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COMMISSION ANNOUNCEMENTSSEC Announces October 29 Roundtable on Mark-To-Market AccountingThe Securities and Exchange Commission announced today that on Oct. 29, 2008, at 9 a.m. ET, it will host the first of two roundtables on "mark-to-market" accounting and current market conditions. The roundtables will provide input to the SEC as part of a Congressionally mandated study pursuant to the Emergency Economic Stabilization Act of 2008. The date and time of the second roundtable will be announced at a later date. "These roundtables will provide the Commission with valuable insights from investors, issuers, and others affected by recent developments in the marketplace," said SEC Chief Accountant Conrad Hewitt. "We are interested in hearing participants' views on transparency and usefulness of reported financial information in times of market turmoil." The first roundtable will consist of two panels. The first panel will discuss the interaction between mark-to-market accounting for financial institutions and the current economic situation. The second panel will focus on potential improvements to the current accounting model and implications of possible changes. The panels will include investors, accountants, standard setters, regulators, business leaders, and other interested parties. Additionally, representatives from the Financial Accounting Standards Board (FASB), International Accounting Standards Board (IASB), and Public Company Accounting Oversight Board (PCAOB) will be present as observers. The panel discussions will focus on:
The roundtable will be held in the auditorium at the SEC's headquarters at 100 F Street NE in Washington, D.C. A final agenda including a list of participants and moderators will be announced at a future date. The roundtable will be open to the public with seating on a first-come, first-served basis. The roundtable also will be webcast on the SEC Web site. The Commission welcomes feedback at any time from investors, financial institutions, auditors and others on the topics to be discussed at the roundtable and on the SEC's study of mark-to-market accounting applicable to financial institutions. Comments may be submitted by any of the following methods: Electronic Comments Use the Commission's Internet comment form, or send an e-mail message to: Paper Comments Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090. All submissions should refer to File No. 4-573. This file number should be included on the subject line if e-mail is used. To help process and review comments more efficiently, please use only one submission method. The Commission is posting all comments on its Web site, and comments will be available for public inspection and copying in the Commission's Public Reference Room on business days between 10 a.m. and 3 p.m. All comments received will be posted publicly without change. Personal identifying information is not edited from submissions. (Press Rel. 2008-252; Rels. 33-8980; 34-58813; File No. 4-573) ENFORCEMENT PROCEEDINGSAlexander & Wade, Inc., SanctionedAlexander & Wade, Inc. (AWI), has been ordered to cease and desist from violations of the registration provisions of the securities laws and to disgorge $2,866,375 of ill-gotten gains. From 2002 to 2005, AWI advised and guided several microcap issuers in raising millions of dollars by selling their common stock to the public in violation of the registration requirements of the federal securities laws and thereby caused violations of Sections 5(a) and 5(c) of the Securities Act of 1933. The sanctions were ordered in an administrative proceeding before an administrative law judge. (Rel. 33-8978; File No. 3-13123) Delinquent Filers' Stock Registrations RevokedThe registrations of the securities of Respondents Jenson International, Inc., and Space Launches Financing, Inc., have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-58786; File No. 3-13184) In the Matter of Stewart KalterOn October 15, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Stewart Kalter. Kalter consented to the issuance of the Order, which orders him to cease and desist from causing certain violations of the federal securities laws, suspends him from association with any broker or dealer for a period of three months, and orders him to pay a civil penalty of $10,000 to the United States Treasury. Pursuant to Kalter's Offer of Settlement, the Order finds that Kalter knowingly signed Form BD on behalf of Vision Securities, Inc., a registered broker-dealer located in Melville, New York, which failed to disclose that the controlling person of Vision Securities was a control person of the firm. The Order finds that by virtue of these actions, Kalter willfully aided and abetted and caused Vision's violations of Sections 15(b)(1) and Section 17(a) of the Exchange Act and Rule 15b3-1 thereunder. The Order also finds that from about October 2005 until about May 2006, Vision Securities solicited investors in connection with a private placement of securities by Issuer X, in exchange for commissions based on the amount Vision raised. The order also finds as follows. A number of the investors who participated in the offering and purchased securities of Issuer X through Vision were solicited by an individual who was not registered as a broker-dealer or approved by a national securities exchange or national securities association to be involved in effecting in securities transactions. This individual was the president of a company that published an on-line, subscription-based newsletter featuring market analysis and stock recommendations (the newsletter