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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2009-2
January 5, 2009


Barbara Lorenzen Named Associate Regional Director For Examinations in SEC's Chicago Regional Office

The Securities and Exchange Commission today announced the appointment of Barbara Lorenzen as an Associate Regional Director for Examinations in its Chicago Regional Office.

In her new position, Ms. Lorenzen will oversee the Commission's compliance examinations of registered broker-dealers and transfer agents located in the nine-state region covered by the Chicago office.

Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, said, "Barbara Lorenzen brings significant leadership qualities to this position. I'm confident that investors in the region will be well-served by her appointment and the continuing outstanding work of the examiners and accountants in the Chicago Regional Office."

Merri Jo Gillette, Director of the Chicago Regional Office, said, "I am delighted that Barbara has agreed to serve as the next Associate Regional Director for the Chicago Regional Office's broker-dealer examination group. She brings a wealth of experience and demonstrated management ability to her new position."

Ms. Lorenzen said, "It is an honor to accept this appointment in the SEC's Chicago Regional Office. I am excited to be joining the examination team, and look forward to the challenges ahead."

Ms. Lorenzen, who begins work at the SEC today, has extensive prior experience in auditing for regulatory compliance in the areas of customer protection and capital standards. She worked for 28 years with the Chicago Board of Trade (CBOT) and held positions of increasing responsibility, including Vice President responsible for the Financial Surveillance and Audits Department.

As head of the CBOT's audit department, Ms. Lorenzen managed a professional staff of 35 individuals. The group was responsible for the ongoing evaluation of financial surveillance techniques and establishing audit procedures to ensure state-of-the art programs for CBOT member firms. Ms. Lorenzen has served multiple terms as chairperson of the Joint Audit Committee, an industry-wide committee made up of members of all domestic commodity exchanges; and as Vice Chairperson of the Intermarket Financial Surveillance Group, comprised of the regulatory arms for all domestic securities and commodities exchanges and the SEC, CFTC, NASD and NFA. She also served as a Board Member of the Futures Industry Association, where she was the Chairperson of the Finance Regulatory Risk Committee. After the CBOT merged with the CME, she became a Managing Director and Chief Compliance Officer for a hedge fund administrator.

Ms. Lorenzen received her bachelor's degree in accounting from Western Illinois University in 1979. (Press Rel. 2009-1)

Alta G. Rodriguez Named SEC's Acting EEO Director

The Securities and Exchange Commission Chairman Christopher Cox today announced the appointment of Alta G. Rodriguez as Acting Equal Employment Opportunity (EEO) Director for the SEC.

The SEC's EEO Office works to ensure that the agency's professional staff is comprised of diverse backgrounds that reflect the diversity of the investing public. The EEO Office's primary mission is to prevent employment discrimination and harassment, and ensure that all SEC employees have the working environment necessary to support their efforts to protect investors, maintain orderly markets, and promote capital formation. Deborah K. Balducchi, Director of SEC's EEO Office since 1996, recently retired.

Ms. Rodriguez has served as the EEO Deputy Director at the SEC since October 2008. She previously served as Manager, National Diversity Initiatives, for the United States Postal Service (USPS), where she led a network of 130 diversity specialists, serving approximately 700,000 postal employees nationwide.

Chairman Cox said, "Ms. Rodriguez's extensive experience on issues related to diversity and equal employment opportunity will ensure that our EEO program continues to help the SEC maintain a fair and efficient workplace, and a diverse and professional staff focused on the interests of investors."

Ms. Rodriguez said, "I'm honored to be named by Chairman Cox as the Acting EEO Director and I'm eager to contribute to the SEC's noble mission of protecting investors, maintaining fair, orderly and efficient markets, and facilitating capital formation."

Ms. Rodriguez, a former litigator with an emphasis on employment and business litigation, spearheaded a number of initiatives to promote the Postal Service's domestic and international products and services within the diverse communities it serves. She also was responsible for, among other things, monitoring compliance with applicable EEO laws, developing and promoting best practices in the areas of diversity and inclusion, and managing the implementation of national diversity programs focused on creating an inclusive workplace and marketplace. During Ms. Rodriguez's tenure, the Postal Service was named "One of the Best Companies for Hispanics" by HispanicBusiness, and "Public-Sector Employer of the Year" by Careers & the disABLED.

Born in Mexico and raised in Southern California, Ms. Rodriguez is the daughter of migrant workers and the oldest of seven children. She graduated from Smith College in Northampton, Mass., in 1990 with a BA degree in Government and a Certificate in International Relations. She has studied at the Institute of Political Studies (Paris, France) and at the University of Paris. Ms. Rodriguez received her law degree from the UCLA School of Law in 1996 and is a member of the California State Bar. (Press Rel. 2009-2)

Shelley Parratt Named Acting Director of SEC's Division of Corporation Finance

Securities and Exchange Commission Chairman Christopher Cox announced today his appointment of Shelley E. Parratt to serve as Acting Director of the Division of Corporation Finance. Ms. Parratt replaces John W. White, who left the Commission earlier this month to return to private practice.

Ms. Parratt has served as Deputy Director of the Division since 2003, and has been responsible for overseeing the disclosure review program, assisting in strategic planning, and developing Division policies and procedures. Among her many accomplishments in this position:

  • Led the Division in revamping its disclosure review program to meet its mandate under the Sarbanes-Oxley Act to review on a regular and systematic basis the disclosures of the approximately 12,000 reporting companies the SEC oversees.
  • Oversaw the Division's review projects on IFRS and executive compensation disclosure and subsequent staff reports on these reviews.
  • Developed and implemented a procedure to make available publicly staff comment letters and company responses related to Division reviews of filings.
  • In response to recent market events, led the Division in issuing staff guidance for financial institutions filing proxy statements in connection with the TARP Capital Purchase Program, as well as Dear CFO letters providing guidance on MD&A disclosure issues for companies' consideration.

