SEC NEWS DIGEST Issue 2002-88 May 7, 2002 COMMISSION ANNOUNCEMENTS COMMISSION MEETINGS CHANGE IN THE MEETING: DELETION OF ITEM The following item will not be considered at the open meeting scheduled for Wednesday, May 8, 2002: The Commission will not hear oral argument on an appeal by Daniel R. Lehl, et al., from the decision of an administrative law judge. 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) 942-7070. ENFORCEMENT PROCEEDINGS SEC INSTITUTES ADMINISTRATIVE PROCEEDINGS TO SUSPEND OR REVOKE THE REGISTRATION OF ANICOM, INC.'S SECURITIES On May 6, the Commission instituted administrative proceedings against Anicom, Inc. to suspend or revoke the registration of its securities for failing to file annual and quarterly reports. Anicom, formerly a national distributor of wire and cable products based in Rosemont, Illinois, filed for bankruptcy under Chapter 11 in January 2000, just six months after the company had announced that it would restate its financial statements for 1998, 1999, and first quarter 2000, and had placed President and Chief Executive Officer Carl Putnam and Chief Financial Officer Donald Welchko on administrative leave. According to the Order Instituting Proceedings, the Division of Enforcement alleges that Anicom has failed to file annual reports since December 31, 1999 and quarterly reports since March 31, 2000, as required by Section 13(a) of the Securities Exchange Act of 1934 and the rules thereunder. The Division of Enforcement also alleges that Anicom has discontinued business activities and liquidated most of its assets in connection with its petition for bankruptcy. A hearing will be held before an administrative law judge to determine whether the staff's allegations are true and, if so, to determine whether it is necessary or appropriate for the protection of investors to suspend or revoke the registration of Anicom's securities. (Rel. 34-45880; AAE Rel. 1553; File No. 3-10779) SEC SUES FORMER EXECUTIVES AND OTHER EMPLOYEES OF ANICOM, INC. FOR FINANCIAL FRAUD On May 6, the Commission filed a civil enforcement action alleging that from January 1, 1998 through March 30, 2000 six Anicom, Inc. executives and other employees carried out a massive financial fraud at the now- bankrupt company. In the suit, filed in federal court in the Northern District of Illinois, the Commission alleged that during this period, the defendants falsely reported millions of dollars of non-existent sales, including sales to a fictitious customer, and used other fraudulent techniques to inflate Anicom's revenues by over $38 million and net income by over $20 million. To conceal the fraud, certain of the defendants lied to Anicom's outside auditors, lied to the Audit Committee of Anicom's Board of Directors in an internal investigation, and withheld information from the Commission's staff. When aspects of the fraud were eventually revealed to the public, Anicom's shareholders lost more than $80 million. The Commission's complaint alleged that the fraud had two distinct aspects. First, President and Chief Executive Officer Carl E. Putnam, along with Vice President of Sales Daryl T. Spinell, Chief Operating Officer John P. Figurelli, and Billing Manager Renee L. LeVault improperly recognized numerous sales that inflated reported revenues and net profits. Additionally, Chief Financial Officer Donald C. Welchko, with assistance from Figurelli, LeVault, and Vice President of Accounting Ronald M. Bandyk, C.P.A., and with at least Putnam's knowledge, caused Anicom in 1999 to improperly recognize over $11.7 million in sales to a fictitious customer