Delinquent Filers’ Stock Registrations Revoked
The registrations of the registered securities of American Industries Ltd., American Resource Corp., American Transportation Television Network, Inc., Amerimmune Pharmaceuticals, Inc., and Anaconda Venture Corp. have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each 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 revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-62807; File No. 3-14003)
Commission Revokes Registration of Securities Of Marbledge Group, Inc. For Failure to Make Required Periodic Filings
On September 1, the Commission revoked the registration of each class of registered securities of Marbledge Group, Inc., n/k/a AR Growth Finance Corp. (ARGW) 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, ARGW 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 Marbledge Group, Inc. (n/k/a AR Growth Finance Corp.) finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of ARGW’s securities pursuant to Section 12(j) of the Exchange Act. This Order settled the charges brought against ARGW in In the Matter of Geotec, Inc., et al., Administrative Proceeding File No. 3-13999.
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 contact:
Additional Materials Available at www.sec.gov
Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to Marbledge Group, Inc.( n/k/a AR Growth Finance Corp.) , In the Matter of Geotec, Inc., et al., Administrative Proceeding File No. 3-13999, Exchange Act Release No. 34-62808 (September 1, 2010).
Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of Geotec, Inc., et al., Administrative Proceeding File No. 3-13999, Exchange Act Release No. 62676 (August 10, 2010). (Rel. 34-62808; File No. 3-13999)
In the Matter of Pinnacle Capital Markets LLC and Michael A. Paciorek
On September 1, the Commission issued an Order Instituting Administrative and Cease-and-Decease Proceedings, Making Findings and Imposing Remedial Sanctions, Penalties and a Cease-and-Desist Order Pursuant to Sections 15(b)(4) and 21C of the Securities Exchange Act of 1934 against Pinnacle Capital Markets LLC and Michael A. Paciorek. The Order finds that Pinnacle willfully violated Section 17(a) of the Securities Exchange Act of 1934 and Rule 17a-8 thereunder, which require a broker-dealer to comply with the reporting, recordkeeping and record retention requirements in regulations implemented under the Bank Secrecy Act, including the requirements in the Customer Identification Program (CIP) rule applicable to broker-dealers. The Order also finds that Paciorek was the cause of Pinnacle’s violations. The CIP rule generally requires a broker-dealer to establish, document, and maintain procedures for identifying customers and verifying their identities.
The Order specifically finds that from October 2003 to August 2006, Pinnacle did not verify the identities of 34 out of a sample of 55 corporate account holders. The Commission also finds that from October 2003 through November 2009, Pinnacle did not collect or verify identifying information for the vast majority of the beneficial owners of sub-accounts maintained by Pinnacle’s omnibus brokerage accounts. Consequently, the order finds that Pinnacle’s documented procedures differed materially from its actual procedures.
As a result of the conduct described above, Pinnacle willfully violated Section 17(a) of the Exchange Act and Rule 17a-8 thereunder by failing to document accurately its CIP. As a result of the conduct described above, Paciorek was a cause of Pinnacle’s violations of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder.
Based on the above, the Order imposes a $25,000 civil monetary penalty on Pinnacle, censures Pinnacle, and imposes cease-and-desist orders on Pinnacle and Paciorek, who consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-62811; File No. 3-14026; Press Rel. 2010-161)
SEC Orders Hearing on Registration Revocation Against Eight Public Companies for Failure to Make Required Periodic Filings
On September 1, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:
In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.
In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings.
For further information contact:
(Rel. 34-62812; File No. 3-14027)
Former Group Vice President of Finance, Tax Counsel and Treasurer of Centerpulse USA, Inc. Settles Charges With SEC
The Securities and Exchange Commission today announced that Richard Jon May, the former Group Vice President of Finance, Tax Counsel and Treasurer of Centerpulse USA, Inc., a subsidiary of Centerpulse Ltd., has settled the Commission’s charges against him arising from his alleged involvement in the improper overstatement of Centerpulse’s income in the third and fourth quarters of 2002. Without admitting or denying the Commission’s allegations, May consented to the entry of a final judgment in the Commission’s litigation pending in the U.S. District Court for the District of Columbia.
The final judgment, which was entered on Aug. 30, 2010, orders May to pay $20,000 in disgorgement and $10,519 in prejudgment interest. The final judgment also permanently enjoins May from violating the falsification of books and records provision of the federal securities laws, Section 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rule 13b2-1, and from aiding and abetting violations of the reporting, books and records and internal controls provisions of the federal securities laws, Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B), and Exchange Act Rules 12b-20, 13a-1 and 13a-16.
