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U.S. Securities and Exchange Commission

SEC News Digest

Issue 2010-131
July 15, 2010


Commission Meetings

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 21, 2010 - 10:00 a.m.

The subject matter of the Open Meeting will be:

  1. The Commission will consider a recommendation to propose for public comment a new rule and rule and form amendments under the Investment Company Act of 1940, the Securities Act of 1933, and the Securities Exchange Act of 1934, to reform the regulation of distribution fees paid by registered open-end management investment companies (funds). The recommended proposal would provide a new framework for how funds currently use their assets to pay for sales and distribution expenses pursuant to rule 12b 1 under the Investment Company Act, and would revise disclosure requirements for transaction confirmations pursuant to rule 10b-10 under the Securities Exchange Act.
  2. The Commission will consider whether to adopt amendments to Part 2 of Form ADV and related rules under the Investment Advisers Act of 1940. The amendments would require investment advisers to provide clients with narrative brochures containing plain English descriptions of the advisers' businesses, services, and conflicts of interest. The amendments also would require advisers to electronically file their brochures with the Commission and the brochures would be available to the public through the Commission's website.

Closed Meeting - Thursday, July 22, 2010 - 2:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, July 22, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; adjudicatory matters; 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.


In the Matter of John F. Kendrick

On July 14, 2010, the Commission issued an Order Making findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b), 15B(c)(4) and 21C of the Securities Exchange Act of 1934 (Order). The Order finds that between December 2000 and July 2009, John F. Kendrick (Kendrick), a former registered representative associated with Southwest Securities, Inc. (Southwest), a registered broker-dealer and municipal securities dealer, was a municipal finance professional associated with Southwest under Municipal Securities Rulemaking Board (MSRB) Rule G-37. Between 2003 and 2008, Kendrick contributed $1,625 to Timothy Cahill, the treasurer of the Commonwealth of Massachusetts (treasurer), who was an incumbent and candidate for elective office at the time of the contributions. According to the Order, the treasurer is responsible for, or has the authority to appoint persons who are responsible for, the hiring of brokers, dealers, or municipal securities dealers for municipal securities business by the Commonwealth of Massachusetts and certain related state governmental units (Issuers). Within two years after Kendrick's contributions, Southwest participated as co-manager for a total of 19 negotiated underwritings by the Issuers. In addition, in June 2005, Kendrick co-hosted a fundraiser and made approximately 82 solicitation requests for campaign contributions for the treasurer while Southwest was engaged in or seeking to engage in municipal securities business with the Issuers. The Order finds that as a result of the conduct described above, Kendrick willfully violated MSRB Rule G-37(c) and caused Southwest to violate MSRB Rule G-37(b) and 15B(c)(1) of the Exchange Act.

Based upon the above, the Order: (a) requires Kendrick to cease and desist from committing or causing any violations and any future violations of Section 15B(c)(1) of the Exchange Act, MSRB Rule G-37(b) and MSRB Rule G-37(c); and (b) requires Kendrick to pay a $10,000 civil money penalty. According to the Order, the Commission did not impose a larger civil penalty against Kendrick based upon his sworn representations in his Statement of Financial Condition and other documents submitted to the Commission. Kendrick consented to the issuance of the Order without admitting or denying any of the findings in the Order, except jurisdiction, which he admitted. (Rel. 34-62500; File No. 3-13830)





Modified: 07/15/2010