called SCL Integration in order to minimize the effect on income of writing off earlier improper sales. Second, Welchko and Bandyk engaged in fraud by entering journal entries that improperly charged certain expenses to an inadvertently created reserve account and a Restructuring Charge, unjustifiably inflated purchase rebates accrued, and accelerated the recognition of sales between reporting periods. The Commission also alleged that in 1999 Putnam and Welchko misled two investigations into allegations of improper sales at Anicom. In October 1999, Putnam and Welchko directed an employee to lie about his knowledge of improper sales during an internal investigation into allegations of sales misconduct. At the time, Putnam told the employee that Anicom was doing the internal investigation just in case the SEC came calling. In December 1999, the Commission requested that Anicom voluntarily produce information related to sales credits issued in 1999. Welchko instructed an Anicom employee to compile the responsive data but to remove all sales credits relating to SCL Integration. As a result, Anicom produced the requested information to the Commission having removed all evidence of the fictitious customer. The Commission's complaint named the following defendants: Carl E. Putnam, age 52, resides in Naperville, Illinois. Putnam had overall responsibility for Anicom's sales. He became Anicom's President in 1993, a Director in 1994, and was made Chief Executive Officer in September 1999. Putnam signed Anicom's annual report, and participated in making public statements about that and other reports filed with the Commission. On July 18, 2000, the Board of Directors placed him on administrative leave. On September 11, 2000, he resigned all positions. Donald C. Welchko, age 47, resides in Willow Springs, Illinois. Welchko had overall responsibility for Anicom's accounting and finance functions. In 1995, he became Anicom's Chief Financial Officer, and in 1998 was made a Director and an Audit Committee member. Welchko participated in preparing Anicom's annual and quarterly reports filed with the Commission. He also signed Anicom's annual and quarterly reports, and participated in making public statements about those reports. On July 18, 2000, the Board placed him on administrative leave. On September 11, 2000, he resigned all positions. The complaint also names the following people as defendants. John P. Figurelli, 54, a resident of Libertyville, Illinois, was Anicom's Chief Operating Officer. Daryl T. Spinell, 38, a resident of Naperville, Illinois, was Anicom's Vice President of Sales. Ronald M. Bandyk, 37, a resident of LaGrange, Illinois, was Anicom's Vice President of Accounting. Renee L. LeVault, 33, a resident of Huntley, Illinois, managed Anicom's Billing Department. Prior to its January 2001 bankruptcy, Anicom was a wire and cable distribution company that employed nearly 1,200 people nationwide and was based in Rosemont, Illinois. In its complaint, the Commission alleged that the defendants' conduct violated the antifraud, periodic reporting, record keeping, internal controls, and lying to the auditors provisions of the federal securities laws. Accordingly, the Commission requests that the court issue a final judgment of permanent injunction and other relief, enjoining them from violating Sections 17(a)(1) and (3) of the Securities Act of 1933, Sections 10(b), and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1, and 13b2-2 promulgated thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, and 13a-13 promulgated thereunder. The Commission seeks civil