SEC News Digest

RULES AND RELATED MATTERS

Regulatory Flexibility Agenda

The Commission has authorized the publication of its April 2010 Regulatory Flexibility Act Agenda. The agenda is a general announcement to the public intended to provide advance notice of rulemaking actions. The agenda, which will not be available to the public until its publication, has been submitted by the Commission to the Regulatory Information Service Center for inclusion in the Unified Agenda of Federal Regulations scheduled for publication in the Federal Register in April 2010. Public comments regarding the agenda and the individual agenda entries are due by June 30, 2010. (Rels. 33-9112, 34-61714, IA-3001, IC-29175, File No. S7-06-10)

ENFORCEMENT PROCEEDINGS

Delinquent Filer's Stock Registration Revoked

The registration of the registered securities of Consumers Financial Corporation has been revoked. The company had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, it 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 company's attempt to terminate registration voluntarily through a "Form 15" was denied because its certification that it had approximately 200 stockholders was untrue, and, because there were over 3,000 stockholders, it was not eligible for voluntary termination through Form 15. The sanctions were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-61717; File No. 3-13628)

In the Matter of William L. Gunlicks

On March 17, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against William L. Gunlicks. The Order finds that Gunlicks was the President, CEO, and sole shareholder of Founding Partners Capital Management Company (Founding Partners), an investment advisor registered with the Commission, from at least 1996 through 2009. The Order further finds that on April 4, 2010, the U.S. District Court for the Middle District of Florida entered by consent a judgment against Gunlicks, permanently enjoining him from future violations of Sections 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1), 206(2) and 206(4) of the Investment Advisers Act of 1940, in the civil action thereunder Securities and Exchange Commission v. Founding Partners Capital Management Co., et al., Civil Action Number 2:09-CV-229-JES-SPC.

The Order finds that the Commission's complaint alleged that, among other things, from at least 2004 through early 2009, Gunlicks and Founding Partners violated the antifraud provisions of the federal securities laws and a December 2007 Commission cease-and-desist order against them in connection with raising hundreds of millions of dollars from investors. The Order also finds that the complaint alleged that Gunlicks and Founding Partners represented to investors that investor money would be loaned to a third-party factoring company to be used to purchase highly liquid, short-term commercial and healthcare receivables, when in fact the factoring company used the money to invest in longer-term, less liquid, and much riskier receivables, in addition to other impermissible uses which were not disclosed to investors.

Based on the above, the Order bars Gunlicks from association with any investment adviser. Gunlicks consented to the Commission's Order without admitting or denying any of the findings therein, except as to the entry of the judgment. (Rel. IA-3004; File No. 3-13820)

In the Matter of Paul H. Heckler and Yosemite Capital Management, LLC

On March 17, 2010, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings pursuant to Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist Order against Paul H. Heckler and Yosemite Capital Management, LLC. The Order finds that a registered investment adviser Yosemite Capital Management, LLC (Yosemite), and its managing director, Paul H. Heckler (Heckler), failed to disclose to clients that their promised due diligence had encountered significant problems. Yosemite, through Heckler, placed $3.25 million of four of its clients' funds through a feeder fund, Ashton Investments LLC, into purported bridge loans arranged by Norman Hsu and Next Components, Ltd. Instead of being placed in bridge loans, however, the moneys were part of Hsu's and Next's $60 million Ponzi scheme.

In January 2007, prior to placing his clients' investments with Ashton and Next, Heckler promised to conduct due diligence to at least two clients prior to placing his clients into the Ashton investment. Although Heckler asked Ashton representatives several key questions, he received incomplete, contradictory, and evasive responses. He received no financials. Investors were promised a high rate of return, effectively 24% per year, and received a post-dated check shortly after investing in the amount of their principal plus interest. In response to Heckler's requests for information, he was told that Hsu was a private person and no information was available. He also received an eight-page brochure from Ashton replete with misspellings, and was told that the bridge loans were safer than stocks or bonds. Because Ashton had no offices, Heckler met the three Ashton representatives -- one of whom Heckler believed was a UPS truck driver or deliveryman -- at local restaurants to discuss the investment. Despite these red flags, Heckler placed four Yosemite clients into the Ashton investment without disclosing to clients that his due diligence process had been thwarted.

In settling the Commission's charges, Paul H. Heckler and Yosemite Capital Management, LLC agreed to cease and desist from committing or causing any violations and any future violations of Section 206(2) of the Investment Advisers Act of 1940. Paul H. Heckler and Yosemite Capital Management, LLC also agreed to be censured and to comply with certain undertakings. Paul H. Heckler agreed to pay a $26,000 civil penalty, and Yosemite Capital Management, LLC, agreed to pay $26,000 in disgorgement, $3,071.86 in prejudgment interest, and a $50,000 civil penalty.

Paul H. Heckler and Yosemite Capital Management, LLC, consented to the issuance of the Order without admitting or denying any of the findings. (Rel. IA-3005; File No. 3-13821)

SELF-REGULATORY ORGANIZATIONS

Proposed Rule Change

NASDAQ OMX PHLX filed a proposed rule change (SR-Phlx-2010-40) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder to establish strike price intervals and trading hours for options on Index-Linked Securities. Publication is expected in the Federal Register during the week of March 15. (Rel. 34-61695)

Accelerated Approval of Proposed Rule Change

The Commission approved on an accelerated basis a proposed rule change (SR-NYSEArca-2010-04) filed by NYSE Arca relating to the WisdomTree Real Return Fund. Publication is expected in the Federal Register during the week of March 15. (Rel. 34-61697)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NASDAQ OMX PHLX relating to fees and rebates for adding and removing liquidity (SR-Phlx-2010-42) 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 March 15. (Rel. 34-61699)

A proposed rule change, as modified by Amendment No. 1 thereto, filed by the Chicago Board Options Exchange to amend its Fees Schedule (SR-CBOE-2010-022) 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 March 15. (Rel. 34-61701)

A proposed rule change (SR-BX-2010-016) filed by NASDAQ OMX BX to Amend BX Rule 9520 Series Regarding Eligibility Procedures for Persons Subject to Certain Disqualifications 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 March 15. (Rel. 34-61702)

A proposed rule change (SR-NASDAQ-2010-023) filed by the NASDAQ Stock Market to Amend NASDAQ Rule 9520 Series Regarding Eligibility Procedures for Persons Subject to Certain Disqualifications 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 March 15. (Rel. 34-61703)

A proposed rule change filed by the NYSE Arca to modify its Sharing-In-Accounts rule to harmonize its requirements with FINRA (SR-NYSEArca-2010-11) 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 March 15. (Rel. 34-61704)

A proposed rule change filed by the NYSE Amex to modify its Sharing-In-Accounts rule to harmonize its requirements with FINRA (SR-NYSEAmex-2010-23) 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 March 15. (Rel. 34-61705)

A proposed rule change filed by NASDAQ OMX PHLX relating to the Controller Space fee (SR-Phlx-2010-37) 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 March 15. (Rel. 34-61711)

A proposed rule change filed by Chicago Board Options Exchange relating to market-maker joint accounts (SR-CBOE-2010-028) 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 March 15. (Rel. 34-61715)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-NASDAQ-2010-006) submitted by The NASDAQ Stock Market pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, modifying its press release requirements for listed companies. Publication is expected in the Federal Register during the week of March 15. (Rel. 34-61713)

The Commission approved a proposed rule change submitted by Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 (SR-CBOE-2010-008) to codify prices for its co-location services. Publication is expected in the Federal Register during the week of March 15. (Rel. 34-61716)

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