SEC News Digest

COMMISSION ANNOUNCEMENTS

Commission Meetings

Closed Meeting - Thursday, August 6, 2009 - 2:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, Aug. 6, 2009, will be: institution and settlement of injunctive actions; institution and settlement of an administrative proceeding; and other matters relating to enforcement proceedings.

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.

ENFORCEMENT PROCEEDINGS

Delinquent Filers' Stock Registrations Revoked

The registrations of the registered securities of Absolute Entertainment, Inc., Advanced Computer Techniques Corp., AGP & Co., Inc., Aid Auto Stores, Inc., Allure Cosmetics, Ltd., Alpha-Beta Technology, Inc., and Alpha Fibre, Inc. (f/k/a Oak Brook Capital III, Inc.), have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-60434; File No. 3-13549)

In the Matter of TJM Proprietary Trading, LLC, Michael R. Benson, and John T. Burke

On August 5, the Commission instituted a settled administrative proceeding charging TJM Proprietary Trading, LLC (TJM) with violations of Regulation SHO in connection with options trading activity that resulted in "naked" short selling. The SEC also charged TJM trader Michael R. Benson with aiding and abetting TJM's violations of Regulation SHO and charged Benson's supervisor, John T. Burke, with failing to supervise Benson.

The Commission found that, from January 2007 through July 2007, TJM willfully violated Rule 203(b)(1) of Regulation SHO as a result of Benson improperly utilizing the market-maker locate exception to avoid locating shares prior to effecting short sale transactions. In willful violation of Rule 203(b)(3) of Regulation SHO, TJM engaged in a series of transactions through Benson's use of short-term FLEX options that did not satisfy its close-out obligations in Regulation SHO threshold securities that had been allocated to TJM by its clearing firm.

According to the Commission's Order, the Commission found that Burke, TJM's Chief Operating Officer, failed reasonably to supervise Benson with a view to preventing him from willfully aiding and abetting and causing TJM's violations of Rules 203(b)(1) and 203(b)(3) of Regulation SHO.

Under the terms of the settlement, TJM consented to the issuance of an administrative order: (i) imposing a censure; (ii) requiring it to cease and desist from committing or causing any violations and any future violations of Exchange Act Rules 203(b)(1) and 203(b)(3); and (iii) requiring it to pay disgorgement of $541,000, which shall be deemed satisfied by its payment of $541,000 to the Chicago Board Options Exchange's (CBOE) Business Conduct Committee (BCC). Benson consented to the issuance of an administrative order: (i) requiring him to cease and desist from causing any violations and any future violations of Exchange Act Rules 203(b)(1) and 203(b)(3); and (ii) suspending him from associating with any broker or dealer for a period of three months. Finally, Burke consented to the issuance of an administrative order suspending him from acting in a supervisory capacity with a broker or dealer for a period of nine months. In addition, as part of their settlement, TJM, Burke, and Benson agreed to an undertaking requiring them to pay, jointly and severally, a $250,000 fine to the CBOE's BCC. (Rel. 34-60440; File No. 3-13569)

In the Matter of Hazan Capital Management, LLC and Steven M. Hazan

On August 5, the United States Securities and Exchange Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order (Order) against Hazan Capital Management, LLC (HCM) and Steven M. Hazan (Hazan) arising out of HCM's violations of the locate and close out provisions of Regulation SHO (Reg SHO).

The Order finds that from January 2005 through October 2007, HCM, a broker-dealer registered with the Commission and putative options market maker, improperly claimed the market maker exception to avoid locating shares before effecting short sale transactions in Reg SHO threshold securities, in violation of Rule 203(b)(1) of Reg SHO. The Order also finds that HCM violated Rule 203(b)(3) of Reg SHO by engaging in a series of sham reset transactions that employed short-term, paired stock and option positions, which enabled HCM to circumvent its close out obligations in Reg SHO threshold securities. In addition, according to the Order, HCM assisted other putative market makers in evading their close out obligations by acting as the counterparty to reset transactions and in doing so sold short shares of Reg SHO threshold securities without borrowing, arranging to borrow, or locating the shares of these threshold securities, in violation of Rule 203(b)(1) of Reg SHO. The Order further finds because HCM improperly failed to borrow or arrange to borrow securities to make delivery when delivery was due, the short sales were "naked" short sales that violated Reg SHO.

The Order also finds that Hazan, the principal trader at HCM and its majority owner, willfully aided and abetted and caused HCM's violations of Rules 203(b)(1) and 203(b)(3) of Reg SHO.