monetary penalties from each of the defendants, and disgorgement of ill-gotten gains from Putnam, Welchko, Figurelli, Bandyk, and Spinell. The Commission also seeks an order permanently barring Putnam, Welchko, Figurelli, Spinell, and Bandyk from acting as officers and directors of any public company. [SEC v. Carl E. Putnam, Donald C. Welchko, John P. Figurelli, Daryl T. Spinell, Ronald M. Bandyk, and Renee L. LeVault, United States District Court for the Northern District of Illinois No. 02C 3235] (LR-17504; AAE Rel. 1554) ATTORNEY AND SECURITIES INDUSTRY PROFESSION SANCTIONED FOR ILLEGAL INSIDER TRADING On May 7, the Commission instituted public administrative proceedings against Steven S. Goldberg (Steven Goldberg), an attorney and former registered representative associated with MML Investors Services, Inc., a registered broker-dealer and wholly owned subsidiary of Massachusetts Mutual Life Insurance Company. In an Order Instituting Public Proceeding Pursuant to Sections 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order), the Commission simultaneously accepted Goldberg's Offer of Settlement, barring Goldberg from association with any broker or dealer. Goldberg consented to the issuance of the Order, without admitting or denying the Commission's findings that he engaged in illegal insider trading based on material, nonpublic information obtained in the course of his employment from a client. Goldberg simultaneously consented to entry of a Final Judgment of Permanent Injunction and Other Relief in the U.S. District Court for the Southern District of New York, which (1) permanently enjoins him from further violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; (2) orders him to pay $28,546 in disgorgement plus $3,553 in prejudgment interest; and (3) orders him to pay $57,092, an amount equal to his profits multiplied by two. (Administrative Proceedings In the Matter of Steven S. Goldberg - Rel. 34-45888; File No. 3-10780); [SEC v. Steven S. Goldberg, 02 Civ. 3488 (JES) (S.D.N.Y.)] (LR-17505) INVESTMENT COMPANY ACT RELEASES INDEPENDENCE ONE MUTUAL FUNDS, ET AL. A notice has been issued giving interested persons until May 28 to request a hearing on an application filed by Independence One Mutual Funds, et al. for an order exempting applicants from Section 17(a) of the Investment Company Act. The order would permit certain series of a registered open-end management investment company to acquire all of the assets and liabilities of certain series of another registered open-end management investment company. Because of certain affiliations, applicants may not rely on Rule 17a-8 under the Act. (Rel. IC-25567 - May 3) NEW YORK STATE COLLEGE CHOICE TUITION SAVINGS PROGRAM TRUST FUND, ET AL. An notice has been issued giving interested persons until May 28 to request a hearing on an application filed by New York State College Choice Tuition Savings Program Trust Fund, et al. for an order under Section 17(b) of the Investment Company Act exempting applicants from Section 17(a) of the Act. The order would permit New York State College Choice Tuition Savings Program Trust Fund to purchase shares of certain series of a registered open-end investment company in-kind. (Rel. IC- 25568; May 3) HOLDING COMPANY ACT RELEASES RELIANT ENERGY, ET AL. A supplemental notice has been issued giving interested persons until May 28 to request a hearing on a proposal by Reliant Energy, Incorporated (REI), an exempt holding company, and CenterPoint Energy, Inc. (New REI), REI's wholly owned subsidiary formed for purposes of the proposed transactions. New REI proposes to