SEC News Digest

COMMISSION ANNOUNCEMENTS

Securities and Exchange Commission Suspends Trading in the Securities of Six 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. EDT on April 21, 2009, and terminating at 11:59 p.m. EDT on May 4, 2009:

• Act Manufacturing, Inc. (AMNUQ)
• Aerovox, Inc. (n/k/a New Bedford Capacitor, Inc.) (ARVXQ)
• Agility Capital, Inc. (AGTY)
• Air Water International Corp. (f/k/a Universal Communications Systems, Inc.) (AWTI)
• Allegiant Physician Services, Inc. (ALPS)
• Alpha Microsystems, Inc. (n/k/a NQL, Inc.) (NQLIQ)

The Commission temporarily suspended trading in the securities of these six 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 three 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. 34-59800)

ENFORCEMENT PROCEEDINGS

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Six Public Companies for Failure to Make Required Periodic Filings

On April 20, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of six companies for failure to make required periodic filings with the Commission:

• I Incubator.com, Inc.
• I Storm, Inc.
• iBeam Broadcasting Corp.
• I.C.H. Corp.
• IDream WS, Inc.
• Images of Life, Inc.

In this Order, the Division of Enforcement (Division) alleges that the six 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 Administrative Law 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 Administrative Law 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. 34-59796; File No. 3-13448)

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Six Public Companies for Failure to Make Required Periodic Filings

On April 20, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of six companies for failure to make required periodic filings with the Commission:

• I.A. Europe Group, Inc. (n/k/a Ghost Technology, Inc.)
• I-Carauction.com, Inc.
• ICIS Management Group, Inc.
• iCommerce Group, Inc.
• IDM Environmental Corp.
• Illinois Creek Corp.

In this Order, the Division of Enforcement (Division) alleges that the six 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 Administrative Law 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 Administrative Law 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. 34-59797; File No. 3-13449)

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Four Public Companies for Failure to Make Required Periodic Filings

On April 20, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of four companies for failure to make required periodic filings with the Commission:

• X-Ramp.com, Inc.
• Xraymedia.com, Inc. (f/k/a Xraymedia.com, Inc.)
• Zenith Holding Corp.
• Zydant Corp.

In this Order, the Division of Enforcement (Division) alleges that the four 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 Administrative Law 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 Administrative Law 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. 34-59798A; File No. 3-13450)

Commission Orders Hearings on Registration Suspension or Revocation Against Six Companies for Failure to Make Required Periodic Filings

In conjunction with today's ttrading suspension, the Commission today 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 of six companies for failure to make required periodic filings with the Commission:

In the Matter of Act Manufacturing, Inc., et al. Administrative Proceeding File No. 3-13452

• Act Manufacturing, Inc.
• Aerovox, Inc. (n/k/a New Bedford Capacitor, Inc.)
• Agility Capital, Inc.
• Air Water International Corp. (f/k/a Universal Communications Systems, Inc.)
• Allegiant Physician Services, Inc.
• Alpha Microsystems, Inc. (n/k/a NQL, Inc.)

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 Administrative Law 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 Administrative Law 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. 34-59801; File No. 3-13452)

In the Matter of Gordon B. Grigg

On April 20, the Commission issued an Order Instituting Administrative Proceeding Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Gordon B. Grigg.

The Order finds that on Feb. 5, 2009, an Order of Permanent Injunction and Other Relief was entered by consent against Grigg, 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 Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (Advisers Act), in the civil action entitled Securities and Exchange Commission v. Gordon B. Grigg, et al., Civil Action Number 3:09-CV-87, in the United States District Court for the Middle District of Tennessee, Nashville Division.

The Commission's complaint in the above-referenced civil action alleged that, from approximately 2003 through 2008, Grigg, a purported financial planner and investment adviser, and an entity he controls, ProTrust management, Inc. (ProTrust), engaged in a scheme to defraud approximately 27 clients out of approximately $6.5 million, by obtaining such funds from clients and claiming to invest them in securities that do not exist. The Commission's complaint further alleged that as part of Grigg's and ProTrust's scheme, they: (1) obtained control over client funds and falsely claimed to have invested such funds in fictitious securities that they described as 'Private Placements; (2) created false and fraudulent account statements reflecting the clients' ownership of the non-existent securities; (3) falsely claimed that they had the ability to invest client funds in government guaranteed commercial paper and bank debt as part of the U.S. government's Troubled Asset Relief Program (TARP) and falsely claimed that they did invest client funds in the TARP; and (4) falsely claimed to have partnerships and other business relationships with several of the nation's top investment firms.

Based on the above, the Order ordered, pursuant to Section 203(f) of the Advisers Act, that Grigg be barred from association with any investment adviser. Grigg consented to the issuance of the Order without admitting or denying any of the findings contained therein, except with respect to jurisdiction and the entry of the permanent injunctions against him. (Rel. IA-2869; File No. 3-13451)

In the Matter of Randy S. Casstevens (CPA)

On April 21, 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 against Randy S. Casstevens. The Order finds that, on April 1, 2009, the United States District Court for the Middle District of North Carolina entered a final judgment against Casstevens permanently enjoining him from future violations of Section 17(a)(3) of the Securities Act of 1933 and Section 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 13a-14, 13b2-1 thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. Casstevens was also ordered to pay $50,000 in disgorgement of ill-gotten gains plus $18,964.05 in prejudgment interest and a civil penalty of $25,000. Based on the final judgment of permanent injunction, the Order suspends Respondent Casstevens for a period of two years from appearing or practicing before the Commission as an accountant with a right to apply for reinstatement in two years. Casstevens consented to the issuance of the Order without admitting or denying the findings in the Order, except he admitted the entry of the injunction against him.

