SEC News Digest

RULES AND RELATED MATTERS

SEC Adopts Portfolio Reporting Rule for Money Market Fund

On September 18, the Commission adopted temporary Rule 30b1-6T under the Investment Company Act of 1940 to require money market funds to report portfolio holdings and valuation information to the Commission under certain circumstances. The new rule continues substantially similar reporting requirements of the Temporary Guarantee Program for Money Market Funds established by the Department of the Treasury, which expires today. The rule was effective on September 18, 2009, and will expire on September 17, 2010. The Commission also requested comment on the temporary rule, and the comment period will end on Oct. 26, 2009. The full text of the release concerning the rule has been posted on the SEC Web site. (Rel. IC-28903; File No. S7-20-09)

ENFORCEMENT PROCEEDINGS

Commission Revokes Registration of Securities of Meisenheimer Capital, Inc. for Failure to Make Required Periodic Filings

On September 22, the Commission revoked the registration of each class of registered securities of Meisenheimer Capital, Inc. (Meisenheimer) 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, Meisenheimer 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 Meisenheimer Capital, Inc. 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 MeisenheimerÕs securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against Meisenheimer in In the Matter of Magnum Resources, Inc., et al., Administrative Proceeding File No. 3-13582.

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 Magnum Resources, Inc., et al., Administrative Proceeding File No. 3-13582, Exchange Act Release No. 60517 (Aug. 18, 2009). (Rel. 34-60703; File No. 3-13582)

In the Matter of Polar Molecular Holding Corporation

On September 22, the Commission instituted public administrative proceedings against Polar Molecular Holding Corporation (Polar or Respondent) of Denver, Colorado, to determine whether the registration of each class of its securities should be revoked or suspended for a period not exceeding twelve months. In the order instituting proceedings (Order), the Division of Enforcement (Division) alleges that Polar has failed to make required periodic filings with the Commission for approximately four years. The Division also alleges that Polar failed to disclose the bankruptcy filings of its operating subsidiary when required.

In these proceedings, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act), a hearing will be scheduled before an Administrative Law Judge (ALJ). At the hearing, the ALJ will hear evidence from the Division and the Respondent 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, 13a-11, and 13a-13 thereunder, are true. The ALJ in these proceedings will then determine whether the registration pursuant to Exchange Act Section 12 of each class of the securities of the Respondent should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the ALJ in these proceedings issue an initial decision not later than 120 days from the date of service of the Order. (Rel. 34-60702; File No. 3-13620)

Court Enters Order Dismissing Disgorgement and Civil Penalty Claims Against Defendants Uncommon Media Group, Inc., Lawrence Gallo and Frederick Hornick, Jr.

The Securities and Exchange Commission announced that on Sept. 15, 2009, the Honorable Daniel T.K. Hurley, United States District Court Judge for the Southern District of Florida, entered an order granting the CommissionÕs motion to dismiss its monetary claims against Defendants Uncommon Media Group, Inc., Lawrence Gallo and Frederick Hornick, Jr. The Order, entered pursuant to Federal Rule of Civil Procedure 41(a), dismisses the CommissionÕs claims for disgorgement, prejudgment interest and civil penalties against Uncommon Media a defunct corporation, Gallo, who has been ordered to pay restitution and sentenced to prison in related criminal proceedings and Hornick, who is destitute.

Previously, Uncommon Media, Gallo and Hornick consented to the entry of a judgment permanently enjoining them from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934 (Exchange Act), and Section 15(a) of the Exchange Act as to Hornick. In addition, Hornick is barred from participating in any penny stock offering and Gallo is barred from serving as an officer or director of a public company. [SEC v. Uncommon Media Group, Inc., Lawrence Gallo, Timothy Rafferty and Frederick Hornick, Jr., Case No. 04-80272-CIV-HURLEY (S.D. Fla.)] (LR-21216)

Final Judgment of Permanent Injunction and Other Relief Entered Against Defendant Timothy Rafferty

The Commission announced that on Sept. 16, 2009, the Honorable Daniel T.K. Hurley of the United States District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction and Other Relief against Defendant Timothy Rafferty. The final judgment enjoins Rafferty from violating Sections 5 and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. In addition to injunctive relief, the final judgment permanently bars Rafferty from participating in the offering of any penny stock and dismisses the CommissionÕs claims for disgorgement, prejudgment interest and civil penalties against him, because he has been ordered to pay restitution and sentenced to prison in a related criminal proceeding. Rafferty consented to entry of the final judgment without admitting or denying any of the allegations in the complaint.

The Commission commenced this action by filing its Complaint on March 23, 2004 against Rafferty and others, alleging that they violated the federal securities laws. [SEC v. Uncommon Media Group, Inc., Lawrence Gallo, Timothy Rafferty and Frederick Hornick, Jr., Case No. 04-80272-CIV-HURLEY (S.D. Fla.)] (LR-21217)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by BATS Exchange relating to fees for use of BATS Exchange, Inc. (SR-BATS-2009-029) 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 September 21. (Rel. 34-60683)

A proposed rule change (SR-Phlx-2009-82), filed by NASDAQ OMX PHLX relating to the Maximum Number of Quoters (ŌMNQĶ) permitted to be assigned in equity options 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 September 21. (Rel. 34-60688)

A proposed rule change filed by the Municipal Securities Rulemaking Board consisting of an interpretive notice regarding MSRB Rule G-15(a), on customer confirmations (SR-MSRB-2009-14) 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 September 21. (Rel. 34-60690)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2009-069) relating to strike price intervals of $0.50 for options on stocks trading at or below $3.00 has become immediately 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 September 21. (Rel. 34-60695)

A proposed rule change filed by the International Securities Exchange (SR-ISE-2009-65) relating to strike price intervals of $0.50 for options on stocks trading at or below $3.00 has become immediately 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 September 21. (Rel. 34-60696)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-BX-2009-041) submitted by NASDAQ OMX BX pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to eliminate Chapter V, Section 13 (Unusual Market Conditions) of the BOX Trading Rules and to modify related rules. Publication is expected in the Federal Register during the week of September 21. (Rel. 34-60686)

The Commission approved a proposed rule change submitted by NASDAQ OMX PHLX (SR-Phlx-2009-59) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to the ExchangeÕs By-Laws, Regulatory Oversight Committee and Referee Program. Publication is expected in the Federal Register during the week of September 21. (Rel. 34-60687)

The Commission approved a proposed rule change submitted by NASDAQ OMX PHLX (SR-Phlx-2009-65) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to strike price intervals of $0.50 for options on stocks trading at or below $3.00. Publication is expected in the Federal Register during the week of September 21. (Rel. 34-60694)

The Commission approved a proposed rule change (FINRA-2009-052), filed by the Financial Industry Regulatory Authority to adopt FINRA Rule 2264 (Margin Disclosure Statement) in the Consolidated FINRA Rulebook. Publication is expected in the Federal Register during the week of September 21. (Rel. 34-60697)

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