SEC News Digest

ENFORCEMENT PROCEEDINGS

In the Matter of Robert L. Duncan, Respondent

On November 9, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Robert L. Duncan (Duncan). The Order finds that on October 22, 2010, the United States District Court for the Northern District of Georgia issued an Order of Permanent Injunction against Duncan permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. The Commission's complaint alleged that, in connection with the sale of interests in the Fund which was managed by Duncan, Duncan misappropriated investor funds, falsely stated to investors that their funds were invested in U.S. equity markets, and sent out false account statements indicating that investors' funds were fully invested and earning returns. The complaint also alleged that Duncan fabricated purportedly audited financial statements for the Fund and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors.

Based on the above, the Order bars Duncan from association with any investment adviser. Duncan 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. IA-3103; File No. 3-14115)

In the Matter of Ralph W. Thompson, Jr.

On November 9, 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 Ralph W. Thompson, Jr.

The Division of Enforcement alleges in the Order that Thompson was the manager and principal of Novus Technologies, LLC and personally participated in the solicitation of investors on behalf of Novus. The Division further alleges that on October 20 2010, an order imposing injunctive relief was entered by consent against Thompson, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a)(1), (2) and (3) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Novus Technologies, LLC, et al., Civil Action Number 2:07-CV-0235, in the United States District Court for the District of Utah.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Thompson an opportunity to respond to those allegations, and to determine what sanctions, if any, are appropriate and in the public interest. The Order directs the administrative law judge to issue an initial decision within 210 days from the date of service of the Order Instituting Proceedings. (Rel. 34-63279; File No. 3-14116)

Cease-and-Desist Order Entered Against Damyon Mouzon, Former President of Nationally Recognized Statistical Rating Organization Lace Financial Corporation

On November 9, the Commission issued an Order Making Findings and Imposing a Cease-And-Desist Order Pursuant to Section 21C of the Securities Exchange Act of 1934 (Order) against Damyon Mouzon, the former President of registered Nationally Recognized Statistical Rating Agency (NRSRO) LACE Financial Corporation (LACE). The Order finds that Mouzon was a cause of LACE's misrepresentations in its application to become registered as an NRSRO and its accompanying request for an exemption from a conflict-of-interest provision. Exchange Act Rule 17g-5(c)(1) (the Ten Percent Rule) prohibits an NRSRO from issuing or maintaining a credit rating solicited by a person that, in the most recently ended fiscal year, provided the NRSRO with net revenue equaling or exceeding ten percent of the NRSRO's total net revenue for the fiscal year. In its NRSRO application and request for an exemption from the Ten Percent Rule, LACE materially misstated the amount of revenue it received from its largest customer during 2007. The Order finds that, as LACE's President, Mouzon was responsible for ensuring the accuracy of the information provided to the Commission in connection with LACE's NRSRO application and its request for an exemption from the Ten Percent Rule, and that he knew or should have known that LACE's representations regarding the amount of revenue received from its largest client during 2007 were inaccurate.

The Order also finds that Mouzon caused LACE to violate certain other provisions governing NRSROs by (a) failing to disclose in its NRSRO application that it performed an extra layer of review when determining credit ratings for certain issuers whose securities made up the pools of asset-backed securities managed by LACE's largest customer, (b) failing to maintain written policies and procedures governing this extra layer of review, and (c) failing to maintain all e-mails concerning its credit ratings. The Order finds that Mouzon knew or should have known that LACE was required to disclose the extra layer of review performed for certain issuers in its NRSRO application and maintain written policies and procedures governing this extra layer of review, but failed to ensure that LACE did so. The Order also finds that Mouzon knew or should have known that, as a registered NRSRO, LACE was required to retain all e-mails relating to its credit ratings, but failed to ensure that LACE did so.

