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COMMISSION ANNOUNCEMENTSCommission MeetingsClosed Meeting - Thursday, November 4, 2010 - 1:30 p.m.The subject matter of the Closed Meeting scheduled for Thursday, November 4, 2010, 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 PROCEEDINGSSecurities and Exchange Commission Orders Hearing on Registration Revocation Against Ten Public Companies For Failure to Make Required Periodic FilingsOn October 27, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of ten companies for failure to make required periodic filings with the Commission:
In this Order, the Division of Enforcement (Division) alleges that the ten issuers are delinquent in their required periodic filings with the Commission. In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-63200; File No. 3-14101) Securities and Exchange Commission Orders Hearing on Registration Revocation Against Eight Public Companies for Failure to Make Required Periodic FilingsOn October 27, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:
In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission. In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-63201; File No. 3-14100) In the Matter of Barry SchwartzOn October 28, 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 Barry Schwartz (Schwartz). The Division of Enforcement (Division) alleges that between 1993 and 1995, Schwartz was a registered representative with Barrett Day Securities, Inc. (Barrett Day), a broker-dealer registered with the Commission. The Division further alleges that, on December 10, 2003, Schwartz pled guilty to conspiracy to commit securities fraud in violation of Title 18 United States Code, Section 371, and conspiracy to commit money laundering in violation of Title 18, United States Code, Section 1956, before the United States District Court for the Eastern District of New York, in United States v. Barry Schwartz, et al., Crim. Information No. 03-CR-290. The Division also alleges that the counts of the criminal indictment to which Schwartz pled guilty alleged, inter alia, that Schwartz, while associated with Barrett Day, used nominees to conceal his ownership of National Health and Safety (National Health) and Tera West Ventures, Inc. (Tera West), whose stocks were traded on the OTC Bulletin Board. The indictment alleged that Schwartz used his controlling interest in National Health and Tera West to arbitrarily set their stock prices and deceived the investing public by making it appear that the sales price was set by a market of multiple, independent shareholders selling their shares of National Health and Tera West. A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent the opportunity to dispute these allegations, and to determine what remedial sanctions, if any, are appropriate. The Commission directed that an administrative law judge issue an initial decision no later than 210 days from the date of service of this order. (Rel. 34-63205; File No. 3-14102) Judge Issues Order Appointing U.S. Attorney to Prosecute Criminal Contempt Against Defendant Alfred Louis "Bobby" Vassallo, Jr.; Hearing on Civil Contempt SetOn October 26, 2010, the Honorable Chief Judge Irma E. Gonzalez of the U.S. District Court for the Southern District of California issued an Order referring the matter of Alfred Louis "Bobby" Vassallo, Jr.'s violations of the Court's Permanent Injunction entered against him on August 24, 2005 to the United States Attorney for the Southern District of California for criminal prosecution. The Court's Order appoints the United States Attorney's Office as prosecutor of criminal contempt. A trial of that action will be set at such time as convenient for the Court and the parties. The Court issued a separate order on October 26 scheduling the hearing on an Order to Show Cause why Vassallo should not be held in civil contempt of the Permanent Injunction for December 9, 2010. The Court's Orders follow from the Commission's Application for an Order to Show Cause re Civil Contempt against Vassallo, filed on September 21, 2010, which alleged that Vassallo violated the Court's Permanent Injunction enjoining him from engaging in the offer and sale of unregistered securities in violation of the securities registration provisions and committing fraud in connection with the offer and sale of securities in violation of the antifraud provisions of the federal securities laws. The Application alleged that Vassallo also violated the Permanent Injunction by failing to disgorge his ill-gotten gains and pay civil penalties and other monetary relief to the Court-appointed Receiver for Presto Telecommunications, Inc. (Presto). The Court granted the Commission's Application and issued an Order to Show Cause on September 24, 2010. The Commission previously filed a complaint against Vassallo and Presto on January 27, 2004 that charged Vassallo with violating the securities registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder for Vassallo's role in perpetrating a fraudulent scheme through Presto, which the Receiver for Presto calculated raised about $20 million from more than 500 investors. [SEC v. Presto