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COMMISSION ANNOUNCEMENTSCommission MeetingsFollowing 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 Disability Program Officer or call 202-551-4158. Open Meeting - Wednesday, January 13, 2010 at 10:00 a.m.The subject matter of the Open Meeting will be:
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. RULES AND RELATED MATTERSBlackRock, Inc.A notice has been issued giving interested persons until Feb. 10, 2010, to request a hearing on an application filed by BlackRock, Inc. for an order under Section 206A of the Investment Advisers Act. The order would exempt BlackRock, Inc. and its investment advisory subsidiaries from Advisers Act rule 206(4)-3(a)(2)(iii)(A)(3), which requires any cash solicitor for an investment adviser to provide a prospective client with a separate solicitor's disclosure document at the time of the solicitation, and from Advisers Act rule 206(4)-3(a)(2)(iii)(B), which requires an investment adviser to receive a prospective client's written acknowledgement of receipt of the separate solicitor's document prior to entering into any advisory contract with that client. (Rel. IA-2971 - January 4) ENFORCEMENT PROCEEDINGSIn the Matter of Mary Beth StevensOn January 5, the Commission announced the issuance of an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 203(f) and 203(k) of the Investment Advisers Act (Order) against Mary Beth Stevens (Stevens). The Order finds that Stevens, the former chief financial officer and chief compliance officer of investment adviser AA Capital Partners Inc. (AA Capital), aided and abetted the misappropriation of more than $23 million by AA Capital and its former president, John Orecchio (Orecchio). The Order finds that, between May 2004 and September 2006, Stevens facilitated Orecchio's and AA Capital's misappropriation of more than $23 million belonging to AA Capital's clients by improperly withdrawing funds from AA Capital's client trust accounts and transferring those funds for Orecchio's personal benefit and to pay the firm's operating expenses. The Order further finds that Stevens falsely characterized the withdrawals in the monthly account statements she prepared and sent to AA Capital's clients as "capital calls" for legitimate investments. The Order also finds that Stevens did not fulfill her responsibility as AA Capital's chief financial officer to properly maintain the firm's books and records and that Stevens' failure to keep up-to-date books and records helped conceal Orecchio's and AA Capital's misappropriations from clients. Based on the above, the Order directs Stevens to cease and desist from committing or causing any violations and any future violations of Sections 204, 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940 and Rules 204-2(a)(1), 204-2(a)(2), 204-2(a)(6) and 206(4)-4 thereunder, bars Stevens from associating with any investment adviser, and requires Stevens to pay disgorgement of $79,583.50, prejudgment interest of $22,472.24, and a civil penalty of $50,000. Stevens consented to the issuance of the Order without admitting or denying any of the findings. (IA-2973; File No. 3-13553) In the Matter of Reza SalehThe Securities and Exchange Commission today announced that a former Perot family companies employee it charged with insider trading in September has agreed to return all of his illicit profits - a total of more than $8.6 million. Just two days after Dell Inc. announced plans to acquire Perot Systems, the SEC filed suit against Reza Saleh of Richardson, Texas, with insider trading, alleging that he illegally traded in Perot Systems call options after learning about the merger before it was announced. The SEC obtained a court order at that time freezing all of Saleh's trading profits. Under the terms of the settlement filed today in federal court in Dallas, the SEC plans to ask the court to appoint a third party to recommend a distribution plan for Saleh's illegal profits. The SEC also will ask the court to impose a financial penalty against Saleh. The settlement is subject to court approval. Without admitting or denying the allegations in the SEC's complaint, Saleh agreed to be permanently enjoined from violations of Sections 10(b) and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5 and 14e-3 thereunder. Pursuant to Section 203(f) of the Investment Advisers Act, Saleh further agreed to an SEC administrative order, barring him from future association with any investment adviser. [SEC v. Reza Saleh, et al., No. 3:09-CV-01778-M (BMGL) (N.D. Tx)] (LR-21360) SEC Settles With Former Merrill Lynch Executive for Aiding and Abetting Enron FraudThe Securities and Exchange Commission announced today that, on Dec. 31, 2009, the U.S. District Court in Houston entered a final judgment in the Commission's civil action against Daniel H. Bayly (Bayly), former global head of investment banking at Merrill Lynch & Co., Inc. (Merrill Lynch). On March 17, 2003, the Commission charged Bayly and three