Commission Seeks Public Comment on Asset-Backed Issuers and Mortgage-Related Pools Under Investment Company Act
The Securities and Exchange Commission today voted unanimously to request public comment on the treatment of asset-backed issuers as well as real estate investment trusts (REITs) and other mortgage-related pools under the Investment Company Act.
Through an advance notice of proposed rulemaking, the SEC is seeking public input on possible amendments the agency might consider proposing to Rule 3a-7, which excludes certain issuers of asset-backed securities from having to comply with the requirements of the Investment Company Act. An advance notice of proposed rulemaking provides the public the opportunity to weigh in even before the SEC develops a formal rule proposal.
Through a separate concept release, the SEC is seeking public interpretations of a provision in the Act – Section 3(c)(5)(C) – that may be used by some companies engaged in the business of acquiring mortgages and mortgage-related instruments such as some REITs. A concept release is a Commission-approved document that poses an idea or ideas to the public to get their views.
“We are inviting public comment in light of the significant developments in the asset-backed and mortgage markets. We want to assure that our regulatory approach is updated to reflect the current market environment while still meeting our investor protection goals,” said SEC Chairman Mary L. Schapiro.
Public comments should be received within 60 days from the date of publication in the Federal Register. (Press Rel. 2011-176).
Commission Seeks Public Comment on Use of Derivatives by Mutual Funds and Other Investment Companies
The Securities and Exchange Commission today voted unanimously to seek public comment on a wide range of issues raised by the use of derivatives by mutual funds and other investment companies regulated under the Investment Company Act.
The SEC is seeking public input through a concept release, which is a Commission-approved document that poses an idea or ideas to the public to get their views. The Commission will use the comments received in response to this concept release to help determine whether regulatory initiatives or guidance is needed that would continue to protect investors and fulfill the purposes underlying the Investment Company Act.
“The derivatives markets have undergone significant changes in recent years, and the Commission is taking this opportunity to seek public comment and ensure that our regulatory approach and interpretations under the Investment Company Act remain current, relevant, and consistent with investor protection,” said SEC Chairman Mary L. Schapiro.
The concept release is a continuation of the SEC’s ongoing review of mutual funds’ use of derivatives announced last year. The concept release requests public input on the issues that the SEC staff has been examining for potential ways to improve the regulation of mutual funds’ use of derivatives.
Public comments should be received within 60 days from the date of publication in the Federal Register. (Press Rel. 2011-175).
Fee Rate Advisory #2 for Fiscal Year 2012
The Securities and Exchange Commission today announced that in fiscal year 2012 the fees that public companies and other issuers pay to register their securities with the Commission will be set at $114.60 per million dollars.
The Commission determined this new rate in accordance with procedures required under the securities laws. Accordingly, the Commission consulted with both the Congressional Budget Office and the Office of Management and Budget regarding the annual adjustment.
A copy of the Commission's order, including the calculation methodology, is available at http://www.sec.gov/rules/other/2011/33-9255.pdf.
The securities laws require the Commission to make annual adjustments to the rates for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934. The Commission must set rates for the fees paid under Section 6(b) to levels that the Commission projects will generate collections equal to annual statutory target amounts. The statutory target amount for fiscal year 2012 is $425 million. The annual adjustment to the fee rate under Section 6(b) also sets the annual adjustment to the fee rates under Sections 13(e) and 14(g).
Under changes made by the Dodd-Frank Act, the annual rate changes for fees paid under Section 6(b) of the Securities Act of 1933 and Sections 13(e) and 14(g) of the Securities Exchange Act of 1934 must take effect on the first day of each fiscal year. Therefore, effective Oct. 1, 2011, the Section 6(b) fee rate applicable to the registration of securities, the Section 13(e) fee rate applicable to the repurchase of securities, and the Section 14(g) fee rates applicable to proxy solicitations and statements in corporate control transactions will decrease from $116.10 per million dollars to $114.60 per million dollars. The Section 6(b) rate is also the rate used to calculate the fees payable with the Annual Notice of Securities Sold Pursuant to Rule 24f-2 under the Investment Company Act of 1940.
The Commission will issue further notices as appropriate to keep the public informed of the effective date of the fee rate changes under Section 6(b), Section 13(e) and Section 14(g). These notices will be posted at the Commission's Internet Web site at http://www.sec.gov. (Press Rel. 2011-173).
Commission Names Kathleen Weiss Hanley As Deputy Chief Economist and Deputy Director of Riskfin
Washington, D.C., Aug. 29, 2011 – The Securities and Exchange Commission today announced that Kathleen Weiss Hanley has been named Deputy Director and Deputy Chief Economist for the SEC’s Division of Risk, Strategy, and Financial Innovation (RiskFin).
RiskFin was created in September 2009 to provide interdisciplinary analysis to help inform the Commission’s policymaking, rulemaking, enforcement, and examinations. The division encompasses the former Office of Economic Analysis, Office of Risk Assessment, and Office of Interactive Disclosure. Its staff has expertise in disciplines including economics, risk analysis, finance, law, mathematics and statistics.
As Deputy Director and Deputy Chief Economist, Dr. Hanley will play an integral role in the division’s economic analysis of policymaking, particularly cost-benefit analysis. She also will be responsible for directing and coordinating the division’s research activities.
“Dr. Hanley is a distinguished financial economist with significant experience in variety of regulatory settings, having recently joined us from the Federal Reserve Board, and has an unparalleled reputation for conducting high-quality financial research,’ said RiskFin Director and SEC Chief Economist Craig Lewis. “She will be instrumental in our ongoing efforts to improve the economic analysis in our rulemakings.”
Dr. Hanley began her new role on August 22. She previously served as a Senior Economist at the Board of Governors of the Federal Reserve System. From 2005 to 2010, she was a Senior Financial Economist in the SEC’s Office of Economic Analysis and later in RiskFin. Before that, she was on the faculty at the University of Michigan and the University of Maryland. She holds an undergraduate degree from Indiana University and received her Ph.D. from the University of Florida while visiting the SEC as a graduate student.
