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 — Wednesday, February 13, 2008 - 10:00 a.m.
The subject matter of the open meeting scheduled for Wednesday, February 13, will be:
Closed Meeting — Friday, February 15, 2008 - 10:00 a.m.
The subject matter of the closed meeting scheduled for Friday, February 15, will be: Formal orders of investigation; Institution and settlement of injunctive actions; Institution and settlement of administrative proceedings of an enforcement nature; Resolution of litigation claims; and A regulatory matter regarding a financial institution.
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.
Chyhe Becker Named Assistant Chief Economist in SEC Office of Economic Analysis
The Securities and Exchange Commission today announced the appointment of Chyhe K. Becker as an Assistant Chief Economist in the Office of Economic Analysis.
Ms. Becker, who will join the SEC staff on March 3, will oversee the Office of Litigation Support and manage the Commission's economic analysis conducted in support of the SEC's enforcement program.
"Chyhe is an exceptionally talented and dedicated economist," said James Overdahl, SEC Chief Economist. "She brings a wealth of experience to the agency and I am confident that under her leadership, the Commission's enforcement program will benefit from thoughtful, well-executed economic analyses."
Ms. Becker brings more than 14 years of experience in economic and litigation consulting to her new position. Prior to joining the Commission staff, Ms. Becker served as a Principal at Chicago Partners, LLC. Her experience includes time at Deloitte Financial Advisory Services LLP, Deloitte and Touche LLP, and Andersen LLP. Ms. Becker received a Ph.D. and MBA from the Graduate School of Business at the University of Chicago and a B.A. with honors from Yale University. (Press Rel. 2008-13)
RULES AND RELATED MATTERS
Proposed Extension of Auditor Attestation Report on Internal Control Over Financial Reporting Requirement for Non-Accelerated Filers
On February 1, the Commission proposed to extend temporary rule and form amendments that would postpone the date by which smaller public companies must comply with the auditor's attestation report on internal control over financial reporting mandated by Section 404(b) of the Sarbanes-Oxley Act of 2002. Pursuant to the proposed extension, a non-accelerated filer would need to provide its auditor's attestation report on internal control over financial reporting in its annual report for a fiscal year ending on or after Dec. 15, 2009. Comments on the proposed amendments should be received by the Commission within 30 days after publication of the proposal in the Federal Register. (Rels. 33-8889; 34-57258; File No. S7-06-03)
Electronic Filing and Revision of Form D
The Commission issued a release adopting rule amendments mandating the electronic filing of information required by Securities Act of 1933 Form D through the Internet. The release also adopts revisions to Form D and to Regulation D in connection with the electronic filing requirement. The revisions simplify and restructure Form D and update and revise its information requirements.
For further information, please contact Corey A. Jennings, Attorney-Advisor, Office of Small Business Policy, or Mark W. Green, Senior Special Counsel (Regulatory Policy), Division of Corporation Finance, at (202) 551-3460. (Rels. 33-8891; 34-57280; 39-2453; IC-28145; File No. S7-12-07.)
Commission Revokes Registration of Securities of TAM Restaurants, Inc. for Failure to Make Required Periodic Filings
On February 6, the Commission revoked the registration of each class of registered securities of TAM Restaurants, Inc. (TAM) 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, TAM 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 TAM Restaurants, Inc. and Dismissing Aerofoam Metals, Inc. (Order) 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 TAM's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against TAM in In the Matter of Laminaire Corp. (n/k/a Cavico Corp.), et al., Administrative Proceeding File No. 3-12658. The Order also dismisses Aerofoam Metals, Inc. from the proceeding.
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 . . . .
For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Laminaire Corp. (n/k/a Cavico Corp.), et al., Administrative Proceeding File No. 3-12658, Exchange Act Release No. 55901 (June 13, 2007). (Rel. 34-57275; File No. 3-12658)
In the Matter of William Patrick Borchard (CPA)
On February 6, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (Order) against William Patrick Borchard. The Order finds that, on Jan. 15, 2008, the Commission filed a complaint against Borchard in SEC v. Gregory B. Raben, et al. (Civil Action No. CV-08-0250-EMC). On Jan. 25, 2008, the court entered an order permanently enjoining Borchard, by consent, from future violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder.
Based on the above, the Order suspends Borchard from appearing or practicing before the Commission as an accountant, with the right to apply to resume appearing or practicing before the Commission after three years. William Patrick Borchard consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-57282; AAE Rel. 2782; File No. 3-12949)
SEC v. F. Douglas Murrell
The Commission announced that on Jan. 30, 2008, it filed a complaint in the U.S. District Court for the Western District of Texas against F. Douglas Murrell (Murrell). Murrell is a resident of Austin, Texas, and is the owner and operator of Capital Consulting Group.
The complaint alleges that in two separate private transactions from July 2004 through September 2004, Murrell sold the common stock of Stinger Systems, Inc. (Stinger), formerly United Consulting Corporation (UCC) to persons who resold the stock to the public via quotation in the Pink Sheets. The complaint further alleges that at no time during the stock sales was a registration statement in effect or filed by Stinger or UCC, and no valid exemption from registration was available for these entities. The complaint also alleges that on or about Sept. 23, 2004, Murrell represented to Stinger's counsel that his son controlled UCC at the time of both private sales to obtain a legal opinion that the shares sold in both transactions should be issued without restrictive legend. In fact, Murrell controlled UCC at the time of both private transactions. The complaint further alleges that, as a result of the fraudulent sales transactions by Murrell and others, 181,000 Stinger shares were sold through the Pink Sheets during the first two weeks of public trading, which represented approximately 18% of Stinger's public float, and generated net sales proceeds of over $1.044 million.
