Following is a schedule of Commission meetings, which will be conducted under provisions of the Government in the Sunshine Act. Meetings will be scheduled according to the requirements of agenda items under consideration.
Open meetings will be held in the Auditorium, Room L-002 at the Commission's headquarters building, 100 F Street, N.E., Washington, D.C. Visitors are welcome at all open meetings, insofar as space is available. Persons wishing to photograph or videotape Commission meetings must obtain permission in advance from the Secretary of the Commission. Persons wishing to tape record a Commission meeting should notify the Secretary's office 48 hours in advance of the meeting.
Any member of the public who requires auxiliary aids such as a sign language interpreter or material on tape to attend a public meeting should contact SECInterpreter@SEC.gov at least three business days in advance. For any other reasonable accommodation related disability contact DisabilityProgramOfficer or call 202-551-4158.
Open Meeting - Wednesday, June 16, 2010 - 10:00 a.m.
The subject matter of the Open Meeting will be:
The Commission will consider whether to propose amendments to rules 156 and 482 under the Securities Act of 1933 and rule 34b-1 under the Investment Company Act of 1940 to address concerns that have been raised about target date retirement fund names and marketing materials.
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.
In the Matter of Gordon Brent Pierce, Newport Capital Corp., and Jenirob Company Ltd.
On June 8, 2010, the Commission issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 (Order) against Gordon Brent Pierce, 52, of Vancouver, Canada, Newport Capital Corp., and Jenirob Company Ltd.
Pierce was found in a previous Commission action to have violated the federal securities laws in connection with his trading in the stock of Lexington Resources, Inc., a now defunct oil and gas company. Pierce was ordered to disgorge approximately $2 million in illegal trading profits from Lexington sales in his personal account.
In the new enforcement action, the Division of Enforcement seeks to recover an additional $8 million in profits from Lexington sales that Pierce reaped through accounts in the names of two offshore companies, Newport Capital Corp. and Jenirob Company Ltd., which the Division of Enforcement alleges Pierce secretly controlled and concealed from the Commission.
The Division of Enforcement alleges in the Order that in 2004, Pierce controlled Lexington by holding the majority of its stock and by providing Lexington a consultant CEO employed by Pierce. According to the allegations, Pierce sold 1.6 million shares of Lexington stock to the public through the Newport and Jenirob accounts for nearly $8 million while Pierce and his business associates conducted a massive spam and newsletter campaign touting Lexington stock.
The Division of Enforcement alleges that Pierce, Newport and Jenirob violated the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933.
An administrative hearing will be scheduled to determine whether the allegations in the Order are true, and to provide Pierce, Newport and Jenirob an opportunity to establish any defenses to the allegations. The proceedings also will determine whether remedial actions are appropriate. As directed by the Commission, the administrative law judge shall issue an initial decision in this matter no later than 300 days from the date of service of the Order. (Rel. 33-9125; File No. 3-13927)
In the Matter of Anthony Bonica
On June 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions (Order) against Anthony Bonica. The Order finds that on May 28, 2010, the United States District Court for the Southern District of New York entered an order permanently restraining and enjoining Bonica, a certified public accountant and the former controller of Monster Worldwide, Inc. (Monster), from direct or indirect violations of Section 17(a) of the Securities Act [15 U.S.C. S 77q(a)], Sections 10(b) and 13(b)(5) of the Exchange Act [15 U.S.C. SS 78j(b) and 78m(b)(5)] and Rules 10b-5 and 13b2-1 [17 C.F.R. SS 240.10b-5 and 240.13b2-1] thereunder, and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 14(a) of the Exchange Act [15 U.S.C. SS 78m(a), 78m(b)(2)(A) and 78n(a)], and Rules 12b-20, 13a-1, 13a-11, 13a-13 and 14a-9 [17 C.F.R. SS 240.12b-20, 240.13a-1, 240.13a-11, and 240.13a-13 and 240.14a-9] thereunder.
The Order finds that the Commission's complaint in the civil injunctive action alleged, among other things, that Bonica participated in a fraudulent stock option backdating scheme; that Bonica's fraudulent conduct caused Monster's periodic filings and proxy statements to falsely portray Monster's options as having been granted at exercise prices equal to the fair market value of Monster's common stock on the date of the grant, when, in fact, Monster was granting in-the-money options; and that Bonica understood the accounting consequences of granting in-the-money options but did nothing to ensure that Monster properly accounted for these options in its financial statements. The complaint alleged that Bonica's conduct caused Monster to file materially false and misleading public reports that contained financial statements that materially understated Monster's compensation expenses and materially overstated its quarterly and annual net income. On Dec. 13, 2006, Monster restated its historical financial results for 1997-2005 in a cumulative pre-tax amount of approximately $339.5 million to record additional non-cash charges for option related compensation. The complaint further alleged that Bonica benefited from the scheme, including the receipt and exercise of backdated grants of in-the-money options.
