David Nelson, Miami Regional Director, Leaving SEC for Private Practice
The Securities and Exchange Commission announced today that after serving as the Director of the agency's Miami Regional Office for nine years, and more than two decades of public service overall, David Nelson will be leaving the SEC to join the law firm of Boies, Schiller & Flexner in September.
As Regional Director since 2000, Mr. Nelson oversaw all aspects of the Miami office's operations, including its enforcement, examination, and litigation programs. Under Mr. Nelson's leadership, the Miami office brought highly significant cases covering the full range of the Commission's enforcement program, including:
Under Mr. Nelson's leadership, the Miami office also conducted hundreds of routine, cause and sweep examinations of broker-dealers, investment advisers and mutual fund firms in the region, which led to the detection and correction of compliance violations.
"David Nelson has served the Commission for two decades with distinction, leading the Miami office in its examinations of securities firms and in some of our most significant enforcement cases," said SEC Chairman Mary Schapiro. "We owe him a debt of gratitude for his dedication, commitment and service. I know that SEC staff and my fellow Commissioners join me in wishing him well in his future endeavors."
Robert Khuzami, Director of the SEC's Division of Enforcement, said, "David Nelson is an extremely talented lawyer and an outstanding public servant. His intellect, integrity, exceptional judgment and vast knowledge of the securities laws and legal process have been great assets for the Miami Regional Office and the Commission."
Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, added, "David has been a forceful advocate for investors. He led the Miami office with a keen focus on the protection of investors, a positive attitude, a uniting sense of teamwork, and a wry sense of humor. Investors in the region have been well-served by his service."
Mr. Nelson said, "I am very grateful to have had the opportunity to work with such talented professionals at the SEC, both in Miami and throughout the agency. I am proud to have been associated with a staff that every day demonstrates such intelligence, energy and selfless teamwork."
Since joining the SEC staff in 1984 as a Staff Attorney in the Division of Enforcement in Washington, D.C., Mr. Nelson subsequently served as a Branch Chief in the Division before relocating to the Miami office, where he rose from Senior Counsel and Branch Chief to Assistant Regional Director to Deputy Regional Director before assuming his current position. During this time, Mr. Nelson was twice cross-designated as a Special Assistant U.S. Attorney to work on criminal matters for the Southern District of New York and for the Southern District of Florida.
Mr. Nelson earned numerous awards during his tenure at the SEC including the John Marshall Award (Department of Justice), Chairman's Special Act Award, Capital Markets Award, and Chief Postal Inspector's Special Award. Nelson also devoted significant efforts to enhancing the Commission's commitment to diversity, and was a member of the SEC's first agency-wide diversity initiative.
Early in his career, Mr. Nelson was a member of the prosecution team in the U.S. Attorney's Office for the Southern District of New York that carried out the criminal investigations and prosecutions of Drexel Burnham Lambert, Michael Milken, Ivan Boesky, and others.
Mr. Nelson attended the Massachusetts Institute of Technology (MIT) before transferring to and graduating from Princeton University with an A.B. His law degree is from Georgetown University Law Center. (Press Rel. 2009-176)
In the Matter of Helmerich & Payne, Inc.
On July 30, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order (Order) against Helmerich & Payne, Inc. (H&P). The Order finds that from 2003 through 2008 H&P's books, records, and accounts did not properly reflect the improper payments made by H&P through two of its wholly-owned subsidiaries, Helmerich & Payne (Argentina) Drilling Company (H&P Argentina) and Helmerich & Payne de Venezuela, C.A. (H&P Venezuela) to customs officials. As a result, H&P violated Exchange Act Section 13(b)(2)(A). H&P also failed to devise or maintain sufficient internal controls to ensure that H&P Argentina and H&P Venezuela complied with the FCPA and to ensure that the payments those subsidiaries made to foreign officials were accurately reflected on its books and records. As a result, H&P violated Exchange Act Section 13(b)(2)(B).
Based on the above, the Commission ordered H&P to cease-and-desist from committing or causing any violations and any future violations of Exchange Act Sections 13(b)(2)(A) and 13(b)(2)(B) and to pay disgorgement of $320,604 and prejudgment interest of $55,077.22. H&P consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-60400; AAE Rel. 3026; File No. 3-13565)
SEC Charges Three Former Integral Systems Officers with Securities Fraud
The Securities and Exchange Commission filed a civil action today charging three former senior officers of Integral Systems, Inc. (Integral Systems or the Company), a corporation based in Columbia, Maryland that manufactures satellite ground systems, with fraudulently concealing for over seven years the identity and involvement of a convicted securities fraud felon in the Company's top management. Named in the complaint were Steven R. Chamberlain, the former CEO of Integral Systems, Elaine M. Brown, the former CFO at the Company and Gary A. Prince, the undisclosed felon. Separately, the Commission instituted and settled an administrative proceeding against Integral Systems charging the firm with violations of the periodic reporting and proxy solicitation provisions of the Securities Exchange Act of 1934 (Exchange Act).
