Statement from Chairman Cox Regarding Senate Confirmation of SEC Commissioner Nominees
Securities and Exchange Commission Chairman Christopher Cox today made the following statement after today's U.S. Senate confirmation of three Commissioner nominees:
(Press Rel. 2008-125)
RULES AND RELATED MATTERS
Modernization of the Oil and Gas Reporting Requirements
The Commission proposed revisions to its oil and gas reporting requirements in Regulation S-K and Regulation S-X, as well as Industry Guide 2. The revisions are intended to provide investors with a more meaningful and comprehensive understanding of oil and gas reserves, which should help investors evaluate the relative value of oil and gas companies. In the three decades that have passed since adoption of these requirements, there have been significant changes in the oil and gas industry. The proposed amendments are designed to modernize and update the oil and gas disclosure requirements to align them with current practices and changes in technology. The proposed amendments would also codify Industry Guide 2 in Regulation S-K, with several additions to, and deletions of, current Industry Guide items. They would further harmonize oil and gas disclosures by foreign private issuers with the proposed disclosures for domestic issuers. Comments should be received on or before 60 days after publication in the Federal Register. (Rels. 33-8935; 34-58030, S7-15-08)
Proposed Amendments to Rule 15a-6 under the Securities Exchange Act of 1934
The Commission proposed amendments to Rule 15a-6 under the Securities Exchange Act of 1934, which provides conditional exemptions from broker-dealer registration for foreign entities engaged in certain activities involving certain U.S. investors. Publication is expected in the Federal Register during the week of June 30. (Rel. 34-58047; Press Rel. 2008-124)
SEC Bars Joshua M. Eudowe from Association with a Broker, Dealer or Investment Adviser
On June 26, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against Joshua M. Eudowe (Eudowe).
The Order finds that on June 20, 2008, a final judgment was entered by consent against Eudowe, 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 Exchange Act Rule 10b-5 in the civil action entitled Securities and Exchange Commission v. Joshua M. Eudowe, 08-CV-5386, in the United States District Court for the Southern District of New York.
The Order finds further that the Commission's complaint alleged that from December 26 through Dec. 29, 2006, Eudowe engaged in a fraudulent trading scheme whereby he made unauthorized purchases of two thinly-traded stocks, FRMO Corp. (FRMO) and CreditRiskMonitor.com, Inc. (CRMZ), by using Goldstein's private password, without Goldstein's knowledge or consent, to place market orders to purchase several thousand shares of FRMO and CRMZ in Goldstein's client accounts. According to the complaint, Eudowe's unauthorized trading caused the stock prices of FRMO and CRMZ to spike, both exceeding 52-week highs. The complaint further alleged that Eudowe then sold several thousand shares of FRMO and CRMZ from his personal brokerage account at the inflated prices caused by his trading scheme, thereby profiting from his unauthorized trading in Goldstein's client accounts.
Based on the above, the Order bars Eudowe from association with any broker or dealer or investment adviser, with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission. Eudowe consented to the issuance of the Order without admitting or denying any of the findings in the Order, except that he admitted to the entry of the injunction. (Rels. 34-58031; IA-2748; File No. 3-13083)
In the Matter of Rubin Investment Group, Inc., et al.
On June 26 the Commission accepted the settlement offers made by Rubin Investment Group, Inc. (RIG) and Daniel Rubin (Rubin), respondents in previously instituted proceedings brought by the Commission. The Commission found that in or around August 2003, in exchange for the stock of Marx Toys & Entertainment Corp. (MRXT) and The Classica Group, Inc. (Classica), RIG, Rubin and others manipulated upward the price of the companies' stock. RIG and Rubin did this, in part, to pump the stock price above a certain price limitation that existed at that time for issuers listed on the NASDAQ, to create profits from the inflated market, and to generate more business for RIG.