Dr. Hanley’s academic work focuses on securities issuance, market microstructure, and structured finance. She has published widely on litigation risk in offerings, information content of prospectuses, short selling in IPOs, closed-end fund discounts, price stabilization, and venture capital. In addition to her academic background, “her familiarity with the SEC allows her to hit the ground running,” said Lewis. (Press Rel. 2011-170).
Commission Recovers CFO’s Bonus And Stock Sale Profits Received During Beazer Homes Accounting Fraud
Pursuant to Section 304 of the Sarbanes Oxley Act, on August 30 2011, the Commission filed an action against James O’Leary (O’Leary), the former CFO of Beazer Homes USA, Inc., an Atlanta, Georgia-based homebuilder (Beazer), seeking to recover bonuses, other incentive and equity-based compensation and stock sale profits received by O’Leary following the filing of Beazer’s fiscal year 2006 financial statements, which statements were ultimately restated due to material misconduct. Without admitting or denying the Commission’s allegations, O’Leary has agreed to reimburse Beazer $1,431,022 in cash within 30 days following the Court’s entry of an order approving the settlement. This amount represents O’Leary’s entire fiscal year 2006 cash incentive bonus, the total money he received from Beazer in exchange for all his restricted stock units taken as additional 2006 incentive compensation, and $274,525 in stock sale profits. The settlement is subject to Court approval. This is the fourth enforcement action that the Commission has brought arising out of Beazer’s accounting misconduct. Earlier this year, the Commission reached a settlement with Beazer’s CEO Ian McCarthy to recover several million dollars in bonus compensation and stock profits received. See Lit. Rel. No. 21873 (Mar. 4, 2011). Beazer also settled an enforcement action in September 2008, and the Commission charged Beazer’s former chief accounting officer Michael Rand in July 2009. [Securities and Exchange Commission v. James O’Leary, Case No. 1:11-cv-2901 (N.D. Ga.)] (LR-22074; see also Press Rel. 2011-172).
Commission Revokes Registration of Securities of M (2003) Plc (F/K/A Marconi Plc) for Failure to Make Required Periodic Filings
On August 31, 2011, the Commission revoked the registration of each class of registered securities of M (2003) PLC (f/k/a Marconi PLC) (M (2003) PLC) for failure to make required periodic filings with the Commission.
Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, M (2003) PLC consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to M (2003) PLC (f/k/a Marconi PLC) finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of M (2003) PLC’s securities pursuant to Section 12(j) of the Exchange Act. This Order settled the proceedings brought against M (2003) PLC in In the Matter of M (2003) PLC (f/k/a Marconi PLC), et al., Administrative Proceeding File No. 3-14470.
Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:
No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . . (Rel. No. 34-65229; File No. 3-14470).
Commission Revokes Registration of Securities of M.B.A. Holdings, Inc. for Failure to Make Required Periodic Filings
On August 31, 2011, the Commission revoked the registration of each class of registered securities of M.B.A. Holdings, Inc. (M.B.A. Holdings) for failure to make required periodic filings with the Commission.
Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, M.B.A. Holdings consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to M.B.A. Holdings, Inc. finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of M.B.A. Holdings’ securities pursuant to Section 12(j) of the Exchange Act. This Order settled the proceedings brought against M.B.A. Holdings in In the Matter of M.B.A. Holdings, Inc., et al., Administrative Proceeding File No. 3-14466.
Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:
No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . . (Rel. No. 34-65230; File No. 3-14466).
Commission Charges Five Senior Executives With Financial Fraud At Syntax-Brillian Corporation
On August 30, 2011, the U.S. Securities and Exchange Commission filed charges in connection with a financial fraud perpetrated by senior management and members of the Board of Directors of Syntax-Brillian Corporation, a developer and distributor of high-definition LCD (liquid crystal display) televisions under the Olevia brand name. The SEC’s Complaint alleges multiple violations of the antifraud, reporting, books and records, internal control, certification, and misrepresentation to auditor provisions of the federal securities laws.
According to the SEC’s Complaint, from at least June 2006 through April 2008, James Li, a Syntax Director who at times was also its President, Chief Operating Officer and Chief Executive Officer, and Thomas Chow, a Syntax Director and its Chief Procurement Officer, engaged in a complex scheme to overstate Syntax’s financial results. The scheme involved Syntax publicly reporting significant sales of LCD televisions in China, when in fact the vast majority of these sales never occurred. The scheme was concealed with fake shipping and sales documents, and further concealed using a circular cash flow that created the façade of substantial revenues from Syntax’s purported sales in China. This circular cash flow involved Syntax sending millions of dollars to its primary manufacturer, Taiwan Kolin Co., Ltd., under the guise of paying various invoices, and Kolin, through the direction of its Chairman of the Board, Christopher Liu, and Kolin’s executive and board member, Roger Kao, forwarding the cash to Syntax’s purported customer in Hong Kong, South China House of Technology Consultants Co. Ltd. (SCHOT). SCHOT then forwarded the cash back to Syntax as payment for the fictitious sales.
The SEC also alleges that Wayne Pratt, Syntax’s Chief Financial Officer, ignored red flags of improper revenue recognition and participated in preparing backdated documentation that was provided to Syntax’s auditors to support fictitious fiscal 2006 year-end sales. Pratt also ignored indications of impaired assets, agency sales, and potential collectability issues.
The SEC’s Complaint also alleges that, during the relevant period, Li and Chow engaged in insider trading.
Without admitting or denying the allegations in the SEC’s Complaint or the Commission’s findings, Li, Kao, Liu, and Pratt have reached settlements with the SEC, as described below.
