SEC News Digest

COMMISSION ANNOUNCEMENTS

Commission Meetings

Following 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 DisabilityProgramOfficer or call 202-551-4158.

Open Meeting - Wednesday, April 14, 2010 - 10:00 a.m.

The subject matter of the Open Meeting will be:

Item 1: The Commission will consider whether to propose a large trader reporting requirement, pursuant to Section 13(h) of the Securities Exchange Act of 1934, which would require large traders to identify themselves to the Commission and require broker-dealers to maintain certain related transaction records.

Item 2: The Commission will consider whether to propose rule amendments regarding (a) prohibiting unfairly discriminatory terms that inhibit efficient access to quotations in a listed option on exchanges, and (b) placing limits on fees for the execution of an order against any quotation in an options series that is the best bid or best offer of an exchange.

Closed Meeting - Wednesday, April 14, 2010 - 3:00 p.m.

The subject matter of the Closed Meeting scheduled for Wednesday, April 14, 2010, will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; an adjudicatory matter; litigation matters; and other matters relating to enforcement proceedings.

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.

ENFORCEMENT PROCEEDINGS

In the Matter of Morgan Asset Management, Inc., Morgan Keegan & Company, Inc., James C. Kelsoe, Jr., and Joseph Thompson Weller, CPA

On April 7, 2010, the Commission issued an Order Instituting Administrative and Cease-And-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Sections 4C, 15(b) and 21C of the Securities Exchange Act of 1934, Sections 9(b) and 9(f) of the Investment Company Act of 1940, Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act of 1940 and Rule 102(e)(1)(iii) of the Commission's Rules of Practice against Morgan Asset Management, Inc. (Morgan Asset), Morgan Keegan & Company, Inc. (Morgan Keegan), James C. Kelsoe, Jr. (Kelsoe), and Joseph Thompson Weller, CPA (Weller).

In the Order, the Division of Enforcement alleges that during various periods between at least January 2007 and July 2007, the daily net asset value (NAV) of each of five registered investment companies--then known as the Morgan Keegan Select Fund, Inc., the RMK High Income Fund, Inc., the RMK Multi-Sector High Income Fund, Inc., the RMK Strategic Income Fund, Inc., and the RMK Advantage Income Fund, Inc., (collectively, the Funds) was materially inflated as a result of the fraudulent conduct of the Respondents. According to the Order, the Funds' Boards of Directors were responsible for pricing the Funds' securities in accordance with the Funds' valuation policies and procedures--a responsibility that each Fund's Board of Directors delegated by contract to Morgan Keegan, a registered broker-dealer and registered investment adviser. Morgan Keegan, according to the Order, priced each portfolio's securities and calculated its daily NAV through its Fund Accounting Department (Fund Accounting). According to the Order, Weller, Morgan Keegan's Controller and Head of Fund Accounting, along with other Morgan Keegan personnel, staffed a Valuation Committee that purportedly oversaw Fund Accounting's processes and evaluated the prices assigned to securities. The Division alleges that Morgan Keegan and Weller failed, despite multiple red flags, to adequately fulfill Morgan Keegan's responsibilities to price the Funds' securities in accordance with the Funds' valuation policies and procedures. According to the Order, Morgan Keegan also fraudulently published NAVs for the Funds without following procedures reasonably designed to determine that the NAVs were accurate.

The Division further alleges that each of the Funds was managed by Morgan Asset, a registered investment adviser, and that Kelsoe, an employee of Morgan Asset and Morgan Keegan, was the portfolio manager for the Funds. The Funds' valuation policies and procedures, according to the Order, required that dealer quotes be obtained for certain securities. The Division alleges that unbeknownst to Fund Accounting and the Funds' independent auditor, Kelsoe actively screened and manipulated the dealer quotes that Fund Accounting and the independent auditor obtained from at least one broker-dealer. According to the Order, Kelsoe also failed to advise Fund Accounting or the Funds' Board of Directors when he received information indicating that the Funds' prices for certain securities should be reduced.

The Division alleges that, as a result of the conduct described above: (i) Morgan Asset, Kelsoe, Morgan Keegan and Weller willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5; thereunder, (ii) Morgan Asset willfully violated, and Kelsoe willfully aided and abetted and caused violations of, Section 206(4) and of the Investment Advisers Act of 1940 (Advisers Act) and Rule 206(4)-7, thereunder; (iii) Morgan Asset willfully violated, and Kelsoe and Morgan Keegan willfully aided and abetted and caused violations of, Sections 206(1) and 206(2) of the Advisers Act; (iv) Morgan Asset, Kelsoe and Weller willfully violated, and Morgan Keegan willfully aided, abetted, and caused violations of, Section 34(b) of the Investment Company Act of 1940 (Investment Company Act); (v) Morgan Keegan willfully violated, and Morgan Asset, Kelsoe and Weller willfully aided and abetted and caused violations of, Rule 22c-1 promulgated under the Investment Company Act; and (vi) Morgan Asset, Morgan Keegan, Kelsoe, and Weller willfully aided and abetted and caused violations of Rule 38a-1 promulgated under the Investment Company Act.

