Following is a schedule of Commission meetings, which will be conducted under provisions of the Government in the Sunshine Act. Meetings will be scheduled according to the requirements of agenda items under consideration.
Open meetings will be held in the Auditorium, Room L-002 at the Commission's headquarters building, 100 F Street, N.E., Washington, D.C. Visitors are welcome at all open meetings, insofar as space is available. Persons wishing to photograph or videotape Commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting.
Any member of the public who requires auxiliary aids such as a sign language interpreter or material on tape to attend a public meeting should contact SECInterpreter@SEC.gov at least three business days in advance. For any other reasonable accommodation related disability contact DisabilityProgramOfficer or call 202-551-4158.
Open Meeting - Friday, December 3, 2010 - 10:00 a.m.
The subject matter of the Open Meeting will be:
The Commission will consider a recommendation to propose joint rules with the Commodity Futures Trading Commission relating to the definitions of "Swap Dealer," "Security-Based Swap Dealer," "Major Swap Participant," Major Security-Based Swap Participant," and "Eligible Contract Participant."
Commissioner Aguilar, as duty officer, determined that no earlier notice thereof was possible.
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.
Field Hearing - Tuesday, December 7, 2010 - 9:00 a.m.
The Securities and Exchange Commission will hold its second field hearing to examine the municipal securities markets on Tuesday, Dec. 7, 2010 at 9:00 a.m.
The hearing will include panel discussions focusing on market stability and liquidity, investor impact, self-regulation, accounting and Build America Bonds.
The panel discussion and presentations will take place in the Auditorium of the Commission's headquarters at 100 F Street, NE, Washington, D.C. and will be open to the public with seating on a first-come, first-served basis. Visitors will be subject to security checks. The hearing also will be webcast live at www.sec.gov.
For further information, please contact the Office of the Secretary at (202) 551-5400.
In the Matter of Milowe Allen Brost a/k/a Milo Brost
On November 30, 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 Milowe Allen Brost a/k/a Milo Brost.
The Order alleges that from at least 1999 to 2008, Brost created and controlled several successive marketing organizations to offer and sell the securities of various companies to investors. Brost recruited and trained salespersons to bring in new investors under a multi-level marketing model. These salespersons acted under Brost's direction in offering and selling the securities. The Order further alleges that on November 12, 2010, a default judgment was entered against Brost, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Merendon Mining (Nevada) Inc., et al., Civil Action Number C10-955RAJ, in the United States District Court for the Western District of Washington.
A hearing will be held by an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-63392; File No. 3-14144)
In the Matter of Priscilla G. Sabado
On November 30, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 15(b)(6) and 21C of the Securities Exchange Act of 1934, and Section 203(f) of the Investment Advisers Act (Order) against Priscilla G. Sabado. The Division of Enforcement alleges that Sabado, a former AXA Advisors registered representative, made material misrepresentations and omissions while offering oil and gas working interest to several clients. According to the Division of Enforcement, Sabado misrepresented or omitted material information regarding the risks of the returns, the projected returns and her family's investment.
Based on the above, the Division of Enforcement alleges that Sabado willfully violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations contained in the Order are true, and to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest.
The Order requires the Administrative Law Judge to issue an initial decision no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 33-9160; 34-63394; IA-3116; File No. 3-14145)
In the Matter of Arnold McClellan and Annabel McClellan
The Securities and Exchange Commission today charged a former Deloitte Tax LLP partner and his wife with repeatedly leaking confidential merger and acquisition information to family members overseas in a multi-million dollar insider trading scheme.
The SEC alleges that Arnold McClellan and his wife Annabel, who live in San Francisco, provided advance notice of at least seven confidential acquisitions planned by Deloitte's clients to Annabel's sister and brother-in-law in London. After receiving the illegal tips, the brother-in-law took financial positions in U.S. companies that were targets of acquisitions by Arnold McClellan's clients. His subsequent trades were closely timed with telephone calls between Annabel McClellan and her sister, and with in-person visits with the McClellans. Their insider trading reaped illegal profits of approximately $3 million in U.S. dollars, half of which was to be funneled back to Annabel McClellan.
The UK Financial Services Authority (FSA) has announced charges against the two relatives - James and Miranda Sanders of London. The FSA also charged colleagues of James Sanders whom he tipped with the nonpublic information in the course of his work at his London-based derivatives firm. Sanders's tippees and clients of his trading firm made approximately $20 million in U.S. dollars by trading on the inside information.
According to the SEC's complaint, Arnold McClellan had access to highly confidential information while serving as the head of one of Deloitte's regional mergers and acquisitions teams. He provided tax and other advice to Deloitte's clients that were considering corporate acquisitions.
The SEC alleges that between 2006 and 2008, James Sanders used the non-public information obtained from the McClellans to purchase derivative financial instruments known as "spread bets" that are pegged to the price of the underlying U.S. stock. The trading started modestly, with James Sanders buying the equivalent of 1,000 shares of stock in a company that Arnold McClellan's client was attempting to acquire. Subsequent deals netted significant trading profits, and eventually James Sanders was taking large positions and passing along information about Arnold McClellan's deals to colleagues and clients at his trading firm as well as to his father.
Among the confidential impending transactions allegedly revealed by McClellan:
The SEC's complaint alleges the following chronology involving insider trading around the Kronos transaction:
The SEC's complaint charges Arnold and Annabel McClellan with violating the antifraud provisions of the federal securities laws. The complaint seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and financial penalties.
The SEC acknowledges the assistance of the UK Financial Services Authority, the U.S. Attorney's Office for the Northern District of California, and the Federal Bureau of Investigation during the investigation. [SEC v. Arnold McClellan and Annabel McClellan, Case No. CV-105412 (JCS) (N.D. Cal.)] (LR-21758)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change by the NYSE Amex (SR-NYSEAmex-2010-106) amending NYSE Amex Equities Rule 5190 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 November 29. (Rel. 34-63381)
A proposed rule change by New York Stock Exchange (SR-NYSE-2010-073) amending NYSE Rule 5190 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 November 29. (Rel. 34-63382)
A proposed rule change filed by the Financial Industry Regulatory Authority (SR-FINRA-2010-062) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934 to extend the proposed implementation period for the rule changes approved in SR-FINRA-2010-042 (Verification of Assets). Publication is expected in the Federal Register during the week of November 29. (Rel. 34-63383)
A proposed rule change filed by BATS Exchange (SR-BATS-2010-035) to extend the Penny Pilot Program 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 29. (Rel. 34-63385)
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