 |
Home | Previous Page | |
|
||
 |
|
|
|
||
 |
|
|
|
|
|||||||||||||||
|
|
|||||||||||||||
|
|
RULES AND RELATED MATTERSWynnefield Capital Management LLC and Wynnefield Capital, Inc.An order has been issued pursuant to Sections 13(f)(2), 13(f)(4), and 36 of the Securities Exchange Act denying the application of Wynnefield Capital Management LLC and Wynnefield Capital, Inc. for an exemption from Rule 13f-1 under that Act. (Rel. 34-61930) Notice of Filing and Order Approving and Declaring Effective an Amendment to the Plan for the Allocation of Regulatory Responsibilities Relating to the Surveillance, Investigation, and Enforcement of Insider Trading RulesThe Commission noticed, approved, and declared effective a proposed plan for the allocation of regulatory responsibilities relating to the surveillance, investigation, and enforcement of insider trading Rules pursuant to Rule 17d-2 under the Securities Exchange Act of 1934 (File No. 4-566). Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61919) ENFORCEMENT PROCEEDINGSIn the Matter of Stephen X. Kim and Spyglass Management, L.P.On April 16, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(e) and 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Stephen X. Kim and Spyglass Management, L.P. The Order finds that on March 29, 2010, a final judgment was entered by consent against Kim and Spyglass, permanently enjoining 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, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, in the civil action entitled SEC v. Stephen X. Kim and Spyglass Management, L.P., Civil Action Number 4:10-cv-00816, in the United States District Court for the Southern District of Texas. Based on the above, the Order bars Kim from association with any investment adviser, and revokes Spyglass's registration as an investment adviser. Kim and Spyglass consented to the issuance of the Order without admitting or denying any of the findings in the Order; however, they admitted the entry of the injunction against them. (Rel. IA-3017; File No. 3-13863) SEC Obtains Final Judgments Against Canadian Defendants in Penny Stock FraudThe Securities and Exchange Commission announced that a federal court in Nevada has entered final judgments, by consent, against Ingo W. Mueller of Vancouver, British Columbia, and Firoz Jinnah of Burnaby, British Columbia, in connection with a fraudulent scheme involving penny stock issuer Exotics.com, Inc. Exotics.com, a Nevada corporation based in Vancouver, British Columbia, was in the business of operating adult-oriented Web sites, and its common stock traded on the Over-the-Counter Bulletin Board beginning in 2001. Among other things, the final judgments, entered by the court on April 15, 2010, order Mueller to pay a civil penalty of $75,000, order Jinnah to pay a civil penalty of $50,000, and impose five-year officer and director bars and five-year penny stock bars against both Mueller and Jinnah. The Commission commenced this action by filing its complaint on April 25, 2005, against 13 defendants and one relief defendant. The Commission's complaint alleged that, between at least 1999 and 2002, the defendants engaged in a stock manipulation and accounting fraud perpetrated by, among others, its officers, attorneys and outside auditors. According to the complaint, Jinnah was nominally the sole officer and director of Exotics.com, but Mueller was de facto the company's top officer and was Jinnah's employer outside of Exotics.com. The complaint alleged, among other things, that Mueller, Jinnah, and other participants in the scheme engaged in manipulative trading of Exotics.com stock for the purpose of artificially increasing the stock's price and trading volume and were responsible for various false and misleading public filings that Exotics.com made with the Commission and for the dissemination of false and misleading public statements about Exotics.com in a press release and spam e-mail and fax messages. Mueller and Jinnah agreed to settle this matter without admitting or denying the allegations in the Commission's complaint. Mueller consented to the entry of a permanent injunction prohibiting him from violating Sections 10(b), 13(d), and 16(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 13d-1, and 16a-3 thereunder. Mueller also was ordered to pay a civil penalty of $75,000 and is barred for five years from serving as an officer or director of a public company and barred for five years from participating in any offering of a penny stock. Jinnah consented to the entry of a permanent injunction prohibiting him from violating Sections 10(b), 13(b)(5), 13(d), and 16(a) of the