 |
Home | Previous Page | |
|
||
 |
|
|
|
||
 |
|
|
|
|
|||||||||||||||
|
|
|||||||||||||||
|
|
COMMISSION ANNOUNCEMENTSKenneth A. Johnson Named SEC Chief Financial OfficerSecurities and Exchange Commission Chairman Mary L. Schapiro today announced that Kenneth A. Johnson has been named Chief Financial Officer for the agency. Mr. Johnson has been serving as acting CFO for much of the past year. The agency's CFO is responsible for leading its Office of Financial Management, which handles the budget, finance, and accounting operations for the SEC. "I'm delighted that Ken has agreed to take on this role at the SEC," said Chairman Schapiro. "His deep experience in the financial arena will be incredibly valuable as we grow as an agency." Mr. Johnson added, "I'm honored to accept this new role at such an important time for the agency. Chairman Schapiro is deeply committed to strong financial management, and I'm proud to lead the agency's initiatives in this area." Mr. Johnson, 37, joined the SEC in 2003 as a Management Analyst in the Office of the Executive Director. In that role, he advised on all aspects of the budget process, developed strategy initiatives, and responded to inquiries from the Office of Management and Budget (OMB) and Congress regarding the SEC's budget and financial operations. He became Chief Management Analyst in 2006. Mr. Johnson has served as a valuable staff expert on legislative proposals, and he managed the development of the SEC's long-range Strategic Plan that would guide agency policy through 2015. Prior to joining the SEC staff, Mr. Johnson worked as a Commerce Analyst at the Congressional Budget Office. His primary responsibility in that role was to analyze and report on the budgetary effects of committee-approved legislation. Mr. Johnson earned his Masters in Public Policy from the Kennedy School of Government at Harvard University, and earned his BA at Stanford University. (Press Rel. 2010-82) ENFORCEMENT PROCEEDINGSIn the Matter of Jesus GutierrezOn May 20, 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 Jesus Gutierrez (Gutierrez). The Order finds that on April 21, 2010, Gutierrez consented to the entry of final judgment enjoining him from violations Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and from aiding and abetting future violations of Section 17(a) of the Exchange Act and Rules 17a-3(a)(6) and 17a-3(a)(17) thereunder. Based on the above, the Order suspends Gutierrez from association with any broker or dealer for a period of 90 days. Gutierrez consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62144; File No. 3-13906) In the Matter of Kederio AinsworthOn May 20, 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 Kederio Ainsworth (Ainsworth). The Order finds that on April 21, 2010, Ainsworth consented to the entry of final judgment enjoining him from violations Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and from aiding and abetting future violations of Section 17(a) of the Exchange Act and Rules 17a-3(a)(6) and 17a-3(a)(17) thereunder. Based on the above, the Order suspends Ainsworth from association with any broker or dealer for a period of 90 days. Ainsworth consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62145; File No. 3-13907) In the Matter of Sherwin Brown and Jamerica Financial, Inc.On May 21, 2010, the Commission issued an Order Instituting Administrative Proceedings pursuant to Sections 203(e) and (f) of the Investment Advisers Act of 1940 and Notice of Hearing (Order) against Sherwin Brown (Brown) and Jamerica Financial, Inc. (Jamerica) based upon the entry of Permanent Injunctions against them in the United States District Court for the District of Minnesota Securities and Exchange Commission v. Sherwin P. Brown, Jamerica Financial, Inc., and Brawta Ventures, LLC, Civil Case No. 06-1213). In the Order the Division of Enforcement (Division) alleges that on Sept. 30, 2008, the United States District Court for the District of Minnesota granted the Commission's Motion for Summary Judgment as to Sections 17(a)(1)-(3) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), Rule 10b-5 promulgated under the Exchange Act, Sections 206(1)-(2) of the Investment Advisers Act of 1940 (Advisers Act), and Rule 204-2 under the Advisers Act. The Division goes on to allege that the Court adopted the findings previously made by the Magistrate Judge's Report and Recommendation dated June 12, 2008 which found that Brown and Jamerica misappropriated client funds and attempted to conceal this misappropriation from their clients. The Division also alleges that the Court adopted recommendations that Jamerica did not maintain the records required by the Advisers Act and Brown was responsible for Jamerica's failure to keep appropriate records. The Division also alleges that on April 30, 2010, a final judgment was entered against Respondents permanently enjoining them from 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 204, 206(1) and 206(2) of the Investment Advisers Act of 1940 and Rule 204-2 thereunder. A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations contained in the Order are true, and to provide the Respondents an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. IA-3028; File No. 3-13908) In the Matter of Gregory W. LaserOn May 21, 