other former executives of Merrill Lynch with aiding and abetting Enron Corp.'s earnings manipulation. That action remains stayed against Bayly's co-defendants pending resolution of a parallel criminal prosecution. On March 17, 2003, the Commission also sued and simultaneously settled all of its Enron aiding-and-abetting charges against Merrill Lynch, which was enjoined from violating the federal securities laws and paid $80 million in financial sanctions for distribution to injured investors through the Commission's Enron Fair Fund. Without admitting or denying the allegations in the Commission's complaint, Bayly has now been permanently enjoined from violating the antifraud provisions, as well as from aiding and abetting violations of the periodic reporting, books-and-records, and internal controls provisions; barred from serving as an officer or director of a public company for five years; and ordered to pay $300,001 in disgorgement and civil money penalties for deposit into the Commission's Enron Fair Fund. As alleged in the Commission's complaint, Bayly substantially assisted Enron's sham sale of an interest in certain Nigerian barges during late 1999. Although the interest in these barges purportedly passed to a special purpose entity in which Merrill Lynch invested equity capital, Bayly had received an oral commitment from Enron's then-Chief Financial Officer, Andrew Fastow, that Merrill Lynch would be repaid within six months at a specified rate of return. In substance, this side agreement transformed what was supposed to be an equity investment into a bridge loan with a fixed interest rate. The complaint alleged that Bayly helped enable this sham "sale" on Enron's interest in the Nigerian barges so as to maintain favorable relations with Enron. By participating in the arrangement - which allowed Enron fraudulently to record $28 million in revenue and $12 million in pre-tax income - Bayly aided and abetted Enron's violations of the federal securities laws. [SEC v. Daniel H. Bayly, et al., Civil Action No. H-03-0946 (S.D. Tex.)] (LR-21361; AAE Rel. 3094) Michael F. Shanahan, Sr., Former Engineered Support Systems, Inc. Chairman and CEO, Agrees to Settle SEC Charges in Option Backdating CaseOn Jan. 5, 2010, the United States District Court for the Eastern District of Missouri entered a final judgment by consent against Michael F. Shanahan, Sr., the former Chairman and CEO of Engineered Support Systems, Inc. (Engineered Support or the Company), resolving the Securities and Exchange Commission's charges against Shanahan Sr. for options backdating filed in July 2007. According to the Complaint, from 1997 through 2002, Shanahan Sr. participated in a fraudulent scheme to grant undisclosed, in-the-money stock options to himself and other Engineered Support employees by backdating Company stock option grants to coincide with historically low closing prices of Engineered Support's common stock. In addition, the Complaint alleged that Shanahan Sr. cancelled previously issued Engineered Support stock options that had fallen out-of-the-money and reissued the options with a new backdated grant date and exercise price, bringing those options back in-the-money. The Complaint also alleged that Shanahan Sr. improperly issued additional Engineered Support stock options to nonemployee directors beyond what they were authorized to receive under the Company's shareholder-approved stock option plans. The Complaint further alleged that Shanahan Sr. and others caused Engineered Support to make material misrepresentations and to omit statements of material fact regarding Engineered Support's stock option grants in its filings with the Commission. According to the Complaint, Engineered Support employees received approximately $20 million of improper in-the-money benefit from the backdating, $15 million of which went to top executives and directors. Without admitting or denying the Commission's allegations, Shanahan Sr. has consented to a permanent injunction from violating Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(b)(5), and 14(a) of the Securities Exchange Act of 1934, and Rules 10b-5, 13a-14, 13b2-1, and 14a-9 thereunder, and from aiding and abetting violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder. Shanahan Sr. has also consented to pay a $750,000 civil penalty, and to be permanently barred from serving as an officer or director of a public company. In a separate criminal matter brought by the United States Attorney's Office in the Eastern District of Missouri, which arose out of similar factual allegations, in July 2008 Shanahan Sr. pled guilty to knowingly and willfully falsifying company records in violation of Sections 13(b)(2) and (5) of the Exchange Act. The District Court sentenced Shanahan Sr. to three years probation, and ordered him to pay restitution of $7,871,662.50 and a $40,000 criminal fine. The Commission's litigation continues against Michael F. Shanahan, Jr., a former Engineered Support director. [SEC v. Michael