publisher). From about October 2005 until about May 2006, Kalter arranged for Vision to pay the newsletter publisher in excess of $200,000, based on the amount invested in the Issuer X private placement by investors solicited by the newsletter publisher's president. When he did so, Kalter knew that neither the publisher nor the president were registered as a broker-dealer and that the newsletter publisher's president was not approved by a national securities exchange or national securities association to be involved in effecting securities transactions. The Order finds that by virtue of these actions, Kalter willfully aided and abetted and caused Vision's violations of Section 15(b)(7) of the Exchange Act and Rule 15b7-1 thereunder. (Rel. 34-58787; File No. 3-13273) Motion by Victor Teicher to Modify Bar Order DeniedThe Commission has denied a motion by Victor Teicher to modify an order barring him from association with any broker, dealer, investment company, investment adviser, or municipal securities dealer. Teicher sought to modify the bar order to permit him to associate with an investment adviser. Teicher had been barred by the Commission following his conviction and the conviction of Victor Teicher & Co., L.P., a former unregistered investment adviser that Teicher controlled, for insider trading. The Commission noted that, in ruling on requests to modify bars, it determines whether, under all the circumstances, "it is consistent with the public interest and investor protection to permit the petitioner to function in the industry without the safeguards provided by the bar." The Commission further noted that administrative bars should "remain in place in the usual case and be removed only in compelling circumstances." Stating that it "remain[ed] troubled about the possibility of further misconduct in the event he is permitted to return to the industry," the Commission determined that "there are no compelling circumstances to justify" the modification Teicher sought. (Rels. 34-58789; IA-2799; File No. 3-8394) In the Matter of Battery Wealth Management, Inc.On October 15, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order pursuant to Sections 203(e) and 203(k) of the Advisers Act as to Battery Wealth Management, Inc. and pursuant to Sections 203(f) and 203(k) as to Wayne Cassaday, (Order) against Battery Wealth Management, Inc. (Battery) and Wayne Cassaday (Cassaday). The Order finds that Albert E. Parish, Jr. (Parish) a vide-president and one-third owner of Battery, operated four investment pools, which, beginning in 2002, Battery recommended to its clients. In February 2007, staff of the Commission's Office of Compliance Inspections and Examinations began an examination of Battery and requested that Battery produce brokerage account statement supporting the claimed account valuations of the various Parish Pools. In March 2007, in response to the staff's request, Parish Parish produced brokerage account statements reflecting account valuations of $11 million in the Stock Pool and $18 million in the Hedged Income Pool as of Dec. 31, 2006. The Commission's staff contacted the broker-dealers that purportedly issued the account statements and determined that the statements were forged. The accounts actually held securities and cash with a value of less than $100,000. Parish also provided the Commission's staff with a commodities account statement purporting to hold approximately $50 million in the Futures Pool. That statement was also fictitious. The account held only $130,000. Subsequently, in April 2007, the scheme ended when the Commission filed an emergency civil injunctive action against Parish, the LLC and a related entity. On May 4, 2007, a federal district court enjoined Parish, and related entities from violating 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 from violating or aiding and abetting violations of Sections 206(1) and (2) of the Investment Advisers Act of 1940. SEC v. Albert E. Parish, Jr., Parish Economics LLC and Summerville Hard Assets LLC, Lit. Rel. No. 10107 (May 9, 2007). Before recommending that Battery's clients invest in the pools, Cassaday reviewed the quarterly account statements provided by Parish's LLC and discussed the investment pools with Parish. Cassaday also viewed Parish's website, which was provided as a direct link from Battery's website. Cassaday ignored certain facts that strongly suggested that Parish was likely deceiving advisory clients. Cassaday had reviewed Parish's personal financial statements, which showed that Parish's sources of reported income were disproportionately low in comparison to the high level of personal expenses reflected by his lavish and flamboyant lifestyle. Cassaday knew that Parish's Loan Pool consisted of Parish's personal IOUs, and that Parish had issued his notes to (and was thus borrowing money from) the IRA accounts of many of Battery's clients. Cassaday had been told that Parish was experiencing personal cash flow problems and that a property Parish owned faced foreclosure. Cassaday also discovered that one of Parish's investment pools had been unable to comply with a redemption request from a Battery client within the requisite 5-day period and instead required six weeks to return the investor's money. Parish admitted to Cassaday that he had deliberately delayed the investor's redemption in hopes of finding a new investor to provide the funds he needed to cover the withdrawal. Nevertheless, Cassaday never took any steps to follow up on these red flags or to inquire whether the pooled funds in which Battery advised its clients to invest were, in fact, investing