In the Matter of Spencer International Advisors, Inc. and Scott A. Spencer, CPA
On July 27, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 (Advisers Act), Making Findings and Imposing Remedial Sanctions and Cease-and-Desist Order (Order) against Spencer International Advisors, Inc. (Spencer International) and Scott A. Spencer (Spencer). The Order finds that through the circumstances of their offering of securities issued by a Florida company, Loder Note, LLC, to their clients, Spencer International and Spencer willfully violated Sections 206(1) and 206(2) of the Advisers Act.
Based on the above, the Order requires that Spencer International and Spencer cease and desist from committing or causing any violations and any future violations of Sections 206(1) and 206(2) of the Advisers Act; Spencer is barred from association with any investment adviser, with the right to reapply for association after three (3) years; Spencer International is censured; and Spencer International and Spencer must each pay a money penalty of $75,000. Spencer International and Spencer consented to the issuance of the Order without admitting or denying any of the findings. (Rel. IA-3059; File No. 3-13980)
In the Matter of Lambros D. Ballas
On July 28, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Lambros D. Ballas.
The Order alleges that on July 8, 2010, a judgment and permanent injunction was entered against Ballas, permanently enjoining him from issuing or causing to be disseminated false or misleading press releases and Internet postings, or other public statements regarding publicly traded or quoted companies where such conduct would constitute an actual or threatened violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled SEC v. Lambros D. Ballas, Civil Action Number 5:09-cv-05036, in the United States District Court for the Northern District of California, San Jose Division. The Order further alleges that during the time in which Ballas engaged in the conduct underlying the injunction described above, Ballas was a registered representative associated with a broker-dealer registered with the Commission.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Ballas an opportunity to respond to these allegations, and to determine what sanctions, if any, are appropriate and in the public interest. As directed by the Commission, an administrative law judge shall issue an initial decision in this matter no later than 210 days from the date of service of the Order. (Rel. 34-62581; File No. 3-13981)
Commission Obtains Permanent Injunction Against Former Nicor Chief Executive Officer Thomas Fisher
The Securities and Exchange Commission announced today that it obtained an order of permanent injunction (Order) against Thomas Fisher, the former Chairman, Chief Executive Officer, and President of Nicor, Inc., a gas utility holding company based in Naperville, Illinois, in the United States District Court for the Northern District of Illinois. Fisher consented to entry of the Order that permanently enjoins him from violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and from aiding and abetting violations of Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, and 13a-13, and requires him to pay $825,000 in disgorgement and prejudgment interest.
The Commission's complaint alleges that from at least 1999 through 2002, Fisher and two other senior Nicor executives materially overstated Nicor's revenues under the company's performance-based rate ("PBR") program and thereby materially overstated Nicor's financial performance. Defendants are alleged to have misrepresented Nicor's actual performance under the PBR program by, among other things, making or authorizing false and misleading statements about Nicor's performance to its investors, the public, the SEC, and the Illinois Commerce Commission. When the false and misleading statements were finally uncovered and Nicor's improper accounting was revealed, Nicor's stock dropped by over 40%. [SEC v. Thomas Fisher, et al., 07-cv-4483 (N.D. Ill.)] (LR-21603)
Defendants Geotec, Inc., Bradley T. Ray, Stephen D. Chanslor, and Williams Richard Lueck Settle SEC Enforcement Action in Geotec, Inc. Litigation
The Securities and Exchange Commission announced that on July 28, 2010, the United States District Court for the Southern District of Florida entered Final Judgments, by consent, against Geotec, Inc., Bradley T. Ray, Stephen D. Chanslor, CPA, and William Richard Lueck, in connection with an enforcement action filed in 2007 that charged the Defendants with fraud and reporting, books and records, and internal controls violations arising from two distinct securities schemes.
The final judgment against Lueck enjoins him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-11 thereunder and imposes an officer and director bar. Based on Lueck's cooperation in this case, the final judgment does not impose a civil penalty against him.
The SEC's complaint alleged that Geotec, Lueck, Ray and Chanslor made false statements in one or more Geotec 2005 SEC filings concerning the company's acquisition of millions of tons of coal. Specifically, the complaint alleged that Geotec falsely stated that another company had obtained a permit for the coal Geotec acquired and failed to disclose that the coal was under a state receivership. The complaint also alleged that Geotec improperly reported the coal as inventory valued at $18.9 million, improperly reported $4.6 million in revenue from a sale of a portion of the coal, and failed to have its quarterly reports filed with the SEC reviewed by an independent accountant. The SEC's complaint also alleged that Lueck improperly directed Geotec to issue 100,000 shares of company stock to a purported stock promoter in a kickback scheme.
Without admitting or denying the allegations in the Commission's complaint, Geotec, Ray, Chanslor, and Lueck consented to the entry of final judgments against them. The final judgment against Geotec enjoins it from violating Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 12b-11, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. The final judgment against Ray enjoins him from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder, imposes an officer and director bar, and orders him to pay a civil penalty of $75,000.
The final judgment against Chanslor enjoins him from violating Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13a-14 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder, imposes an officer and director bar, and orders him to pay a civil penalty of $25,000.
Chanslor also consented to the entry of an Administrative Order, pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the Commission as an accountant, with a right to apply for reinstatement after three years.
The final judgments against Geotec, Ray, Chanslor, and Lueck resolve the litigation in this case. [SEC v. Geotec, Inc. f/k/a Geotec Thermal Generators, Inc., Bradley T. Ray, William Richard Lueck, and Stephen D. Chanslor, Case No. 09-80986-CIV-COHN (S.D. Fla.)] (LR-21604)
INVESTMENT COMPANY ACT RELEASES
Nationwide Life Insurance Company, et al.
An order has been issued under Section 6(c) of the Investment Company Act, as amended (Act), to Nationwide Life Insurance Company (NWL), Nationwide Variable Account-II and Nationwide Investment Services Corporation (together the Applicants) granting exemptions from Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to permit the recapture of certain bonus credits applied to purchase payments made under a certain deferred variable annuity contract (Current Contract) issued by NWL and under contracts that are substantially similar in all material respects to the Current Contract that NWL may issue in the future (Future Contracts) (Current Contract and Future Contracts collectively, the Contracts). The order also extends to any other separate accounts of NWL and its successors in interest that support the Future Contracts and any Financial Industry Regulatory Authority member broker-dealers controlling, controlled by, or under common control with any Applicant, whether existing or created in the future, that may act as principal underwriter for the Contracts. (Rel. IC-29369 - July 27)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by New York Stock Exchange (SR-NYSE-2010-54) deleting NYSE Rule 123G and adopting new Rule 5290 to correspond with rule changes filed by the Financial Industry Regulatory Authority, Inc. 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 26. (Rel. 34-62569)
A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2010-72) deleting Rule 123G - NYSE Amex Equities and adopting new Rule 5290 - NYSE Amex Equities to correspond with rule changes filed by the Financial Industry Regulatory Authority, Inc. 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 26. (Rel. 34-62572)
Approval of Proposed Rule Change
The Commission approved proposed rule changes submitted by the New York Stock Exchange (SR-NYSE-2010-43) and NYSE Amex (SR-NYSEAmex-2010-53) under Rule 19b-4 of the Securities Exchange Act of 1934 incorporating the receipt and execution of odd-lot interest into the round lot market and decommission of the use of the "Odd-Lot System." Publication is expected in the Federal Register during the week of July 26. (Rel. 34-62578)
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