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 Gregory W. Laser (Laser). The Order finds that Laser, age 46 and a resident of San Diego, California, was the main sales agent for investments offered by Dean P. Gross (Gross), doing business as Bridon Entertainment (Bridon), since at least December 2006. Laser solicited investors for Gross and received commissions for doing so. Laser was formerly registered with the Commission as a broker-dealer from 1986 to 1989, but is not currently registered with the Commission in any capacity. On March 1, 2010, a judgment was entered by consent against Laser, permanently enjoining him from future violations of Sections 5(a), 5(c), and 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 thereunder, in the civil action entitled Securities and Exchange Commission v. Dean P. Gross and Gregory W. Laser, Civil Action Number 2:09-CV-09-9144 AHM (RZx), in the United States District Court for the Central District of California. The Commission's complaint alleged that, in connection with the offer and sale of notes and investment contracts, Laser falsely told investors that their funds were used solely to purchase discounted advertising time or space for resale; that Bridon had contracts with major companies including Home Depot, Federal Express, Warner Bros., DIRECTV, and Slim-Fast for the resale of advertising time or space; and that investor returns and principal repayments were paid from profits earned on the resale of advertising. The complaint alleged that laser did not perform due diligence or investigation of Gross's claims before soliciting others to invest. The complaint also alleged that Laser failed to disclose his own commissions in some instances and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. The complaint also alleged that Laser sold securities for which the offer and sale was not registered, and that he acted as an unregistered broker-dealer, with respect to the sale of Gross's securities. Based on the above, the Order bars Laser from association with any broker or dealer. Laser consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62149; File No. 3-13909) In the Matter of David F. MerrickOn May 21, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act), Making Findings and Imposing Remedial Sanctions (Order) against David F. Merrick (Merrick). The Order finds that Merrick served as the president of Traders International Return Network (TIRN), an unregistered foreign investment company headquartered in Panama. From at least July 2008 through October 2009, Merrick and TIRN operated a Ponzi scheme through the offer and sale of securities in TIRN in the form of investment contracts to investors. Merrick and TIRN raised at least $22 million from at least 2,500 investors. Throughout this period, Merrick engaged in the business of effecting transactions in securities for the accounts of others, and Merrick held himself out as being in the business of making investment decisions for TIRN. Merrick does not hold any securities licenses and has never been registered with the Commission in any capacity. No registration statement has been filed or is in effect with the Commission in connection with the offer or sale of the TIRN securities. On Oct. 14, 2009, the Commission filed an emergency action in the United States District Court for the Middle District of Florida against Merrick and TIRN. The Commission's Complaint alleged the facts stated above and in addition stated that Merrick and TIRN intentionally misled investors in TIRN by misrepresenting that their money would be used to buy Forex, international stocks and bonds, and other investments. Instead of purchasing these investments, Merrick and TIRN transferred investor funds among Merrick's co-defendant shell entities and misappropriated at least $3.7 million of the funds for Merrick's personal expenditures. On Oct. 14, 2009, the court entered a preliminary injunction order prohibiting the offer or sale of interests in TIRN, freezing Merrick's assets and ordering him to repatriate all assets back into the United States. On May 11, 2010, a permanent injunction order was entered by consent against Merrick. Merrick, without admitting or denying the allegations of the Commission's Complaint, except as to jurisdiction, consented to the entry of an order permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933; Sections 10(b) and 15(a)(1) of the Exchange Act and Rule 10b-5 thereunder, Sections 206(1), 206(2) and 206(4) of the Advisers Act and Rule 206(4)-8 thereunder; and Section 7(d) of the Investment Company Act of 1940. Based on the above, the Order bars Merrick from association with any broker, dealer, or investment adviser. Merrick consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the civil injunctive action (SEC v. David F. Merrick, et al., Case No. 6:09-CV-1744-ORL-31KRS, M.D. Florida; LR-21525). (Rel. 34-62150; IA-3029; File No. 3-13910) U.S. District Court Enters Final Judgment Against Massachusetts Investment Adviser and U.S. Court of Appeals Affirms Default Judgment Against Hedge Fund Manager in Fraud SchemeThe Securities and Exchange Commission announced today that the U.S. District Court for the District of Massachusetts entered a Final Judgment by consent on May 18, 2010 in a previously-filed enforcement