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COMMISSION ANNOUNCEMENTSStatement by Chairman Schapiro on IASB and FASB Commitment to Improve IFRS and U.S. GAAP and to Bring About Their ConvergenceSEC Chairman Mary L. Schapiro today made the following statement: "I am greatly encouraged by the commitment of the IASB and the FASB to provide greater transparency to the standard setting process and their convergence efforts. I believe that these efforts will result in improved financial information provided to investors." Background Today, the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB) issued a statement reaffirming the Boards' commitment to improving International Financial Reporting Standards (IFRS) and U.S. Generally Accepted Accounting Principles (U.S. GAAP). In the statement the IASB and the FASB described their plans to strengthen their efforts for completing the major projects in their Memorandum of Understanding (MoU) by 2011. The publication of this statement is intended to provide an understanding of the progress that is being made by the Boards on these projects and to address public concerns regarding the potential of the two Boards to reach different conclusions in the major projects in the MoU. The respective oversight bodies of the IASB and the FASB also issued a statement fully supporting the efforts of the IASB and the FASB in reaching improved and converged global accounting standards. (Press Rel. 2009-237) Commission MeetingsClosed Meeting - Thursday, November 12, 2009 - 2:00 p.m.The subject matter of the Closed Meeting scheduled for Thursday, Nov. 12, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; 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 PROCEEDINGSCommission Sustains NASD's Findings of Violation Against and Imposition of a Six Month Suspension on Kevin M. GlodekThe Commission has sustained NASD's findings that Kevin M. Glodek, formerly a general securities representative associated with NASD member firm William Scott & Co., made material misrepresentations to certain of his customers in early 2001, in connection with their purchases of the securities of Metropolitan Health Networks, Inc. The Commission found, as Glodek admitted, that these misrepresentations constituted violations of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b 5 thereunder, and NASD Conduct Rules 2110 and 2120. The Commission found that the $25,000 fine and six month suspension that NASD imposed were not excessive or oppressive sanctions for Glodek's violations. (Rel. 34-60937; File No. 3 13414) Securities and Exchange Commission Orders Hearing on Registration Revocation Against Six Public Companies for Failure to Make Required Periodic FilingsOn Nov. 4, 2009, 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:
In this Order, the Division of Enforcement (Division) alleges that the eight 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. 34-60940; File No. 3-13676) In the Matter of Rhino Trading, LLC, Fat Squirrel Trading Group, LLC, Damon Rein, and Steven PeterOn Nov. 4, 2009, the Commission instituted a settled administrative proceeding charging Rhino Trading, LLC (Rhino) and Fat Squirrel Trading Group, LLC (FSTG) with willful violations of Regulation SHO in connection with options trading activity. The SEC also charged Rhino and FSTG trader Damon Rein with willfully aiding and abetting and causing Rhino's and FSTG's violations of Regulation SHO and charged FSTG trader Steven Peter with willfully aiding and abetting and causing FSTG's violations of Regulation SHO. The Commission found that, Rhino from June 2007 through August 2007, and FSTG from February 2007 through July 2007, willfully violated Rule 203(b)(3) of Regulation SHO by engaging in a series of transactions through Rein's and Peter's use of short-term FLEX options that did not satisfy their close-out obligations in Regulation SHO threshold securities that had been allocated to Rhino and FSTG by their clearing firms. Under the terms of the settlement, Rhino and FSTG consented to the issuance of an administrative order: (i) imposing a censure; (ii) requiring them to cease and desist from committing or causing any violations and any future violations Exchange Act Rule 203(b)(3); and (iii) requiring them to pay disgorgement of $350,000 and $45,000, respectively, which shall be deemed satisfied by entry of the Chicago Board Options Exchange's (CBOE) issuance of its Decision Accepting Offer of Settlement (File No. 09-0010) and its Decision Accepting Offer of Settlement (File No. 