consistent with the representations made to investors. As a result, Battery violated Sections 206(1) and 206(2) by advising its clients, through Parish and Cassaday, to invest in the investment pools although Parish knew the pools did not have the claimed assets and that the purported returns were fictitious and Cassaday took no steps to verify the pools' assets or returns. By directing its clients to invest in funds that were being looted by Parish, an officer and part-owner of Battery, Battery defrauded its clients. Cassaday provided substantial assistance to the fraudulent scheme by recommending that Battery's clients invest in the pools despite knowing certain facts that strongly suggested that Parish was likely deceiving advisory clients. Cassaday thus willfully aided and abetted and caused Battery's violations of Sections 206(1) and 206(2). Battery's Compliance Manual, which was a generic compliance manual purchased for $179, did not address the particular risks of Battery's business, particularly the conflicts of interest resulting from Parish's operation of a side business that offered and managed pooled funds that Parish and Cassaday recommended to Battery's advisory clients. In addition, the manual did not address conflicts of interest arising from borrowing by insiders from advisory clients. Cassaday, as Battery's president and chief compliance officer, was responsible for the manual and its deficiencies. As a result, Battery willfully violated and Cassaday willfully aided and abetted and caused violations of Section 206(4) of the Advisers Act and Rule 206(4)-7 thereunder which requires investment advisers to adopt and implement written policies and procedures reasonably designed to prevent violation of the Advisers Act and the rules promulgated thereunder and to evaluate annually the effectiveness of those policies and their implementation. Based on the above, the Order censures Battery and requires that Battery cease and desist from committing or causing any violations and any future violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder and that Cassaday cease and desist from committing or causing any violations or future violations of Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-7 thereunder. The Order also bars Cassaday from association with any investment adviser, with the right to reapply for association after one (1) year to the appropriate self-regulatory organization, or if there is none, to the Commission. The Order also directs that Cassaday shall pay disgorgement of $5,864 and prejudgment interest of $867 for a total of $6,731, and shall pay a civil penalty of $40,000. Battery was ordered to pay disgorgement of $97,363 plus prejudgment interest, but payment of such amount is waived and no civil penalty imposed based upon Battery's sworn financial statement. (Rels. IA-2800A; File No. 3-13274) In the Matter of David A. Finnerty, et al.On October 15, the Commission issued three separate Orders Making Findings and Imposing a Cease-and-Desist Order Pursuant to Section 21C Securities Exchange Act of 1934 as to Todd J. Christie, Kevin M. Fee, and Thomas J. Murphy, Jr., and an Order Dismissing Administrative and Cease-and-Desist Proceedings Instituted Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b), 21C and 11(b) of the Securities Exchange Act of 1934 And Rule 11b-1 thereunder. The Christie Order The Christie Order finds that during the period from January 1, 1999 to approximately March 2003, Christie, a former specialist on the New York Stock Exchange and Chief Executive Officer, managing director, and partner at Spear Leeds & Kellog L.P., executed hundreds of trades that constituted interpositioning, which generated thousands of dollars in profit for his firm's proprietary account at the expense of customer orders, and hundreds of trades that constituted trading ahead, which generated thousands of dollars in customer harm, and, in doing so, violated Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. Based on the above, the Christie Order orders Christie to cease and desist from committing or causing any violations and any future violations of Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. (Rel. 34-58793; File No. 3-11893) The Fee Order The Fee Order finds that during the period from at least 1999 through June 30, 2003, Fee, a former specialist on the New York Stock Exchange at Bear Wagner Specialists LLC and a predecessor firm, executed hundreds of trades that constituted interpositioning, which generated thousands of dollars in profit for his firm's proprietary account at the expense of customer orders, and hundreds of trades that constituted trading ahead, which generated thousands of dollars in customer harm, and, in doing so, violated Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. Based on the above, the Fee Order orders Fee to cease and desist from committing or causing any violations and any future violations of Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. (Rel. 34-58792; File No. 3-11893) The T. Murphy Order The T. Murphy Order finds that during the period from at least 1999 through June 30, 2003, T. Murphy, a former specialist on the New York Stock Exchange at Fleet Specialist, Inc. (now known as Banc of America Specialist, Inc.) and a predecessor firm, executed hundreds of trades that constituted interpositioning, which generated thousands of dollars in profit for his firm's proprietary account at the expense of customer orders, and hundreds of trades that constituted trading ahead, which generated thousands of dollars in customer harm, and, in doing