SEC News Digest

COMMISSION ANNOUNCEMENTS

Barry Walters Named Chief Freedom of Information Act and Privacy Act Officer

The Securities and Exchange Commission today announced that Barry Walters has been named Chief Freedom of Information Act and Privacy Act Officer.

In this role, Mr. Walters is responsible for overseeing the Commission's Freedom of Information Act (FOIA) and Privacy Act operations. He returns to the SEC, where he previously served as Freedom of Information/Privacy Act Officer from 2001 to 2002. Mr. Walters has held multiple senior positions dealing with FOIA and Privacy Act-related matters in government and the private sector.

"I am pleased to welcome Barry back to the SEC," said SEC General Counsel and Senior Policy Director David Becker. "Given the great importance of making sure investors receive the information they need, and handling sensitive information in a secure manner, I am confident his experience in these areas will serve the agency well."

Each year, the SEC receives approximately 10,000 FOIA requests, relating to almost every aspect of the Commission's work.

"It is a pleasure for me to return to the Commission to serve in this important position," Mr. Walters said. "On his first full day in office, President Obama issued a memorandum regarding the Freedom of Information Act emphasizing the importance of openness in government. My team and I will work hard to achieve the President's goal by serving the needs of the investor community and the American public at large."

Prior to returning to the SEC, Mr. Walters served as a Senior Privacy and Policy Advisor for several private sector firms. His prior government experience includes serving as a Senior Policy Advisor for the Transportation Security Administration, Deputy Director of the Office of Screening Coordination at the Department of Homeland Security, and as a civilian trial attorney for the U.S. Air Force.

Mr. Walters retired as a Lieutenant Colonel from the U.S. Air Force Reserve after 25 years of active duty and reserve service, including the last 13 years as a Judge Advocate. Mr. Walters received his J.D. from New England School of Law in Boston, and his master's and bachelor's degrees from the University of South Carolina. (Press Rel. 2009-217)

ENFORCEMENT PROCEEDINGS

In the Matter of Warwick Insurance Managers, Inc.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default (Default Order) in Warwick Insurance Managers, Inc., Administrative Proceeding No. 3-13626. The Order Instituting Proceedings alleged that Respondents repeatedly failed to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of Warwick Insurance Managers, Inc., Watermarc Food Management Co., Welcome Home, Inc., Whitehall Limited, Inc., Word-Tronics Corp., Worksafe Industries, Inc., World Commerce Online, Inc., Worldwide Film Funding, Inc., Worldwide Web Networx Corp., and Wulf International, Ltd., pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-60827; File No. 3-13626)

In the Matter of Value Merchants, Inc.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default (Default Order) in Value Merchants, Inc., Administrative Proceeding No. 3-13605. The Order Instituting Proceedings alleged that five Respondents failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of Value Merchants, Inc., Varner Technologies, Inc. (f/k/a Peppermill Capital Corp.), Veronex Technologies, Inc., ViaGrafix Corp., and Viapay Limited (f/k/a Interface e.com, Inc.) pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-60828; File No. 3-13605)

SEC Obtains Emergency Relief Against David F. Merrick, Traders International Return Network and Others In Lawsuit Alleging Misappropriation of Investors' Funds and Ponzi Scheme

On Oct. 14, 2009, the Securities and Exchange Commission filed an emergency civil action in the U.S. District Court of the Middle District of Florida charging David F. Merrick, a resident of Apopka, Florida, Traders International Return Network (TIRN), MS, Inc., GTT Services, Inc., MDD Consulting, Inc. and Go ! Tourism, Inc. with fraudulent conduct.

The Commission's complaint alleges that, since at least July 2008, Merrick and entities under his control engaged in a fraudulent scheme to misappropriate investors' funds for his personal use and to repay other investors in a Ponzi scheme, raising at least $22 million from at least 2500 investors throughout the United States. The complaint alleges that Merrick, as an investment adviser, and TIRN intentionally misled investors in TIRN by misrepresenting that their money would be used to buy Forex, international bonds, international stocks and other investments. The complaint alleges that, instead of purchasing these investments, Merrick and TIRN transferred investor funds among entities controlled by Merrick, including MS, GTT Services, MDD Consulting and Go ! Tourism, and misappropriated at least $3.7 million of the funds for Merrick's personal expenditures and to pay credit cards debts of MS and GTT Services. The complaint also alleges that Merrick and TIRN operated a Ponzi scheme, using new investor funds to repay existing investors. The complaint alleges that at least $8.8 million was transferred to Anres Technologies Corporation, a privately-owned company that issues pre-paid debit cards. The complaint further alleges that Merrick and TIRN falsely represented that investors requesting a withdrawal of funds would receive a debit card loaded with their initial investment and return on their investments, when, in fact, the money loaded on the cards was money from other investors. The complaint also alleges that at least $2.3 million of investor funds were transferred to accounts in Panama, Mexico, Malaysia, Switzerland and the Netherlands.