The Commission's order finds that, among other things, despite the terms of MRXT's and Classica's Form S-8 registration statements filed with the Commission, and the requirements of Commission Form S-8, RIG and Rubin knew that RIG was a corporate entity, not a natural person, and therefore RIG was barred from receiving Form S-8 shares; that RIG did not intend to provide bona fide services to either MRXT or Classica; and that RIG and others engaged in efforts both to promote MRXT and Classica to potential investors and to raise capital for the issuers in exchange for the discounted Form S-8 shares RIG received. RIG and Rubin also knew that RIG and others engaged in efforts to artificially inflate the price of MRXT's and Classica's stock in exchange for the Form S-8 shares, and that the Form S-8 registration statements contained or incorporated by reference materially false or misleading statements and omissions which concealed the true nature of RIG's mission and the attendant compensation.
In accordance with their settlement offers, the Commission ordered that: (i) RIG and Rubin cease and desist from committing or causing violations and any future violations of the relevant antifraud provisions; and (ii) RIG and Rubin be barred from participating in any offering of a penny stock. RIG and Rubin consented to the issuance of the order without admitting or denying the Commission's findings. (Rels. 33-8936; 34-58032; File No. 3-11293)
In the Matter of Steven Sirianni
On June 27, 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 Steven Sirianni (Sirianni).
In the Order, the Division of Enforcement alleges that between October 2003 and March 2004, Sirianni received $75,800 in undisclosed compensation for soliciting customer purchases of World Information Technology, Inc. (World Information) stock. Between August 25 and Dec. 24, 2003, Sirianni solicited purchases of World Information stock from twelve brokerage customers. Those twelve customers purchased a total of 106,900 World Information shares.
The Order further alleges that on June 10, 2008, a final judgment was entered against Sirianni, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. World Information Technology, Inc., et al., Civil Action Number 06-CV-13181, in the United States District Court for the Southern District of New York.
Sirianni, age 59, is a resident of Wausau, Wisconsin. Between March 2003 and October 2004, he was a stock broker with Berthel, Fisher & Company Financial Services, Inc., a registered broker-dealer located in Wausau, Wisconsin.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Sirianni an opportunity to establish any defenses, and to determine what, if any, remedial action is appropriate in the public interest against Sirianni pursuant to Section 15(b) of the Exchange Act. The Commission directed that an Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-58046; File No. 3-13084)
INVESTMENT COMPANY ACT RELEASES
Orders of Deregistration Under the Investment Company Act
Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2008-62) to Extend the Quarterly Options Series Pilot Program until July 10, 2009 has become immediately 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 June 30. (Rel. 34-58018)
A proposed rule change filed by the International Securities Exchange (SR-ISE-2008-49) to extend the Quarterly Options Series Pilot Program until July 10, 2009 has become immediately 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 June 30. (Rel. 34-58019)
A proposed rule change filed by the International Securities Exchange (SR-ISE-2008-48) to extend the Short Term Options Series Pilot Program until July 12, 2009 has become immediately 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 June 30. (Rel. 34-58020)
A proposed rule change filed by the National Stock Exchange to amend NSX rules to provide for an optional limit cap price on any pegged Zero Display Reserve Order (SR-NSX-2008-10) has become immediately 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 June 30. (Rel. 34-58021)
Approval of Proposed Rule Change
The Commission granted approval of proposed rule change (SR-FICC-2008-02 ) filed by the Fixed Income Clearing Corporation under Section 19(b)(1) of the Exchange Act that allows FICC to amend the rules of the Government Securities Division to mandate Demand Comparison submission and processing for blind-brokered repo trades that are submitted by a specified cut-off time. Publication is expected in the Federal Register during the week of June 30. (Rel. 34-58025)
Proposed Rule Change
The Commission issued notice of a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2008-63) relating to listing and trading of shares of the MacroShares Medical Inflation Trusts. Publication is expected in the Federal Register during the week of June 30. (Rel. 34-58024)
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