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, July 14, 2010 - 10:00 a.m.
The Commission will consider whether to issue a concept release to solicit public comment as to whether the Commission should consider revisions to its rules to promote greater efficiency and transparency in the U.S. proxy system and enhance the accuracy and integrity of the shareholder vote.
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 Dennis Lee Keating II
On July 6, 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 Dennis Lee Keating II. The Order finds that on June 28, 2010, a judgment was entered against Dennis Lee Keating II, permanently enjoining him from future violations of Sections 5 and 17(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, in the civil action entitled SEC v. Dennis Lee Keating II, Civil Action Number 2:10-cv-00419-DAK in the United States District Court for the District of Utah.
The Order further finds that the Commission's complaint alleged that from August 2006 through at least April 2007, Keating fraudulently conducted an unregistered offering of securities, raising over $17.6 million from over 100 investors for an investment in Paseo Partners LLC (Paseo), a company formed by Keating. The complaint alleged that Keating, while acting as an unregistered broker-dealer, made multiple misrepresentations to Paseo's investors, including how their funds would be used, that he personally invested millions of dollars in Paseo when he had not, that a broker-dealer supervised the Paseo offering, and that investors would receive a four to twelve time return on their investments. The complaint also alleged that until at least Nov. 1, 2008, Keating continued lulling investors with false assurances that they would receive a return on their Paseo investments. Based on the above, the Order bars Keating from association with any broker, dealer, or investment adviser. Keating 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. 34-62456; IA-3048; File No. 3-13957)
In the Matter of Miracor Diagnostics, Inc.
On July 7, 2010, an Administrative Law Judge issued an Order Making Findings and Revoking Registrations of Securities by Default (Default Order) in Miracor Diagnostics, Inc., Administrative Proceeding No. 3-13921, as to Miracor Diagnostics, Inc., MPEL Holdings Corp., Computer Transceiver Systems, Inc., MR3 Systems, Inc., and Mutual Risk Management Ltd. The Default Order finds that these Respondents failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 13a-1 and 13a-13 or 13a-16 because each Respondent failed to make periodic filings with the Commission for a number of years. Based on these findings, the Default Order, pursuant to Section 12(j) of the Exchange Act, revoked the registration of each class of each Respondent's registered securities. (Rel. 34-62458; File No. 3-13921)
Former Ropes & Gray Attorney Brien Santarlas Settles SEC Insider Trading Charges
The Securities and Exchange Commission announced today that on July 2, 2010, The Honorable Richard J. Sullivan of the United States District Court for the Southern District of New York, entered a final judgment against Brien Santarlas in SEC v. Brien Santarlas, 09-CV-10100 (S.D.N.Y.), an insider trading case the Commission filed on Dec. 10, 2009. The Commission charged Santarlas, who was an attorney at the law firm of Ropes & Gray LLP during the relevant time period, with violations of the antifraud provisions of the federal securities laws. The Commission alleged that Santarlas misappropriated from his law firm material, nonpublic information concerning at least two corporate acquisitions involving Ropes & Gray clients -- 3Com Corp. and Axcan Pharma Inc.
As alleged in the Commission's complaint, Santarlas gained access to material, nonpublic information concerning the acquisitions by, among other means, accessing Ropes & Gray's computer network and viewing confidential deal documents. According to the complaint, using attorney Jason Goldfarb as a conduit, Santarlas and his Ropes & Gray colleague, Arthur Cutillo, tipped inside information concerning these corporate acquisitions to Zvi Goffer, a proprietary trader at Schottenfeld Group, LLC, in exchange for cash kickbacks. The complaint further alleged that Goffer traded on this information for Schottenfeld, and had numerous downstream tippees who also traded on the information, including other professional traders and portfolio managers at hedge fund advisers. The Commission previously charged Cutillo, Goldfarb, Goffer, and six others in connection with this insider trading scheme on Nov. 5, 2009. For further information see [SEC v. Cutillo, et al., 09-CV-9208 (S.D.N.Y.) (RJS)] (LR-21283).
To settle the Commission's charges, Santarlas consented to the entry of a final judgment that: (i) permanently enjoins him from future violations of Section 10(b) of the Securities Exchange Act of 1934, and Exchange Act Rule 10b-5; (ii) orders him to pay disgorgement of $32,500, which will be deemed satisfied, on a dollar for dollar basis, by the amount of any forfeiture ordered in the parallel criminal case, United States v. Brien Santarlas, 09-CR-1170 (S.D.N.Y.); and (iii) orders him to pay a civil penalty of $32,500. Additionally, in a related administrative proceeding, Santarlas consented to the entry of a Commission order suspending him from appearing or practicing before the Commission as an attorney. In a parallel criminal case, Santarlas previously pled guilty to charges of securities fraud and conspiracy to commit securities fraud and is awaiting sentencing. [SEC v. Brien Santarlas, Civil Action No. 09-CV-10100 (S.D.N.Y.) (RJS)] (LR-21587); (Administrative Proceeding - Rel. 34-62460; File No. 3-13958)
In the Matter of Edward J. Driving Hawk, Sr.