The SEC is seeking a permanent injunction, disgorgement with prejudgment interest, civil penalties, and an officer and director bar against Chow for his role in the fraudulent scheme.
The SEC’s investigation was conducted by Christine Neal, Paul Gumagay, Rachel Nonaka, and Michael Hoess. The SEC acknowledges the assistance and cooperation of the Securities and Futures Commission (Hong Kong). [SEC v. James Li (A/K/A Ching Hua Li), Thomas Chow (A/K/A Man Kit Chow), Roger Kao (A/K/A Chao Chun Kao), Christopher Liu (A/K/A Chi Lei Liu), and Wayne A. Pratt, Civil Action No. CV-11-1712-PHX-SRB (SRB) (D. Ariz.) (Filed Aug. 30, 2011)] (LR-22075; AAER-3315).
District Court Enters Final Judgments of Permanent Injunction and Other Relief Against Defendants Pharma Holdings, Inc., Edward Klapp Iv and Edward Klapp Jr.
The Securities and Exchange Commission announced that on August 29, 2011, the United States District Court for the Southern District of Florida entered final judgments of permanent injunction against Pharma Holdings, Inc. (“Pharma Holdings”), Edward Klapp IV (“Klapp IV”) and Edward Klapp, Jr. (“Klapp Jr.”). The judgment against Klapp IV also imposed a disgorgement of $1,180,682.80, representing profits gained as a result of the conduct alleged in the complaint, together with prejudgment interest thereon in the amount of $65,407.39; and a civil penalty in the amount of $130,000. The judgment against Klapp Jr. also imposed a disgorgement of $504,696.86, representing profits gained as a result of the conduct alleged in the complaint, together with prejudgment interest thereon in the amount of $27,959.17; and a civil penalty in the amount of $130,000. In addition, both Klapp IV and Klapp Jr. are prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Securiteis and Exchange Act, 15 U.S.C. § 78, or that is required to file reports pursuant to Section 15(d) of the Exchange Act , 15 U.S.C. § 78o(d).
The SEC’s complaint alleged that from 2005 through September 2009, Pharma Holdings, purportedly in the pharmaceutical supply business, and the Klapps raised approximately $5 million from at least 80 European investors, primarily residing in the United Kingdom, through the fraudulent offer and sale of Pharma Holdings stock. In connection with its stock offerings, Pharma Holdings issued false press releases and made false postings on its website overstating Pharma Holdings’ sales revenues and net profits, and touting non-existent business agreements with multinational corporations, including a purported IPO and/or acquisition by a large corporation or mutual fund. Further, Pharma Holdings and the Klapps failed to disclose that Edward Klapp IV had been criminally convicted of a felony involving fraud. [Securities and Exchange Commission v. Pharma Holdings, Inc., Edward Klapp IV and Edward Klapp Jr., Case No. 10-cv-81615 (S.D. Fla.)] (LR-22076).
In the Matter of Daxor Corp.
An Administrative Law Judge has issued an Initial Decision in Daxor Corp., Admin. Proc. No. 3-14055. The Initial Decision finds that Daxor Corporation (Daxor) is an investment company under Section 3(a)(1)(C) of the Investment Company Act of 1940 (the Act), and it does not qualify for the exemption under Section 3(b)(1) of the Act. Because Daxor is not registered as an investment company, it is in violation of Section 7(a) of the Act. The Initial Decision orders Daxor to cease and desist from violating Section 7(a) of the Act, and to register as an investment company under Section 8 of the Act, or otherwise come into compliance with the Act. (ID Rel. No. 428; File No. 3-14055).
Commission Charges Convicted Felon, Insurance Broker with Offering Fraud in the Matter of Safe Harbor Private Equity Fund
The United States Securities and Exchange Commission (Commission) announced an enforcement action filed on August 29, 2011 against James Davis Risher, a convicted felon, and Daniel Joseph Sebastian, a former insurance broker, with violations of the antifraud provisions of the federal securities laws. From no later than January 2007 until July 2010, Risher and Sebastian operated a Ponzi scheme through which they raised approximately $22 million from more than 100 investors nationwide and in Canada for a purported private equity fund which they marketed under the names Managed Capital Fund, Safe Harbor Private Equity Fund, and Preservation of Principal Fund (collectively, the Fund).
The SEC’s complaint, filed in the United States District Court for the Middle District of Florida, charges Risher and Sebastian with making several material misrepresentations and omissions to investors in the offer and sale of unregistered securities. The SEC alleges they told investors the Fund earned annual returns ranging from 14% to 124% by investing in public equity securities through a FINRA-regulated broker-dealer and sent investors false account statements indicating such returns. Risher invested only a fraction of investor funds in equities through a broker-dealer and misappropriated the majority the money for personal use. Furthermore, Risher represented that the Fund was registered in Bermuda and both he and Sebastian falsely claimed that the Fund was audited annually by a Bermudan auditor. Sebastian further misrepresented to investors that their principal would be guaranteed against loss.
The SEC’s enforcement action charges Risher and Sebastian with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The SEC’s enforcement action further charges Risher with violating Sections 206(1), (2), and (4) of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-8 thereunder, and Sebastian with aiding and abetting Risher’s violations of Section 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. The SEC seeks permanent injunctions, disgorgement, and financial penalties against Risher and Sebastian.
The U.S. Attorney’s Office for the Middle District of Florida, which conducted a parallel investigation of this matter, has also filed charges against Risher. The SEC acknowledges assistance from the U.S. Attorney’s Office for the Middle District of Florida, the Federal Bureau of Investigation, the Internal Revenue Service, the United States Postal Inspector Service, the Florida Department of Law Enforcement, and the Florida Office of Financial Regulation. [SEC v. Risher, et. al. Civil Action No. 6:11-cv-1440-18-GJK (M.D. Fla., filed August 29, 2011)] (LR-22077; see also Press Rel. 2011-171).
