Closed Meeting on Thursday, July 30, 2009 at 2:00 p.m.
The subject matter of the Closed Meeting scheduled for Thursday, July 30, 2009, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; other matters relating to enforcement proceedings; and an adjudicatory matter.
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.
Securities and Exchange Commission Investor Advisory Committee Open Meeting
Securities and Exchange Commission Investor Advisory Committee will hold an Open Meeting on Monday, July 27, 2009, in the Auditorium, Room L-002. The meeting will begin at 10:00 a.m. and will be open to the public, with seating on a first-come, first-served basis. Doors will open at 9:30 a.m. Visitors will be subject to security checks.
The agenda for the meeting includes opening remarks, introduction of Committee members, discussion of Committee agenda and organization, and discussion of investor views of possible refinements to the disclosure regime.
For further information, please contact the Office of the Secretary at (202) 551-5400.
Commission Sustains NYSE Disciplinary Action Against Gregory W. Gray, Jr.
The Commission sustained NYSE disciplinary action against Gregory W. Gray, Jr., formerly associated with Quick & Reilly, Inc., and H&R Block Financial Advisors, both NYSE member firms. NYSE found that Gray engaged in conduct inconsistent with just and equitable principles of trade by effecting unauthorized trades in two of his customers' accounts. NYSE also found that Gray engaged in acts detrimental to the interest or welfare of the Exchange by threatening and harassing complaining customers and/or their family members. NYSE censured Gray and barred him from acting in any capacity with a member firm for three years.
In sustaining the NYSE's action, the Commission found that Gray engaged in unauthorized trading and that he made repeated harassing phone calls to former clients in an effort to get them to withdraw their complaints against him. The Commission cited to testimony in the record describing how Gray called one elderly customer several times, blamed the customer for causing Gray to lose his job, and threatened to come to the customer's home to have him sign a letter retracting his complaint against Gray. The Commission endorsed NYSE's determination that "[t]he frequency and tone of the telephone calls [Gray] placed to these three customers and their family members were unreasonable and inconsistent with the behavior that is expected of a registered representative" and concluded that "Gray's conduct was unacceptable in a representative of the securities industry." In sustaining the sanctions NYSE imposed, the Commission noted that the Securities Exchange Act "permits us to 'cancel, reduce, or require the remission of' a sanction imposed by a self regulatory organization but does not permit us to increase the sanction." (Rel. 34-60361; File No. 3-13344)
SEC Announces Settlements in Market Manipulation Case Involving SeaLife Corporation
The Securities and Exchange Commission announced today that on June 23, 2009, the United States District Court for the District of Colorado entered final judgments against Jeffrey A. Hayden and Barry S. Griffin. The final judgments settle the Commission's claims against both Hayden and Griffin for alleged violations of the federal securities laws.
In its complaint in this matter, the Commission alleged that during 2003, SeaLife Corporation (SeaLife) and its president, Robert E. McCaslin engaged in a fraudulent capital-raising scheme that ultimately led to the manipulation of SeaLife securities. The complaint alleged that SeaLife and McCaslin hired stock promoters Roland M. Thomas and Douglas A. Glaser to raise capital for the company and that Thomas, Glaser and others, including Hayden and Griffin, participated in the subsequent manipulation of SeaLife securities. At the time the complaint was filed, SeaLife Corporation was a Culver City, California company that claimed to sell environmentally friendly products, such as nontoxic boat paint and certain agricultural products. [SEC v. Jeffrey A. Hayden and Barry S. Griffin, et al., Civil Action No. 05-cv-622-RPM, (D. Colo.)] (LR-21145)
Jury Finds Vision Securities, Daniel James Gallagher, and Christopher Castaldo Liable for Violating or Aiding and Abetting Violations of Broker Licensing and Registration Requirements
On July 20, 2009, a federal jury returned a verdict in the SEC's favor against Daniel James Gallagher and Vision Securities, a registered broker-dealer he controlled, and a verdict partially in the SEC's favor against Christopher Castaldo. After a six-day trial before U.S. District Court Judge Jed S. Rakoff, the jury found Vision liable on the SEC's claim that Castaldo acted as an unlicensed broker with respect to an offering of securities and did so in close, controlling association with Vision, and that Castaldo and Gallagher knowingly assisted Vision in the violation. The jury found in Castaldo's favor on charges that he acted as an unregistered broker with respect to two other securities offerings not involving Vision or Gallagher.