In addition, the complaint alleges that TIRN unlawfully operated as a foreign investment company in the United States, Merrick and TIRN sold securities, namely, interests in TIRN, in a public offering without registering the securities with the Commission, and Merrick and TIRN also conducted business as broker-dealers without registering with the Commission.

In an order dated Oct. 14, 2009, the Honorable Judge Gregory Presnell entered a preliminary injunctive order prohibiting the offer or sale of interests in TIRN and enjoining: Merrick, TIRN, MS, GTT Services, MDD Consulting and Go ! Tourism from violating the antifraud provisions of the Securities Exchange Act of 1934 [Section 10(b) and Rule 10b-5 thereunder]; Merrick and TIRN from violating the antifraud provisions of the Securities Act of 1933 [Section 17(a)]; Merrick from violating the antifraud provisions of the Investment Advisers Act of 1940 [Sections 206(1), 206(2), 206(4) and Rule 206(4)-8]; Merrick and TIRN from violating the securities registrations provisions [Section 5(a) of the Securities Act], foreign investment company provisions [Section 7(d) of the Investment Company Act of 1940] and broker-dealer registration provisions [Section 15(a)(1) of the Exchange Act]. Among other things, the Court also entered orders freezing the assets of the defendants and ordering them to repatriate assets into the United States. [SEC v. David F. Merrick, Traders International Return Network, MS, Inc., GTT Services, Inc., MDD Consulting, Inc., and Go ! Tourism, Inc., Civil Case No. 6:09-CV-1744-ORL-31KRS, USDC, M.D., Fla.] (LR-21248)

INVESTMENT COMPANY ACT RELEASES

Neuberger Berman Management LLC, et al.

A notice has been issued giving interested persons until Nov. 9, 2009, to request a hearing on an application filed by Neuberger Berman Management LLC, et al., under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act and Rule 19b-1 under the Act. The order would permit certain registered closed-end management investment companies to make periodic distributions of long-term capital gains with respect to their outstanding common stock as frequently as monthly in any taxable year, and as frequently as distributions are specified by or in accordance with the terms of any outstanding preferred stock that such investment companies may issue. (Rel. IC-28945 - October 14)

SELF-REGULATORY ORGANIZATIONS

Accelerated Approval of Proposed Rule Change

The Commission issued notice of filing and granted accelerated approval of a proposed rule change submitted by NYSE Arca (SR-NYSEArca-2009-89), through its wholly owned subsidiary, NYSE Arca Equities, Inc., relating to replacement indexes for PowerShares DB Commodity Index Tracking Fund and PowerShares DB Agriculture Fund. Publication is expected in the Federal Register during the week of October 19. (Rel. 34-60819)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2009-70) amending NYSE Amex Equities Rule 123C(8)(a)(1) to extend the operation of the Extreme Order Imbalances Pilot 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 October 19. (Rel. 34-60808)

A proposed rule change filed by New York Stock Exchange (SR-NYSE-2009-104) amending NYSE Rule 123C(8)(a)(1) to extend the operation of the Extreme Order Imbalances Pilot 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 October 12. (Rel. 34-60809)

A proposed rule change (SR-NYSEAmex-2009-68) filed by NYSE Amex amending NYSE Amex Equities Rule 14 to be consistent with the new system capability to receive orders for execution on the Exchange containing settlement instructions of "Cash," "Next Day" and "Seller's Option" directly to a Floor broker's hand-held device 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 October 12. (Rel. 34-60811)

A proposed rule change (SR-NYSE-2009-102) filed by New York Stock Exchange amending NYSE Rule 14 to be consistent with the new system capability to receive orders for execution on the Exchange containing settlement instructions of "Cash," "Next Day" and "Seller's Option" directly to a Floor broker's hand-held device 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 October 12. (Rel. 34-60812)

A proposed rule change filed by NASDAQ OMX BX (SR-BX-2009-063) 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 October 12. (Rel. 34-60814)

SECURITIES ACT REGISTRATIONS

• Latest Securities Act registrations (TXT)

RECENT 8K FILINGS

• Latest 8-K filings (TXT)

http://www.sec.gov/news/digest/2009/dig101509.htm