The Commission’s complaint alleged that May, along with two other former Centerpulse executives, overstated Centerpulse’s third quarter 2002 income by improperly deferring recognition of a $25 million expense; and improperly overstated Centerpulse’s fourth quarter and fiscal 2002 income by not increasing a reserve to cover at least $18 million in liabilities and improperly using anticipated refund credits to offset another $5 million in expenses.
The Commission previously reached a settlement in this litigation with Urs Kamber, Centerpulse’s former Chief Financial Officer, and Stephan Husi, Centerpulse’s former Head of Corporate Planning and Controlling. See LR-20605/AAER-2835 (May 30, 2008); and LR-20860/AAER-2919 (Jan. 21, 2009). The Commission also previously reached administrative settlements with Dennis L. Hynson, CPA, Christopher W. Kelford and Paula J. Norbom, CPA, the former vice presidents of finance for Centerpulse’s three U.S. divisions, who consented to the entry of cease and desist orders relating to improper accounting decisions they made during the third quarter of 2002. See Admin. Proc. No. 3-13047/AAER-2832 / Rel.34-57889 (May 30, 2008); Admin. Proc. No. 3-13048 / AAE Rel. No. 2833 / Rel. 34-57890 (May 30, 2008); and Admin. Proc. No. 3-13049 / AAE Rel. No. 2834 / Rel. 34-57891 (May 30, 2008). [SEC v. Urs Kamber, Stephan Husi and Richard Jon May, Civil Action No. 1:07-CV-01867, JDB, D.D.C)] (LR-21636; AAER-3178)
In the Matter of Halek Energy, LLC, CBO Energy, Inc., Jason A. Halek, and Christopher Chad Wilbourn
On Aug. 31, 2010, the Securities and Exchange Commission filed suit in United States District Court in Dallas, Texas, alleging that Jason A. Halek of Southlake, Texas, and two companies he owns and controls – Halek Energy, LLC and CBO Energy, Inc. – fraudulently sold investments in Texas oil and gas projects. The Commission also charged that one of Halek’s salesmen, Christopher Chad Wilbourn, illegally acted as an unregistered broker-dealer and unlawfully offered and sold unregistered securities.
The Commission’s complaint alleges that, between June 2007 and September 2009, Jason Halek, Halek Energy and CBO Energy raised approximately $22 million from at least 300 investors nationwide by making materially false and misleading statements about the risks of the oil and gas projects, the use of investor funds, and potential returns from the investments. The complaint further alleges that Jason Halek knew these representations were false and that the vast majority of the oil or gas projects never provided the promised returns to investors. Finally, the complaint alleges that Wilbourn earned large commissions from promoting and selling unregistered oil and gas working interests and pre-IPO shares.
The Commission charges Jason Halek, Halek Energy and CBO Energy with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the Commission charges Wilbourn with violating Sections 5(a) and 5(c) of the Securities Act and Section 15(a) of the Exchange Act. The defendants have agreed to injunctions against future violations of these provisions. Halek has agreed to pay a $50,000 civil penalty. The Commission is also seeking disgorgement plus prejudgment interest against each defendant and a civil penalty against Wilbourn. [SEC v. Halek Energy, LLC, CBO Energy, Inc., Jason A. Halek and Christopher Chad Wilbourn, Civil Action No. 3:10-cv-01719-K, Aug. 31, 2010] (LR-21637)
SEC Charges Pharmaceutical Company Insider And Former Hedge Fund Manager For Insider Trading, Resulting In Approximately $14 Million In Profits
The United States Securities and Exchange Commission (Commission) announced that it has filed a complaint in the United States District Court for the Eastern District of Pennsylvania against James W. Self, Jr. (Self), an Executive Director of Business Development at a pharmaceutical company located in New Jersey (the Company), and Stephen R. Goldfield (Goldfield), a former hedge fund manager, for engaging in unlawful insider trading in advance of the April 23, 2007 announcement that AstraZeneca would acquire MedImmune, Inc. (MEDI). The Commission’s complaint alleges that Self tipped Goldfield, a friend and former business school classmate, with material nonpublic information regarding the MEDI acquisition and that Goldfield unlawfully purchased 17,000 MEDI call options and 255,000 shares of MEDI stock while in possession of the material nonpublic information provided to him by Self. Goldfield realized actual profits of approximately $14 million from his unlawful trading.