Telecommunications, Inc. and Alfred Louis Vassallo, Jr., United States District Court for the Southern District of California, Case No. 04CV00162IEG] (LR-21710) Former Investment Adviser Sentenced to Eight Years in PrisonThe Commission announced today that, on October 26, 2010, Stephen F. Clifford, formerly an investment adviser based in Plymouth, Massachusetts, was sentenced to eight years and one month in federal prison, followed by three years of supervised release, in connection with his earlier guilty plea to criminal charges brought by the United States Attorney's Office for the District of Massachusetts. On May 4, 2010, Clifford pled guilty to one count of willfully violating Sections 206 and 217 of the Investment Advisers Act of 1940, one count of wire fraud, one count of mail fraud, and three counts of subscribing to false tax returns. Clifford's federal prison term will run consecutively to a state prison term he is currently serving for an unrelated offense. Clifford also must pay restitution in the federal criminal action of over $4.5 million. The Commission filed a civil injunctive action against Clifford on June 17, 2008. The Commission's action, which is still pending, alleges that, between at least July 2004 and June 2008, while acting as an investment adviser, Clifford defrauded nearly a dozen investors of nearly $3 million and misappropriated investor funds for his personal use. The U.S. Attorney's Office filed its case against Clifford on December 16, 2009, making substantially similar charges. On June 2, 2010, based on his guilty plea in the federal criminal action, the Commission instituted and simultaneously settled public administrative proceedings against Clifford and barred him from association with any broker, dealer, or investment adviser. The Commission acknowledges the assistance of the Massachusetts Securities Division, the United States Postal Inspection Service, and the United States Attorney's Office. For more information, see Litigation Release Nos. 20622 (June 18, 2008), 21343 (December 18, 2009), and 21518 (May 6, 2010), and Exchange Act Release No. 62208 (June 2, 2010). [U.S. v. Stephen Clifford, No. 09-CR-10387-NG (D. Mass.); SEC v. Stephen F. Clifford d/b/a Clifford Financial Associates, No. 08-CV-11023-RGS (D. Mass.)] (LR-21711) SEC Charges Massachusetts-Based Company and Its Principals With Multi-Million Dollar Foreign Currency Trading FraudThe Commission's complaint alleges that BTR offered investors investments in a program that traded in the Forex market. BTR solicited investments through a website, sales representatives called "introducing brokers," and live presentations by Karlis and Akyil. BTR attracted investors from around the world, with many residing in Florida. BTR's representations to investors, included the following: (1) investors would have 100% transparency about what was going on in their accounts through the provision of daily and monthly account statements and twenty-four hour access to real-time trading information regarding the trading that Akyil was doing on their behalf; (2) the BTR trading system was set up with a stop-loss program, so investors could lose no more than an agreed-upon percentage (typically 30%) of their initial investment; and (3) BTR and its principals would be paid from profits only. The SEC alleges that in fact Karlis and Akyil diverted some investor funds for their own benefit. To conceal the fraud, BTR sent investors misleading account statements, while Akyil and Karlis were actually depleting the investment pool through misappropriation and trading losses. According to the Complaint, BTR collapsed in September 2008 due to significant losses accrued as a result of concealed trading far past the stop loss limits promised to investors. Ultimately, BTR distributed the remaining funds, which accounted for only approximately 10% of account balances, to its investors. The Commission's complaint alleges that BTR, Akyil, and Karlis violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks the entry of a permanent injunction, disgorgement of ill-gotten gains plus pre-judgment interest, and the imposition of civil monetary penalties against BTR, Akyil, and Karlis. [SEC v. Boston Trading and Research, LLC, Ahmet Devrim Akyil and Craig Karlis, 10-CA-11841 (D. Mass.)] (LR-21712) SELF-REGULATORY ORGANIZATIONSImmediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by the Chicago Board Options Exchange to Establish a Pilot Program to List Series with Additional Expiration Months for Each Class of Options Opened for Trading on the Exchange (SR-CBOE-2010-097) 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 November 1. (Rel. 34-63185) A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2010-095) related to Hybrid 3.0 classes 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 November 1. (Rel. 34-63186) A proposed rule change (SR-CBOE-2010-094) filed by the Chicago Board Options Exchange related to the hybrid automatic execution feature 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 November 1. (Rel. 34-63191) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig102810.htm
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