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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2010-180
September 23, 2010

COMMISSION ANNOUNCEMENTS

SEC Issues Notice of Proposed Distribution Plan and Opportunity for Comment in the Matter of Prime Capital Services, Inc.

The Securities and Exchange Commission announced today that it has given notice, pursuant to Rule 1103 of the Securities and Exchange Commission's Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. 201.1103, that the Division of Enforcement has filed a proposed plan (Distribution Plan) for the distribution of monies in the matter of Prime Capital Services, Inc., et al.

The Distribution Plan provides for distribution of the $594,263.58 in penalty, disgorgement and prejudgment interest paid by Prime Capital Services, Inc. and its parent company, Gilman Ciocia, Inc., plus any accumulated interest, less any federal, state, or local taxes on the interest and tax administrator fees. The proposed plan provides for distribution of the monies to eligible investors who purchased variable annuities from Prime Capital Services, Inc.

A copy of the Distribution Plan may be obtained by submitting a written request to Robert J. Keyes, Associate Regional Director and Chief of Regional Office Operations, United States Securities and Exchange Commission, 3 World Financial Center, 4th Floor, New York, NY 10281-1022. Interested parties may also print a copy of the proposed Distribution Plan from the Commission's public website, http://www.sec.gov. Any person or entity wishing to comment on the Distribution Plan may do so in writing by submitting their comments within 30 days of the date of the Notice (i) to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090; or (ii) via the Commission's Internet comment form (www.sec.gov/litigation/admin.shtml); or (iii) by sending an e-mail to rule-comments@sec.gov. Comments submitted by e-mail or via the Commission's website should include the Administrative Proceeding File Number (Admin. Proc. File No. 3-13532) in the subject line. Comments received will be publicly available. Persons should submit only information that they wish to make publicly available. (Rel. 34-62979; File No. 3-13532)


Commission Meetings

Closed Meeting - Wednesday, September 29, 2010 - 10:30 a.m.

The subject matter of the Closed Meeting scheduled for Wednesday, September 29, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; and other matters relating to enforcement proceedings.

At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551-5400.


ENFORCEMENT PROCEEDINGS

In the Matter of William Dyer

On September 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against William Dyer. The Order finds that an order of permanent injunction was entered against Dyer in the civil action entitled Securities and Exchange Commission v. Amante Corporation, et al., Civil Action Number 09-CV-61716-JIC, in the United States District Court for the Southern District of Florida. The Order also finds that from December 2008 through October 2009, Dyer was a telemarketing sales agent for Commonwealth Capital Management, Inc. (Commonwealth) and offered and sold the stock of Amante Corporation (Amante). During this period, Dyer solicited investors to purchase Amante's stock and received transaction-based compensation in connection with sales of Amante's stock. When he solicited investors to purchase Amante's stock, Dyer was neither registered as a broker or dealer nor associated with a registered broker or dealer.

Based on the above, the Order bars Dyer from association with any broker or dealer. Dyer consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62972; File No. 3-14061)


In the Matter of Matthew A. Dies

On September 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against Matthew A. Dies (Order).

The Order finds that Dies is the investor relations associate of United American Ventures, LLC (UAV), a purported venture capital firm based in Irvine, California. The Order further finds that on August 13, 2010, the United States District Court for the District of New Mexico entered a judgment by consent against Dies, permanently enjoining him from violating certain antifraud and registration provisions of the federal securities laws in a civil injunctive action entitled Securities and Exchange Commission v. United American Ventures, LLC, et al., Case No. CV 10-0568 JCH/LFG (See LR-21556, June 14, 2010). The Order finds that the Commission's complaint alleged that from approximately February 2009 through November 2009, Dies participated in a scheme whereby UAV fraudulently obtained millions of dollars from investors in UAV bonds.

Based on the above, the Order bars Dies from associating with any broker or dealer. Dies consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that he admitted the entry of the injunction. (Rel. 34-62973; File No. 3-14062)


In the Matter of Eric J. Hollowell

On September 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against Eric J. Hollowell (Order).