In the Matter of Sean Mansfield
The Commission announced the issuance of 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 Sean Mansfield. The Order finds that Sean Mansfield was a partner with Financial Counselors, LLC, an investment adviser registered with the Commonwealth of Massachusetts. On March 29, 2011, Mansfield pled guilty in the United States District Court for the District of Massachusetts to an Information charging him with 17 counts of wire fraud in violation of Title 18 United States Code Section 1343, two counts of embezzlement from a pension fund in violation of Title 18 United States Code Section 664, and four counts of money laundering in violation of Title 18 United States Code Section 1957(a), in the criminal action entitled United States v. Sean Mansfield, Criminal Action No. 11-30009-MAP, in the United States District Court for the District of Massachusetts. The Information alleged that, among other things, Mansfield devised a scheme to defraud clients of Financial Counselors and other investment advisory clients and obtained more than $3 million from such clients.
Based on the above, the Order bars Sean Mansfield from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. Sean Mansfield consented to the issuance of the Order without admitting or denying any of the findings, except as to the Commission’s jurisdiction over him and the subject matter of the proceedings, and the findings regarding his guilty plea in Section III.2 of the Order, which are admitted. (IA-3269; File No. 3-14523).
Commission Obtains Emergency TRO and Other Relief Against Belal K. Faruki and Neural Markets, LLC
The Commission today announced an asset freeze against a Chicago-area money manager and his hedge fund advisory firm that the SEC charged with lying to prospective investors in their startup quantitative hedge fund. A federal court lifted a seal order in the case on Monday, August 29, 2011, after freezing the assets at the SEC’s request. The Court also entered a Preliminary Injunction Order by Consent of all defendants today.
The SEC alleges that Belal K. Faruki, who lives in Aurora, Illinois, and his advisory firm, Neural Markets, LLC., presented themselves as managers of a start-up quantitative hedge fund with a history of successful trading. According to the complaint, since early 2010 Faruki and Neural Markets have solicited several highly sophisticated individuals to invest in the “Evolution Quantitative 1X Fund,” a hedge fund that supposedly used a proprietary algorithm to carry out an arbitrage strategy involving trading in liquid ETFs, and defrauded at least one investor out of $1 million. The SEC alleges that Faruki and Neural Markets lied throughout the solicitation process about their performance track record; about the existence of other wealthy investors in the fund; that Faruki had invested his own money in the fund; and that Faruki and Neural Markets had engaged a top-tier auditor to assist in preparing quarterly and annual financial statements for the fund.
According to the SEC’s complaint, filed in federal court in Chicago, Illinois, Faruki and Neural Markets solicited sophisticated investors by presenting themselves as managers of a start-up quantitative hedge fund that purportedly began trading in 2009. The complaint alleges that from January 2010 through at least October 2010, Faruki and Neural Markets made numerous false and misleading statements during their solicitation of investors. Faruki claimed that he had created the Evolution 1X Fund managed by Neural Markets and that the quant fund had a track record of positive returns since at least December 2009; that other wealthy investors had invested $5 million in the fund; that Faruki had invested his own money in the fund so that his interests were aligned with the other supposed investors; and that Faruki and Neural Markets had engaged a reputable auditor to audit quarterly and annual financial statements for Neural Markets and the fund. The SEC alleged that these claims were false as Faruki and Neural Markets did not have the performance track record they touted, the Evolution 1X Quantitative Fund attracted just one investor, Faruki never invested his own money in the fund and Faruki and Neural Markets never engaged the reputable audit firm. The SEC further alleged that, based on these misrepresentations, at least one highly sophisticated individual invested $1 million in the Evolution Quantitative 1X Fund. According to the complaint, Faruki and Neural Markets continued to deceive the investor after he invested money, falsely claiming that the fund had generated positive returns when, in reality, it suffered losses in two months of trading.
The Commission alleges that by engaging in the course of conduct described above, Faruki and Neural Markets violated 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 Section 206(4) of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-8 therunder and, in the alternative, Faruki aided and abetted Neural Markets’ primary violations of 206(4) of the Advisers Act and Rule 206(4)-8 thereunder. The SEC’s complaint – filed August 10, 2011 – sought (i) emergency relief, including a temporary restraining order and asset freeze, (ii) permanent injunctions, disgorgement of ill-gotten gains and financial penalties from Faruki and Neural Markets, and (iii) disgorgement from relief defendants Evolution Quantitative 1X Fund and Evolution Quantitative 1X, LLC, based on allegations that they received ill-gotten gains. That same day, the Court granted the emergency relief requested by the SEC. The litigation continues on the claims and relief sought by the Commission.
On the same day the SEC filed its complaint on Aug. 10, 2011, the court granted the SEC’s request for emergency relief including a temporary restraining order and asset freeze. The Preliminary Injunction Order entered today with the consent of the Defendants continues the terms of the TRO until the final resolution of the action. (LR-22079; see also Press Rel. 2011-174).
In the Matter of Anthony Scolaro
The Commission today filed a settled civil enforcement action against Anthony Scolaro, a former portfolio manager at the hedge fund investment adviser Diamondback Capital Management, LLC, charging Scolaro with using inside information to trade ahead of the November 29, 2009 announced acquisition of Axcan Pharma Inc. The SEC’s complaint also names Diamondback as a relief defendant.
In its complaint, the SEC alleges that Arthur Cutillo and Brien Santarlas, two former attorneys with the international law firm of Ropes & Gray LLP, misappropriated from their law firm material, nonpublic information concerning the acquisition of Axcan. As alleged in the complaint, they tipped the inside information, through another attorney, to Zvi Goffer, a proprietary trader at the broker-dealer Schottenfeld Group LLC, in exchange for kickbacks. The SEC alleges that Goffer tipped the inside information to fellow Schottenfeld proprietary trader Franz Tudor, who traded in the securities of Axcan, and tipped the information to his friend Scolaro. The SEC alleges that based on this inside information, Scolaro traded in the securities of Axcan on behalf of a Diamondback hedge fund, resulting in illicit profits for the fund of approximately $1.1 million.