On Feb. 4, 2008, the Honorable Lee Yeakel, U.S. District Judge for the Western District of Texas, entered a final judgment against Murrell, enjoining him from future violations of Sections 5(a) and 5(c) of the Securities Act of 1933. The court also ordered Murrell to pay disgorgement of $55,000, and prejudgment interest of $13,178.95. Further, the court ordered Murrell to be permanently barred from participating in any offering of a penny stock, and from inducing or attempting to induce the purchase or sale of any penny stock. Murrell consented to the entry of the final judgment without admitting or denying any of the allegations of the Commission's complaint. [SEC v. F. Douglas Murrell, Civil Action No. 1-08-CV-00086-LY WDTX] (LR-20448)
Former KPMG Consulting Principal Settles SEC Charges for Role in Peregrine Accounting Fraud
The Commission today filed a settled enforcement action against a former principal and managing director of KPMG Consulting LLC for his role in deceiving investors in a major corporate accounting fraud.
Larry A. Rodda was charged by the SEC in 2004 with aiding and abetting a massive financial fraud orchestrated by senior officers at Peregrine Systems, Inc., a San Diego software company that has since been acquired by Hewlett-Packard Company. According to the SEC's complaint, Rodda knowingly signed four sham software license agreements that allowed Peregrine to improperly record approximately $22 million in revenue. Rodda has agreed to pay an $80,000 financial penalty to settle the SEC's charges.
According to the SEC's complaint, Rodda and eight other defendants fraudulently inflated the product revenues Peregrine reported in SEC filings and elsewhere from its fiscal year 2000 through the third quarter of its fiscal year 2002. In February 2003, Peregrine restated its financial results for 11 quarters, reducing previously reported revenue of $1.34 billion by more than $507 million.
The sham software license agreements signed by Rodda made it appear that Peregrine had actually sold software to end-users through Rodda's employer, KPMG Consulting. In fact, based on oral side agreements with a Peregrine executive, Rodda knew that his firm would have no payment obligation on the software license agreements. The Commission also alleges that Rodda helped Peregrine conceal the true nature of one of these agreements from Peregrine's auditors at Arthur Andersen when he signed a false audit confirmation.
Rodda pleaded guilty in November 2004 to criminal charges brought by the U.S. Attorney's Office for the Southern District of California. He pleaded guilty to one count of conspiracy to commit securities fraud, wire fraud, bank fraud and falsification of the books, records and accounts of a public corporation. On Jan. 23, 2008, Rodda was sentenced to six months in the custody of the Bureau of Prisons, six months of home detention, and two years of supervised release. He was ordered to pay a $100 mandatory special assessment. Twelve other individuals - including Peregrine's former CEO and CFO - have pleaded guilty in the ongoing criminal case.
Without admitting or denying the SEC's allegations, Rodda agreed to be enjoined from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in addition to paying the financial penalty. The settlement is subject to the approval of the U.S. District Court for the Southern District of California. [SEC v. Stephen P. Gardner, et al., Civil Action No. 04 CV 2002 JAH (RBB) (S.D. Cal.)] (LR-20449; AAE Rel. 2781)
INVESTMENT COMPANY ACT RELEASES
Bear Stearns Asset Management, Inc., et al.
A notice has been issued giving interested persons until February 26 to request a hearing on an application filed by Bear Stearns Asset Management, Inc., et al. for an order to permit (a) series of certain open-end management investment companies to issue shares (ETS) redeemable in large aggregations only and (b) secondary market transactions in ETS to occur at negotiated market prices. (Rel. IC-28143 - February 5)
Immediate Effectiveness of Proposed Rule Change
A proposed rule change (SR-BSE-2008-06) filed by the Boston Stock Exchange regarding a proposed combination between the Montréal Exchange Inc. and TSX Group Inc. 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 February 4. (Rel. 34-57260)
Approval of Proposed Rule Changes
The Commission approved a proposed rule change (SR-Phlx-2007-91) submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the Philadelphia Stock Exchange to require all non-Streaming Quote Trader Registered Option Traders to submit a list of options for intended assignment to the Exchange. Publication is expected in the Federal Register during the week of February 11. (Rel. 34-57263)
The Commission approved a proposed rule change (SR-CHX-2007-27) submitted by the Chicago Stock Exchange to eliminate a requirement that a participant have a formal written agreement to use another participant's give-up. Publication is expected in the Federal Register during the week of February 11. (Rel. 34-57264)
The Commission approved a proposed rule change (SR-PHLX-2007-68) and Amendment Nos. 1 and 2 thereto submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the Philadelphia Stock Exchange relating to customized U.S. dollar-settled foreign currency options. Publication is expected in the Federal Register during the week of February 11. (Rel. 34-57265)
The Commission approved a proposed rule change (SR-Amex-2006-31), as modified by Amendment Nos. 1, 2, and 3 thereto, submitted pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 by the American Stock Exchange relating to annual shareholder meeting requirements. Publication is expected in the Federal Register during the week of February 11. (Rel. 34-57268)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change, as modified by Amendment No. 1 thereto, by the Chicago Board Options Exchange (SR-CBOE-2008-05) to allow CBOE to list up to seven expiration months for reduced-value and jumbo options that overlie broad-based security indexes for which full-value options are used by CBOE to calculate a constant three-month volatility index. Publication is expected in the Federal Register during the week of February 4. (Rel. 34-57261)
Proposed Rule Change
NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities, Inc., filed a proposed rule change (SR-NYSEArca-2008-06) relating to the dissemination of the index value for Equity Index-Linked Securities pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of February 11. (Rel. 34-57273)
SECURITIES ACT REGISTRATIONS
RECENT 8K FILINGS