According to the Order, the Commission's complaint alleged that between approximately February 2003 and December 2003, Casstevens, a former Chief Financial Officer of Krispy Kreme Doughnuts, Inc., in a departure from Generally Accepted Accounting Principles, improperly accounted for Krispy Kreme's Senior Executive Incentive Compensation Plan by improperly under-accruing or reversing amounts for the Company's quarterly incentive compensation expense, thereby misrepresenting the Company's earnings. In addition, the Complaint alleged that, in Company filings and analyst conference calls, Casstevens misrepresented the Company's financial performance and failed to disclose that but for these under-accruals and reversals, the Company would have failed to exceed its previously announced quarterly earnings per share guidance by one penny in the affected quarters. The complaint alleged that, as a result of his actions, Krispy Kreme filed materially false and misleading financial information for the fourth quarter of the Company's 2003 fiscal year in the Company's Form 10-K for the year ended Feb. 2, 2003, in various current reports filed during the relevant periods, and in the Company's quarterly reports on Form 10-Q for the first three quarters of the Company's 2004 fiscal year. Securities and Exchange Commission v. Scott A. Livengood, John W. Tate, and Randy S. Casstevens, Civil Action No. 1:09-CV-00159 (M.D. NC March 4, 2009) (LR-20923). (Rel. 34-59803; AAE Rel. 2965; File No. 3-13453)

SEC Charges Owner of California Broker-Dealer with Misappropriating Millions in Investor Funds

The Securities and Exchange Commission today filed securities fraud charges against the owner and CEO of Morgan Peabody, Inc., a Sherman Oaks, California-based broker-dealer formerly registered with the Commission, for misappropriating millions of dollars of investor funds raised during three securities offerings.

The SEC's complaint, filed in U.S. District Court in Los Angeles, charges Davis A. Williams and three entities he controls with conducting fraudulent securities offerings that were sold to more than 100 customers in nine states between January 2007 and September 2008. According to the complaint, Williams directed registered representatives of Morgan Peabody to offer and sell debentures and promissory notes issued by WFG Holdings, Inc. and Sherwood Secured Income Fund, LLC. The SEC alleges that Williams, who owns and controls WFG Holdings and Sherwood, used millions of the approximately $9 million raised from investors to fund his lavish lifestyle, including spending (1) nearly $50,000 a month in rent for his personal residence, (2) at least $175,000 on personal travel, and (3) more than $200,000 on meals and entertainment.

According to the SEC's complaint, WFG Holdings investors were told that funds raised would be used to invest in the operations of Morgan Peabody. Sherwood investors were told that at least 90% of funds raised would be used to invest in real estate. As alleged in the complaint, however, Williams transferred millions of dollars of investor funds into bank accounts he controlled, including a bank account held by Williams Financial Group, LLC (an entity owned by Williams), and then used the money on personal expenses.

The SEC's complaint charges Williams, WFG Holdings, Sherwood, and Williams Financial Group with violating Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. [SEC v. David A. Williams, Sherwood Secured Income Fund, LLC, WFG Holdings, Inc., and Williams Financial Group, LLC, United States District Court for the Central District of California, Civil Action No. CV 09-2709 FMC (JCx)] (LR-21007)

INVESTMENT COMPANY ACT RELEASES

MetLife Insurance Company of Connecticut, et al.

An order has been issued pursuant to Sections 26(c) and 17(b) of the Investment Company Act on an application filed by MetLife Insurance Company of Connecticut, et al. (Applicants). The order permits the Applicants to substitute shares of certain registered management investment companies for shares of certain other registered management investment companies. The order also exempts them from Section 17(a) of the Act to the extent necessary to permit certain in-kind transactions in connection with the substitutions. (Rel. IC-28699 - April 20)

SELF-REGULATORY ORGANIZATIONS

Accelerated Approval of Proposed Rule Change

NYSE Arca filed, and the Commission has approved on an accelerated basis, a proposed rule change (SR-NYSEArca-2009-28) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to listing and trading of shares of the ETFS Silver Trust. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59781)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by the BATS Exchange (SR-BATS-2009-009) related to fees for use of BATS Exchange, Inc. 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 April 20. (Rel. 34-59782)

A proposed rule change filed by the NASDAQ Stock Market to establish InterACT, a new service, and related fees (SR-NASDAQ-2009-033) 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 April 20. (Rel. 34-59786)

Proposed Rule Changes

The Financial Industry Regulatory Authority (f/k/a the National Association of Securities Dealers, Inc. filed a proposed rule change (SR-FINRA-2009-019) under Section 19(b)(1) of the Securities Exchange Act of 1934 to adopt FINRA Rules 1010 (Electronic Filing Requirements for Uniform Forms) and 2263 (Arbitration Disclosure to Associated Persons Signing or Acknowledging Form U4) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59784)

Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2007-024) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to amendments involving best execution and interpositioning. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59788)

The Commission noticed a proposed rule change (SR-NYSEArca-2009-32) submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to implement the NYSE Arca Realtime Reference Price service on a permanent basis. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59790)

The Commission noticed a proposed rule change (SR-NYSE-2009-42) submitted by the New York Stock Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to implement the NYSE Realtime Reference Price service on a permanent basis. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59791)

The Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2009-024) related to its Obvious Error Rules pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59793)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-FINRA-2009-009) submitted by the Financial Industry Regulatory Authority pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt FINRA Rule 1122 (Filing of Misleading Information as to Membership or Registration) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59789)

The Commission approved a proposed rule change (SR-Phlx-2009-17) submitted by NASDAQ OMX PHLX relating to the nomination and election of candidates for Governor and Independent Governor. Publication is expected in the Federal Register during the week of April 20. (Rel. 34-59794)

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