To settle the SEC’s charges, Scolaro consented to the entry of a final judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $125,980, prejudgment interest of $14,420, and a civil penalty of $62,945. Diamondback, as a relief defendant, has consented to a final judgment ordering it to disgorge $962,486 in gains resulting from Scolaro’s trades, plus prejudgment interest of $110,246. In addition, Scolaro consented to the entry of an SEC order barring him from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. Scolaro previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Anthony Scolaro, 11-CR-429 (S.D.N.Y.) (WHP), and is awaiting sentencing. (LR-22078).
The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue.
Registration statements may be viewed in person in the Commission's Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission's Web site at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.
S-1 American Standard Energy Corp., ONE PLAZA WEST, 100 MILL PLAIN ROAD, DANBURY, CT, 06811, (757) 961-0866 - 17,459,249 ($88,122,432.00) Equity, (File 333-176546 - Aug. 30) (BR. 04) S-1 AMERICAN APPAREL, INC, 747 WAREHOUSE STREET, LOS ANGELES, CA, 90021, 213-488-0226 - 43,219,679 ($38,249,415.92) Equity, (File 333-176547 - Aug. 30) (BR. 09B) S-1 New Source Energy Corp, 914 NORTH BROADWAY SUITE 230, OKLAHOMA CITY, OK, 73102, 405-272-3028 - 0 ($100,000,000.00) Equity, (File 333-176548 - Aug. 30) (BR. ) N-2 BlackRock Municipal 2027 Term Trust, 55 EAST 52ND STREET, NEW YORK, NY, 10055, (800) 882-0052 - 0 ($1,000,000.00) Equity, (File 333-176553 - Aug. 30) (BR. ) S-1 Grizzly Gold Corp., 3651 LINDELL ROAD, SUITE D, LAS VEGAS, NV, 89103, 702-932-9959 - 23,900,000 ($2,390,000.00) Equity, (File 333-176555 - Aug. 30) (BR. 02) S-8 FLEXIBLE SOLUTIONS INTERNATIONAL INC, 2614 QUEENSWOOD DR, VICTORIA B C V8N 1X5, A1, 2504779969 - 945,000 ($2,635,930.00) Equity, (File 333-176556 - Aug. 30) (BR. 06C) S-4 ACI WORLDWIDE, INC., 120 BROADWAY, SUITE 3350, NEW YORK, NY, 10271, 402-390-7600 - 0 ($157,580,831.00) Equity, (File 333-176557 - Aug. 30) (BR. 03C) S-1 ENERTECK CORP, 10701 CORPORATE DRIVE, SUITE 150, STAFFORD, TX, 77477, (281) 240-1787 - 4,000,000 ($2,200,000.00) Equity, (File 333-176558 - Aug. 30) (BR. 06A) S-3 CAS MEDICAL SYSTEMS INC, 44 EAST INDUSTRIAL ROAD, BRANFORD, CT, 06405, 2034886056 - 6,244,149 ($16,203,566.65) Equity, (File 333-176560 - Aug. 30) (BR. 10A) S-4 Euramax International, Inc., 5445 TRIANGLE PARKWAY, SUITE 350, NORCROSS, GA, 30092, (770) 449-7066 - 0 ($375,000,000.00) Debt, (File 333-176561 - Aug. 30) (BR. ) S-3 USEC INC, 2 DEMOCRACY CENTER, 6903 ROCKLEDGE DRIVE, BETHESDA, MD, 20817, 3015643200 - 22,826,407 ($52,272,472.03) Equity, (File 333-176564 - Aug. 30) (BR. 04C) S-4 WINDSTREAM CORP, 4001 RODNEY PARHAM RD., LITTLE ROCK, AR, 72212, 5017487000 - 0 ($941,199,084.00) Equity, (File 333-176565 - Aug. 30) (BR. 11A) S-4 PLATINUM ENERGY SOLUTIONS, INC., 2100 WEST LOOP SOUTH, STE 1600, HOUSTON, TX, 77027, 8322528783 - 0 ($115,000,000.00) Non-Convertible Debt, (File 333-176566 - Aug. 30) (BR. ) S-8 MONEYGRAM INTERNATIONAL INC, 1550 UTICA AVENUE SOUTH, MINNEAPOLIS, MN, 55416, 9525913000 - 10,000,000 ($23,600,000.00) Equity, (File 333-176567 - Aug. 30) (BR. 03A) S-8 CHILDRENS PLACE RETAIL STORES INC, 500 PLAZA DRIVE, SECAUCUS, NJ, 07094, 2015582400 - 0 ($77,980,000.00) Other, (File 333-176569 - Aug. 30) (BR. 02B)
Form 8-K is used by companies to file current reports on the following events:
8-K reports may be viewed in person in the Commission's Public Reference Branch at 100 F Street, N.E., Washington, D.C. To obtain paper copies, please refer to information on the Commission's Web site at http://www.sec.gov/answers/publicdocs.htm. In most cases, you can view and download this information by using the search function located at http://www.sec.gov/edgar/searchedgar/companysearch.html.