so, violated Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. Based on the above, the T. Murphy Order orders T. Murphy to cease and desist from committing or causing any violations and any future violations of Section 11(b) of the Exchange Act and Rule 11b-1 thereunder. (Rel. 34-58790; File No. 3-11893) The P. Murphy Order The P. Murphy Order finds that in light of the administrative record developed since the institution of the Administrative Proceeding against P. Murphy, a former NYSE specialist at Spear Leeds & Kellogg L.P, the Commission deems it appropriate and in the public interest to dismiss the Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b), 21C and 11(b) of the Securities Exchange Act of 1934 and Rule 11b-1 thereunder (OIP) against him. (Rels. 33-8979; 34-58791; File No. 3-11893) Commission Revokes Registration of Securities of BCC Acquisitions Corp. for Failure to Make Required Periodic FilingsOn October 16, the Commission revoked the registration of each class of registered securities of BCC Acquisitions Corp. (BCC) 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, BCC 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 BCC Acquisitions Corp. 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 BCC's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against BCC in In the Matter of Bay Area Holdings, Inc. et al., Administrative Proceeding File No. 3-13182. 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 Bay Area Holdings, Inc. et al., Administrative Proceeding File No. 3-13182, Exchange Act Release No. 58523 (Sept. 11, 2008). (Rel. 34-58795; File No. 3-13182) Commission Revokes Registration of Securities of Capfilm, Inc. for Failure to Make Required Periodic FilingsOn October 16, the Commission revoked the registration of each class of registered securities of Capfilm, Inc. (Capfilm) 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, Capfilm 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 Capfilm, 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 Capfilm's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against Capfilm in In the Matter of Cabot Medical Corp., et al., Administrative Proceeding File No. 3-13198. 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 Cabot Medical Corp., et al., Administrative Proceeding File No. 3-13198, Exchange Act Release No. 58552 (September 16, 2008). (Rel. 34-58796; File No. 3-13198) Delinquent Filers' Stock Registrations RevokedThe registrations of the registered securities of Ramsin Product Development, Inc., Raycomm Transworld Industries, Inc., RDC International, Inc., Realax Software AG, ReClaim, Inc., and Red Bell Brewing Co. have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-58797; File No. 3-13227) In the Matter of James L. DemersOn October 16, 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 James L. DeMers. The Order finds that on Sept. 25, 2008, a judgment was entered against James L. DeMers, 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, and Sections 206(1), 206(2), and 206(4) of the Investment Advisers Act of 1940 and Rule 206(4)-8 thereunder, in the civil action entitled Securities and Exchange Commission v. Robert Louis Carver, et al., Civil Action Number, 8:08-CV-627 in the United States District Court for the Central District of California. The Order further finds that the Commission's complaint alleged that DeMers made fraudulent misrepresentations and omissions in the unregistered offer and sale of securities in Lincoln Funds International, Inc., Brookstone Capital, Inc., and three biotechnology funds created for making biotechnology-related investments. In addition, the Order finds that the complaint alleged that DeMers misappropriated investors' funds, while acting as an investment adviser, which constituted fraud on the biotechnology funds. Additionally, the Order finds that the complaint alleged that DeMers acted as an unregistered broker-dealer. Based on the above, the Order bars DeMers from association with any broker, dealer, or investment adviser. DeMers consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the Commission's jurisdiction over him, the subject matter of these proceedings, and the entry of the judgment in the civil injunctive action. (Rel. 34-58798; IA-2801; File No. 3-13275) In the Matter of Medcap Management & Research LLC and Charles Frederick Toney, Jr.The Commission today charged San Francisco investment adviser MedCap Management & Research LLC (MMR) and its principal Charles Frederick Toney, Jr. with reporting misleading results to hedge fund investors by engaging in a practice known as "portfolio pumping." The SEC alleges that Toney made extensive quarter-end purchases of a thinly-traded penny stock in which his fund was heavily invested, more than quadrupling the stock price and allowing him to report artificially inflated quarterly results to fund investors. Without admitting or denying the SEC's allegations, MMR and Toney have agreed to settle the charges by paying financial penalties and agreeing to an order barring Toney from acting as an investment adviser for at least one year. According to the SEC's Order, MedCap Partners L.P. (MedCap), a hedge fund run by MMR and Toney, was suffering from dramatic losses and facing increasing redemptions from fund investors by September 2006. Over the last four days of the month, Toney - through a separate fund that MMR managed - placed numerous buy orders for a thinly-traded over-the-counter stock in which MedCap already was heavily invested. Toney's buying pressure caused the stock price to more than quadruple, from $0.85 to $3.72. The SEC alleges that because the