09-0009), respectively. Additionally, Rhino has agreed to an undertaking requiring it to pay, jointly and severally with Rein, a fine of $150,000 to the CBOE's Business Conduct Committee (BCC). FSTG has also agreed to an undertaking requiring it to pay, jointly and severally with Rein and Peter, a fine of $30,000 to the CBOE's BCC. The individuals - Rein and Peter - have offered to consent to the issuance of an administrative order: (i) requiring them to cease and desist from committing or causing any violations and any future violations of Exchange Act Rule 203(b)(3); and (ii) suspending them from associating with any broker or dealer for a period of three months. In addition, Rein has agreed to an undertaking requiring him to pay, jointly and severally with Rhino, a fine of $150,000, and separately, an undertaking requiring him to pay, jointly and severally with FSTG and Peter, a fine of $30,000 to the CBOE's BCC. Finally, Peter has agreed to an undertaking requiring him to pay, jointly and severally with FSTG and Rein, a fine of $30,000 to the CBOE's BCC. (Rel. 34-60941; File No. 3-13677) Commission Revokes Registration of Securities of Platinum Entertainment, Inc. (n/k/a Vidalia Gichner Holdings, Inc.) for Failure to Make Required Periodic FilingsOn Nov. 5, 2009, the Commission revoked the registration of each class of registered securities of Platinum Entertainment, Inc. (n/k/a Vidalia Gichner Holdings, Inc.) (PTETQ) 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, PTETQ 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 Platinum Entertainment, Inc. (n/k/a Vidalia Gichner Holdings, Inc.) 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 PTETQ's securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against PTETQ in In the Matter of Altiva Financial Corp., et al., Administrative Proceeding File No. 3-13651. 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 . . . . For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Altiva Financial Corp., et al., Administrative Proceeding File No. 3-13651, Exchange Act Release No. 60830 (Oct. 15, 2009). (Rel. 34-60943; File No. 3-13651) SEC Charges Wall Street Ring that Made Over $20 Million Serially Trading on Acquisition Information Tipped by Attorney at International Law FirmThe Securities and Exchange Commission today announced insider trading charges against nine defendants in a case involving serial insider trading by a ring of Wall Street traders and hedge funds who made over $20 million trading ahead of corporate acquisition announcements using inside information tipped by an attorney at the international law firm of Ropes & Gray LLP, in exchange for kickbacks. The SEC alleges that Arthur J. Cutillo, an attorney in the New York office of Ropes & Gray, misappropriated from his law firm material, nonpublic information concerning at least four corporate acquisitions or bids involving Ropes & Gray clients -- the 2007 acquisitions of Alliance Data Systems Corp. (ADS), Avaya Inc. (Avaya), 3Com Corp. (3Com), and Axcan Pharma Inc. (Axcan). The complaint alleges that Cutillo, through his friend and fellow attorney Jason Goldfarb, tipped inside information concerning these acquisitions to Zvi Goffer, a proprietary trader at the broker-dealer Schottenfeld Group, LLC (Schottenfeld). The complaint further alleges that Zvi traded on this information for Schottenfeld, and had numerous downstream tippees who also traded on the information, including other professional traders and portfolio managers at two hedge fund advisers. The Commission's complaint names the following defendants and includes the allegations set forth below: Arthur J. Cutillo, a resident of Ridgewood, New Jersey, is an attorney in the New York office of the international law firm of Ropes & Gray. Cutillo misappropriated from his law firm material, nonpublic information concerning at least four corporate acquisitions involving Ropes & Gray clients -- the 2007 acquisition announcements of ADS, Avaya, 3Com, and Axcan. Cutillo illegally tipped that information, through his friend and fellow attorney Jason Goldfarb, to Zvi Goffer, a proprietary trader Schottenfeld, in exchange for kickbacks. Jason C. Goldfarb, a resident of New York, New York, is an attorney in private practice in New York. Goldfarb illegally tipped Zvi Goffer material, nonpublic information concerning upcoming corporate acquisitions that Cutillo misappropriated from Ropes & Gray, in exchange for kickbacks. Zvi Goffer, a resident of New York, New York, is currently employed at Echotrade