STATE NAME OF ISSUER CODE 8K ITEM NO. DATE COMMENT 1 800 FLOWERS COM INC DE 2.02,9.01 08/30/11 30DC, INC. MD 1.01,9.01 08/24/11 3M CO DE 1.01,2.03,9.01 08/24/11 ACI WORLDWIDE, INC. DE 8.01,9.01 08/30/11 ACTIVE NETWORK INC DE 7.01,9.01 08/30/11 ACXIOM CORP DE 8.01 08/30/11 ADA-ES INC CO 1.01,9.01 08/29/11 AEHR TEST SYSTEMS CA 1.01,2.03,9.01 08/25/11 ALLIANCE FINANCIAL CORP /NY/ NY 8.01,9.01 08/30/11 ALTRIA GROUP, INC. VA 5.07 05/19/11 AMEND AlumiFuel Power Corp NV 5.03,9.01 08/30/11 AMBICOM HOLDINGS, INC NV 5.02 08/26/11 AMERICAN AIRLINES INC DE 8.01 08/30/11 AMERICAN ELECTRIC POWER CO INC NY 7.01 08/30/11 AMERICAN SCIENTIFIC RESOURCES INC NV 1.01,2.03 08/25/11 AMR CORP DE 8.01 08/30/11 Amwest Imaging Inc NV 5.02 08/29/11 ARCH COAL INC DE 9.01 06/14/11 AMEND Atlantic Coast Financial CORP MD 3.01 08/25/11 AVIS BUDGET GROUP, INC. DE 1.01,2.03,9.01 08/26/11 AVISTA CORP WA 8.01 08/26/11 BAR HARBOR BANKSHARES ME 5.02 08/30/11 AMEND BARNES & NOBLE INC DE 2.02,9.01 08/30/11 BARRY R G CORP /OH/ OH 1.01 08/24/11 BE Resources Inc. CO 5.02,9.01 08/30/11 BEACON ENTERPRISE SOLUTIONS GROUP INC NV 7.01,9.01 08/30/11 BELDEN INC. DE 1.01 08/26/11 BIOJECT MEDICAL TECHNOLOGIES INC OR 1.01,3.02,9.01 08/29/11 BIONOVO INC DE 8.01,9.01 08/30/11 Bitzio, Inc. NV 3.02 08/22/11 BJs RESTAURANTS INC CA 8.01,9.01 08/30/11 BOEING CO DE 5.03,9.01 08/29/11 BOEING CO DE 5.07 05/02/11 AMEND BORGWARNER INC DE 5.02 08/30/11 BRIGHTPOINT INC IN 5.02,9.01 08/29/11 Brooklyn Federal Bancorp, Inc. X1 8.01 08/24/11 Buckeye Oil & Gas, Inc. FL 8.01,9.01 08/26/11 BUREAU OF NATIONAL AFFAIRS INC DE 1.01,5.02,9.01 08/29/11 CAPELLA EDUCATION CO 1.01 08/29/11 CardioNet, Inc. CA 8.01 08/25/11 Cardium Therapeutics, Inc. DE 8.01,9.01 08/25/11 Care Investment Trust Inc. MD 5.02,9.01 08/25/11 CARMAX INC VA 1.01,1.02,2.03,9.01 08/26/11 CB RICHARD ELLIS GROUP INC DE 1.01,2.03,9.01 08/26/11 CENTER BANCORP INC NJ 8.01,9.01 08/24/11 CENTRAL BANCORP INC /MA/ MA 5.02 08/30/11 CHEESECAKE FACTORY INC DE 8.01,9.01 08/29/11 China Information Technology, Inc. 1.01,9.01 08/30/11 AMEND China TMK Battery Systems Inc. NV 1.01,2.01,9.01 08/30/11 CIMAREX ENERGY CO DE 5.02,5.03,9.01 08/25/11 Clean Energy Fuels Corp. DE 1.01,2.03,3.02,9.01 08/24/11 CNB FINANCIAL CORP/PA PA 7.01,9.01 08/30/11 COFFEE HOLDING CO INC NV 2.02 08/30/11 COMMVAULT SYSTEMS INC DE 5.07 08/24/11 COMVERGE, INC. DE 5.07 05/05/11 AMEND CONCURRENT COMPUTER CORP/DE DE 2.02,9.01 08/30/11 CSG SYSTEMS INTERNATIONAL INC DE 5.07 05/17/11 AMEND CVS CAREMARK CORP DE 1.01,9.01 08/24/11 CYBERDEFENDER CORP CA 3.01 08/24/11 DALE JARRETT RACING ADVENTURE INC FL 5.02,9.01 07/11/11 DANA HOLDING CORP DE 5.02,9.01 08/25/11 DAYTON POWER & LIGHT CO OH 1.01,1.02,2.03,9.01 08/24/11 DBUBS 2011-LC3 Mortgage Trust DE 9.01 08/30/11 De Yang International Group Ltd DE 3.02,5.01,5.02,5.03 05/25/11 AMEND DELTA AIR LINES INC /DE/ DE 1.01,8.01,9.01 08/24/11 DIGAGOGO VENTURES CORP DE 1.01,9.01 08/29/11 Digitiliti Inc DE 5.02 08/29/11 Discover Card Execution Note Trust DE 8.01 08/29/11 DOLLAR GENERAL CORP TN 2.02,7.01,9.01 08/30/11 DONALDSON CO INC DE 2.02,9.01 08/29/11 Douglas Lake Minerals Inc. NV 7.01,9.01 08/30/11 DPL INC OH 1.01,1.02,2.03,9.01 08/24/11 DREW INDUSTRIES INC DE 8.01,9.01 08/29/11 DSW Inc. OH 2.02,9.01 08/30/11 Eastern Insurance Holdings, Inc. PA 8.01,9.01 08/26/11 EASTON-BELL SPORTS, INC. DE 5.02 08/25/11 ECOLAB INC DE 8.01,9.01 08/29/11 EMPIRE PETROLEUM CORP DE 1.01,7.01 08/17/11 ENPRO INDUSTRIES, INC NC 9.01 12/12/07 