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COMMISSION ANNOUNCEMENTSSEC Approves New Stock-By-Stock Circuit Breaker RulesThe Securities and Exchange Commission today approved rules that will require the exchanges and FINRA to pause trading in certain individual stocks if the price moves 10 percent or more in a five-minute period. The rules, which were proposed by the national securities exchanges and FINRA and published for public comment, come in response to the market disruption of May 6. The SEC anticipates that the exchanges and FINRA will begin implementing the newly-adopted rules as early as Friday, June 11. "The May 6 market disruption illustrated a sudden, but temporary, breakdown in the market's price setting function when a number of stocks and ETFs were executed at clearly irrational prices," said SEC Chairman Mary Schapiro, who convened a meeting of the exchange leaders and FINRA at the SEC following the market disruption. "By establishing a set of circuit breakers that uniformly pauses trading in a given security across all venues, these new rules will ensure that all markets pause simultaneously and provide time for buyers and sellers to trade at rational prices." Under the rules, trading in a stock would pause across U.S. equity markets for a five-minute period in the event that the stock experiences a 10 percent change in price over the preceding five minutes. The pause, which would apply to stocks in the S&P 500(R) Index, would give the markets the opportunity to attract new trading interest in an affected stock, establish a reasonable market price, and resume trading in a fair and orderly fashion. Initially, these new rules would be in effect on a pilot basis through Dec. 10, 2010. The markets will use the pilot period to make appropriate adjustments to the parameters or operation of the circuit breakers as warranted based on their experience, and to expand the scope to securities beyond the S&P 500 (including ETFs) as soon as practicable. "It is my hope to rapidly expand the program to thousands of additional publicly traded companies," added Chairman Schapiro. At Chairman Schapiro's request, the SEC staff also will:
The SEC staff is working with the markets to consider recalibrating market-wide circuit breakers currently on the books - none of which were triggered on May 6. These circuit breakers apply across all equity trading venues and the futures markets. (Press Rel. 2010-98) Commission MeetingsClosed Meeting - Thursday, June 17, 2010 - 2:00 p.m.The subject matter of the Closed Meeting scheduled for Thursday, June 17, 2010, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; consideration of amicus participation; and other matters relating to enforcement proceedings. 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. ENFORCEMENT PROCEEDINGSCommission Revokes Registration of Securities of By American Midland Corp. for Failure to Make Required Periodic FilingsOn June 10, 2010, the Commission revoked the registration of each class of registered securities of American Midland Corp. (American Midland) for failure to make required periodic filings with the Commission. Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, American Midland consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to American Midland finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of American Midland's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against American Midland in In the Matter of Alyn Corp., et al., Administrative Proceeding File No. 3-13881. Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows: No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . . For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Alyn Corp., et al., Administrative Proceeding File No. 3-13881, Exchange Act Release No. 62046, May 6, 2010. (Rel. 34-62253; File No. 3-13881) Commission Revokes Registration of Securities of By American Millennium Corp. for Failure to Make Required Periodic FilingsOn June 10, 2010, the Commission revoked the registration of each class of registered securities of American Millennium Corp. (American Millennium) for failure to make required periodic filings with the Commission. Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, American Millennium consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to American Millennium finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of American Millennium's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against American Millennium in In the Matter of Alyn Corp., et al., Administrative Proceeding File No. 3-13881. Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows: No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . . For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Alyn Corp., et al., Administrative Proceeding File No. 3-13881, Exchange Act Release No. 62046, May 6, 2010. (Rel. 34-62254; File No. 3-13881) SEC v. Merendon Mining (Nevada) Inc., et al.On June 10, 2010, the Securities and Exchange Commission filed an injunctive action in U.S. District Court for the Western District of Washington, charging six individuals and four companies with securities fraud. The complaint alleges that Milowe Allen Brost, Gary Allen Sorenson, Larry Lee Adair, Ward K. Capstick, Bradley Dean Regier, Martin M. Werner, Syndicated Gold Depository, Merendon Mining Corp. Ltd., Merendon Mining (Nevada) Inc., and the Institute for Financial Learning Group of Companies, Inc. perpetrated a $300 million Ponzi scheme on investors in a purportedly successful gold mining operation. The SEC alleges that Brost and Sorenson of Calgary were the primary architects and beneficiaries of the scheme that persuaded more than 3,000 investors across the U.S. and Canada to invest their savings, retirement funds and even home equity. Brost and his sales team presented themselves as an independent financial education firm that had discovered profitable investment opportunities with companies involved in gold mining. They held seminars where they promised investors they could earn 18 to 36 percent annual returns by investing with these companies, and they claimed the investments were fully collateralized by gold. Unbeknownst to investors, they were actually investing in shell companies owned or controlled by Brost or Sorenson. Investor funds were often transferred multiple times through numerous bank accounts held as far away as Asia, Europe and South America, and then ultimately used to make "interest payments" to investors, fund the few unprofitable companies that actually had operations, and personally enrich Brost, Sorenson and others involved in the scheme. According to the SEC's complaint, Brost and his sales team - called Structurists - sold investors shares in a series of shell companies and then put their money through a "structuring" process that culminated with the transfer of funds from Syndicated Gold Depository (SGD) to Merendon Mining Corp. Ltd. - which was purportedly a successful gold mining and refining company that would pay investors out of its profits. Sorenson, who controlled Merendon Mining Corp. Ltd., claimed to be a successful businessman receiving loans from SGD through arms-length transactions. Sorenson hosted tours by potential investors at his Honduran refinery and demonstrated the pouring of gold bars while making false claims about the profitability of his company. Brost and Sorenson concealed their ownership and control of SGD by using personal aliases, corporate entities and trust agreements with nominee shareholders. The SEC alleges that investor money whirled through accounts located in the U.S. and Canada as well as the Bahamas, Belize, Bermuda, Ecuador, Honduras, Malaysia, Panama, Peru, Portugal, and Venezuela. Brost and Sorenson diverted investor funds to their personal benefit, using millions of dollars to purchase and renovate extravagant homes, ranches, and recreational vehicles. Sorenson also purchased and outfitted a luxury fishing resort in South America. Sorenson's wife and daughter are named as relief defendants in the case in order to recover investor assets now in their possession. Sorenson used investor funds pay off the mortgage of daughter Laura Sorenson and invest in a film production company for her benefit, and he purchased a home and other items for wife Thelma Sorenson. The SEC's complaint claims that, based on this conduct, all of the defendants violated Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The Complaint also claims that all of the defendants except for Merendon Mining Corp. Ltd, violated Sections 5(a) and 5(c) of the Securities Act. The Complaint further alleges that Brost, Capstick and the Institute for Financial Learning Group of Companies, Inc. violated Section 15(a) of the Exchange Act. The Commission's complaint seeks permanent injunctions, an order to provide an accounting, disgorgement of ill-gotten gains, third tier penalties and officer and director bars against the individuals. [SEC v. Merendon Mining (Nevada) Inc., Larry Lee Adair, Milowe Allen Brost a/k/a Milo Brost, M.B. Gonne or Phillip K. Collins, Ward K. Capstick, Bradley Dean Regier, Gary Allen Sorenson a/k/a Don Grey Fox, Martin M. Werner, Syndicated Gold Depository Inc., now known as Bahama Resources Alliance Ltd., Merendon Mining Corp. Ltd., Institute For Financial Learning Group of Companies, Inc. (Case 2:10-cv-00955)] (LR-21552) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig061010.htm
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