Exchange Act and Rules 10b-5, 13d-1, and 16a-3 thereunder and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-11, 12b-20, 13a-1, 13a-11, and 13a-13 thereunder. Jinnah also was ordered to pay a civil penalty of $50,000 and is barred for five years from serving as an officer or director of a public company and barred for five years from participating in any offering of a penny stock. The Commission previously obtained judgments by default against two other defendants and judgments by consent against four additional defendants. The civil action remains pending against the remaining five defendants and a relief defendant. The Commission acknowledges the assistance of the British Columbia Securities Commission. For further information, see Litigation Release Nos. 19207 (April 28, 2005) [civil injunctive action filed], 19645 (April 7, 2006) [judgment by default against Exotics.com], 19699 (May 15, 2006) [judgment by consent against Barry Duggan], 19957 (Jan. 4, 2007) [judgment by default against Gary Thomas], 21028 (May 7, 2009) [judgment by consent against Edward James Wexler], 21456 (March 19, 2010) [judgments by consent against Stephen P. Corso and Brian K. Rabinovitz], and Exchange Act Release Nos. 59766 (April 14, 2009) [forthwith suspension of Stephen P. Corso, CPA] and 61771 (March 24, 2010) [suspension of Brian K. Rabinovitz, CPA]. [SEC v. Exotics.com, Inc., et al., Civil Action No. 2:05-cv-00531-PMP-GWF, United States District Court, District of Nevada] (LR-21490) SEC Settles With Five Defendants in SEC v. Collins & Aikman; David A. Stockman Consents to Injunction in Connection With Collins and Aikman Fraud and Agrees to Pay $7.2 Million in Civil Penalties, Disgorgement, and Prejudgment InterestThe Securities and Exchange Commission today announced that it reached settlements in SEC v. Collins & Aikman Corp., et al., No. 07-CV-2419 (SAS) (S.D.N.Y.) with defendants David A. Stockman (Stockman), J. Michael Stepp (Stepp), Elkin B. McCallum (McCallum), David R. Cosgrove (Cosgrove), and Paul C. Barnaba (Barnaba), all former executives or board members of Collins & Aikman Corporation (C&A), an auto parts supplier that went bankrupt in 2005. The proposed settlements are subject to Court approval. Stockman, C&A's former CEO and Chairman of the Board, Stepp, C&A's former CFO and Vice Chairman of the Board, McCallum, a former C&A Board member, and Cosgrove, C&A's former Corporate Controller, without admitting or denying the Commission's allegations, would each consent to entry of a final judgment permanently enjoining them from violating the antifraud provisions of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act) and the reporting, recordkeeping, internal controls, and lying to auditors provisions of the Securities Exchange Act of 1934 (Exchange Act). Stockman and Stepp also would be permanently enjoined from violating the Sarbanes-Oxley certification provisions. Barnaba, C&A's former Vice President and Director of Purchasing-Plastic Division, without admitting or denying the Commission's allegations, would consent to entry of a final judgment permanently enjoining him from violation of the reporting, recordkeeping, internal controls, and lying to auditors provisions of the Exchange Act. Pursuant to the settlement, Stockman has agreed to pay $7.2 million, comprised of $400,000 in civil penalties, disgorgement of $4,424,000, and prejudgment interest of $2,376,000, with the disgorgement and prejudgment interest obligations subject to an offset of up to $4.4 million for payments Stockman makes to settle two securities class action lawsuits against him seeking recovery of the same money as the Commission. Stepp and McCallum have each agreed to pay a civil penalty of $75,000, Cosgrove has agreed to pay a civil penalty of $40,000, and Barnaba has agreed to pay a civil penalty of $20,000. Upon motion to the Court, the civil penalties paid by Stockman may be distributed pursuant to the Fair Funds provisions of Section 308(a) of the Sarbanes-Oxley Act of 2002. In addition, based upon the anticipated entry of a permanent injunction against him, Cosgrove has offered to consent, without admitting or denying the Commission's findings, to the issuance of an administrative order pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the Commission as an accountant with a right to apply for reinstatement after three years. The SEC's complaint alleges that Stockman participated in fraudulent rebate transactions, joined by Stepp, McCallum, Cosgrove, and Barnaba, to inflate C&A's reported income between 2001 and 2004. The complaint alleges that Stockman and other defendants obtained false