Change in the Meeting: Additional Item
The following item has been added to the Thursday, Jan. 14, 2010 Closed Meeting agenda: post argument discussion.
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.
RULES AND RELATED MATTERS
Full Values Advisors LLC
An order has been issued pursuant to Sections 13(f)(2), 13(f)(4), and 36 of the Securities Exchange Act denying Full Value Advisors LLC's (Full Value) application for an exemption from Rule 13f-1 under that Act. (Rel. 34-61327) Another order also has been issued under Sections 13(f)(3) and 13(f)(4) of the Securities Exchange Act denying Full Value's requests for confidential treatment of information required to be filed pursuant to Section 13(f)(1) of that Act. (Rel. 34-61328)
In the Matter of NATCO Group Inc.
On Jan. 11, 2010, the Commission filed a settled civil action in the United States District Court for the Southern District of Texas charging NATCO Group Inc. (NATCO) with violations of the books and records and internal controls provisions of the Foreign Corrupt Practice Act. According to the complaint, TEST Automation & Controls, Inc. (TEST), a wholly owned subsidiary of oil field services provider NATCO Group Inc., created and accepted false documents while paying extorted immigration fines and obtaining immigration visas in the Republic of Kazakhstan. NATCO's system of internal accounting controls failed to ensure that TEST recorded the true purpose of the payments, and NATCO's consolidated books and records did not accurately reflect these payments. Without admitting or denying the allegations in the Commission's complaint, NATCO agreed to pay a $65,000 civil penalty.
In a related administrative proceeding, the Commission today issued a settled cease-and-desist order against NATCO finding that NATCO violated the books and records and internal controls provisions of the Exchange Act in connection with the improper payments made by TEST. Without admitting or denying the Commission's findings, NATCO consented to the issuance of an order that requires NATCO to cease and desist from committing or causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. [SEC v. NATCO Group Inc., Civil Action No. 4:10-CV-98(S.D. Tex.)] (LR-21374; AAE Rel. 3102); Administrative Proceeding In the Matter of NATCO Group Inc. - (Rel. 34-61325; AAE Rel. 3101; File No. 3-13742)
SEC Obtains Final Judgment Against Former Chief Executive Officer and Other Senior Officers and Directors of National Century Financial Enterprises for Their Roles in $2.38 Billion Securities Fraud
On Jan. 8, 2010, the United States District Court for the Southern District of Ohio entered final judgments against Lance Poulsen, the former Chairman and Chief Executive Officer of National Century Financial Enterprises, Inc. (NCFE); Donald Ayers, NCFE's former Chief Operating Officer and a former member of its board of directors; Randolph Speer, NCFE's former Chief Financial Officer; and Rebecca Parrett, NCFE's former Director of Accounts Receivable and also a member of the board of directors, resolving the Securities and Exchange Commission's charges that they orchestrated a fraud on institutional investors in securities issued by NCFE subsidiaries.
The Commission's complaint alleges that NCFE, through its subsidiaries, purchased medical accounts receivable and issued notes that securitized those receivables. The subsidiaries were required to maintain certain cash reserves and receivables as collateral for the notes. Nevertheless, NCFE officials depleted the reserve accounts and collateral base by "advancing" at least $1.2 billion to health-care providers, some of which were wholly or partly owned by NCFE or its principals, without receiving eligible receivables in return. The complaint alleges NCFE officials misrepresented the status of the programs' reserve accounts and collateral base to investors and concealed the reserve account and collateral shortfalls by creating or allowing the creation of false offering documents, monthly investor reports, and accounting records. NCFE collapsed suddenly in October 2002 upon revelation of the fraud. The collapse caused investor losses exceeding $2.38 billion and approximately 275 health-care providers were forced to file for bankruptcy protection.