Based on the above, the Order censures HCM; bars Hazan from association with any broker or dealer, with the right to reapply for association after five (5) years; and orders HCM to cease-and-desist from committing or causing, and Hazan to cease-and-desist from causing, any violations and any future violations of Exchange Act Rules 203(b)(1), and 203(b)(3). The Order also requires HCM and Hazan to pay, jointly and severally, disgorgement in the amount of $3,000,000, which obligation shall be deemed satisfied by the orders of NYSE Amex, LLC directing Hazan and HCM to pay disgorgement in the amount of $1,500,000, and NYSE Arca, Inc., directing Hazan and HCM to pay disgorgement in the amount of $1,500,000, in related actions brought by those self-regulatory organizations; and acknowledges HCM's and Hazan's undertakings to pay, jointly and severally, fines of $500,000 to each of NYSE Amex, LLC and NYSE Arca, Inc. HCM and Hazan consented to the issuance of the Order without admitting or denying any of the findings in the order. (Rel. 34-60441; File No. 3-13570). (Rel. 34-60441; File No. 3-13570)

SEC Settles Fraud Action against Former Royal Ahold Executive Vice President

The Securities and Exchange Commission announced today that it filed a settled Final Judgment against Johannes Gerhardus Andreae. Andreae, who consented to the Judgment without admitting or denying the allegations in the Commission's Complaint, is a former Executive Vice President and former member of the executive board of Royal Ahold (Koninklijke Ahold N.V.). The proposed Final Judgment would: (i) permanently enjoin Andreae from violating the antifraud provisions of the Securities Act of 1933; violating, or aiding and abetting violations of, the antifraud and recordkeeping provisions of the Securities Exchange Act of 1934 (Exchange Act); and from aiding and abetting the reporting, recordkeeping, and internal control provisions of the Exchange Act; and (ii) bar Andreae from serving as an officer or director of a public company. The proposed Final Judgment is subject to the approval of the U.S. District Court for the District of Columbia.

The Commission's Complaint against Andreae alleges that Andreae and others at Royal Ahold participated in a scheme to consolidate joint ventures improperly, which caused Royal Ahold fraudulently to publish materially false and misleading financial and other statements for at least fiscal years 2000 and 2001 and for the first three quarters of 2002. Royal Ahold is a publicly held company organized in The Netherlands. At the time of the alleged misconduct, the company had registered securities with the Commission pursuant to Section 12(b) of the Exchange Act. [SEC v. Johannes Gerhardus Andreae, Civil Action No. 1:04-cv-01741-RMU, USDC, DDC] (LR-21168; AAE Rel. 3030)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by the NASDAQ Stock Market (SR-NASDAQ-2009-073) to amend its fees related to orders routed to NASDAQ via the Options Intermarket Linkage 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 August 3. (Rel. 34-60407)

A proposed rule change filed by Financial Industry Regulatory Authority (SR-FINRA-2009-051) relating to the use of multiple market participant symbols when quoting or trading OTC Equity Securities has become immediately 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 August 3. (Rel. 34-60414)

A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2009-50) to duplicate in the NYSE Amex Equities Price List the section of the NYSE Amex Options Price List setting forth regulatory fees applicable to member organizations 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 August 3. (Rel. 34-60418)

A proposed rule change filed by New York Stock Exchange extending until August 10, 2009 the operation of Interim NYSE Rule 128, which permits the Exchange to cancel or adjust clearly erroneous executions (SR-NYSE-2009-79) 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 August 3. (Rel. 34-60419)

The Fixed Income Clearing Corporation filed a proposed rule change (SR-FICC-2009-07) under Section 19(b)(1) of the Exchange Act, which proposed rule change became effective upon filing, to modify the haircuts applied to Eligible Clearing Fund Securities and Eligible Participant Fund Securities. Publication is expected in the Federal Register during the week of August 3. (Rel. 34-60421)

A proposed rule change (SR-FINRA-2009-049) filed by the Financial Industry Regulatory Authority to adopt the selection specifications and study outline for the Limited Representative - Investment Banking ("Series 79") Examination Program 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 August 3. (Rel. 34-60424)

Accelerated Approval of Proposed Rule Change

The Commission published notice of, and granted accelerated approval to, a proposed rule change (SR-BX-2009-045) submitted by NASDAQ OMX BX pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend the Fee Schedule of the Boston Options Exchange Group, LLC. Publication is expected in the Federal Register during the week of August 3. (Rel. 34-60416)

Proposed Rule Changes

The Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2009-052) related to its hybrid matching algorithms pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 3. (Rel. 34-60420)

The Commission issued notice of a proposed rule change submitted by the Financial Industry Regulatory Authority (SR-FINRA-2009-048) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt FINRA Rule 5230 (Payments Involving Publications that Influence the Market Price of a Security) in the consolidated FINRA rulebook. Publication is expected in the Federal Register during the week of August 3. (Rel. 34-60422)

NASDAQ OMX BX filed a proposed rule change (SR-BX-2009-043) under Section 19(b)(1) of the Securities Exchange Act of 1934 to extend a fee holiday for the registration of associated persons. Publication is expected in the Federal Register during the week of August 3. (Rel. 34-60427)

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