An Administrative Law Judge has issued an Initial Decision in Edward J. Driving Hawk, Sr., Administrative Proceeding No. 3-13745. The Initial Decision bars Respondent Edward J. Driving Hawk, Sr. (Driving Hawk), from association with any broker or dealer. The sanction was ordered in an administrative proceeding, following a court-ordered injunction and felony conviction against him. In September 2006, Driving Hawk was enjoined from violating the antifraud provisions of the federal securities laws based on his involvement in a fraudulent offering of approximately $78 million in securities issued by U.S. Reservation Bank & Trust, an unauthorized bank based in Arizona. In 2009, he pled guilty to one felony count and was sentenced to imprisonment and ordered to pay monetary penalties also based on his conduct in connection with the fraudulent offering. (Initial Decision No. 399; File No. 3-13745)
SEC Charges Snamprogetti Netherlands, B.V. With Foreign Bribery and Related Accounting Violations and ENI, S.P.A. With Books and Records and Internal Controls Violations - ENI and Snamprogetti to Pay Jointly $125 Million in Disgorgement; Snamprogetti also to Pay a Criminal Penalty of $240 Million
The Securities and Exchange Commission today charged Italian company ENI, S.p.A. and its former Dutch subsidiary Snamprogetti Netherlands B.V. with multiple violations of the Foreign Corrupt Practices Act (FCPA) in a bribery scheme that included deliveries of cash-filled briefcases and vehicles to Nigerian government officials to win construction contracts.
Snamprogetti and ENI will jointly pay $125 million to settle the SEC's charges, and Snamprogetti will pay an additional $240 million penalty to settle separate criminal proceedings announced today by the U.S. Department of Justice.
ENI and Snamprogetti are the latest to be charged in the decade-long Nigerian bribery scheme conducted by a joint venture of companies that also included Technip and KBR, Inc., both named in previous SEC enforcement actions. Technip, KBR and its former parent Halliburton Company paid a combined $917 million to settle FCPA charges. The $365 million to be paid by ENI and Snamprogetti brings the total sanctions against the companies involved in the scheme to more than $1.28 billion.
According to the SEC's complaint against ENI and Snamprogetti, filed today in federal district court in Houston, senior executives at Snamprogetti and the other joint venture companies authorized the hiring of two agents, a U.K. solicitor and a Japanese trading company, through which more than $180 million in bribes were funneled to Nigerian government officials to obtain several contracts to build liquefied natural gas (LNG) facilities on Bonny Island, Nigeria. The Nigerian government exercised majority control over the company that awarded the contracts - Nigeria LNG Ltd.
The SEC's complaint alleges that senior sales executives at the joint venture companies formed a "cultural committee" to consider how to implement and hide the bribery scheme through sham consulting and services contracts with subcontractors or vendors. After Nigeria LNG awarded the joint venture companies a $2.2 billion LNG-related construction contract in December 1995, the companies sent a total of $60 million to the U.K. agent's Swiss bank account over the next 52 months. The U.K. agent transferred the money to accounts owned or controlled by high-ranking Nigerian government officials.
The SEC alleges that following a change in Nigerian government in 1999, representatives from the joint venture companies traveled to Nigeria to meet a high-ranking government official to continue the scheme. The official confirmed that the U.K. agent was the correct intermediary, and also appointed his own representative to negotiate the bribe amount. A senior officer from Snamprogetti and others from the joint venture met with the Nigerian official's representative in London and negotiated an amount of $32.5 million to be delivered through the U.K. agent. Days after the London meeting, Nigeria LNG awarded a contract to the joint venture companies for $1.2 billion.
The SEC alleges that in 2002 and 2003, the U.K. agent used a subcontractor on the Nigeria LNG project to transfer millions of dollars to a Nigerian government official for the benefit of a Nigerian political party. The subcontractor personally hand-delivered U.S. cash in briefcases to the Nigerian official in a hotel room in Abuja, Nigeria. The subcontractor also delivered the bribes to the Nigerian official in local Nigerian currency, the Naira. In these instances, because the Naira was too bulky to deliver by hand, the subcontractor loaded the cash into vehicles that were delivered to the Nigerian official.