Based on the above, the Order suspends Bonica from appearing or practicing before the Commission as an accountant with a right to request that the Commission consider his reinstatement after three years. Bonica consented to the issuance of the Order without admitting or denying the findings in the Order, except he admitted the entry of the injunction. (Rels. 34-62242; AAE Rel. 3140; File No. 3-13929)
In the Matter of Duane C. Johnson
On June 8, 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 Duane C. Johnson. The Order finds that on May 25, 2010 a Final Judgment was entered by consent against Johnson, permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act), Sections 15(a) and 10(b) of the Exchange Act and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Duane C. Johnson, et al., Civil Action Number 2:07-CV-0235, in the United States District Court for the District of Utah.
Based on the above, the Order bars Duane Johnson from association with any broker or dealer. Duane Johnson consented to the issuance of the Order without admitting or denying the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62243; File No. 3-13930)
In the Matter of Robert Tringham
On June 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Robert Tringham. The Order finds that on May 11, 2010, a judgment was entered against Robert Tringham, permanently enjoining him from future violations of Section17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) 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 Securities and Exchange Commission v. Finbar Securities Corp., et al., Civil Action Number CV 09-2325 ODW (VBKx) in the United States District Court for the Central District of California.
The Order further finds that the Commission's complaint alleged that Tringham held himself out as the president, chief executive officer, secretary, and chief financial officer of Finbar Securities Corp., a California corporation, based in West Covina, California. Tringham also described himself as the "manager" and "branch manager" of the Finbar office in West Covina. The Commission's complaint alleged that Tringham and Finbar were fraudulently operating as an unregistered broker-dealer by issuing account statements to investors which falsely represented that Respondent was "a licensed Securities Dealer," displayed the NASD logo despite the fact that the use of the NASD name ceased in July 2007, referenced a clearing firm that is no longer in operation, and cited to non-existent CUSIP numbers purportedly representing the investor's securities holdings, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors.
Based on the above, the Order bars Tringham from association with any broker, dealer, or investment adviser. Tringham consented to the issuance of the Order without admitting or denying any of the findings in the Order except as to the Commission's jurisdiction over him, the subject matter of these proceedings, and the entry of the judgment in the civil injunctive action. (Rel. 34-62244; IA-3036; File No. 3-13931)
Delinquent Filer's Stock Registration Revoked
The registration of the registered securities of Universal Property Development & Acquisition Corp. has been revoked. The company had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, it violated a crucial provision of the federal securities laws that requires public corporations to publicly disclose current, accurate financial information so that investors may make informed decisions. The revocation was ordered in an administrative proceeding before an administrative law judge. (Rel. 34-62245; File No. 3-13883)
In the Matter of V-GPO, Inc.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Three Respondents (Default Order) in V-GPO, Inc., Administrative Proceeding No. 3-13864. The Order Instituting Proceedings (OIP) alleged that four Respondents failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission (Commission). The Default Order finds these allegations to be true as to three Respondents. It revokes the registrations of each class of registered securities of V-GPO, Inc., Videolan Technologies, Inc., and Voicenet, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934.
The Commission has previously accepted a settlement offer from Vertigo Theme Parks, Inc. (f/k/a Snap2 Corp.), the fourth Respondent named in the OIP. (Rel. 34-62246; File No. 3-13864)
SEC Charges Texas Resident for Operating a Faith-Based Affinity Fraud Scheme
On June 7, 2010, the Securities and Exchange Commission filed an emergency civil injunctive action to halt an ongoing religious affinity fraud orchestrated by Petrogas Overseas Trading, LP and its owner, Samuel O. LeMaire.
The Commission's complaint alleges that beginning in at least 2007 and continuing through the present, LeMaire and Petrogas raised at least $2.3 million by appealing to the Christian faith of potential investors. The Commission alleges that LeMaire, a Nigerian citizen living in North Texas, held himself out as a minister and a "man of God" who planned to start a foundation to help needy children in Nigeria. LeMaire proposed to fund this foundation, and also make money for investors, with profits earned from the sale of taker-loads of oil from Nigeria. The Commission alleges that LeMaire told investors that he had connections to, and relationships within, the Nigerian oil industry, and promised investors anywhere from a 200% to a 1,000% return on their money. Unfortunately, the Commission alleges, LeMaire used investor funds to finance his own lavish lifestyle and support friends and family in the U.S. and abroad. In fact, for at least two years, the Commission alleges, LeMaire continued to raise funds while claiming that millions of dollars were sitting offshore waiting to be transferred to the U.S. and distributed to investors - all of which was false.
The Commission's complaint, filed in United States District for the Northern District of Texas, alleges that LeMaire and Petrogas 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's complaint also names Petroenergy, Inc. as a relief defendant.
