In the Matter of Ephraim Fields
On July 8, 2010, the Commission issued an Order Instituting Administrative and Cease-And-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Section 21C of the Securities Exchange Act of 1934, and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-And-Desist Order As To Ephraim Fields (Fields), a New York resident who was the owner and manager of a registered investment adviser, Clarus Capital Management, LCC (Clarus Management).
The Order finds that Fields marked the closing price of the stock of Cleveland, Ohio based Hawk Corporation (Hawk) to delay the requirement that Hawk comply with the internal control provisions promulgated under Section 404 of the Sarbanes-Oxley Act of 2002 (SOX 404) in Rule 13a-15 under the Exchange Act. The Order finds that on June 30, 2006, the closing price that would have triggered Hawk's obligation to comply with SOX 404 for its fiscal year ended Dec. 30, 2006 was $12.30 (trigger price). The Order finds that on June 30, 2006, one of Hawk's Corporate Executives called Fields. The Order finds that in that call, the Corporate Executive stated that if Hawk's stock closed below the trigger price that day, Hawk could avoid compliance with SOX 404 by year-end. The Order further finds that based on the call, Fields believed the Corporate Executive wanted him to make sure that Hawk's stock closed below the trigger price. The Order further finds that shortly after the call with the Corporate Executive, Fields submitted eight limit day orders on behalf of Clarus Capital, LLC (Clarus), an unregistered hedge fund for which Fields was the general partner and for which Clarus Management served as an investment adviser, to sell a total of 40,000 shares of Hawk at $12.29. The Order further finds that, as a result, Hawk's stock price was capped that day at $12.29.
The Order finds that as a result of this conduct, Fields willfully violated Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which prohibit fraudulent conduct in the offer and sale of securities and in connection with the purchase, offer, or sale of securities.
Based on the above, the Order: (1) requires Fields to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; (2) censures Fields; and (3) requires Fields to pay a civil money penalty in the amount of $50,000 to the United States Treasury. Fields consented to the issuance of the Order against him without admitting or denying any of the findings in the Order, except as to the Commission's jurisdiction over him and the subject matter of the proceedings, which he admitted. (Rels. 33-9127; 34-62474; IA-3051; AAE Rel. 3151; File No. 3-13962)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by New York Stock Exchange amending NYSE Rule 46 to permit the Exchange Chairman to designate more or less than twenty (20) Floor Governors, as needed (SR-NYSE-2010-50), 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 July 5. (Rel. 34-62461)
A proposed rule change filed by NYSE Amex amending Rule 46 - NYSE Amex Equities to permit the Exchange Chairman to designate more or less than twenty (20) Floor Governors, as needed (SR-NYSEAmex-2010-65), 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 July 5. (Rel. 34-62462)
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