Securities and Exchange Commission Suspends Trading in Two Issuers for Failure to Make Required Periodic Filings
The Commission announced the temporary suspension of trading of the securities of the following issuers, commencing at 9:30 a.m. EST on Jan. 13, 2009, and terminating at 11:59 p.m. EST on Jan. 27, 2009:
The Commission temporarily suspended trading in the securities of these two 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 six 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 this company.
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 company 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 this company that has 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. 34-59235)
Change in the Meeting: Time Change
The closed meeting scheduled for Thursday, January 15, 2009, at 2:00 p.m. has been changed to Thursday, January 15, 2009, at 1:00 p.m.
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.
Commission Orders Hearings on Registration Suspension or Revocation Against Four Companies for Failure to Make Required Periodic Filings
In conjunction with today's trading suspension, the Commission also instituted a public administrative proceeding to determine whether to revoke or suspend for a period not exceeding twelve months the registration of each class of the securities four companies for failure to make required periodic filings with the Commission:
In the Order, the Division of Enforcement (Division) alleges that the respective respondents 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 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. 34-59236; File No. 3-13336)
Former Amkor Technology General Counsel Kevin J. Heron Settles Insider Trading Charges; Relief Includes Permanent Anti-Fraud Injunction and Officer and Director Bar
The Commission today announced that on Jan. 9, 2009, the Honorable Stewart J. Dalzell of the United States District Court for the Eastern District of Pennsylvania entered a Final Judgment of permanent injunction and other relief, including a permanent officer and director bar against Kevin J. Heron (Heron), the former General Counsel of Amkor Technology (Amkor). Without admitting or denying the Commission's allegations, Heron consented to the entry of the Final Judgment. The judgment settles the Commission's claims against Heron in a civil action filed on April 18, 2007.
The Commission's complaint alleged that from October 2003 through June 2004, Heron engaged in a pattern of insider trading by trading in Amkor securities prior to five Amkor public announcements relating to financial results and company business transactions. As alleged in the complaint, Heron executed more than fifty illegal trades in Amkor stock and options on the basis of material, nonpublic information that Heron had learned as a result of his position as general counsel.
In October 2007, in a parallel criminal proceeding, Heron was convicted of securities fraud. Heron was sentenced to, and is currently serving, fifteen months incarceration, and ordered to forfeit approximately $43,000 of illegal trading proceeds.
The Final Judgment (i) permanently enjoins Heron from future violations of the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5, (ii) imposes a permanent officer and director bar, and (iii) orders Heron to pay disgorgement of $75,000.
As part of the settlement, the Commission today issued an administrative order, pursuant to Rule 102(e)(3) of the Commission's Rules of Practice, suspending Heron from appearing or practicing before the Commission as an attorney. Heron consented to the issuance of the order, without admitting or denying the Commission's findings in the order, except as to the Commission's jurisdiction over him and the entry of the permanent injunction against him.
The Commission acknowledges the assistance of the United States Attorney's Office for the Eastern District of Pennsylvania and the Federal Bureau of Investigation.
For additional information, please see Litigation Release No. 20779 (April 18, 2007). [SEC v. Kevin Heron, Civil Action No. 2:07-cv-01542 (SD), E.D. Pa.] (LR-20851) (Rel. 34-59240; File No. 3-13339). [SEC v. Kevin J. Heron, United States District Court for the Eastern District of Pennsylvania, Civil Action No. 07-cv-01542-SD] (LR-20851)
In the Matter of Joseph Lando
On January 13, the Commission announced the issuance of an Order Instituting Administrative Proceedings Pursuant to 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanction (Order) against Joseph Lando, age 35 and a resident of Millstone, New Jersey. The Order finds that from May 1997 to July 2005, Lando was a securities lending representative and head of sales for Janney Montgomery Scott, LLC, a broker-dealer registered with the Commission. The Order further finds that on Oct. 23, 2008, Lando pled guilty to one count of commercial bribery in violation of Title 18 United States Code, Section 1952 before the United States District Court for the Eastern District of New York, in United States v. Joseph Lando, Crim. Indictment No. 08-CR-335. The count of the criminal indictment to which Lando pled guilty alleged, inter alia, that in or about and between January 2003 and November 2004, Lando, together with others, did knowingly and intentionally aid a manager at Van der Moolen Specialists USA, LLC in paying, and a stock loan trader at National Investor Services Corp. (NISC) in receiving, bribes to influence the NISC's trader's conduct in relation to NISC's affairs.
Based on the above, the Order bars Lando from association with any broker or dealer. Lando consented to the issuance of the Order without admitting or denying any of the Commission's findings, except he admits to the Commission's jurisdiction over him and the subject matter of the proceedings and his guilty plea on Oct. 23, 2008. (Rel. 34-59241; File No. 3-13340)
Paul G. Risoli Barred from Association with any Broker, Dealer, or Investment Adviser
On January 13, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities and Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions against Paul G. Risoli. The Order finds that from June 2003 through February 2007, Risoli was a registered representative associated with Banc of America Securities LLC, a broker-dealer and investment adviser registered with the Commission. The Order further finds that on Aug. 2, 2007, Risoli pled guilty to criminal charges of wire fraud and conspiracy to commit wire fraud and commercial bribery (U.S. v. Paul Risoli, No. 1:07-CR-145, S.D.N.Y.). The Order further finds that the criminal charges to which Risoli pled guilty, alleged that Risoli caused Banc of America to allocate stock from certain initial public offerings and secondary offerings to Q Capital Investment Partners, LP (Q Capital) in exchange for Q Capital paying Risoli cash kickbacks.