LLC (Echotrade), registered broker-dealer, and is also a trader at Incremental Capital, LLC (Incremental Capital). During the relevant time period, Zvi Goffer was a registered representative and proprietary trader at Schottenfeld, a registered broker-dealer. Zvi Goffer illegally traded on and/or tipped material, nonpublic information concerning the proposed acquisitions of Avaya, 3Com, and Axcan. Craig C. Drimal, a resident of Weston, Connecticut. Drimal is a trader who, during part of the relevant time period, worked out of the offices of Galleon Management, LP. Currently, Drimal is a registered representative at Echotrade and is also a trader at Incremental Capital. Drimal illegally traded on and/or tipped material, nonpublic information concerning the proposed acquisitions of Avaya, 3Com, and Axcan. Schottenfeld Group, LLC is a registered broker-dealer located in New York, New York. Schottenfeld illegally traded on material, nonpublic information concerning the proposed acquisitions of Avaya, 3Com, and Axcan. Gautham Shankar is a resident of New Canaan, Connecticut. During the relevant time period, Shankar was a registered representative and proprietary trader at Schottenfeld. Shankar illegally traded on and tipped material, nonpublic information concerning the proposed acquisitions of Avaya, 3Com, and Axcan. David Plate, a resident of New York, New York, is a registered representative at G-2 Trading LLC, a registered broker-dealer. During the relevant time period, Plate was a registered representative and proprietary trader at Schottenfeld. Plate illegally traded on material, nonpublic information concerning the proposed acquisitions of Avaya, 3Com, and Axcan. Emanuel Goffer, a resident of New York, New York, is employed at Echotrade and is also a trader at Incremental Capital. During the relevant time period, Emanuel Goffer was a registered representative and proprietary trader at Spectrum Trading LLC, a registered broker-dealer. Emanuel Goffer illegally traded on material, nonpublic information concerning the proposed acquisitions of Avaya and 3Com. Michael A. Kimelman, a resident of Larchmont, New York, is a registered representative at Echotrade and also is a trader at Incremental Capital. During the relevant time period, Kimelman was a trader at Lighthouse Financial Group LLC, an investment bank and registered broker-dealer. Kimelman illegally traded on material, nonpublic information concerning the proposed acquisition of 3Com. As a result of conduct described in the complaint, the Commission alleges that each of the defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's complaint seeks permanent injunctive relief, disgorgement of illicit profits with prejudgment interest, and the imposition of civil monetary penalties. In a related criminal case, the U.S. Attorney's Office for the Southern District of New York announced today criminal charges against Cutillo, Goldfarb, Zvi Goffer, Drimal, Shankar, Plate, Emanuel Goffer, and Kimelman, in connection with the above insider trading schemes. The Commission thanks the U.S. Attorney's Office and the Federal Bureau of Investigation for their cooperation and assistance in connection with this matter. The Commission's investigation is continuing. [SEC v. Arthur J. Cutillo, Jason C. Goldfarb, Zvi Goffer, Craig C. Drimal, Schottenfeld Group, LLC, Gautham Shankar, David Plate, Emanuel Goffer, and Michael Kimelman, Civil Action No. 09-09208 (LAK) (S.D.N.Y.)] (LR-21283) SEC Charges 13 Additional Individuals and Entities in Galleon Insider Trading CaseHedge Fund Managers, Professional Traders and Senior Corporate Executive Among Newly Charged in $33 Million SchemeOn Nov. 5, 2009, the Securities and Exchange Commission filed an amended complaint in the United States District Court for the Southern District of New York in its insider trading action against billionaire Raj Rajaratnam and his New York-based hedge fund advisory firm Galleon Management LP. The SEC's amended complaint names thirteen new defendants and alleges insider trading that cumulatively generated more than $33 million in illicit gains. Among those identified today by the SEC were three hedge fund managers, three professional traders at Schottenfeld Group, a New York-based trading firm, and a senior executive at Atheros, a California-based developer of networking technologies. On October 16, the SEC filed a complaint in federal court in Manhattan alleging, among other things, that Rajaratnam had tapped into his network of friends and close business associates to obtain insider tips and confidential information about corporate earnings or takeover activity at several companies, including Google, Hilton, Intel and Polycom. He then used the non-public information to illegally trade on behalf of Galleon. Today's amended complaint names some of the sources for the insider tips and confidential information to Rajaratnam and Galleon, and identifies other traders who traded on the basis of the same inside information or other newly identified inside information coming from various sources. The SEC's initial complaint, in addition to Rajaratnam and Galleon, had charged:
Today's amended complaint adds the following new defendants:
The amended complaint alleges trading on inside information concerning the following events or transactions:
The SEC's complaint charges each of the defendants with violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and, except for Shah, Kumar, Moffat, Goffer and Plate violations of Section 17(a) of the Securities Act of 1933 and. The complaint seeks a final judgment permanently enjoining the defendants from future violations of the above provisions of the federal securities laws, ordering them to disgorge their ill-gotten gains plus prejudgment interest, and ordering them to pay financial penalties. The complaint also seeks to permanently prohibit Goel, Moffat and Hariri from acting as an officer or director of any registered public company. [SEC v. Galleon Management, LP, Raj Rajaratnam, Rajiv Goel, Anil Kumar, Danielle Chiesi, Mark Kurland, Robert Moffat, New Castle Funds LLC, Roomy Khan, Deep Shah, Ali T. Far, Choo-Beng Lee, Far & Lee LLC, Spherix Capital LLC, Ali Hariri, Zvi Goffer, David Plate, Gautham Shankar, Schottenfeld Group LLC, Steven Fortuna, and S2 Capital Management, LP, Civil Action No. 09-CV-8811 (SDNY) (JSR)] (LR-21284) SELF-REGULATORY ORGANIZATIONSImmediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by Chicago Board Options Exchange (SR-CBOE-2009-083) to change the time at which CBSX opens for trading from 8:15 a.m. Central Time to 8:00 a.m. Central Time 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 Nov. 2, 2009. (Rel. 34-60910) A proposed rule change (SR-NYSE-2009-109) filed by the New York Stock Exchange to extend the pilot program in relation to certain of its continued listing standards 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 Nov. 2, 2009. (Rel. 34-60911) A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-108) to adjust its rebates paid to Supplemental Liquidity Providers 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 Nov. 2, 2009. (Rel. 34-60912) A proposed rule change filed by the International Securities Exchange (SR-ISE-2009-88) relating to amending the Direct Edge ECN Fee Schedule 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 Nov. 2, 2009. (Rel. 34-60914) A proposed rule change filed by New York Stock Exchange amending exchange Rule 62 to support quoting and trading in a minimum price variation below $.01 for securities traded on the exchange for orders or interest priced below $1.00 per share (SR-NYSE-2009-107) 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 Nov. 2, 2009. (Rel. 34-60915) A proposed rule change filed by NYSE Amex amending exchange Rule 62 to support quoting and trading in a minimum price variation below $.01 for securities traded on the exchange for orders or interest priced below $1.00 per share (SR-NYSEAmex-2009-78) 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 Nov. 2, 2009. (Rel. 34-60916) A proposed rule change (SR-CBOE-2009-079) filed by the Chicago Board Options Exchange relating to the Penny 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 Nov. 2, 2009. (Rel. 34-60919) A proposed rule change filed by NYSE Arca amending Rule 6.82 - Lead Market Makers to eliminate obsolete language and clarify rule provisions (SR-NYSEArca-2009-96) 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 Nov. 2, 2009. (Rel. 34-60923) Accelerated Approval of Proposed Rule ChangeThe Commission granted accelerated approval to a proposed rule change (SR-ISE-2009-89) submitted by the International Securities Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to the amounts that Direct Edge ECN, in its capacity as an introducing broker for non-ISE Members, passes through to such non-ISE Members. Publication is expected in the Federal Register during the week of Nov. 2, 2009. (Rel. 34-60913) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2009/dig110509.htm
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