stock represented over one-third of MedCap's holdings, the brief boost in its price inflated MedCap's reported value by $29 million, masking what would otherwise have been a 40 percent quarterly loss for MedCap. Immediately after the quarter ended, Toney reported to MedCap's investors that the fund's investments had begun to "bounce" and that the fund's performance was improving. Toney failed to disclose that this "bounce" was almost entirely the result of his four-day purchasing spree. Following MMR's brief buying activity, both the stock price and MedCap's asset value declined to their previous levels. According to the SEC's order, at the same time, MMR charged fees to the fund based on the inflated quarter-end asset value. The Commission found that MMR and Toney breached their fiduciary duties to MedCap and to MMR's other fund in which the penny stock was acquired. Toney and MMR, without admitting or denying the Commission's findings, have agreed to cease and desist from violating the antifraud provisions of the Investment Advisers Act. MMR also will disgorge the higher management fees it received due to the inflated fund asset value, plus interest - an amount totaling $70,633.69 - and receive a Commission censure. Toney also has agreed to a bar from association with any investment adviser with the right to reapply after one year, and to pay a $100,000 penalty. (Rel. IA-2802; File No. 3-13276) SEC Completes Fair Fund Distribution in Gorsek MatterThe Commission announced today the completion of a $272,037.33 Fair Fund distribution to defrauded customers of Strategic Investments, Inc. (SII), a now-defunct broker-dealer based in Springfield, Illinois. The distribution concludes the Commission's action in SEC v. Wayne F. Gorsek, et al., No. 99-CV-3072-JES (C.D. Ill.). The defendants were the owners and associates of Strategic Investment Advisory, Inc. (SIA), a stock promoter that falsely claimed to provide independent recommendations about microcap companies. As the U.S. District Court for the Central District of Illinois concluded, registered representatives at SII defrauded customers by recommending the purchase of securities that SIA had been paid to tout, without disclosing that material fact to their brokerage customers. On Feb. 20, 2008, the Honorable Jeanne E. Scott, U.S. District Judge for the Central District of Illinois, approved the Commission's Distribution Plan and appointed one of the Commission's attorneys as Distribution Agent and Tax Administrator, given the small size of the Fair Fund. Following a claims process conducted by Commission attorneys, Judge Scott granted the Commission's motion to disburse the Fair Fund to Eligible Claimants on Sept. 24, 2008. In 2002, the SEC obtained judgments against Wayne F. Gorsek, Lyndell F. Parks and P. Brenden Gebben. The Court had previously granted the Commission's motion for summary judgment against defendants Gorsek and Parks and held them liable - as co-owners of SIA - for violations of the antifraud and anti-touting violations of the federal securities laws. After a jury trial, defendant Gebben was also found liable for violations of the antifraud and anti-touting violations of federal securities laws. Finally, after a bench trial, the Court again found defendant Gorsek liable - as a principal of SII - of defrauding his brokerage clients at SII. For more information about the SEC's action, please see Litigation Release Nos. 16018 (Jan. 7, 1999), 17010 (May 18, 2001), 17352 (Feb. 5, 2002), and 17953 (Jan. 28, 2003). [SEC v. Wayne F. Gorsek, et al., No. 99-CV-3072-JES (C.D. Ill.)] (LR-20780) SEC Files Enforcement Action Against Connecticut Real Estate Company and Its CEO for Fraudulent Market Manipulation SchemeThe Commission announced today that it filed a civil injunctive action in the United States District Court for the District of Connecticut against Excellency Investment Realty Trust, Inc., a publicly-traded real estate investment trust located in Hartford, Connecticut, and its chief executive officer, David D. Mladen, of Scarsdale, New York, in connection with an alleged fraudulent market manipulation scheme. The Commission's complaint, filed on Oct. 16, 2008, alleges that during at least July 2006 through September 2006, Mladen and Excellency engaged in a market manipulation scheme to defraud Excellency investors. According to the complaint, Mladen, acting in his capacity of CEO of Excellency and acting through a brokerage account that was owned and controlled in part by Excellency and Mladen, traded in Excellency stock in such a way as to artificially increase the price of Excellency stock. The complaint alleges that Mladen purchased Excellency stock in small quantities at progressively higher prices and executed wash or match trades in order to create the appearance of an active market for Excellency shares. Mladen's trading activity systematically manipulated the stock price of Excellency, causing it to increase from $8 per share to $24.35 per share. According to the complaint, Excellency and Mladen violated the antifraud provision of the Securities Exchange Act of 1934, including Section 10(b) and Rule 10b-5 thereunder. The Commission is seeking injunctive relief against both, and the imposition of civil penalties against Mladen and an order barring Mladen from serving as an officer or director of a publicly traded company. [SEC v. Excellency Investment Realty Trust, Inc. and David Mladen, Civil Action No. 308 CV 1583 (JBA) (District of Connecticut)] (LR-20781) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2008/dig101608.htm
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