Securities and Exchange Commission Suspends Trading in the Securities of Four Issuers for Failure to Make Required Periodic Filings
The U.S. Securities and Exchange Commission announced the temporary suspension of trading in the securities of the following issuers, commencing at 9:30 a.m. EST on November 24, 2008, and terminating at 11:59 p.m. EST on December 8, 2008:
The Commission temporarily suspended trading in the securities of these four issuers due to a lack of current and accurate information about the companies because they have not filed periodic reports with the Commission in over two years. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).
The Commission cautions brokers, dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies.
Brokers and dealers should be alert to the fact that, pursuant to Exchange Act Rule 15c2-11, at the termination of the trading suspensions, no quotation may be entered relating to the securities of the subject companies unless and until the broker or dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of these companies that have been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, DC at (202) 551-5720. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.
If any broker, dealer or other person has any information which may relate to this matter, they should immediately communicate it to the Delinquent Filings Branch of the Division of Enforcement at (202) 551-5466, or by e-mail at DelinquentFilings@sec.gov. (Rel. 34-59001)
Commission Orders Hearings on Registration Suspension or Revocation Against Five Companies for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission today also instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities of five companies for failure to make required periodic filings with the Commission:
In this Order, the Division of Enforcement (Division) alleges that the five issuers are delinquent in their required periodic filings with the Commission.
In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the judge will hear evidence from the Division and the respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-59002; File No. 3-13295)
In the Matter of Prosper Marketplace, Inc.
On November 24, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 8A of the Securities Act of 1933, Making Findings and Imposing a Cease and Desist Order (Order) against Prosper Marketplace, Inc. (Prosper). The Order finds that Prosper violated Sections 5(a) and (c) of the Securities Act of 1933 during the period January 1, 2006 through October 14, 2008, by engaging in the unregistered offering of securities via Prosper's online lending platform. Prosper offers loans in a double-blind, auction-like process wherein multiple lenders bid to fund loans to borrowers. Since the inception of its platform in January 2006, Prosper has initiated approximately $174 million in loans.
The loan notes offered by Prosper are securities. The loans are non-recourse in nature and in amounts between $1,000 and $25,000. Lenders and borrowers register on the website and create Prosper identities. Potential lenders bid on funding all or portions of loans for specified interest rates, which are typically higher than rates available from financial institutions. Individual lenders do not actually lend money directly to the borrower; rather, the borrower receives a loan from a bank with which Prosper has contracted. The interests in a given loan are then sold and assigned through Prosper to the lenders, with each lender receiving an individual non-recourse promissory note in the amount of the lender's bid. Prosper collects an origination fee from each borrower of one to three percent of loan proceeds and collects servicing fees from each lender of one percent of loan payments. Prosper administers the collection of loan payments from the borrower and the distribution of such payments to the lenders. Prosper also initiates collection of past due loans from borrowers, assigns delinquent loan accounts to collection agencies and sells defaulted loans to debt purchasers. Lenders and borrowers are prohibited from transacting directly and from learning each others' true identities.
Based on the above, the Order orders Prosper to cease and desist from committing or causing any violations and any future violations of Sections 5(a) and (c) of the Securities Act of 1933. Prosper consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 33-8984; File No. 3-13296)
In the Matter of Annie Astor-Carbonell (CPA)
On November 24, 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 Annie Astor-Carbonell. The Order finds that Astor-Carbonell was permanently enjoined by the United States District Court for the Southern District of New York from future violations of federal securities laws and ordered to pay a $75,000 civil money penalty. The Order also finds that the Commission's complaint alleged that Astor-Carbonnell, a certified public accountant licensed to practice in the Commonwealth of Puerto Rico and a former director and member of the board of First BanCorp, was alleged to have concealed the true nature of over $4 billion worth of mortgage-related transactions from First BanCorp's auditor and the investing public. First BanCorp profited from these transactions by earning over $100 million in net interest income with minimal risk.
Based on the above, the Order suspends Astor-Carbonell from appearing or practicing before the Commission as an accountant, with the right to apply for reinstatement after five years. Astor-Carbonell consented to the issuance of the Order without admitting or denying any of the findings in the Order, except she admitted the entry of the injunction. (Rel. 34-59007; AAE Rel. 2903; File No. 3-13297)
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:
Eaton Vance Municipal Bond Fund L.P. [File No. 811-2778[Rel. No. IC-28488]
XTF Advisors Trust
An order has been issued pursuant to Section 8(f) of the Investment Company Act declaring that XTF Advisors Trust has ceased to be an investment company. (Rel. IC-28518 - November 21)
Proposed Rule Changes
NYSE Arca, through its wholly owned subsidiary, NYSE Arca Equities filed a proposed rule change (SR-NYSEArca-2008-121) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder amending Rule 5.2(j)(6) to increase the permissible aggregate weight of underlying foreign country securities. Publication is expected in the Federal Register during the week of November 24. (Rel. 34-58984)
The Boston Stock Exchange filed a proposed rule change (SR-BSE-2008-36) relating to delisting standards. Publication is expected in the Federal Register during the week of November 24. (Rel. 34-58990)
The Commission issued a notice of filing of a proposed rule change by the Municipal Securities Rulemaking Board pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934, to MSRB Rule G-34, CUSIP Numbers and New Issue Requirements, to Establish a Transparency System for Municipal Auction Rate Securities and Municipal Variable Rate Demand Obligations (SR-MSRB-2008-07). Publication is expected in the Federal Register during the week of November 24. (Rel. 34-58998)
A proposed rule change (SR-BSE-2008-54) filed by the Boston Stock Exchange to amend certain BOX Rules related to the PIP to eliminate the requirement that there be at least three market makers quoting in a relevant options class in order for a PIP to commence 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 November 24. (Rel. 34-58999)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the International Securities Exchange to enable the listing and trading of options on index-linked securities (SR-ISE-2008-86) has become 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 November 24. (Rel. 34-58985)
A proposed rule change filed by BATS Exchange relating to fees of other market centers related to clearly erroneous rulings (SR-BATS-2008-010) has become 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 November 24. (Rel. 34-58989)
A proposed rule change filed by the NASDAQ Stock Market regarding its obvious errors rule and the adoption of a catastrophic error provision (SR-NASDAQ-2008-088) has become 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 November 24. (Rel. 34-58992)
Accelerated Approval of Proposed Rule Change
The Commission granted accelerated approval to a proposed rule change (SR-NYSEArca-2008-128) filed by NYSE Arca relating to listing of PowerShares DB Funds. Publication is expected in the Federal Register during the week of November 24. (Rel. 34-58993)
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