F. Shanahan, Sr., et al, United States District Court for the Eastern District of Missouri, Civil Action No. 4:07-cv-270-JCH (E.D. Mo.)] (LR-21362) INVESTMENT COMPANY ACT RELEASESRiverSource Variable Portfolio - Money Market Series, Inc.An order has been issued under Section 8(f) of the Investment Company Act declaring that RiverSource Variable Portfolio - Money Market Series, Inc. has ceased to be an investment company. (Rel. IC-29103 - January 5) RiverSource Variable Portfolio - Income Series, Inc.An order has been issued under Section 8(f) of the Investment Company Act declaring that RiverSource Variable Portfolio - Income Series, Inc. has ceased to be an investment company. (Rel. IC-29104 - January 5) RiverSource Variable Portfolio - Investment Series, Inc.An order has been issued under Section 8(f) of the Investment Company Act declaring that RiverSource Variable Portfolio - Investment Series, Inc. has ceased to be an investment company. (Rel. IC-29105 - January 5) RiverSource Variable Portfolio - Managed Series, Inc.An order has been issued under Section 8(f) of the Investment Company Act declaring that RiverSource Variable Portfolio - Managed Series, Inc. has ceased to be an investment company. (Rel. IC-29107 - January 5) WM Variable TrustAn order has been issued under Section 8(f) of the Investment Company Act declaring that WM Variable Trust has ceased to be an investment company. (Rel. IC-29108 - January 5) SELF-REGULATORY ORGANIZATIONSImmediate Effectiveness of Proposed Rule ChangesThe Depository Trust Company filed a proposed rule change (SR-DTC-2009-19) under Section 19(b)(1) of the Exchange Act, which became effective upon filing, to revise DTC's Fee Schedule. Publication is expected in the Federal Register during the week of January 4. (Rel. 34-61263) A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2009-099) relating to the concurrent listing of $2.50 and $1 strikes on MNX options 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 January 4. (Rel. 34-61270) A proposed rule change filed by the NASDAQ OMX PHLX to amend the $1 strike program to allow low-strike LEAPS (SR-Phlx-2009-108) 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 January 4. (Rel. 34-61277) A proposed rule change filed by the International Securities Exchange relating to options on the Brazilian real (SR-ISE-2009-110) 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 January 4. (Rel. 34-61279) A proposed rule change (SR-NFA-2009-01) filed by the National Futures Association relating to amendments to Compliance Rule 2-29(h) and the adoption of an interpretive notice regarding the use of on-line social networking groups to communicate with the public has become effective. Publication is expected in the Federal Register during the week of January 4. (Rel. 34-61280) A proposed rule change (SR-NASDAQ-2009-115), filed by NASDAQ Stock Market to allow all SPY and IWM option series to quote in penny increments 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 January 4. (Rel. 34-61281) A proposed rule change (SR-Phlx-2009-110), filed by NASDAQ OMX PHLX to allow all SPY and IWM option series to quote in penny increments 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 January 4. (Rel. 34-61282) A proposed rule change filed by the NASDAQ OMX BX to facilitate annual membership billing conducted by NASDAQ OMX BX using the FINRA CRD system (SR-BX-2009-082) 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 January 4. (Rel. 34-61283) A proposed rule change filed by the National Futures Association (SR-NFA-2009-02) Concerning a Change to the Interpretive Notice Regarding Security Futures Products Proficiency Training has become immediately effective under Section 19(b)(7) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of January 4. (Rel. 34-61284) A proposed rule change filed by the International Securities Exchange to extend the pilot program to expose All-Or-None orders until Jan. 31, 2010 (SR-ISE-2009-112) 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 January 4. (Rel. 34-61286) A proposed rule change filed by the International Securities Exchange to make the Exchange's pilot program to expose All-Or-None orders permanent (SR-ISE-2009-113) 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 January 4. (Rel. 34-61287) Approval of Proposed Rule ChangesThe Commission approved a proposed rule change (SR-NYSE-2009-112), submitted by the New York Stock Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, regarding the Exchange's Gap Quote Policy. Publication is expected in the Federal Register during the week of January 4. (Rel.34-61275) The Commission approved a proposed rule change (SR-NYSEAmex-2009-82), submitted by NYSE Amex pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, regarding the Exchange's Gap Quote Policy. Publication is expected in the Federal Register during the week of January 4. (Rel. 34-61276) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig010610.htm
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