The Commission’s complaint further alleges that Self had been assigned to the Company’s team that was tasked with evaluating a potential acquisition of MEDI, and learned nonpublic information about the potential MEDI acquisition. The Complaint alleges that Self knew that he owed a duty to the Company to maintain the confidence of all nonpublic information he learned during the course of his employment and to abstain from disclosing any such information to others.
The Complaint alleges that during a meeting with Goldfield on or about March 12 or 13, 2007, Self, in violation of his duty to the Company, told Goldfield that he had been assigned to work on the potential MEDI acquisition and showed Goldfield a confidential deal sheet, which described MEDI and the procedure and planned timing for the subsequent confidential auction process. The Complaint further alleges that, following this meeting, Self continued to provide nonpublic information to Goldfield on the status of the potential acquisition. From March 15, 2007 continuing through April 20, 2007, Goldfield traded while in possession of the material nonpublic information that Self provided to him. Goldfield closed out his MEDI position entirely within the four business days immediately following the April 23, 2007 announcement about the acquisition, and realized $13,978,752 in profits from his unlawful trading. By May 31, 2007, Goldfield lost all of the profits he had earned trading MEDI through aggressively trading index options.
Without admitting or denying the Commission’s allegations, Self has agreed to settle the case against him. Self has consented to a permanent injunction against future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In addition, Self has consented to an order imposing a civil penalty of $50,000, based on Self’s sworn statements in his statement of financial condition and other materials provided to the staff.
Without admitting or denying the Commission’s allegations, Goldfield has also agreed to settle the case against him. Goldfield has consented to a permanent injunction against future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In addition, Goldfield has consented to an order for disgorgement in the amount of $13,978,752, along with prejudgment interest of $2,666,275, for a total of $16,645,027, provided that payment of all but $600,000 is waived, based on Goldfield’s sworn statements in his statement of financial condition and other materials provided to the staff. [Securities and Exchange Commission v. James W. Self Jr. and Stephen R. Goldfield, Civil Action No. 10-CV-4430-ER, E.D.P.A.] (LR-21638)
INVESTMENT COMPANY ACT RELEASES
The Blackstone Group, L.P.
An order has been issued on an application filed by The Blackstone Group, L.P. to exempt certain future partnerships, limited liability companies and other investment vehicles formed for the benefit of eligible employees of The Blackstone Group, L.P. and its affiliates from certain provisions of the Investment Company Act (Act). Each partnership or other investment vehicle will be an “employees’ securities company” within the meaning of section 2(a)(13) of the Act. (Rel. IC-29406 – Aug. 31, 2010)
Kohlberg Capital Corporation
An order has been issued on an application filed by Kohlberg Capital Corporation under Section 6(c) of the Investment Company Act for an exemption from Sections 23(a), 23(b) and 63 of the Act, and under Sections 57(a)(4) and 57(i) of the Act and Rule 17d-1 under the Act permitting certain joint transactions otherwise prohibited by Section 57(a)(4) of the Act. The order permits Kohlberg Capital to issue restricted shares of its common stock to its directors who are not also employees or officers of Kohlberg Capital under the terms of its 2010 Amended and Restated Non-Employee Director Plan. (Rel. 29407 – Aug. 31, 2010)
Immediate Effectiveness of Proposed Rule Changes
A proposed rule change filed by the New York Stock Exchange LLC (SR-NYSE-2010-60) amending NYSE Rule 107B to revise the quoting requirements and add a volume requirement 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 Aug. 30, 2010. (Rel. 34-62791)
A proposed rule change filed by NYSE Amex LLC amending Rule 107B – NYSE Amex Equities to revise the quoting requirement (SR-NYSEAmex-2010-85) 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 Aug. 30, 2010. (Rel. 34-62792)
A proposed rule change filed by Chicago Board Options Exchange, Incorporated (SR-CBOE-2010-076) to amend its Fee Schedule has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected to made in the Federal Register during the week of Aug. 30, 2010. (Rel. 34-62763)
Proposed Rule Change
The Options Clearing Corporation filed a proposed rule change (File No. SR-OCC-2010-13) under Section 19(b)(1) of the Exchange Act to revise OCC’s By-Laws to allow OCC to make adjustments to the settlement price of exchange-designated security futures for all cash dividends or distributions paid by the issuer of the underlying security. Publication of the proposal is expected in the Federal Register during the week of Aug. 30, 2010. (Rel. 34-62801)
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