Commission Revokes Registration of Securities of Transderm Laboratories Corp. for Failure to Make Required Periodic Filings
On September 9, the Commission revoked the registration of each class of registered securities of Transderm Laboratories Corp. (Transderm Laboratories) for failure to make required periodic filings with the Commission.
Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, Transderm Laboratories consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Transderm Laboratories finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of Transderm Laboratories' securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against Transderm Laboratories in the Matter of Tops Appliance City, Inc., et al., Administrative Proceeding File No. 3-13573.
Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:
No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .
Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Tops Appliance City, Inc., et al., Administrative Proceeding File No. 3-13573, Exchange Act Release No. 60463, August 10, 2009. (Rel. 34-60636; File No. 3-13573)
SEC Files Settled Insider Trading Action Against Jeff L. Soisson and Karen Kaye Walker
On September 8, the Securities and Exchange Commission filed an insider trading action in the United States District Court in Dallas, Texas against Jeff L. Soisson and Karen Kaye Walker. The Commission alleges that Soisson and Walker, who are married, engaged in unlawful insider trading in the securities of i2 Technologies, Inc.
The Commission's complaint alleges as follows: on Aug. 11, 2008, JDA Software Group, Inc. announced a merger agreement with i2 Technologies. On Nov. 4, 2008, Walker, who was JDA's communications director, learned through her employment that JDA was not going to proceed with the merger. This information was not public at the time. Walker immediately alerted Soisson of the news and, shortly afterwards, he sold approximately 40,000 shares of i2 Technologies stock - the couple's entire stake - that they had purchased several months earlier. After JDA announced on Nov. 5, 2008 that it was effectively not proceeding with the merger, i2 Technologies' share price declined sharply, closing that day at $10.42 compared the previous day's closing price of $14.60. By selling his i2 Technologies shares in advance of the announcement, Soisson avoided losses of $163,224.
Without admitting or denying the complaint's allegations, Soisson and Walker have agreed to settle the Commission's charges by consenting to the entry of a final judgment that: (i) permanently enjoins them from further violations of Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder; (ii) orders them to jointly and severally pay $163,224 in disgorgement and $3,973.89 in prejudgment interest; and (iii) orders them to jointly and severally pay a civil penalty of $163,224. [SEC v. Jeff L. Soisson and Karen Kaye Walker, Civil Action No. 09-cv-1669, United States District Court for the Northern District of Texas (Dallas Division)] (LR-21201)
SEC Charges Former CEO of Florida Telecommunications Company for Accounting Fraud
On September 8, the Securities and Exchange Commission filed a civil action against Timothy J. Huff (Huff), the former chief executive officer (CEO) of GlobeTel Communications Corp. ("GlobeTel" or the "company"), a publicly-traded company headquartered in Fort Lauderdale, Florida, now known as Sanswire Corp.
According to the complaint, which was filed in the United States District Court for the Southern District of Florida, Huff participated in a scheme to fraudulently inflate GlobeTel's revenue from approximately May 2002 through October 2004. The complaint alleges that Huff's scheme involved the creation of millions of dollars in fake invoices and call detail records that appeared to reflect transactions between GlobeTel and telecommunications companies in Mexico, Brazil and the Philippines. The complaint further alleges that, as a result of Huff's scheme, GlobeTel issued materially false and misleading periodic reports, registration statements and press releases. Huff allegedly received compensation from the company of about $4.9 million and exercised stock options with a value of more than $1.5 million. The SEC charges Huff with violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13a-14 and 13b2-2 thereunder and seeks as relief permanent injunctions, civil penalties, disgorgement with prejudgment interest and an officer and director bar.
The SEC previously charged GlobeTel and a number of other former officers in connection with these and other securities law violations. The SEC also charged Huff for violations of Section 5(a) and 5(c) of the Securities Act of 1933. Without admitting or denying the allegations, Huff settled those charges by consenting to an injunction and $30,000 civil penalty. For additional information, see LR-20371 (Nov. 26, 2007) and LR-20550 (May 1, 2008). [SEC v. Timothy J. Huff, Case No. 09-61419 (S.D. Fla.] (LR-21202; AAE Rel. 3046)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NASDAQ OMX PHLX (SR-Phlx-2009-78) relating to an extension of the FLEX minimum size pilot program 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 September 7. (Rel. 34-60627)
A proposed rule change (SR-CBOE-2009-063) filed by the Chicago Board Options Exchange 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 September 7. (Rel. 34-60629)
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