The SEC's complaint alleged that Vision violated Sections 15(b)(7) and of the Securities and Exchange Act of 1934 (Exchange Act) and Rule 15b-7 thereunder, and that Gallagher and Castaldo were liable pursuant to Section 20(e) of the Exchange Act as aiders and abettors of Vision's violation. The SEC's complaint also alleged that Castaldo violated Section 15(a) of the Exchange Act with respect to two other securities offerings.
The Court has scheduled a hearing to consider appropriate relief against the defendants on July 31. [SEC v. Christopher Castaldo, et al., 08 Civ. -8397 (--JSR) (S.D.N.Y.)] (LR-21146)
INVESTMENT COMPANY ACT RELEASES
AdvisorShares Investments, LLC and AdvisorShares Trust
An order has been issued on an application filed by AdvisorShares Investments, LLC and AdvisorShares Trust. The order denies a hearing request filed with respect to the application and exempts applicants from Sections 2(a)(32), 5(a)(1), 17(a)(1) and (2), and 22(d) of the Investment Company Act and from Rule 22c-1 under the Act. The order permits: (a) series of certain open-end management investment companies to issue shares redeemable in large aggregations only; (b) secondary market transactions in shares of the series to occur at negotiated market prices; and (c) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of large aggregations of shares. (Rel. IC-28822 - July 20)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-ISE-2009-52) filed by the International Securities Exchange relating to the extension of the Price Improvement Mechanism pilot program has become effective under Section 19(b)(3)(A) under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 20. (Rel. 34-60333)
A proposed rule change (SR-BX-2009-038) filed by NASDAQ OMX BX to extend a pilot program that allows for no minimum size order requirement for the Price Improvement Period process on the Boston Options Exchange facility has become effective under Section 19(b)(3)(A) under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 20. (Rel. 34-60337)
A proposed rule change (SR-CBOE-2009-051) filed by the Chicago Board Options Exchange to extend two pilot programs related to the Exchange's Automated Improvement Mechanism has become effective under Section 19(b)(3)(A) under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 20. (Rel. 34-60338)
A proposed rule change filed by NASDAQ OMX BX to establish procedures to prevent information advantages resulting from the affiliation between BOX and NOS (SR-BX-2009-035) 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 July 20. (Rel. 34-60349)
A proposed rule change, as modified by Amendment Nos. 1 and 2 thereto, filed by the NASDAQ Stock Market to modify routing of orders from NASDAQ Options Market to an affiliate exchange (SR-NASDAQ-2009-065) 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 July 20. (Rel. 34-60354)
Approval of Proposed Rule Changes
The Commission approved a proposed rule change (SR-FINRA-2009-019) submitted by the Financial Industry Regulatory Authority (f/k/a the National Association of Securities Dealers, Inc.) to adopt, subject to certain amendments, 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 July 20. (Rel. 34-60348)
The Commission approved a proposed rule change submitted by the Chicago Stock Exchange (SR-CHX-2009-02) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to the rejection of undisplayed odd-lot orders from the Exchange's Matching System. Publication is expected in the Federal Register during the week of July 20. (Rel. 34-60353)
JOINT INDUSTRY PLAN RELEASES
Immediate Effectiveness of the Twelfth Substantive Amendment to the Second Restatement of the Consolidated Tape Association Plan
Pursuant to Rule 608 under the Securities Exchange Act of 1934, the Consolidated Tape Association (CTA) has filed an amendment to the CTA Plan to delete the ticker display charge from Schedule A-1 of Exhibit E of the CTA Plan. Publication is expected in the Federal Register during the week of July 20. (Rel. 34-60320)
SECURITIES ACT REGISTRATIONS
RECENT 8K FILINGS