period from purchasing shares offered in a secondary offering.

Based on the above, the Order requires Adams to cease and desist from committing or causing any violations and any future violations of Rule 105 of Regulation M under the Exchange Act and to pay disgorgement of $331,387 and prejudgment interest of $16,613 to the United States Treasury (to be paid in four quarterly installments of $87,000). Adams consented to the issuance of the Order without admitting or denying any of the findings in the Order. In connection with the same conduct, Adams also agreed to consent to the entry of a district court judgment ordering Adams to pay a civil monetary penalty of $165,693 in a settled civil action filed by the Commission. (Rel. 34-62072; File No. 3-13885)


In the Matter of Peter G. Grabler

On May 11, 2010, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (the Order) against Peter G. Grabler. The Order finds that Grabler violated Rule 105 of Regulation M in connection with at least 119 offerings between February 2006 and November 2008 resulting in gains of $636,123. The Order further finds that Grabler engaged in a strategy of participating in numerous secondary offerings of stock in public companies in order to improve his access to initial public offerings underwritten by the same broker-dealers through which he participated in the secondary offerings. At all relevant times through Oct. 9, 2007, Rule 105 prohibited covering a short sale with securities obtained in a public offering when the short sale occurred during a restricted period, generally five business days before the pricing of the offering. Since Oct. 9, 2007, Rule 105 prohibits any person effecting a short sale during the restricted period from purchasing shares offered in a secondary offering.

Based on the above, the Order requires Grabler to cease and desist from committing or causing any violations and any future violations of Rule 105 of Regulation M under the Exchange Act and to pay disgorgement of $636,123 and prejudgment interest of $35,232 to the United States Treasury. Grabler consented to the issuance of the Order without admitting or denying any of the findings in the Order. In connection with the same conduct, Grabler also agreed to consent to the entry of a district court judgment ordering Grabler to pay a civil monetary penalty of $318,061 in a settled civil action filed by the Commission. (Rel. 34-62073; File No. 3-13886)


INVESTMENT COMPANY ACT RELEASES

Jackson National Life Insurance Company of New York, et al.

A notice has been issued giving interested persons until June 2, 2010, to request a hearing on an application filed by Jackson National Life Insurance Company of New York (JNL New York), JNLNY Separate Account I, and Jackson National Life Distributors LLC (collectively, Applicants). Applicants seek an order under Section 6(c) of the Investment Company Act to exempt certain transactions from the provisions of Sections 2(a)(32), 22(c), and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to the extent necessary to permit the recapture, under specified circumstances, of certain contract enhancements applied to purchase payments made under deferred variable annuity contracts issued by JNL New York. (Rel. IC-29265 - May 10)


SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Change

A proposed rule change filed by NYSE Arca to adopt Commentary .02 to Rule 5.32, Terms of FLEX Options, to establish a pilot program to permit FLEX Options to trade with no minimum size requirement (SR-NYSEArca-2010-34) 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 May 10. (Rel. 34-62054)


SECURITIES ACT REGISTRATIONS


RECENT 8K FILINGS

 

http://www.sec.gov/news/digest/2010/dig051110.htm


Modified: 05/11/2010