The Order requires Mouzon to cease and desist from committing or causing any violations and any future violations of Exchange Act Sections 15E(a)(1) and 17(a) and Rules 17g-1 and 17g-2 governing NRSROs. Mouzon consented to the issuance of the Order without admitting or denying the findings. The Order resolves the pending cease-and-desist proceeding instituted against Mouzon on September 2, 2010. (See Release No. 34-62835; see also Release No. 34-62834.) (Rel. 34-63280; File No. 3-14029)

Gary S. Becker Sanctioned

Gary S. Becker (Becker) has been barred from association with any broker or dealer. The sanction was ordered in an administrative proceeding before an administrative law judge, following a court-ordered injunction against him. In July 2010, Becker was enjoined from violating the antifraud and registration provisions of the federal securities laws based on his involvement in a fraudulent scheme in connection with the sale of unregistered securities.

Over a period from 2001 to 2007, Becker and another raised approximately $1.3 million from twenty-nine investors through the sale of unregistered securities offerings in an entity known as Gold Rush Technologies, Inc. They represented to investors that the money raised would be used to form a brokerage firm, but instead diverted approximately 79% of the offering proceeds to enrich themselves and others. During the time in which he engaged in this conduct, Becker was a registered representative with a broker-dealer registered with the Securities and Exchange Commission. (Rel. 34-63281; File No. 3-13976)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-NSX-2010-14) filed by the National Stock Exchange to amend the NSX Fee and Rebate Schedule has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63251)

A proposed rule change filed by NASDAQ OMX PHLX (SR-Phlx-2010-150) relating to amendments to the Fee Schedule has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63252)

A proposed rule change filed by the NASDAQ Stock Market (SR-NASDAQ-2010-144) relating to access service fees has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63253)

A proposed rule change filed by NASDAQ OMX PHLX (SR-Phlx-2010-155) to amend the fees assessed for use of the Testing Facility 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 8. (Rel. 34-63257)

A proposed rule change filed by NASDAQ Stock Market (SR-NASDAQ-2010-145) to amend the fees assessed for use of the Testing Facility 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 8. (Rel. 34-63258)

A proposed rule change filed by NASDAQ OMX BX (SR-BX-2010-075) to amend the fees assessed for use of the Testing Facility 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 8. (Rel. 34-63259)

A proposed rule change filed by Stock Clearing Corporation of Philadelphia (SR-SCCP-2010-03) to amend certain administrative provisions of its By-Laws and Rules has become effective pursuant to Section 19(b)(3)(A)(iii) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63268)

A proposed rule change filed by the NASDAQ Stock Market to add new Rule 7014 to enable NASDAQ members to qualify for a monthly fee credit (SR-NASDAQ-2010-141) 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 8. (Rel. 34-63270)

A proposed rule change filed by NYSE Amex amending its options fee schedule to reflect fees charged for co-location services (SR-NYSEAmex-2010-101) 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 8. (Rel. 34-63274)

A proposed rule change filed by the NASDAQ Stock Market to establish a program for managed data solutions (SR-NASDAQ-2010-138) 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 8. (Rel. 34-63276)

Financial Industry Regulatory Authority filed a proposed rule change under Rule 19b-4 (SR-FINRA-2010-058) to delay the effective date of the changes to the FINRA trade reporting and Order Audit Trail System rules approved in SR-FINRA-2010-043. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63277)

Proposed Rule Changes

The Commission noticed a proposed rule change (SR-FINRA-2010-055) submitted by the Financial Industry Regulatory Authority pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend FINRA Rule 6140 (Other Trading Practices). Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63256)

The Commission issued notice of a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2010-95) pursuant to Rule 19b-4 under the Exchange Act to list and trade Shares of the ETFS Asian Gold Trust. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63267)

Approval of Proposed Rule Change

The Commission approved a proposed rule change submitted by the New York Stock Exchange (SR-NYSE-2010-67) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 changing the NYBX order execution sequence. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63266)

JOINT INDUSTRY PLAN RELEASES

Immediate Effectiveness of Proposed Amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information

The Options Price Reporting Authority filed a notice of filing and immediate effectiveness of a proposed amendment pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder (SR-OPRA-2010-03) to revise the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information to serve as the operating agreement for OPRA LLC. Publication is expected in the Federal Register during the week of November 8. (Rel. 34-63273)

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