The Order finds that Hollowell is the president and portfolio manager of United American Ventures, LLC (UAV), a purported venture capital firm based in Irvine, California. The Order further finds that on August 13, 2010, the United States District Court for the District of New Mexico entered a judgment by consent against Hollowell, permanently enjoining him from violating certain antifraud and registration provisions of the federal securities laws in a civil injunctive action entitled Securities and Exchange Commission v. United American Ventures, LLC, et al., Case No. CV 10-0568 JCH/LFG (See LR-21556, June 14, 2010). The Order finds that the Commission's complaint alleged that from approximately July 2007 through November 2009, Hollowell participated in a scheme whereby UAV fraudulently obtained at least $10 million from investors in UAV bonds.

Based on the above, the Order bars Hollowell from associating with any broker or dealer. Hollowell consented to the issuance of the Order without admitting or denying any the findings in the Order, except that he admitted the entry of the injunction. (Rel. 34-62974; File No. 3-14063)


In the Matter of Anthony (Tony) J. Oliva

On September 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against Anthony (Tony) J. Oliva (Order).

The Order finds that Oliva is the sole officer and owner of a New Mexico limited liability company called Integra Investment Group, LLC (Integra). The Order further finds that on August 13, 2010, the United States District Court for the District of New Mexico entered a judgment by consent against Oliva, permanently enjoining him from violating certain antifraud and registration provisions of the federal securities laws in a civil injunctive action entitled Securities and Exchange Commission v. United American Ventures, LLC, et al., Case No. CV 10-0568 JCH/LFG (See LR-21556, June 14, 2010). The Order finds that the Commission's complaint alleged that from approximately April 2009 through November 2009, Oliva, operating through Integra, participated in and received commissions from the fraudulent sale of bonds issued by United American Ventures, LLC, a purported venture capital firm based in Irvine, California.

Based on the above, the Order bars Oliva from associating with any broker or dealer. Oliva consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that he admitted the entry of the injunction. (Rel. 34-62975; File No. 3-14064)


In the Matter of Philip Lee David Jack Thomas

On September 22, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions against Philip Lee David Jack Thomas (Order).

The Order finds that Thomas founded United American Ventures, LLC (UAV), a purported venture capital firm based in Irvine, California, in 2006, and served as UAV's president until approximately May 25, 2009. The Order further finds that on Aug. 13, 2010, the United States District Court for the District of New Mexico entered a judgment by consent against Thomas, permanently enjoining him from violating certain antifraud and registration provisions of the federal securities laws in a civil injunctive action entitled Securities and Exchange Commission v. United American Ventures, LLC, et al., Case No. CV 10-0568 JCH/LFG (See LR-21556, June 14, 2010). The Order finds that the Commission's complaint alleged that from approximately July 2007 through November 2009, Thomas participated in a scheme whereby UAV fraudulently obtained at least $10 million from investors in UAV bonds.

Based on the above, the Order bars Thomas from associating with any broker or dealer. Thomas consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that he admitted the entry of the injunction. (Rel. 34-62976; File No. 3-14065)


In the Matter of Atchison Casting Corp.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Four Respondents (Default Order) in Atchison Casting Corp., Administrative Proceeding No. 3-14005. The Order Instituting Proceedings (OIP) alleged that six Respondents each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission (Commission).

The proceeding ended as to Hampton Consulting Corp. and CityFed Financial Corp. on Aug. 27, 2010, and Sept. 3, 2010, respectively. Atchison Casting Corp., Exchange Act Release Nos. 62778, 62839.

The Default Order finds the allegations of the OIP to be true as to the remaining four Respondents. It revokes the registrations of each class of registered securities of Atchison Casting Corp. (n/k/a Bradken-Atchison/St. Joseph, Inc.), divine, inc. (n/k/a Enivid, Inc.), Genesis Worldwide Inc., and Jake's Pizza International, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-62978; File No. 3-14005)


In the Matter of Carlson Capital, L.P.