The final judgments permanently enjoin Poulsen, Ayers, Speer and Parrett from future violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, and bar each from serving as an officer or director of a public company. The court further ordered Parrett to pay a civil penalty of $120,000. Without admitting or denying the allegations in the SEC's complaint, Poulsen, Ayers and Speers each consented to the entry of final judgment in the Commission's civil suit. The court entered the final judgment against Parrett in absentia, because she is a fugitive from justice. [SEC v. Lance Poulsen, et al., Case No. 2:05-CV-01142 (S.D. Ohio)] (LR-21373)
Court Enters Default Final Judgments of Disgorgement and Other Relief Against Relief Defendants Mundo Trade, Inc., and First Fiduciary Business Trust
The Commission announced that on Jan. 6, 2010, the Honorable Anne C. Conway of the United States District Court for the Middle District of Florida entered Default Final Judgments of Disgorgement and Other Relief Against Relief Defendants Mundo Trade, Inc. and First Fiduciary Business Trust. The default final judgment against Mundo Trade orders it to pay disgorgement of $403,018 and prejudgment interest of $40,252. The default final judgment against First Fiduciary orders it to pay disgorgement of $392,383 and prejudgment interest of $39,190.
The Commission commenced this action on Dec. 5, 2007, by filing an emergency action against Defendants Robert Lane, Wealth Pools International, Inc., and Recruit For Wealth alleging they defrauded investors through a fraudulent pyramid scheme. The Commission also named as relief defendants Mundo Trade, First Fiduciary and members of Robert Lane's family and other related entities who received investor proceeds raised in the fraudulent and unregistered offering. [SEC v. Robert E. Lane, et al., Civil Action No. 6:07-cv-1920-Orl-22KRS (M.D. Fla.)] (LR-21375)
SEC Settles Insider Trading Charges Against Canadian Businessman
The Securities and Exchange Commission today announced that, on Jan. 11, 2010, the U.S. District Court for the Southern District of New York entered a settled Final Judgment as to Defendant Martin Gollan, in the previous filed Commission insider trading action, Securities and Exchange Commission v. Phillip Macdonald, Martin Gollan, and Michael Goodman, Civil Action No. 09-CV-5352 (HB) (S.D.N.Y. filed June 10, 2009). The Commission's Complaint in that action alleges that Gollan, a Canadian scrap metal dealer, engaged in insider trading in the securities of certain companies ahead of public announcements of business combinations. The Complaint alleges that between January and June 2005, the wife of Gollan's co-defendant, Michael Goodman, learned the identities of those companies in the course of her employment as an administrative assistant with Merrill Lynch Canada, Inc. Goodman's wife sometimes mentioned the information to Goodman, expecting that he would keep it confidential. Goodman instead misappropriated the information by, among other things, recommending stocks to his business associate, Gollan. On the basis of the information, Gollan then purchased securities ahead of business combination announcements. (Goodman previously consented to the entry of a Final Judgment against him in the Commission's action.)
Gollan consented to the entry of the Final Judgment against him, without admitting or denying the allegations in the Commission's Complaint, except as to jurisdiction. The Final Judgment against Gollan permanently enjoins him from further violations of the antifraud insider trading provisions of the Securities Exchange Act of 1934 and orders him to pay disgorgement of $91,976, together with prejudgment interest thereon in the amount of $22,471.70. [SEC v. Phillip Macdonald, Martin Gollan, and Michael Goodman, Civil Action No. 09-CV-5352 (HB) (S.D.N.Y.)] (LR-21376)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change (SR-NYSEAmex-2009-98) filed by NYSE Amex to establish a new class of NYSE Amex Equities market participants referred to as "Supplemental Liquidity Providers" or "SLPs" 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 January 11. (Rel. 34-61308)
The Depository Trust Company filed a proposed rule change (SR-DTC-2009-18) under Section 19(b)(1) of the Exchange Act, which became effective upon filing to modify its Settlement Progress Payment and Principal and Income Withdrawal cutoff times. Publication is expected in the Federal Register during the week of January 11. (Rel. 34-61318)
A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2010-01) amending its Options 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 January 11. (Rel. 34-61324)
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