AMEND ENTECH SOLAR, INC. DE 5.07 08/24/11 EPOCRATES INC DE 5.02 08/30/11 EXPRESS SCRIPTS INC DE 1.01,2.03,9.01 08/29/11 EZCORP INC DE 1.02,9.01 08/28/11 Federal Home Loan Bank of Atlanta X1 2.03 08/30/11 Federal Home Loan Bank of Chicago X1 2.03 08/24/11 Federal Home Loan Bank of Cincinnati X1 2.03,9.01 08/24/11 Federal Home Loan Bank of Dallas 2.03,9.01 08/24/11 Federal Home Loan Bank of Des Moines X1 2.03,9.01 08/26/11 Federal Home Loan Bank of Indianapoli X1 2.03,9.01 08/30/11 Federal Home Loan Bank of New York X1 2.03,9.01 08/24/11 Federal Home Loan Bank of Pittsburgh PA 2.03,9.01 08/24/11 Federal Home Loan Bank of San Francis X1 2.03 08/24/11 Federal Home Loan Bank of Seattle 2.03 08/24/11 Federal Home Loan Bank of Topeka 2.03,9.01 08/24/11 FIRST M&F CORP/MS MS 5.02,9.01 08/30/11 FIRST MARBLEHEAD CORP 2.02,7.01,9.01 08/30/11 FIRST PACTRUST BANCORP INC MD 1.01,3.02,3.03, 5.03,8.01,9.01 08/30/11 FIRST PLACE FINANCIAL CORP /DE/ DE 3.01,9.01 08/24/11 FIRST SECURITY GROUP INC/TN TN 5.02 08/24/11 FORCE FUELS INC. 1.01,1.02,3.02, 5.02,9.01 08/24/11 Forex International Trading Corp. NV 2.02,7.01,9.01 08/30/11 Forex International Trading Corp. NV 2.02,7.01,9.01 08/30/11 GenOn Energy, Inc. DE 5.02,8.01 08/24/11 Global Geophysical Services Inc DE 5.02 08/29/11 Global Investor Services, Inc. UT 1.01,3.02,9.01 08/24/11 Global Smoothie Supply, Inc. TX 8.01 08/29/11 Golden Minerals Co 5.07 08/30/11 GOLDSANDS DEVELOPMENT CO DE 5.07 08/29/11 GOOD SAM ENTERPRISES, LLC DE 7.01 08/26/11 Gordmans Stores, Inc. DE 2.02,9.01 08/30/11 Graystone Co DE 5.02,5.07,8.01 08/24/11 GT Advanced Technologies Inc. DE 5.02,5.07,9.01 08/24/11 Hampden Bancorp, Inc. DE 7.01,9.01 08/29/11 HAMPSHIRE GROUP LTD DE 1.01,2.01,3.02, 5.02,8.01,9.01 08/24/11 HANSEN MEDICAL INC 5.02 08/29/11 HARRIS & HARRIS GROUP INC /NY/ NY 8.01,9.01 08/30/11 HEARTLAND FINANCIAL USA INC DE 8.01,9.01 08/30/11 HELICOS BIOSCIENCES CORP DE 1.01,7.01,9.01 08/26/11 Heron Lake BioEnergy, LLC MN 1.01 08/29/11 Heron Lake BioEnergy, LLC MN 1.01 08/30/11 HINES REAL ESTATE INVESTMENT TRUST IN 8.01 08/30/11 HollyFrontier Corp DE 7.01,9.01 08/29/11 HollyFrontier Corp DE 9.01 08/24/11 HollyFrontier Corp DE 5.07 05/12/11 AMEND HUDSON TECHNOLOGIES INC /NY NY 5.07 08/30/11 IAC/INTERACTIVECORP DE 2.01,9.01 08/25/11 ILLINOIS TOOL WORKS INC DE 4.01,4.02 08/30/11 ILLINOIS TOOL WORKS INC DE 1.01,2.03,9.01 08/30/11 AMEND IRON MINING GROUP, INC. 1.03,2.04 08/24/11 ISRAMCO INC DE 8.01,9.01 08/30/11 JACKSONVILLE BANCORP INC /FL/ FL 8.01,9.01 08/30/11 JONES SODA CO WA 5.02 08/29/11 KEATING CAPITAL INC 7.01,9.01 08/25/11 KEWAUNEE SCIENTIFIC CORP /DE/ DE 1.01,5.02,5.03, 5.07,9.01 08/24/11 LAZARE KAPLAN INTERNATIONAL INC DE 2.02,8.01 08/30/11 LIONS GATE ENTERTAINMENT CORP /CN/ 1.01,8.01,9.01 08/30/11 LKQ CORP DE 7.01,9.01 08/25/11 LUBYS INC DE 1.01,2.03,9.01 08/25/11 MAKEMUSIC, INC. MN 5.07,9.01 08/24/11 MATTEL INC /DE/ DE 8.01 08/25/11 MEDTRONIC INC MN 5.07 08/25/11 MEMC ELECTRONIC MATERIALS INC DE 5.02 08/26/11 MICROELECTRONICS TECHNOLOGY Co NV 1.01 08/30/11 MIDSOUTH BANCORP INC LA 8.01,9.01 08/30/11 MILLER ENERGY RESOURCES, INC. 2.02,7.01,9.01 08/30/11 MINE SAFETY APPLIANCES CO PA 5.02 08/25/11 MOD PAC CORP NY 8.01 08/30/11 MONSANTO CO /NEW/ DE 5.02,9.01 08/24/11 MPHASE TECHNOLOGIES INC NJ 1.01 08/30/11 MULTI COLOR Corp OH 1.01,2.03,3.02, 8.01,9.01 08/26/11 Nalco Holding CO 8.01,9.01 08/30/11 National American University Holdings DE 5.02,8.01,9.01 08/29/11 NEAH POWER SYSTEMS, INC. NV 