SEC'S New Division of Risk, Strategy, and Financial Innovation Adds Experts to Senior Ranks
On Nov. 5, 2009, the Securities and Exchange Commission announced that three experts in the fields of risk management, structured finance and corporate transactions have been named to senior positions at the SEC's newly-established Division of Risk, Strategy, and Financial Innovation. The Division was created in September to enhance the agency's capabilities and help identify developing risks and trends in the financial markets.
The Division's new senior officials are:
I am pleased that Adam, Bruce, and Rick have agreed to come to the Commission," said Henry Hu, Director of the SEC's Division of Risk, Strategy, and Financial Innovation. "The role of the SEC has never been more critical. How modern capital markets, derivatives and structured products, and systemic risk are addressed today may well affect the nation for generations to come. Adam, Bruce, and Rick bring energy, expertise, and creativity. They will be important in this Division's efforts to offer analysis that integrates economic, finance, and legal disciplines, with full appreciation of the complexities of today's world. They will add to the new Division's growing roster and give us a deeper bench to draw from as we fulfill our mission of protecting investors."
Dr. Bookstaber said, "These times present a rare opportunity for fundamental financial reform. I am honored to be counted as part of this great team and am committed to the goals of investor protection and control of systemic risk."
Mr. Glass said, "I feel privileged to have been asked by Professor Hu to join this new Division. The SEC's work could not be more important at this critical time. I much look forward to playing a role in identifying and responding to new risks and trends in today's financial markets."
Mr. Kraus said, "I am honored by Professor Hu's invitation to join him alongside experts in economics and finance in these unprecedented times. The challenges present new mandates and fresh opportunities for positive change, and I look forward to assisting him and all the Risk Fin professionals in every way I can."
The Division of Risk, Strategy, and Financial Innovation combines the Office of Economic Analysis, the Office of Risk Assessment, and other functions to provide the Commission with sophisticated analysis that integrates economic, financial, and legal disciplines. The Division's responsibilities cover three broad areas: risk and economic analysis; strategic research; and financial innovation. (Press Rel. 2009-238)
Commission Revokes Registration of Securities of New Zealand Petroleum Co., Ltd. (n/k/a Abano Healthcare Group, Ltd.) for Failure to Make Required Periodic Filings
On Nov. 6, 2009, the Commission revoked the registration of each class of registered securities of New Zealand Petroleum Co., Ltd. (n/k/a Abano Healthcare Group, Ltd.) (New Zealand Petroleum) 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, New Zealand Petroleum 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 New Zealand Petroleum 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 or 13a-16 thereunder and revoking the registration of each class of New Zealand Petroleum's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against New Zealand Petroleum in In the Matter of National Venture Capital Fund, Inc., et al., Administrative Proceeding File No. 3-13632.
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 National Venture Capital Fund, Inc., et al., Administrative Proceeding File No. 3-13632, Exchange Act Release No. 60734, Sept. 29, 2009. (Rel. 34-60947; File No. 3-13632)
Delinquent Filers' Stock Registrations Revoked
The registrations of the registered securities of Western Fidelity Funding, Inc., Western Real Estate Fund, Inc., Willamette Valley, Inc. Microbreweries Across America, Windsor Energy Corp., Wireless Billboards Technologies Corp., and WPB Financiers Ltd. 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. 34-60948; File No. 3-13650)
In the Matter of Nicos Achilleas Stephanou
The United States Securities and Exchange Commission announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Nicos Achilleas Stephanou (Stephanou). The Order finds that Stephanou, who was a registered representative employed by UBS Investment Bank as a Director of Mergers and Acquisitions in UBS's London office, had a Final Judgment entered against him on Sept. 23, 2009, in the civil action entitled SEC v. Nicos Achilleas Stephanou, et al., Civil Action Number 09-CV-01043 (RJS), in the United States District Court for the Southern District of New York.
The Commission's complaint in that action alleged, among other things, that Stephanou tipped three individuals with material nonpublic information about three impending corporate acquisitions. The Complaint also alleged that Stephanou traded securities in his father's brokerage account based on the material nonpublic information he possessed concerning the acquisitions. Based on that trading, Stephanou is alleged to have generated illegal profits of $461,893. The Final Judgment entered against Stephanou in the civil action permanently enjoins him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, orders him to pay disgorgement of $461,893, together with prejudgment interest of $77,175.
On May 6, 2009, Stephanou pled guilty to seven counts of securities fraud and conspiracy to commit securities fraud. The charges in that criminal information are based largely on the same conduct alleged in the Commission's complaint.
Based on the above, the Order bars Stephanou from association with any broker or dealer. Stephanou consented to the issuance of the Order without admitting or denying any of the findings except as to the Commission's jurisdiction over him and the subject matter of the proceedings, and the findings contained in Sections III.2 and III.4 of the Order, which are admitted.
For further information, please see Litigation Rel. No. 20884 (Feb. 5, 2009). (Rel. 34-60954; File No. 3-13679); [SEC v. Nicos Achilleas Stephanou, et al., Civil Action No. 09 CV 1043 (S.D.N.Y.)] (LR-21285)
INVESTMENT COMPANY ACT RELEASES
FaithShares Trust, et al.
A notice has been issued giving interested persons until Nov. 30, 2009, to request a hearing on an application filed by FaithShares Trust, FaithShares Advisors, LLC and SEI Investments Distribution Company for an order to permit (a) series of an open-end management investment company to issue shares (Fund Shares) that can be redeemed only in large aggregations (Creation Unit Aggregations); (b) secondary market transactions in Fund Shares to occur at negotiated prices; (c) certain series to pay redemption proceeds, under certain circumstances, more than seven days after the tender of Fund Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Unit Aggregations; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Fund Shares. (Rel. IC-28991 - November 5)
Proposed Rule Changes
The NYSE Arca filed a proposed rule change (SR-NYSEArca-2009-90) amending NYSE Arca Equities Rule 2.100 to provide the NYSE Arca with the authority to declare an emergency condition with respect to trading on or through the systems and facilities of the NYSE Arca and enable the NYSE Arca to act as a back-up trading facility for affiliated exchanges owned and operated by NYSE Euronext. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60921)
The New York Stock Exchange filed a proposed rule change (SR-NYSE-2009-105) adopting NYSE Rule 49 to provide the Exchange with the authority to declare an emergency condition with respect to trading on or through the systems and facilities of the Exchange and to transfer trading of Exchange-listed securities to its corporate affiliate, NYSE Arca, Inc. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60922)
The Chicago Board Options Exchange filed a proposed rule change (SR-CBOE-2009-078), as modified by Amendment No. 1 thereto, relating to professional orders. Publication is expected in the Federal Register during the week of November 9. (Rel. 34-60931)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-CBOE-2009-082) filed by the Chicago Board Options Exchange relating to temporary membership status and interim trading permit access fees 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 November 9. (Rel. 34-60932)
A proposed rule change filed by NASDAQ OMX BX amending the Fee Schedule of the Boston Options Exchange Facility (SR-BX-2009-071) 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 November 9. (Rel. 34-60934)
A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2009-081) to amend the marketing fee 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 November 9. (Rel. 34-60938)
A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2009-79) to add 75 options classes to the Penny Pilot 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 November 9. (Rel. 34-60939)
A proposed rule change filed by NASDAQ OMX PHLX to extend its sponsored access pilot program (SR-Phlx-2009-93) 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 November 9. (Rel. 34-60942)
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