action against defendant Lydia Capital, LLC, an investment adviser based in Boston, Massachusetts. The judgment was entered in connection with a civil injunctive action filed in April 2007 by the Commission against Lydia Capital and its two principals, Glenn Manterfield and Evan Andersen. The Final Judgment enjoined Lydia Capital from engaging in future violations of the antifraud provisions of the federal securities laws. The Commission also announced that on May 6, 2010, the United States Court of Appeals for the First Circuit rejected an appeal by Manterfield, a citizen of the United Kingdom, seeking to overturn the District Court's Default Judgment entered against him on April 8, 2009. In its decision, the First Circuit held that the District Court did not abuse its discretion in entering a Default Judgment against Manterfield. The Judgment entered against Manterfield permanently enjoined him from violating 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. The Judgment further holds Manterfield liable for $2,350,000 million in disgorgement of ill-gotten gains, plus prejudgment interest of $425,998, and a civil penalty in the amount of $130,000. The Commission originally filed its action against Lydia Capital, Manterfield and Andersen on April 12, 2007, in the U.S. District Court in Massachusetts and filed an Amended Complaint on May 1, 2007. The Amended Complaint alleged that from June 2006 through April 2007, Manterfield and Andersen, acting through Lydia Capital, engaged in a scheme to defraud more than 60 investors, who invested approximately $34 million in Lydia Capital Alternative Investment Fund LP, a hedge fund managed by Lydia Capital. The Amended Complaint alleged that defendants told investors that they intended to use the hedge fund's assets to acquire a portfolio of life insurance policies in the life settlement market. According to the Amended Complaint, Manterfield, Andersen, and Lydia made a series of material misrepresentations and omissions, including: (1) materially overstating, and in some instances completely fabricating the hedge fund's performance; (2) inventing business partners, offices, and investors in an attempt to legitimatize the firm and concealing the truth as to why key vendors and banks ceased relationships with the defendants; (3) lying about Manterfield's significant criminal history, and failing to disclose a February 2007 criminal asset freeze against him in England; (4) lying about how the hedge fund planned to address certain material risks and failing to disclose others; and (5) misstating the nature of the hedge fund's assets and its investment process. In addition, the Amended Complaint alleged that Manterfield and Andersen took millions of dollars of investors' funds by withdrawing investor monies to which they were not entitled. On April 12, 2007, the U.S. District Court issued a temporary restraining order that, among other things, froze the three defendants' assets. On May 3, 2007, the Court issued a consented-to preliminary injunction and ordered a continuation of an asset freeze of the defendants' assets. On June 1, 2007, the Court appointed a Receiver for Lydia Capital. On Sept. 16, 2008, the Court entered a Final judgment by consent against Andersen. Without admitting or denying the SEC's allegations, Lydia Capital consented to the entry of a the judgment permanently enjoining it from violating 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. The Final Judgment did not impose disgorgement or a civil penalty because Lydia Capital's remaining assets are being managed by a court-ordered receiver, who is expected to propose a plan to distribute any remaining assets to the fund's underlying investors. In separate administrative proceedings to be instituted, Lydia Capital has also consented to the entry of an order revoking its registration as an investment adviser. The Commission acknowledges the assistance of the Financial Services Authority of the United Kingdom and the Securities Division of the Secretary of State of the Commonwealth of Massachusetts, which also filed an action against the parties on April 13, 2007. [SEC v. Lydia Capital, LLC et al., Civil Action No. 07-CV-10712, USDC, D. Mass] (LR-21528) SEC v. Edward A. Allen, David L. Olson, and A&O Investments, LLCThe Securities and Exchange Commission today announced that it filed a civil injunctive action against Edward A. Allen and David L. Olson, residents of Lakeland, Florida, and their company A&O Investments, LLC, accusing them of conducting a fraudulent, unregistered offer and sale of approximately $14.8 million in securities. The SEC's complaint, filed in the United States District Court for the Northern District of Ohio, alleges that from approximately September 2005 through December 2008, Allen and Olson raised approximately $14.8 million from at least 100 investors through the offer and sale of promissory notes issued by A&O. The complaint alleges that both Allen and Olson recruited promissory note investors from customers of Georgia-based registered broker-dealer World Group Securities, Inc. (WGS), for which Allen and Olson were registered representatives, and through mass mailings and word-of-mouth after Allen and Olson left WGS. The complaint alleges that Allen and Olson told investors that