8.01,9.01 08/30/11 NESS TECHNOLOGIES INC 5.07,8.01,9.01 08/30/11 NEW JERSEY RESOURCES CORP NJ 1.01,1.02,2.03 08/30/11 NEWS CORP 8.01,9.01 08/30/11 Next 1 Interactive, Inc. NV 1.02,2.03,9.01 08/26/11 NEXTERA ENERGY INC FL 2.03 08/26/11 NICHOLAS FINANCIAL INC FL 8.01,9.01 08/30/11 Nine Mile Software, Inc. NV 1.01,2.01,3.02, 5.01,5.02,9.01 08/22/11 NORTHERN OIL & GAS, INC. 5.02,9.01 08/29/11 NUGEN HOLDINGS, INC. DE 9.01 01/29/10 AMEND NUPATHE INC. DE 7.01,8.01,9.01 08/29/11 OLIN CORP VA 7.01,9.01 08/30/11 OMEGA PROTEIN CORP NV 7.01,9.01 08/29/11 PACIFIC MERCANTILE BANCORP CA 1.01,3.02,7.01,9.01 08/26/11 PARKER DRILLING CO /DE/ DE 5.02,9.01 08/29/11 PEOPLES LIBERATION INC DE 5.02 08/24/11 PERCEPTRON INC/MI MI 5.02 08/23/11 PERMA FIX ENVIRONMENTAL SERVICES INC DE 5.02,5.07,8.01,9.01 08/24/11 Pike Electric CORP 1.01,1.02,2.03,9.01 08/24/11 POWER SOLUTIONS INTERNATIONAL, INC. DE 5.03,5.07,7.01,9.01 08/25/11 PREMIER EXHIBITIONS, INC. FL 5.07 08/25/11 PRIME GLOBAL CAPITAL GROUP Inc NV 1.01,9.01 07/01/11 PROGENICS PHARMACEUTICALS INC DE 8.01,9.01 08/30/11 PROSPECT GLOBAL RESOURCES INC. NV 5.02,9.01 08/24/11 PROVECTUS PHARMACEUTICALS INC NV 5.07 08/26/11 PUBLIC MEDIA WORKS INC DE 8.01 08/30/11 PVH CORP. /DE/ DE 2.02,9.01 08/30/11 QSGI INC. DE 1.03 08/26/11 Real Goods Solar, Inc. CO 9.01 06/21/11 AMEND Reef Global Energy VII, L.P. NV 2.01 08/24/11 Reef Global Energy VIII, L.P. 2.01 08/24/11 RENTRAK CORP OR 5.02,5.07 08/24/11 RESMED INC DE 5.02,8.01 08/24/11 ROYAL GOLD INC DE 8.01,9.01 08/30/11 Sagebrush Gold Ltd. NV 2.01,2.03,3.02, 8.01,9.01 08/30/11 Sagent Pharmaceuticals, Inc. DE 5.02,8.01,9.01 08/25/11 Sara Lee Corp MD 5.02 08/30/11 SCHLUMBERGER LTD /NV/ P8 7.01,9.01 08/30/11 SEATTLE GENETICS INC /WA DE 5.02,9.01 08/24/11 SENTRY PETROLEUM LTD. 7.01,9.01 08/29/11 SHARPROCK RESOURCES INC. NV 3.02 08/24/11 SIERRA RESOURCE GROUP INC NV 5.02 08/23/11 SIGNATURE GROUP HOLDINGS, INC. NV 8.01 08/24/11 SMITH A O CORP DE 2.01,9.01 08/26/11 SOHU COM INC DE 8.01,9.01 08/29/11 SPARTON CORP OH 8.01,9.01 08/24/11 SPX CORP DE 1.01 08/24/11 Standard Gold CO 5.02,9.01 08/24/11 Steadfast Income REIT, Inc. MD 1.01,2.01,2.03, 7.01,9.01 08/24/11 STEC, INC. CA 7.01,9.01 08/29/11 Stratus Media Group, Inc NV 9.01 08/29/11 AMEND SUN BANCORP INC /NJ/ NJ 7.01,9.01 08/30/11 SWS GROUP INC DE 2.02,9.01 08/29/11 SWS GROUP INC DE 4.02 08/29/11 SYNTHESIS ENERGY SYSTEMS INC DE 7.01,9.01 08/30/11 TANDY BRANDS ACCESSORIES INC DE 1.01,1.02,2.03 08/25/11 TELTRONICS INC DE 7.01 08/30/11 Territorial Bancorp Inc. MD 8.01,9.01 08/26/11 TIDEWATER INC DE 8.01,9.01 08/26/11 TPC Group Inc. DE 5.02 08/29/11 Transocean Ltd. V8 7.01,9.01 08/30/11 Treaty Energy Corp NV 1.01,9.01 08/11/11 Tree.com, Inc. DE 5.07 08/26/11 UNIGENE LABORATORIES INC DE 8.01,9.01 08/25/11 Unilife Corp DE 2.02,7.01,9.01 08/30/11 Uniontown Energy Inc. NV 5.02 08/25/11 UNITED FIRE & CASUALTY CO IA 7.01,8.01,9.01 08/30/11 UNIVERSAL BIOSENSORS INC DE 1.01,9.01 08/29/11 URANIUM ENERGY CORP NV 1.01,9.01 08/24/11 Vera Bradley, Inc. 2.02,9.01 08/30/11 VERAMARK TECHNOLOGIES INC DE 1.01,2.03 06/16/11 AMEND VERTEX PHARMACEUTICALS INC / MA MA 5.02 08/29/11 VIRTUAL PIGGY, INC. DE 5.03,9.01 08/22/11 Vocus, Inc. DE 7.01,9.01 08/18/11 WASHINGTON POST CO DE 5.07 05/16/11 AMEND WAUSAU PAPER CORP. WI 5.07 04/21/11 AMEND WELLS REAL ESTATE FUND X L P GA 2.01,9.01 08/25/11 WELLS REAL ESTATE FUND XI L P GA 2.01,9.01 08/25/11 Wizard World, Inc. DE 1.01,3.02,9.01 08/19/11 ZBB ENERGY CORP WI 1.01 08/30/11