Ms. Parratt also has served in a number of other senior positions during her tenure with the Division, including Associate Director, Assistant Director, and Branch Chief.

Chairman Cox said, "Shelley Parratt will be a strong leader during this especially busy time for the Division of Corporation Finance. Her expertise, solid judgment, and long experience in serving America's investors and the SEC's registrants will ensure that the Division remains in capable hands. The SEC and the nation's investors are very fortunate to have her in this important position."

Ms. Parratt joined the Division of Corporation Finance as a Financial Analyst in 1986. She received her MBA from Syracuse University in 1985 and received her BA from St. Lawrence University in 1982. (Press Rel. 2009-3)


In the Matter of Robert L. Flickinger II

On January 5, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Order) against Robert L. Flickinger II. The Order finds that from April 2004 until October 2004 Flickinger was the owner, president, and principal of Mercer Capital Securities, LLC (Mercer Capital Securities), a broker-dealer registered with the Commission. The Order also finds that Flickinger was the president and majority shareholder of Mercer Capital, Inc. (Mercer Capital), a Delaware company and former commodities broker-dealer based in Boca Raton, Florida and Portland, Oregon, which, with Flickinger, offered and sold its own securities from September 2004 until November 2006. Additionally, the Order finds that Flickinger was a director of Mercer Capital Management, a Florida corporation and unregistered securities broker-dealer that under Flickinger's direction offered and sold the securities of two Wyoming limited partnerships, Tri-State I and Tri-State II (the Tri-State entities), from December 2005 until November 2006. The Order furthermore finds the Commission's complaint alleged that in connection with the unregistered offer and sale of the securities of the Tri-State entities and Mercer Capital Flickinger made material misrepresentations and omissions in statements to investors concerning, among other things, the business relationships and prior investment performance of the Tri-State entities and the source of purported returns paid to investors, and that during part of the time of Flickinger's conduct he was associated with Mercer Capital Securities. The Order moreover finds that in the Commission's civil case, on December 3, 2008 the District Court entered a judgment by consent against Flickinger permanently enjoining him from violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act), ordering him to pay disgorgement and a civil penalty pursuant to Section 20(d) of the Securities Act and Section 21(d) of the Exchange Act, and barring him from participating in an offering of penny stock as defined by Exchange Act Rule 3a51-1 or serving as an officer or director of a public company.

Based on the above, the Order barred Flickinger from association with any broker or dealer. Flickinger consented to the issuance of the Order without admitting or denying any of the findings except as to the entry of the final judgment. (Rel. 34-59195; File No. 3-13323)

Court Enters Final Judgments Against Massachusetts Company and its Principal in Securities Fraud Case

The Commission announced today that on Dec. 23, 2008, the United States District Court for the District of Massachusetts entered a final judgment by consent against Howard Graham, principal of Braintree Energy, Inc., and a default judgment against the company itself, a now defunct Massachusetts corporation formerly located in Cheshire, Massachusetts. The Commission's action, filed on Feb. 20, 2007, alleged that Braintree and Graham fraudulently offered and sold unregistered securities in the form of investment contracts and/or fractional interests in oil and gas leases and that Graham diverted almost $3 million for his own personal use. The final judgment enjoins Graham from violating of the antifraud, securities registration and broker-dealer registration provisions of the securities laws. In addition, Graham was ordered to pay over $3 million in disgorgement plus prejudgment interest, and a penalty of $120,000. The Commission obtained a default judgment against Braintree Energy, Inc., permanently enjoining it from violating the federal securities laws.

According to the Commission's complaint, from at least 2000 through 2006, Graham and Braintree made numerous oral and written misrepresentations to more than 200 investors nationwide and in foreign countries regarding the expected rate of return, level of profits and risks associated with the investment. The Commission alleged that Graham and Braintree told potential investors that they could expect the return of their principle within months to a year and that Graham failed to disclose that he intended to and did take approximately 30% of investors' funds for himself. The Commission alleged that Graham and Braintree, through their fraud, obtained at least $9 million of investor funds and diverted approximately $3 million for Graham's personal use. The Commission also alleged that Graham and others at his direction led investors to believe that investing in their offerings was not risky, falsely assuring some investors that Braintree had never offered interests in oil or gas wells that did not produce, and that investors' monies were safer than if they had invested in certificates of deposit. The complaint alleged that, in fact, most investors have received no profits and most have not even recovered their initial investments.

Without admitting or denying the substantive allegations in the Commission's complaint, Graham consented to the entry of a final judgment ordering him to pay $3,269,903.60. In addition, the final judgments against Graham and Braintree impose permanent injunctions prohibiting Graham and Braintree from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. [SEC v. Braintree Energy, Inc. and Howard Graham, Civil Action No. 1:07-CV-10307, United States District Court for the District of Massachusetts] (LR-20841)


Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-FINRA-2008-066) filed by the Financial Industry Regulatory Authority that reflects the closing of the FINRA/NSX Trade Reporting Facility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of is expected in the Federal Register during the week of January 5. (Rel. 34-59175)

A proposed rule change filed by Financial Industry Regulatory Authority (SR-FINRA-2008-68) to extend the pilot program regarding the use of multiple MPIDs on the Trade Reporting Facilities and the Alternative Display Facility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of is expected in the Federal Register during the week of January 5. (Rel. 34-59183)





Modified: 01/05/2009