SEC News Digest

RULES AND RELATED MATTERS

Delegation of Authority to Director of the Division of Enforcement

The Commission is amending its rules to delegate to the Director of the Division of Enforcement the authority to submit witness immunity requests to the Department of Justice for witnesses who have provided or have the potential to provide substantial assistance in the Commission's investigations and related enforcement actions. This delegation is intended to conserve Commission resources, enhance the Division's ability to detect violations of the federal securities laws, increase the effectiveness and efficiency of the Division's investigations, and improve the success of the Commission's enforcement actions. (Rel. 34-61339)

Policy Statement Concerning Cooperation by Individuals in its Investigations and Related Enforcement Actions

The Commission is issuing a policy statement announcing the analytical framework it uses to evaluate cooperation by individuals. This framework serves two important purposes: it promotes the fair and effective exercise of discretion by the Commission, and it enhances confidence on the part of the public and cooperating individuals that decisions regarding cooperation in the Commission's investigations and related enforcement actions will be made in an appropriate and consistent manner. (Rel. 34-61340)

ENFORCEMENT PROCEEDINGS

In the Matter of William J. Herisko

On Jan. 14, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against William J. Herisko, a resident of Palm Springs, California, based on the entry of a permanent injunction against him in the civil action entitled Securities and Exchange Commission v. U.S. Reservation Bank & Trust, et al., Civil Action No. 02-0581 PHX (EHC) in the United States District Court for the District of Arizona, Phoenix Division.

In the Order, the Division of Enforcement alleges that, on Sept. 25, 2006, a judgment was entered against Herisko, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Division of Enforcement further alleges in the Order that the Commission's complaint in the civil action alleged, among other things, that, from at least March 2000 through at least April 2002, Herisko, along with a company he controlled called Global-Link Capital Markets, Ltd., engaged in a fraudulent securities offering that defrauded investors of approximately $78 million.

A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Herisko an opportunity to dispute the allegations, and to determine what, if any, remedial action is appropriate and in the public interest pursuant to Section 15(b) of the Securities Exchange Act of 1934.

The Order directed that an Administrative Law Judge shall issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-61351; File No. 3-13743)

In the Matter of Adnan S. Zaman

On Jan. 14, 2010, the Commission issued 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 Adnan S. Zaman (Zaman). On Jan. 12, 2010, the Honorable Susan Illston, United States District Judge for the Northern District of California, entered a final judgment by consent against Zaman in the civil action entitled Securities and Exchange Commission v. Vinayak S. Gowrish, et al., Civil Action No.09-CV-5883 (N.D. Cal.), an insider trading case.

The Commission's complaint alleged, inter alia, that Zaman, as a Lazard investment banker, was privy to highly confidential acquisition information involving Lazard clients. In breach of his fiduciary and other duties of trust and confidence owed to Lazard and its clients, Zaman misappropriated and illegally tipped material, nonpublic acquisition information to two friends who traded stock and options on the basis of the tipped information. The complaint further alleged that, in exchange for tipping the information, Zaman received kickbacks in the form of cash, free rent, and other items of value.

Zaman consented to the entry of a final judgment which (i) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Section 14(e) of the Exchange Act and Rule 14e-3 thereunder; and (ii) orders disgorgement of $68,790 in ill-gotten gains plus prejudgment interest thereon. Additionally, Zaman consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the entry of the final judgment, which he admitted. The Order bars him from association with any broker or dealer. (Rel. 34-61362; File No. 3-13749)

In the Matter of New York Broker Deutschland AG

An Administrative Law Judge has issued an Order Making Findings and Revoking Registration by Default (Default Order) in New York Broker Deutschland AG. The Order Instituting Proceedings alleged that Respondent failed repeatedly to file required annual reports while its securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true. It revokes the registration of each class of registered securities of New York Broker Deutschland AG, pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-61364; File No. 3-13611)

STANDARDS SETTING BOARDS

Approval of PCAOB Auditing Standard No. 7, Engagement Quality Review

The Commission approved the Public Company Accounting Oversight Board's proposed new Auditing Standard No. 7, Engagement Quality Review. Publication is expected in the Federal Register during the week of January 18, 2010. (Rel. 34-61363)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-BX-2009-088) filed by NASDAQ OMX BX relating to the Fee Schedule of the Boston Options Exchange Facility 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 18. (Rel. 34-61342)

A proposed rule change (SR-NYSEAmex-2009-94) filed by NYSE Amex amending Commentary .01 to Rule 903G 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 18. (Rel. 34-61343)

A proposed rule change (SR-OC-2009-04) and Amendment No. 1 filed by OneChicago to modify the maintenance standards for security futures has become effective under Section 19(b)(7)(B) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of January 18. (Rel. 34-61346)

A proposed rule change filed by the NASDAQ Stock Market to amend the $1 strike program to allow low-strike LEAPS (SR-NASDAQ-2010-003) 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 18. (Rel. 34-61347)

A proposed rule change (SR-ISE-2010-01) filed by International Securities Exchange to codify certain provisions of the Options Listing Procedures Plan into ISE's rules 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 18. (Rel. 34-61348)

A proposed rule change (SR-CBOE-2010-004) filed by the Chicago Board Options Exchange to modify the trading hours for the CBOE Stock Exchange 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 18. (Rel. 34-61349)

Accelerated Approval of Proposed Rule Change

The Commission published notice of filing of Amendment Nos. 2 and 3 and granted accelerated approval to a proposed rule change (SR-NASDAQ-2008-104), as modified by Amendment Nos. 1, 2, and 3 thereto, submitted by the NASDAQ Stock Market pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt a modified Sponsored Access Rule. Publication is expected in the Federal Register during the week of January 18. (Rel. 34-61345)

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