The SEC's complaint also alleges that ENI failed to ensure that its former subsidiary, Snamprogetti, complied with ENI's internal controls concerning the use of agents, and that the books and records of both companies were falsified as a result of the bribery scheme. After ENI became a U.S. issuer in 1995, it became subject to the FCPA, including the requirement to create and maintain adequate internal controls.
Without admitting or denying the SEC's allegations, Snamprogetti has consented to the entry of a court order permanently enjoining it from violating the anti-bribery and recordkeeping and internal controls provisions in Sections 30A and 13(b)(5) of the Securities Exchange Act of 1934 and Rule 13b2-1, and ENI has consented to the entry of a court order permanently enjoining it from violating the recordkeeping and internal controls provisions in Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. Snamprogetti and ENI also consented to the entry of court orders that require them, jointly and severally, to pay $125 million in disgorgement. The proposed settlements are subject to court approval.
In the related criminal proceeding announced today, the U.S. Department of Justice filed a criminal action against Snamprogetti, charging one count of conspiring to violate the FCPA and one count of aiding and abetting violations of the anti-bribery provisions of the FCPA. Snamprogetti has entered into a deferred prosecution agreement with the DOJ and agreed to pay a criminal penalty of $240 million.
The SEC acknowledges the assistance of the U.S. Department of Justice, Fraud Section; the Federal Bureau of Investigation; and foreign authorities in Europe, Asia, Africa and the Americas. [SEC v. ENI, S.p.A. and Snamprogetti Netherlands, B.V., Case No. 4:10-cv-02414, S.D. Tex. (Houston)] (LR-21588; AAE Rel. 3149)
INVESTMENT COMPANY ACT RELEASES
Nationwide Life Insurance Company, et al.
A notice has been issued giving interested persons until July 26, 2010, to request a hearing on an application filed by Nationwide Life Insurance Company (NWL); Nationwide Variable Account-II; and Nationwide Investment Services Corporation (collectively, Applicants). Applicants seek an amended order under Section 6(c) of the Investment Company Act, as amended, granting exemptions from the provisions of Sections 2(a)(32), 22(c) and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder to permit the recapture of certain bonus credits applied to purchase payments made under a certain deferred variable annuity contract (Current Contract). Applicants request that the relief under the order extend to any deferred variable annuity contracts substantially similar in all material respects to the Current Contract that NWL may issue in the future (Future Contracts). Applicants also request that the relief in the order extend to any other separate accounts of NWL and its successors in interest that support the Future Contracts and any Financial Industry Regulatory Authority member broker-dealers controlling, controlled by, or under common control with any Applicant, whether existing or created in the future, that in the future may act as principal underwriter for the Contracts. (Rel. IC-29337 - July 2)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by NASDAQ OMX PHLX relating to routing fees (SR-Phlx-2010-88) 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 July 5. (Rel. 34-62423)
A proposed rule change filed by NYSE Arca amending its Fee Schedule (SR-NYSEArca-2010-62) 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 July 5. (Rel. 34-62433)
National Securities Clearing Corporation filed a proposed rule change (SR-NSCC-2010-06), which became effective upon filing pursuant to Section 19(b)(3)(A) of the Exchange Act, that amends NSCC rules to create a new membership type which will be able to access NSCC's mutual fund services. Publication is expected in the Federal Register during the week of July 5. (Rel. 34-62435)
A proposed rule change filed by NYSE Arca to expand its $1 Strike Program (SR-NYSEArca-2010-66) 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 July 5. (Rel. 34-62450)
A proposed rule change filed by NYSE Arca (SR-NYSEArca-2010-65) to list options on Trust Issued Receipts in $1 strike intervals 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 July 5. (Rel. 34-62453)
Proposed Rule Change
Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2010-030) pursuant to Section 19(b)(1) of the Act to adopt the NASD Rule 11000 Series (Uniform Practice Code (UPC)) as FINRA rules in the consolidated FINRA rulebook, subject to certain amendments, and to delete NASD Rule 3370 (Purchases) and the following corresponding provisions in the Incorporated NYSE Rules and Interpretations: 176 (Delivery Time); 180 (Failure to Deliver); 282 (Buy-in Procedures) and its Supplementary Material paragraphs .10-.80; 291 (Failure to Fulfill Closing Contract); 292 (Restrictions on Members' Participation in Transaction to Close Defaulted Contracts); 293 (Closing Contracts in Suspended Securities); 294 (Default in Loan of Money); 387 (COD Orders) and its Supplementary Material paragraphs .10-.60; Rule 387 Interpretations /01 - /18; 430 (Partial Delivery of Securities to Customers on C.O.D. Purchases); and Rule 430 Interpretation /01. Publication is expected in the Federal Register during the week of July 5. (Rel. 34-62454)
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