In the Matter of Diane Bjorkstrom (CPA)
On Jan. 19, 2010, the Commission issued an Order Instituting Public Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (Order) against Diane Bjorkstrom. The Order finds that, on Nov. 17, 2009, the Commission filed a complaint against Bjorkstrom in SEC v. Diane Bjorkstrom (Civil Action No. CV-09-5394-JW). On Jan. 6, 2010, the court entered an order permanently enjoining Bjorkstrom, by consent, from future violations of Sections 17(a)(2) and (3) of the Securities Act of 1933 and Section 13(b)(5) of the Exchange Act and Rules 13a-14 and 13b2-1 thereunder, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13 thereunder.
Based on the above, the Order suspends Bjorkstrom from appearing or practicing before the Commission as an accountant, with the right to apply to resume appearing or practicing before the Commission after two years. Diane Bjorkstrom 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 injunction. (Rel. 34-61375; AAE Rel. 3104; File No. 3-13751)
In the Matter of Mortgages Ltd. Securities, LLC
On Jan. 19, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Revoking Broker-Dealer Registration (Order). The Order finds that through Mortgages Ltd. Securities, LLC (MLS), a registered broker-dealer, Mortgages Ltd. (MLtd.), an Arizona-based private lender and affiliate of MLS, raised more than $741 million from about 2,700 investors nationwide from February 2004 to June 2008. MLS made oral and written misrepresentations to investors concerning the safety and liquidity of the investment and risks associated with the investment. MLS led investors to believe that the loans MLtd. had underwritten were safer than they actually were, and investors were unaware that MLtd. was taking on larger and riskier loans. MLS misrepresented how the declining market conditions that worsened throughout 2007 impacted the safety of the investment, and how MLtd. and its principal had increasingly resorted to selling their personal assets to prop up MLtd.
Based on the above, the Order revokes the registration of MLS as a broker or dealer with the Commission and orders it to pay disgorgement of $6,973,785 and prejudgment interest of $331,048, but waives payment of such amounts and imposes no civil penalty based on its representations in its sworn financial statement and other documents. MLS consented to the issuance of the Order without admitting or denying any of the findings contained in the Order. (Rel. 34-61377; File No. 3-13752)
Massachusetts Broker Pleads Guilty to Criminal Charges in Connection with Securities Fraud
The Securities and Exchange Commission announced today that on Jan. 12, 2010, Gregg Thomas Rennie, of Quincy, Massachusetts, pled guilty to thirteen counts of securities fraud and one count of wire fraud in a case being prosecuted by the United States Attorney's Office in Boston, Massachusetts. On Sept. 30, 2009 the U.S. Attorney's Office filed a criminal Information against Rennie, a licensed securities broker, charging that he defrauded investors by selling approximately $3.2 million in purported investments in federally subsidized real estate developments, among other things, and used the investors' funds to pay his own expenses and debts. Rennie is currently scheduled to be sentenced on April 13, 2010.
The Commission previously filed a civil injunctive action against Rennie based on similar conduct on Jan. 23, 2009. According to the Commission's complaint, from early 2007 through early 2009, Rennie made misrepresentations to several of his clients about investing their money in risk-free "federal housing certificates" that paid up to 12% per year, tax free, and were offered by a real estate investment company based in Boston. In fact, however, the complaint alleges that the investments were completely fictitious and that Rennie had no relationship with the real estate investment company whose name he used. According to the Commission's filings, Rennie defrauded clients who were elderly, including an 89 year old man. The filings allege that Rennie induced some clients to cash out their investments in annuities, incurring substantial surrender charges, in order to invest in his fraudulent program. According to the complaint, Rennie used investor proceeds to pay personal expenses, including a gym membership and liquor, grocery, shoe and department store purchases, and withdrew thousands of dollars in cash from the account where investor funds were sent.
On May 18, 2009, the Commission obtained a final judgment by default against Rennie in which he was enjoined from future violations of the securities laws and ordered to pay disgorgement in the amount of $3,678,377, representing profits gained as a result of the conduct alleged in the Commission's Complaint, prejudgment interest in the amount of $30,653, and a penalty of $500,000.