The Commission seeks an ex parte temporary restraining order, asset freeze, accounting, and orders preserving documents, expediting discovery, and requiring the surrender of passports and the repatriation of assets against each defendant. The Commission also seeks preliminary and permanent injunctions against further violations of the securities laws, disgorgement plus prejudgment interest, and civil money penalties from each defendant. The Commission also seeks to recover investor funds improperly obtained by the relief defendant. [SEC v. Petrogas Overseas Trading, LP and Samuel O. LeMaire, Defendants, and Petroenergy, Inc., Relief Defendant, Civil Action No. 4-10 CV-395-A (N.D. Tx)] (LR-21549)
SEC Sues Former CFO of Advanced Materials Group, Inc. for Fraudulently Inflating Sales and for Misappropriating Hundreds of Thousands of Dollars for Personal Expenses
On June 9, the Commission sued William G. Mortensen, the former CFO of Advanced Materials Group, Inc. (AMG), in U.S. District Court in Dallas for fraudulently inflating AMG's publicly reported sales, earnings and accounts receivable over multiple quarters in 2008 and 2009. The Commission charged that Mortensen committed securities fraud, lied to accountants, falsified records and circumvented internal controls, and aided and abetted reporting, record-keeping and internal control violations. The Commission also alleged that Mortensen misappropriated hundreds of thousands of dollars from AMG to pay personal expenses. The Commission seeks civil penalties, disgorgement of ill-gotten gains, a permanent officer and director bar and permanent injunctive relief against Mortensen.
The Commission also charged Mortensen's subordinate, Feng Zheng, with participating in the scheme. The Commission alleges that Zheng lied to accountants, falsified records, circumvented internal controls, and aided and abetted securities fraud and reporting, record-keeping and internal controls violations. Zheng has agreed to settle these charges, without admitting or denying the Commission's allegations, by paying a $25,000 civil penalty and accepting a permanent injunction against future violations of the antifraud, lying-to-accountants, reporting, record-keeping and internal controls provisions of the federal securities laws.
In related administrative proceedings instituted pursuant to Section 12(j) of the Exchange Act, AMG has consented to the revocation of its securities registration. The Commission is also instituting settled administrative proceedings pursuant to Rule 102(e) of the Commission's Rules of Practice against AMG's former auditor, Fei-Fei Catherine Fang, in which she has consented to a permanent bar from appearing or practicing before the Commission as an accountant. [SEC v. William G. Mortensen and Feng Zheng, Case No. 3:10-CV-1142-B (United States District Court for the Northern District of Texas, Dallas Division)] (LR-21550; AAE Rel. 3141)
SEC Settles Charges Against Two Defendants Arising Out of Lucent Technologies Inc. Accounting Fraud
On June 7, 2010, the Securities and Exchange Commission filed settlements for its claims against Alice Leslie Dorn and Jay William Carter arising out of an accounting fraud action against Lucent Technologies Inc. (Lucent) and ten individuals. Dorn and Carter have agreed to settle the Commission's remaining claims against them without admitting or denying the allegations in the Commission's Amended Complaint. The settlements are subject to court approval.
The Commission alleged that Dorn, Lucent's former Vice President of Indirect Sales for North America, entered into side agreements with certain of Lucent's distributors that granted the distributors rights and privileges beyond those contained in their respective distribution agreements. Those side agreements made it improper for Lucent to recognize revenue, and caused Lucent to materially overstate its pre-tax income for fiscal year 2000. Dorn has consented to the entry of an order permanently enjoining her from aiding and abetting the violation of the anti-fraud provisions of the federal securities laws, and enjoining her from violating, or aiding and abetting the violation of, the books and records, internal controls, and reporting provisions of the federal securities laws. Dorn would be enjoined from aiding and abetting violations of Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 10b-5, 12b-20, 13a-11 and 13a-13. Dorn would also be enjoined from directly violating Section 13(b)(5) of the Exchange Act and Exchange Act Rule 13b2-1. In addition, Dorn will pay a civil penalty in the amount of $40,000.
The Commission alleged that Carter, former President of Lucent's AT&T customer business unit, authorized a side agreement in connection with a $53 million sales transaction with AT&T Wireless Services in 1999-2000, which made it improper for Lucent to recognize revenue in its third quarter of 2000. Carter has consented to the entry of an order permanently enjoining him from violating the books and records and internal control provisions of the federal securities laws, Section 13(b)(5) of the Exchange Act and Exchange Act Rule 13b2-1. Carter will also pay a $25,000 civil penalty. [SEC v. Lucent Technologies, Inc., et al., Civil Action No. 04-2315 (WHW) (D. N.J.)] (LR-21551; AAE Rel. 3142)
INVESTMENT COMPANY ACT RELEASES
EQ Advisors Trust, et al.
A notice has been issued giving interested persons until June 29, 2010, to request a hearing on an application filed by EQ Advisors Trust, et al. for an order under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act, and under Section 6(c) of the Act for an exemption from Rule 12d1-2(a) under the Act. The order would (a) permit certain registered open-end management investment companies to acquire shares of other registered open-end management investment companies and unit investment trusts that are within and outside the same group of investment companies, and (b) permit funds of funds relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-29294 - June 4)
Immediate Effectiveness of Proposed Rule Change
A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2010-050) to amend the Fees 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 June 7. (Rel. 34-62227)
SECURITIES ACT REGISTRATIONS
RECENT 8K FILINGS