On September 23, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934 and Section 203(e) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order (Order) against Carlson Capital, L.P. (CCLP). The Order finds that, CCLP, a registered investment adviser and manager of hedge funds based in Dallas, Texas, violated Rule 105 of Exchange Act Regulation M (Rule 105), which prohibits buying shares of an equity security through a public offering after having sold short the same security during a restricted period (generally defined as five business days before the pricing of the offering).

The Order finds that CCLP willfully violated Rule 105 through four different equity offerings in 2008. The Order also finds that the "separate accounts" exception to Rule 105 did not apply to the firm's participation in one of the offerings. This exception allows the purchase of an offered security in an account that is "separate" from the account through which the same security was sold short, if decisions regarding securities transactions for each account are made separately and without coordination of trading or cooperation among or between the accounts. In November 2008, a portfolio manager at CCLP bought stock through a public offering after another portfolio manager sold the same stock short. The combined activities of the portfolio managers violated Rule 105, and did not qualify for the separate accounts exception, because the firm's portfolio managers: (1) could access each others' trading positions and trade reports and could consult with each other about companies of interest; (2) reported to a single chief investment officer who supervised the firm's portfolios and had ultimate authority over the firm's positions; and (3) were not prohibited from coordinating with each other with respect to trading. The Commission further found that the portfolio manager who sold short the stock during the restricted period received information that the other portfolio manager intended to buy offering shares, before the short sales were made.

Based on the above, the Order censures CCLP and requires the firm to cease and desist from committing or causing any violations and any future violations of Rule 105. CCLP will pay a $260,000 civil monetary penalty, $2,256,386 in disgorgement, and $136,848 in prejudgment interest. CCLP consented to the issuance of the Order without admitting or denying any of the findings contained therein. (Rels. 34-62982; IA-3086; File No. 3-14066)


SEC v. M. Mark McAdams and R. Dane Freeman

The Securities and Exchange Commission announced that the Honorable Terry L. Wooten, United States District Judge for the District of South Carolina, entered an order permanently enjoining M. Mark McAdams (McAdams). The order restrained and enjoined McAdams from future violations of Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. McAdams was also ordered to pay disgorgement, pre-judgment interest and a civil penalty in amounts to be resolved upon motion of the Commission at a later date, and directed that for purposes of that motion, the allegations of the Commission's Complaint shall be deemed true. McAdams consented to the entry of the order without admitting or denying the allegations of the Commission's Complaint.

The Complaint, filed on March 18, 2010, alleged fraud against McAdams and his co-defendant R. Dane Freeman (Freeman) in connection with sales of securities interests in Global Holdings, a limited liability company organized by McAdams. Approximately $3.5 million was raised from investors during the first nine months of 2008. The Complaint alleged that McAdams and Freeman told investors orally and in writing that Global Holdings was "in the business of locating and securing high return investment opportunities for investors on international trading platforms." Most of the Global Holdings' investors executed a joint venture agreement that was prepared by McAdams and signed by either McAdams or Freeman. These joint venture agreements represented that Global Holdings would utilize those funds "for the purpose of buying and selling Standard and Poor's AAA or AA rated bonds and/or Medium Term Notes" on an "overseas trading platform." Some of the joint venture agreements stated that investors who invested $20,000 would receive $1,000,000 after 60 days, a return of 4,900%. At least one joint venture agreement stated that an investor's $500,000 would grow to $1,500,000 after 60 days, for a 200% rate of return. Most investors, if not all of them, never received either profits or a return of their principal. Instead, over $500,000 in investor funds were transferred to accounts controlled by Freeman and his family. McAdams received many questions about the high yield investment program from the outset, from investors and his own family members, to whom McAdams vouched for the existence and legality of the global trading platforms that supposedly would generate such outlandish returns. McAdams also misrepresented the success of the program. McAdams falsely misrepresented to a potential investor that Global Holdings had participated in hundreds of similar transactions that had already produced hundreds of millions of dollars for dozens of investors. [SEC v. M. Mark McAdams and R. Dane Freeman, Civil Action No. 4:10-CV-00701-TLW (D.S.C.)] (LR-21661)


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http://www.sec.gov/news/digest/2010/dig092310.htm


Modified: 09/23/2010