documents from suppliers designed to mislead C&A's external auditors. The complaint also alleges that Stockman and other defendants caused C&A to file financial statements with the SEC that materially misrepresented C&A's financial results. According to the complaint, during the time Stockman was engaged in this conduct, he was collecting millions of dollars in management fees C&A paid Stockman's private equity fund, Heartland Industrial Partners. As part of the settlement, the Commission has submitted proposed stipulated dismissals of its fraud charges under Section 17(a)(1) of the Securities Act and Section 10(b) and Rule 10b-5 under the Exchange Act against Stockman, Stepp, McCallum, Cosgrove, and Barnaba. In addition, the Commission has submitted proposed stipulated dismissals of all claims against defendants John G. Galante, C&A's former Treasurer, Christopher M. Williams, C&A's former Executive Vice President of Business Development, Gerald E. Jones, C&A's former Chief Operating Officer and Executive Vice President of Fabrics, and Thomas V. Gougherty, C&A's former Controller-Plastics Division. C&A, without admitting or denying the Commission's allegations, previously consented to the entry of a final judgment permanently enjoining it from, among other things, violating the antifraud provisions of the federal securities laws, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5. [SEC v. Collins & Aikman Corporation, et al. Civil Action No. 07-CV-2419 (S.D.N.Y.) (Judge Shira A. Scheindlin)] (LR-21491; AAE Rel. 3127) SEC Obtains Final Judgment Against Frank J. Custable, Jr. in Penny Stock SchemeThe Securities and Exchange Commission announced today that on April 14, 2010, Judge Joan B. Gottschall of the U.S. District Court for the Northern District of Illinois entered a final judgment against Frank J. Custable, Jr. Custable, a former resident of Glendale-Heights, Illinois, was the architect of a complex and wide-reaching fraudulent penny stock scheme that he orchestrated from November 2001 until the SEC commenced an emergency lawsuit in March 2003 and obtained a temporary restraining order shutting it down. The final judgment, to which Custable consented: (i) enjoins Custable from future violations of the antifraud and registration provisions contained in Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and at Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; (ii) enjoins Custable from future violations of the securities reporting provisions contained at Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder; (iii) permanently bars him from participating in an offering of penny stock; (iv) orders him to disgorge $4,444,113 of ill-gotten gains plus an additional $1,981,736 of prejudgment interest; and (iv) orders him to pay a civil penalty in the amount of $120,000. The Commission's complaint alleged that Custable and others violated the registration, antifraud and reporting violations of the federal securities laws through the use of unregistered and fraudulent penny stock offerings. The complaint alleged that Custable accomplished this by obtaining and dumping massive quantities of improperly registered or unregistered shares of stock of at least seven different penny stock companies on the general public, generating net proceeds to Custable of at least $4.3 million. The complaint additionally alleged that Custable fraudulently concealed his ownership interest in the seven penny stocks by having various entities and persons he controlled engage in a host of securities transactions on his behalf. The complaint alleged that Custable obtained stock through fraudulent Form S-8 registrations (normally intended to allow distribution of securities to employees and consultants), fraudulent manipulations of Rule 144(k) holding requirements for resales of restricted stock, and through a scheme to counterfeit nearly half of the outstanding stock of one of these penny stock companies. The complaint alleged that the penny stock companies received substantial financing from Custable in exchange for providing these massive blocks of unregistered or improperly registered stock that Custable dumped on the market through various nominee accounts held in the names of persons or entities he employed or controlled. In addition to charging Custable and certain of his employees, the Commission also charged certain of the penny stock companies and their officers with securities fraud and registration violations, as well as certain individuals and entities employed or controlled by Custable. Custable has pled guilty to various federal charges arising out of his conduct in the scheme, and on June 