On May 29, 2009, the Commission instituted administrative proceedings against Rennie based on the injunctive against him to determine what, if any, remedial action was appropriate and in the public interest. On Aug. 12, 2009, an administrative law judge issued an order by default barring Rennie from association with any broker or dealer or investment adviser. [U.S. v. Gregg Thomas Rennie, Criminal Action No. 09-CR-10285-EFH, (D. Mass.); [SEC v. Gregg Thomas Rennie, Civil Action No. 09-CV-10107-DPW, (D. Mass.)] (LR-21379)
Final Judgment of Permanent Injunction and Other Relief Entered Against Defendant Yolanda C. Velazquez
The Commission announced that on Dec. 18, 2009, the United States District Court for the Southern District of Indiana entered a Final Judgment of Permanent Injunction and Other Relief against Defendant Yolanda C. Velazquez. The final judgment enjoins Defendant from violating Sections 5(a) and 5 (c) of the Securities Act of 1933, and Sections 15(a) and 15(b)(6)(B)(i) of the Securities Exchange Act of 1934. In addition, the final judgment requires Velazquez to pay disgorgement of $280,329.08, plus prejudgment interest of $26, 971.04, and a civil penalty of $130, 000.00. Velazquez consented to the entry of the final judgment without admitting or denying any allegations in the complaint.
The Commission commenced this action on June 8, 2009, by filing a complaint against Berkshire Resources, L.L.C. and others alleging Defendants carried out an offering fraud. [SEC v. Berkshire Resources, et al.., Civil Action No. 09-0704-SEB-JMS] (LR-21380)
Commission Voluntarily Dismisses All Monetary Claims for Disgorgement, Prejudgment Interest and Civil Penalties Against Andres L. Pimstein, The Bottom Line of South Florida, Inc. and Summit Trading LLC
The Securities and Exchange Commission announced that on Jan. 15, 2010, at its request, the Honorable Donald L. Graham, United States District Court Judge for the Southern District of Florida, dismissed with prejudice, the Commission's claims for disgorgement, prejudgment interest and civil penalties against Andres L. Pimstein, The Bottom Line of South Florida, Inc. and Summit Trading LLC (collectively, Defendants). In a related criminal proceeding, the criminal court ordered Pimstein to pay restitution of $24,957,323.00 to defrauded victims and sentenced him to 17 years in prison. In addition, the State of Florida has dissolved Bottom Line and Summit.
Previously, on Dec. 9, 2008, the Court entered judgments of permanent injunction and other relief against Defendants, by their consent, that permanently enjoined them 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 for their alleged $30 million Ponzi scheme. [SEC v. Andres L. Pimstein, The Bottom Line of South Florida, Inc. and Summit Trading LLC, Case No. 08-23024-CIV-GRAHAM (S.D. Fla.)] (LR-21381)
JOINT INDUSTRY PLANS
Notice of Filing and Immediate Effectiveness of Proposed Amendment to the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information
The Options Price Reporting Authority filed with the Securities and Exchange Commission a notice of filing and immediate effectiveness of a proposed amendment pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder (SR-OPRA-2009-01) to revise the Plan for Reporting of Consolidated Options Last Sale Reports and Quotation Information to serve as the operating agreement for OPRA LLC. Publication is expected in the Federal Register during the week of January 18. (Rel. 34-61367)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by New York Stock Exchange (SR-NYSE-2010-01) waiving all transaction fees for shares executed on the NYSE MatchPointSM System until Jan. 29, 2010, 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. 34-61350)
A proposed rule change, and Amendment No.1 thereto, filed by Chicago Board Options Exchange (SR-CBOE-2010-001) relating to the elimination of the Hybrid Electronic Quoting Fee 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. 34-61357)
A proposed rule change filed by the NYSE Amex (SR-NYSEAmex-2010-03) amending Rule 452 - NYSE Amex Equities and Section 723 of the NYSE Amex Company Guide to insert a date (Jan. 1, 2010) that was inadvertently omitted in a previous rule change 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. 34-61360)
Approval of Proposed Rule Change
The Commission approved a proposed rule change filed by the Financial Industry Regulatory Authority (SR-FINRA-2009-082) relating to the reporting of trade cancellations to FINRA. Publication is expected in the Federal Register during the week of January 18. (Rel. 34-61359)
Proposed Rule Change
The Commission issued notice of a proposed rule change submitted by Financial Industry Regulatory Authority (SR-FINRA-2010-001) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to publication of certain aggregate daily trading volume data. Publication is expected in the Federal Register during the week of January 18. (Rel. 34-61361)
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