SEC News Digest

COMMISSION ANNOUNCEMENTS

Change in the Meeting: Cancellation of Meetings

The Open Meeting scheduled for Monday, Feb. 8, 2010, at 10:00 a.m., the Closed Meeting scheduled for Monday, Feb. 8, 2010, at 11:00 a.m., and the Closed Meeting scheduled for Thursday, Feb. 11, 2010, at 2:00 p.m., was cancelled.

For further information please contact the Office of the Secretary at (202) 551-5400.

ENFORCEMENT PROCEEDINGS

In the Matter of J. Bennett Grocock, Esq.

On Feb. 8, 2010, the Commission issued an Order Instituting Public Administrative Proceedings and Imposing Suspension Pursuant to Rule 102(e)(3) of the Commission's Rules of Practice (Order) against J. Bennett Grocock. The Order finds that a court of competent jurisdiction has permanently enjoined Grocock from further violations of the federal securities laws, and that Grocock has submitted an Offer of Settlement in which he agrees to be suspended from appearing or practicing before the Commission. Based on the above, the Order suspends Grocock from appearing or practicing before the Commission. (Rel. 34-61511; File No. 3-13780)

SEC Files Settled Civil Injunctive Action Against Samuel and Joyce Vitale

On Feb. 9, 2010, the Commission filed a settled civil injunctive against Samuel Vitale and Joyce Vitale for orchestrating a fraudulent scheme involving seven mutual to stock bank conversion offerings. The SEC's complaint alleges that from approximately January 2005 until March 2007, the Defendants spearheaded a scheme to defraud the banks and their depositors by secretly using relatives and business entities as nominees to acquire stock in those conversions in contravention of the offering terms and applicable banking regulations. Over the course of the fraudulent scheme, the Defendants reaped $659,512 in ill-gotten profits from secondary market sales of the fraudulently obtained stock.

The SEC's complaint, which was filed in the United States District Court for the Southern District of Florida, alleges that Samuel and Joyce Vitale violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

Without admitting or denying the allegations in the complaint, Samuel and Joyce Vitale have consented to the entry of a final judgment that permanently enjoins them from committing future violations of the above provisions, and orders them to pay $757,179 in disgorgement and prejudgment interest, and $150,000 in civil penalties each. [SEC v. Samuel B. Vitale and Joyce D. Vitale, Defendants, Case No. 10-CV-20408 (S.D. Fla.)] (LR-21411)

Court Enters Final Judgment Settling Action Against Michael J. Byrd

The Securities and Exchange Commission announced that, on Feb. 3, 2010, the Honorable Charles R. Breyer, United States District Judge for the Northern District of California, entered Final Judgment as to Michael J. Byrd, based on his Consent submitted in order to settle the Commission's action against him. The Final Judgment against Byrd, which he agreed to without admitting or denying the allegations against him, provides that he is enjoined from violating Sections 17(a)(2) and (3) of the Securities Act of 1933 and Sections 13(b)(5) and 16(a) of the Securities Exchange Act of 1934, and Rules 13b2-1, 13b2-2 and 16a-3, and from aiding and abetting future violations of Sections 13(a), 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13. Byrd is further ordered to pay a civil penalty of $175,000 and to pay disgorgement, plus prejudgment interest, of $249,843. In the Commission's complaint against Byrd, filed in 2007, the Commission alleged that Byrd, during his employment with Brocade Communications Systems, Inc., at times received information about certain stock options and should have fully investigated to determine whether Brocade's financial statements accurately reflected the necessary compensation expenses. [SEC v. Michael J. Byrd, Case No. 3:07-cv-04223-CRB (N.D. Cal.)] (LR-21412)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-NYSEArca-2010-06) filed by NYSE Amex adding 75 options classes to the Penny Pilot Program 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 February 15. (Rel. 34-61482)

A proposed rule change filed by the International Securities Exchange (SR-ISE-2010-10) relating to amending the Direct Edge ECN Fee Schedule 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 February 15. (Rel. 34-61490)

A proposed rule change filed by the Chicago Stock Exchange (SR-CHX-2010-03) to increase the provide credit for transactions involving issues priced less than one dollar 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 February 15. (Rel. 34-61493)

A proposed rule change filed by the Chicago Board Options Exchange relating to Rule 8.85 and Rule 8.92 regarding the requirement to own an Exchange membership (SR-CBOE-2010-012) 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 February 15. (Rel. 34-61494)

A proposed rule change filed by NYSE Amex to amend Rule 991 Options Communications (SR-NYSEAmex-2010-04) 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 February 15. (Rel. 34-61499)

Approval of Proposed Rule Changes and Accelerated Approval of Proposed Rule Change

The Commission issued an order granting approval of proposed rule changes (SR-ISE-2009-106; SR-NYSEAmex-2009-86; and SR-NYSEArca-2009-110) submitted by the International Securities Exchange, NYSE Amex, and NYSE Arca and notice of filing and order granting accelerated approval of a proposed rule change (SR-CBOE-2010-007) submitted by the Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to listing and trading options on the ETFS Gold Trust and the ETFS Silver Trust. Publication is expected in the Federal Register during the week of February 15. (Rel. 34-61483)

Proposed Rule Change

The Commission issued notice of a proposed rule change submitted by Chicago Board Options Exchange (SR-CBOE-2010-008) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to codify pricing for co-location services. Publication is expected in the Federal Register during the week of February 15. (Rel. 34-61489)

Accelerated Approval of Proposed Rule Change

The Commission granted accelerated approval to a proposed rule change (SR-ISE-2010-11) submitted by the International Securities Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to the amounts that Direct Edge ECN, in its capacity as an introducing broker for non-ISE Members, passes through to such non-ISE Members. Publication is expected in the Federal Register during the week of February 15. (Rel. 34-61491)

Approval of Proposed Rule Change

The Commission granted approval of a proposed rule change filed by NYSE Arca (SR-NYSEArca-2009-113) under Section 19(b)(1) of the Securities Exchange Act of 1934 to list and trade the Sprott Physical Gold Trust. Publication is expected in the Federal Register during the week of February 15. (Rel. 34-61496)

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