they would use the investors' money to purchase, rehabilitate, and sell real estate. The complaint further alleges that Allen and Olson promised to pay investors annual returns of 20%, represented that the returns were generated from the sale of its real estate properties, and told investors that they were doing well in the real estate market and were making money. According to the complaint, the majority of the promissory notes purportedly were secured by property owned by A&O. The complaint alleges that Allen and Olson's representations about their use of offering proceeds, the collateral securing the investments, and the success of the investments were all false. According to the complaint, in reality Allen and Olson operated a Ponzi scheme by using approximately $4.4 million of investors' funds to pay "interest" and, in some cases, principal to previous investors and spent only $5.1 million of the $14.8 million raised to purchase and rehabilitate real estate. The complaint further alleges that Allen and Olson used $2.2 million to pay personal expenses for themselves and their family members. According to the complaint, Allen and Olson also misrepresented and omitted to state material facts regarding the collateral securing the notes, in that as much as approximately $5.5 million worth of A&O promissory notes purportedly were secured by the same piece of property in Lakeland, Florida. This property's value was grossly inadequate to secure the notes. The complaint alleges that as a result of their misconduct, Allen, Olson, and A&O violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is seeking permanent injunctions and disgorgement of ill-gotten gains, including prejudgment interest, from Allen, Olson, and A&O and civil penalties from Allen and Olson. SEC v. Edward A. Allen, David L. Olson, and A&O Investments, LLC, Case No. 1:10-cv-01143 (N.D. Ohio)] (LR-21529) Brian Hollnagel and BCI Aircraft Leasing, Inc.The Securities and Exchange Commission announced that on April 26, 2010, the Honorable Elaine E. Bucklo granted a motion to stay the Commission's above captioned litigation "pending the outcome of related criminal proceedings against defendant Hollnagel." Previously, on March 10, 2010, the Special September 2008 Grand Jury for the Northern District of Illinois returned an indictment for Brian Hollnagel, a defendant in the Commission's above captioned litigation. U.S. v. Brian Hollnagel and Brian Olds, Criminal Action No. 1:10-cr-0195 (N.D. Ill.) (St. Eve., J.). In particular, this indictment includes a count of wire fraud (18 USC 1343) against Hollnagel in connection with his scheme to pay bribes to Brian Olds, an officer at a public company, AAR Corp. These bribes were paid in exchange for Olds using his position at AAR to ensure that AAR purchased from, or sold aircraft to, BCI at prices favorable to BCI. In addition, in October 2009, the Commission filed a Motion for Sanctions against the Defendants and their attorneys, Rothgerber Johnson & Lyons, for alleged improper destruction of evidence. The Court subsequently found, in an order on April 7, 2010, that "Rothgerber, Johnson & Lyons had acted improperly in destroying emails." However, the Court declined to assess specific sanctions until the Commission later reports on the full extent of prejudice it has suffered from this improper destruction of evidence. Previously, on Aug. 13, 2007, the Commission filed a civil injunctive complaint alleging that Defendants Hollnagel and BCI, from approximately 1998 through 2007, raised at least $82 million from approximately 120 investors as part of a fraudulent scheme in which the Defendants commingled investor funds, used investor funds to pay other investors, and failed to use investor funds as represented. The Complaint alleged that, as a result of their conduct, the Defendants violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. [SEC v. Brian Hollnagel and BCI Aircraft leasing, Inc., Civil Action No. 1:07-cv-4538 (N.D. Ill.) (Bucklo, J.)] (LR-21530) SELF-REGULATORY ORGANIZATIONSProposed Rule ChangeThe Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2010-022) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to increase the number of arbitrators on each list generated by the Neutral List Selection System. Publication is expected in the Federal Register during the week of May 24. (Rel. 34-62134) Immediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by The NASDAQ Stock Market to require companies to provide notification to Nasdaq of any noncompliance with the corporate governance requirements (SR-NASDAQ-2010-060) 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 May 24. (Rel. 34-62135) A proposed rule change filed by The NASDAQ Stock Market to modify fees for members using the NASDAQ Market Center (SR-NASDAQ-2010-059) 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 May 24. (Rel. 34-62138) Approval of Proposed Rule ChangeThe Commission approved a proposed rule change (SR-CBOE-2010-018), as modified by Amendment No. 1 thereto, submitted by Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to list and trade CBOE Gold ETF Volatility Index Options. Publication is expected in the Federal Register during the week of May 24. (Rel. 34-62139) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig052110.htm
|