The Commission's complaint alleges that from 1999 through August 2006 Chamberlain, Brown and Prince made materially false and misleading statements, and omitted material information, in various filings with the Commission by failing to disclose Prince's role at the Company and his legal background in its filings. Prince's executive officer position at Integral Systems was concealed from investors out of concern that disclosing his securities fraud conviction and other legal issues would have a negative impact on the Company's stock price. The complaint states that Prince pleaded guilty to criminal charges of conspiracy to commit securities fraud and bank fraud at another company in 1995. In related Commission actions, he was enjoined from violating the antifraud and other provisions of the federal securities laws and was barred from appearing or practicing before the Commission as an accountant. Prince had been CFO of Integral Systems for several years until he resigned shortly before his criminal conviction. When Prince was rehired in 1998 after serving his criminal sentence, he was given executive officer responsibilities in the Company's accounting, financial reporting, and policy making functions, but was never disclosed as an officer of the Company.
As a result of the conduct described in the complaint, the Commission alleges that Chamberlain, Brown and Prince violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and aided and abetted violations of Exchange Act Section 13(a) and Rules 12b-20 and 13a-1. Defendants Chamberlain and Brown are alleged to have also violated Exchange Act Rule 13a-14 by signing false and misleading certifications accompanying Integral Systems' periodic filings. The complaint also alleges that Chamberlain violated, and Brown and Prince aided and abetted violations of, the proxy statement provisions of Exchange Act, Section 14(a) and Rule 14a-9 thereunder; and that Prince violated the Exchange Act's provisions concerning stock ownership and transaction reports, Exchange Act Section 16(a) and Rule 16a-3 thereunder. The Commission also alleges that through certain of his conduct at the Company, such as reviewing the Company's filings with the Commission and drafting the MD&A portion of those filings, Prince violated the Commission's order denying him the privilege of appearing or practicing before the Commission as an accountant.
The Commission seeks permanent injunctions against further violations of the securities laws against each defendant, as well as court orders imposing officer and director bars and civil penalties.
In the related administrative proceeding against Integral Systems, without admitting or denying the Commission's findings, Integral Systems consented to an order finding that the Company violated the periodic reporting and proxy solicitation provisions of the Exchange Act. The order directs Integral Systems to cease and desist from committing or causing violations of Sections 13(a) and 14(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 14a-9.
The Commission acknowledges the assistance of The Nasdaq Stock Market, Inc., Listing Investigations in this matter. (In the Matter of Integral Systems, Inc. - Rel. 34-60401; File No. 3-13566); [SEC v. Steven R. Chamberlain, Elaine M. Brown and Gary A. Prince, Civil Action No. 09-cv-01423 (D. D.C.)] (LR-21159)
SEC Halts Ongoing Fraud Conducted by Investment Adviser in Central Pennsylvania
The Securities and Exchange Commission today announced the filing of an emergency action in the United States District Court for the Middle District of Pennsylvania against Robert Glenn Bard (Bard), of Warfordsburg, Pennsylvania and his firm, Vision Specialist Group LLC (Vision Specialist), an investment adviser registered with Pennsylvania and West Virginia, for conducting an ongoing fraud. The Commission alleges that from at least 2005 to the present, Bard and Vision Specialist have targeted investors in and around the small rural community of Warfordsburg with promises of high yields and safety of principal, telling clients that they had invested in safe investments such as bonds, certificates of deposit, and money market funds. In reality, Bard squandered hundreds of thousands of dollars or more of client funds by making risky (and losing) investments in penny stocks and other securities and borrowing on margin.
The Commission's Complaint further alleges that Bard, through Vision Specialist, perpetrated his scheme by materially misrepresenting and failing to fully disclose the types of investments he made for clients and the performance of clients' accounts. He created false statements misrepresenting the true value of client accounts and used Vision Specialist's operating account to cover client withdrawals and pay margin calls so that clients believed their accounts had funds that they did not have. In addition, for at least one client, Bard and Vision Specialist charged fees although Bard represented that he would not. Furthermore, Bard forged client authorization forms to transfer funds between accounts to conceal the dissipation of assets. Bard has marketed himself as a deeply religious man and has benefitted from his and his family's reputation in this small rural community. Vision Specialist currently has at least $4.4 million in advisory client assets under management in over 150 accounts.
As a result of the conduct described in the Complaint, the Commission alleges that Bard and Vision Specialist violated 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 (2) of the Investment Advisers Act of 1940. The Complaint seeks permanent injunctions, disgorgement together with prejudgment interest, and civil penalties from Bard and Vision Specialist.
Acting on the Commission's request, the Court today issued a temporary restraining order which freezes Bard and Vision Specialist's assets, precludes them from exercising any authority over client accounts and imposes other emergency relief.
The Commission's investigation is continuing.
The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA), the Pennsylvania Securities Commission, the United States Attorney's Office for the Middle District of Pennsylvania and the Federal Bureau of Investigation in this matter. [SEC v. Robert Glenn Bard and Vision Specialist Group LLC, Case No. 1:09 CV 1473 (M.D. Pa.)] (LR-21160)
Proposed Rule Changes
The Depository Trust Company filed a proposed rule change (SR-DTC-2009-13) under Section 19(b)(1) of the Securities Exchange Act of 1934. The proposed rule change would modify the timing when an issuer of certain municipal securities or its agent notifies DTC of a redemption or an advance refunding of such municipal securities. Publication is expected in the Federal Register during the week of July 27. (Rel. 34-60394)
Chicago Stock Exchange filed a proposed rule change (SR-CHX-2009-10) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to add the Quote@CHX and Reprice@CHX order types to Brokerplex system. Publication is expected in the Federal Register during the week of July 27. (Rel. 34-60395)
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