Based on the above, the Order bars Risoli from association with any broker, dealer, or investment adviser, with the right to reapply for association after three years to the appropriate self-regulatory organization, or if there is none, to the Commission. Risoli consented to the issuance of the Order without admitting or denying the findings in the Order, except as to his guilty plea. (Rels. 34-59242; IA-2829; File No. 3-13341)
Final Judgments Entered Against Defendants Jarrod W. McMillin, Innovative Projects, Inc., and Laurence G. Young
The Commission announced that on Jan. 8, 2009, the United States District Court for the District of Colorado entered a Final Judgment against Defendants Jarrod W. McMillin and Innovative Projects, Inc. The Final Judgment finds McMillin and Innovative Projects, Inc. jointly and severally liable for disgorgement in the amount of $673,983 representing profits gained as a result of the conduct alleged in the Commission's complaint plus pre-judgment interest of $19,349, for a total of $693,332. The Judgment also finds McMillin liable for a civil penalty in the amount of $130,000. On December 22, 2008, the United States District Court entered a Default Judgment against Defendant Laurence G. Young in the same case. The Default Judgment finds Young liable for disgorgement in the amount of $282,103 representing profits gained as a result of the conduct alleged in the complaint, prejudgment interest of $16,698, and a civil penalty of $282,102, for a total of $580,903.
The Commission's complaint alleged that McMillin and Young were part of a Ponzi scheme known as American Investors Network or AIN. AIN solicited funds to finance an advertising program and promised to return monthly profits of $10,000 to $20,000 on each $2,000 investment. The advertising interests were investment contracts which are securities under federal law. Among other claims, the complaint alleged there was no advertising program and that investors who received "profit" distributions were paid with funds solicited from other investors. The complaint also alleged that McMillin and Young acted as an unregistered broker-dealer in connection with the offer and sale of securities. For further information, see Release No. 20415 (Dec. 21, 2007). [SEC v. Jarrod McMillin et al., Civil Action No. 07-cv-2636-REB-MEH, USDC, D. Colo.] (LR-20850)
SEC v. John Zeglis, As Executor, Successor/Representative to James D. Zeglis, Gautam Gupta, Lance D. McKee, and Jim W. Dixon
The Commission announced that the Honorable Milton I. Shadur, United States District Judge for the Northern District of Illinois, entered a Final Judgment as to defendant John Zeglis, in his capacity as Executor to the Estate of James D. Zeglis ("Zeglis, as Executor" or "the defendant") on Jan. 7, 2009. James D. Zeglis died on Aug.15, 2008.
The Court ordered disgorgement and prejudgment interest against Zeglis, as Executor, in the respective amounts of $25,000 and $5,254.67. The Court further ordered the defendant to satisfy payment of these amounts within thirty business days after entry of the final judgment. Zeglis, as Executor, consented to the entry of the judgment without admitting or denying any of the allegations of the Commission's Complaint.
The Commission's Complaint, filed on Sept. 16, 2008, alleged fraud by James D. Zeglis (Zeglis), Gautum Gupta (Gupta) Jim W. Dixon (Dixon) and Lance D. McKee (McKee) in connection with insider trading in the securities of Georgia-Pacific Corporation. The Complaint alleged that Zeglis misappropriated material nonpublic information from his brother, a member of Georgia-Pacific's board of directors, and further alleged that on Nov. 10, 2005, three days before a public announcement that Georgia-Pacific had agreed to be acquired by Koch Industries, Inc., Zeglis tipped Dixon and Gupta, both of whom purchased Georgia-Pacific securities. Gupta, in turn, tipped McKee, who also purchased Georgia-Pacific securities. Further, the Complaint alleged that on Sunday, Nov. 13, 2005, Koch Industries, Inc. (Koch) publicly announced a definitive agreement for a Koch subsidiary to make a cash tender offer for all shares of Georgia-Pacific. The following day, Georgia-Pacific's stock price increased 36% in response to the announcement. McKee then sold his Georgia-Pacific securities, realizing a profit of $7,157.60. Dixon also realized a profit of $116,000 from the sale of Georgia-Pacific options. Thereafter, over the course of several months, Dixon paid Zeglis kickbacks from his ill-gotten gains of approximately $25,000.
On Oct. 9, 2008, final judgments were also entered against Dixon and McKee. [SEC v. John Zeglis, As Executor, Successor/Representative To James D. Zeglis, Gautam Gupta, Lance D. McKee, and Jim W. Dixon, Civil Action File No. 08CV5259] (LR-20852)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2008-134) relating to temporary membership status and interim trading permit access fees 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 January 12. (Rel. 34-59213)
A proposed rule change (SR-NASDAQ-2008-099) filed by the NASDAQ Stock Market to extend the temporary suspension of the continued listing requirements related to bid price and market value of publicly held shares for listing on the Nasdaq Stock Market through April 19, 2009 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 January 12. (Rel. 34-59219)
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