9, 2009 was sentenced to a prison term of 21 years. Judgments have previously been entered in this case against 13 defendants and three relief defendants in connection with Custable's scheme. For further information, see LR-18057 (March 31, 2003) and LR-21423 (Feb. 23, 2010). [SEC v. Frank J. Custable, Jr., et al., Civil Action No. 03-cv-2182 (N.D. Ill.)] (LR-21492) SELF-REGULATORY ORGANIZATIONSImmediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by the Chicago Stock Exchange to amend certain incorrect or inaccurate cross-references (SR-CHX-2010-07) 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 April 19. (Rel. 34-61903) A proposed rule change filed by the Financial Industry Regulatory Authority (SR-FINRA-2010-016) to amend Section 4(c) of Schedule A to the FINRA By-Laws to add a reference to the fees assessed for the Series 51, 52 and 53 examinations 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 April 19. (Rel. 34-61907) The Options Clearing Corporation filed a proposed rule change (SR-OCC-2010-06) which became effective upon filing, under Section 19(b)(1) of the Exchange Act, to revise certain By-laws and Rules related to the Stock Loan/Hedge and Market Loan Programs. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61911) A proposed rule change filed by New York Stock Exchange (SR-NYSE-2010-29) implementing an equity transaction fee schedule for shares executed on the NYSE MatchPointSM System 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 April 19. (Rel. 34-61913) A proposed rule change (SR-CBOE-2010-033) filed by Chicago Board Options Exchange relating to amending the strategy fee cap 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 April 19. (Rel. 34-61915) A proposed rule change filed by NYSE Arca (SR-NYSEArca-2010-29) to amend Rule 6.4 Commentary .04 to permit the concurrent listing of $3.50 and $4 strikes for classes participating in the $0.50 Strike and $1 Strike Programs 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 April 19. (Rel. 34-61920) A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2010-38) to amend Rule 903 Commentary .06 to permit the concurrent listing of $3.50 and $4 strikes for classes participating in the $0.50 Strike and $1 Strike Programs 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 April 19. (Rel. 34-61921) The Depository Trust Company filed a proposed rule change (SR-DTC-2010-07) under Section 19(b)(1) of the Exchange Act, to enhance its existing processing relating to end of day liquidity. The rule change became effective upon filing. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61922) A proposed rule change (SR-NYSE-2010-33) filed by the New York Stock Exchange to extend from May 30, 2010 until June 30, 2010 the final date by which the Exchange must terminate its affiliation with NYFIX Securities Corporation 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 April 19. (Rel. 34-61923) A proposed rule change filed by NASDAQ OMX BX to modify fees for members using the NASDAQ OMX BX Equities System (SR-BX-2010-030) 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 April 19. (Rel. 34-61931) A proposed rule change filed by the NASDAQ OMX BX (SR-BX-2010-028) has become effective pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to amend certain rules to reflect changes to corresponding FINRA rules. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61934) Approval of Proposed Rule ChangeThe Commission approved a proposed rule change (SR-NYSE-2010-15) submitted by New York Stock Exchange, pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, making permanent the Exchange's Pilot Program with respect to its continued listing standards. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61912) Proposed Rule ChangesNew York Stock Exchange filed a proposed rule change (SR-NYSE-2010-30) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder to establish the NYSE BBO Service. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61914) The Commission issued notice of a proposed rule change submitted by the Financial Industry Regulatory Authority (SR-FINRA-2010-012) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend FINRA Rule 8312 (FINRA BrokerCheck Disclosure). Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61927) NYSE Amex filed a proposed rule change (SR-NYSEAmex-2010-35) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder to establish the NYSE Amex Trades service and the NYSE Amex BBO service and related fees. Publication is expected in the Federal Register during the week of April 19. (Rel. 34-61936) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig041910.htm
|