acquire the securities of certain intermediate holding companies and other subsidiaries, as part of a corporate restructuring and New REI will register as a holding company under section 5 of the Act. Texas Genco Holdings, Inc. and GP LLC, intermediate holding companies that will be formed as part of the restructuring, request exemption from the Act under section 3(a)(1). New REI requests authorization to distribute all of the shares it owns in Reliant Resources, Inc. to New REI's shareholders and authority for an initial public offering of Texas Genco Holdings, Inc.'s common stock. For a period of one year from the date of the Commission's initial order in this matter, New REI, on behalf of itself and its subsidiaries, requests authorization to enter into various types of financing transactions and New REI requests authority to provide goods and services to New REI system companies in accordance with the at-cost standards under the Act. New REI requests that the Commission reserve jurisdiction over the acquisition of certain gas utility subsidiaries to be formed as part of the restructuring. (Rel. 35-27526) SELF-REGULATORY ORGANIZATIONS WITHDRAWAL SOUGHT A notice has been issued giving interested persons until May 28 to comment on the application of Transfinancial Holdings, Inc. to withdraw its Common Stock, par value $.01, from listing and registration on the American Stock Exchange. (Rel. 34-45883) SECURITIES ACT REGISTRATIONS 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 obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . SB-2 INTERNATIONAL BROADCASTING CORP /NV/, 1125 E CLARK AVE, STE A, SANTA MARIA, CA, 93455, 8059385573 - 19,399,962 ($388,000.00) Equity, (File 333-87616 - May. 6) (BR. 09) S-8 F5 NETWORKS INC, 401 ELLIOT AVE WEST, STE 500, SEATTLE, WA, 98119, 2062725555 - 1,500,000 ($18,000,000.00) Equity, (File 333-87618 - May. 6) (BR. 03) S-3 CAL DIVE INTERNATIONAL INC, 400 N SAM HOUSTON PKWY E, SUITE 400, HOUSTON, TX, 77060, 2816180400 - 0 ($119,830,000.00) Equity, (File 333-87620 - May. 6) (BR. 04) S-8 VIVENDI UNIVERSAL, 42 AVENUEDE FRIEDLAND, 75380 PARIS CEDEX, 08 FRANCE, I0, 00000, 0113317171 - 0 ($184,020,000.00) Equity, (File 333-87622 - May. 6) (BR. 02) S-8 PHOENIX INTERNATIONAL INDUSTRIES INC /FL/, 501 SOUTH DIXIE HIGHWAY, WEST PALM BEACH, FL, 33401, 5618325208 - 5,000,000 ($200,000.00) Equity, (File 333-87624 - May. 6) (BR. 37) S-8 AUBURN NATIONAL BANCORPORATION INC, 100 N GAY ST, P O DRAWER 3110, AUBURN, AL, 36831-3110, 3348219200 - 0 ($3,124,650.00) Equity, (File 333-87626 - May. 6) (BR. 07) S-8 COHESION TECHNOLOGIES INC, 2500 FABER PL, PALO ALTO, CA, 94303, 6508560200 - 0 ($370,218.00) Equity, (File 333-87628 - May. 6) (BR. 36) S-8 SOUTHWEST BANCORP OF TEXAS INC, 4400 POST OAK PARKWAY, HOUSTON, TX, 77027, 7132358800 - 1,500,000 ($51,495,000.00) Equity, (File 333-87630 - May. 6) (BR. 07) S-3 AMERICAN MEDICAL TECHNOLOGIES INC/DE, 5555 BEAR LANE, STE 1100, CORPUS CHRISTI, TX, 78405, 3612891145 - 0 ($600,000.00) Equity, (File 333-87634 - May. 6) (BR. 36) SB-2 STONEHAVEN REALTY TRUST, 4150 OLSON MEMORIAL HIGHWAY, MINNEAPOLIS, MN, 55422, 7633981100 - 0 ($1,246,139.00) Equity, (File 333-87636 - May. 6) (BR. 08) S-8 SURGICARE INC/DE, 6699 CHIMNEY ROCK, STE 105, HOUSTON, TX, 77081, 7136651406 - 0 ($116,000.00) Equity, (File 333-87638 - May. 6) (BR. 01) S-4 UNITED RENTALS INC /DE, FOUR GREENWICH OFFICE PARK, GREENWICH, CT, 06830, 2036223131 - 0 ($103,080,000.00) Equity, (File 333-87644 - May. 6) (BR. 06) S-4 SIX FLAGS INC, 11501 NE EXPWY, OKLAHOMA CITY, OK, 73131, 4054752500 - 0 ($480,000,000.00) Non-Convertible Debt, (File 333-87646 - May. 6) (BR. 05) RECENT 8K FILINGS Form 8-K is used by companies to file current reports on the following events: Item 1. Changes in Control of Registrant. Item 2. Acquisition or Disposition of Assets. Item 3. Bankruptcy or Receivership. Item 4. Changes in Registrant's Certifying Accountant. Item 5. Other Materially Important Events. Item 6. Resignations of Registrant's Directors. Item 7. Financial Statements and Exhibits. Item 8. Change in Fiscal Year. Item 9. Regulation FD Disclosure. The following companies have filed 8-K reports for the date indicated and/or amendments to 8-K reports previously filed, responding to the item(s) of the form specified. 8-K reports may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . STATE 8K ITEM NO. NAME OF ISSUER CODE 1 2 3 4 5 6 7 8 9 DATE COMMENT ------------------------------------------------------------------------------------ 1 800 FLOWERS COM INC DE X 05/06/02 800 TRAVEL SYSTEMS INC FL X X 05/02/02 ABN AMRO MORTGAGE CORP SERIES 1999-3 DE X 04/01/02 ACT MANUFACTURING INC MA X X 04/25/02 ALDERWOODS GROUP INC DE X 03/06/02 AMEND ALLIANCE BANCORP OF NEW ENGLAND INC DE X X 05/06/02 ARIZONA PUBLIC SERVICE CO AZ X 04/26/02 AVANT CORP DE X X 05/02/02 BARON CAPITAL TRUST DE X X 04/30/02 BLUE STAR COFFEE INC NV X 05/06/02 AMEND CHOICE HOTELS INTERNATIONAL INC /DE DE X X X 04/30/02 COGENTRIX ENERGY INC NC X X 04/30/02 CREDIT & ASSET REPACKAGING VEHICLE CO DE X X 05/03/02 CREDIT SUISSE FIRST BOSTON MORTGAGE S DE X X 05/03/02 CREDIT SUISSE FIRST BOSTON MORTGAGE S DE X X 05/03/02 CT COMMUNICATIONS INC /NC NC X X 04/30/02 DUALSTAR TECHNOLOGIES CORP DE X X 04/30/02 ETOYS INC DE X X 04/19/02 FAO INC CA X 05/26/02 AMEND GATX CORP NY X 05/06/02 GENESIS ENERGY LP DE X 05/06/02 GENESIS MICROCHIP INC /DE DE X 02/19/02 AMEND GRIFFON CORP DE X X 04/30/02 INDIGINET INC/FL FL X X 03/07/02 AMEND INTERPLAY ENTERTAINMENT CORP DE X X 04/30/02 INTRABIOTICS PHARMACEUTICALS INC /DE DE X X 05/03/02 ISTA PHARMACEUTICALS INC CA X X 05/03/02 IVP TECHNOLOGY CORP NV X 05/06/02 KEYSPAN CORP NY X X 05/06/02 LABORATORY CORP OF AMERICA HOLDINGS DE X 05/06/02 LACLEDE GROUP INC MO X X 05/06/02 LEVI STRAUSS & CO DE X X X 05/06/02 MID-STATE BANCSHARES CA X X 05/01/02 MIDWEST GRAIN PRODUCTS INC KS X 05/06/02 MILACRON INC DE X X X 05/06/02 MILLS CORP DE X 05/01/02 MSC SOFTWARE CORP DE X X 04/19/02 NEUROTECH DEVELOPMENT CORP DE X X 05/02/02 AMEND NEW JERSEY RESOURCES CORP NJ X X 05/06/02 NOBLE DRILLING CORP DE X X 04/30/02 NOVELL INC DE X 05/06/02 NUWAY ENERGY INC DE X 05/03/02 PEMSTAR INC MN X X 05/03/02 PEMSTAR INC MN X X 05/03/02 PEOPLES ENERGY CORP IL X X 05/06/02 PEOPLES ENERGY CORP IL X X 05/06/02 PINNACLE WEST CAPITAL CORP AZ X 04/26/02 PLAINS ALL AMERICAN PIPELINE LP DE X X 05/06/02 PMR CORP DE X X 05/06/02 PR SPECIALISTS INC DE X X X X 05/06/02 PROMOTIONS COM INC DE X 04/18/02 PROTEO INC NV X X 04/25/02 RESTORATION HARDWARE INC CA X X 05/03/02 RIMPAC RESOURCES LTD/NM NV X 04/30/02 SAMSONITE CORP/FL DE X X 05/03/02 SEITEL INC DE X X 05/03/02 SENTIGEN HOLDING CORP DE X X 05/06/02 SEQUA CORP /DE/ DE X X 05/06/02 SERVICE MERCHANDISE CO INC TN X X 02/25/02 SONIC AUTOMOTIVE INC DE X 05/01/02 AMEND SOUTHWEST GAS CORP CA X 05/01/02 STANDARD AUTOMOTIVE CORP DE X 05/06/02 STILWELL FINANCIAL INC DE X X 04/30/02 SUSQUEHANNA MEDIA CO DE X X 05/06/02 TEKNOWLEDGE CORP DE X 05/06/02 TEMPLE INLAND INC DE X X 04/25/02 TIBCO SOFTWARE INC DE X X 04/23/02 TRIQUINT SEMICONDUCTOR INC DE X X 04/29/02 US AIRWAYS GROUP INC DE X X 05/03/02 VALCOM INC /CA/ DE X X 06/30/02 AMEND VESTA INSURANCE GROUP INC DE X X 05/02/02 WAYNE SAVINGS BANCSHARES INC /DE/ DE X 05/01/02 AMEND