A hearing will be scheduled before an administrative law judge to determine whether the allegations of the Division contained in the Order are true, to provide Respondents an opportunity to respond to such allegations, and to determine what, if any, remedial action is appropriate in the public interest. As directed by the Commission, the Administrative Law Judge shall issue an initial decision in this matter not later than 300 days from the date of service of the Order. (Rels. 33-9116; 34-61856; IA-3009; IC-29203; AAE Rel. 3125; File No. 3-13847)

Final Judgment Entered Against John C. Hopf in Settlement of Charges of Conducting an Unlawful Public Offering

The Securities and Exchange Commission today announced that the United States District Court for the District of Nevada entered a final judgment against John C. Hopf in a civil action concerning an unlawful offering of unregistered stock by 21st Century Technologies, Inc. Without admitting or denying the allegations of the Commission's complaint, Hopf consented to the entry of a permanent injunction and penny stock bar, and to pay disgorgement of $110,000.

The Commission's complaint alleged that Hopf acted as a statutory underwriter of 21st Century's 2003 unregistered offering, and alleged that Hopf sold 21st Century securities without a valid exemption from registration, in violation of the securities registration provisions of the federal securities laws.

The final judgment enjoins Hopf from violating Sections 5(a) and 5(c) of the Securities Act of 1933, bars him from participating in any offering of penny stock for a period of one year, and orders him to pay $110,000 in disgorgement of trading profits. In reaching this settlement with Hopf, the Commission's action against all seven of the defendants in this matter is completed.

For further information, please see Litigation Release Nos. 21319 (Dec. 2, 2009); 20695 (Aug. 28, 2008); and 20525 (April 10, 2008). [SEC v. Compass Capital Group, Inc., Mark A. Lefkowitz, Alvin L. Dahl, John R. Dumble, John C. Hopf, Kevin D. Romney, and Shane H. Traveller, Case No. 2:08-CV-00457-ECR-PAL, USDC, D. Nev.] (LR-21478)

SEC v. Stefan Benger, et al.

The Commission announced that on April 1, 2010, the Honorable Joan H. Lefkow, U.S. District Court for the Northern District of Illinois, entered a final judgment by consent against Handler, Thayer & Duggan, LLC (HTD) in SEC v. Stefan H. Benger, et al., Civil Action No. 09-cv-00676 (N.D. Ill.). The judgment orders HTD to pay disgorgement in the amount of $196,912.45, representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $16,447.18, and a civil penalty in the amount of $25,000. In addition, the judgment dismisses the Commission's claims for permanent injunctive relief and a penny stock bar against HTD in light of the fact that the firm is in the process of winding down its affairs and will be dissolved. HTD consented to entry of the final judgment without admitting or denying the allegations in the Commission's complaint.

The Commission commenced this action on February 3, 2009, when it filed an ex parte, emergency action alleging that four Chicago residents and their entities worked in concert with boiler room sales agents based in Europe to orchestrate a massive international boiler room scheme. The allegedly fraudulent scheme involved the sale of shares of U.S. penny stock issuers to investors located throughout Europe. Critical to the scheme was the fact that defendants never informed investors that more than 60% of their investment funds were used to pay sales commissions. From March 2007 until the filing of the Commission action, the scheme allegedly raised at least $44.2 million from at least 1,400 investors. On February 3, U.S. District Judge Joan Lefkow granted all emergency relief requested by the Commission.

The Commission alleged in its original complaint that HTD, a Chicago law firm, acted as an escrow agent through its employee, Philip T. Powers. The Commission charged HTD solely with effecting transactions in, or inducing or attempt to induce, the purchase or sale of securities, without registering with the Commission as a broker or dealer, in violation of Section 15(a) of the Securities Exchange Act of 1934 (Exchange Act).

In addition, Judge Lefkow granted the Commission leave to file an amended complaint naming Stephan von Hase (von Hase) and his entity, CTA Worldwide Services, SA (CTA) as defendants. The Commission alleges that von Hase and CTA participated in the boiler room scheme described in the original complaint by acting in concert with the remaining defendants. The amended complaint alleges von Hase and CTA entered into agreements with penny stock issuers to solicit foreign investors in exchange for commissions that collectively exceed 60% of the investor proceeds. Von Hase and CTA allegedly retained foreign sales agents to solicit investors and, through escrow agents, received approximately $16.7 million from investors without informing them of the exorbitant fees. The Commission's amended complaint alleges that von Hase and CTA violated Section 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder through their participation in the scheme and seeks an order of permanent injunction, disgorgement plus prejudgment interest, civil penalties and a penny stock bar.

For further information, see LR-20881 (Feb. 4, 2009). [SEC v. Stefan Benger, et al., Civil Action No. 1:09-CV-676 (United States District Court for the Northern District of Illinois)] (LR-21479)

Two More Former Executives of Symbol Technologies, Inc. Settle

SEC Action, Concluding Liability Proceedings in the 12-Defendant Accounting Case

The Securities and Exchange Commission announced the settlement of its enforcement action against Michael DeGennaro (DeGennaro), former Senior Vice President of Finance at Symbol Technologies, Inc. (Symbol).

On June 3, 2004, the Commission filed a complaint in the United States District Court for the Eastern District of New York alleging that Symbol and eleven former Symbol executives, including DeGennaro, committed and/or aided and abetted violations of various provisions of the Securities Exchange Act of 1934 (Exchange Act) in connection with Symbol's financial reporting from 1999 through 2002. As part of the settlement, DeGennaro has consented, without admitting or denying the allegations in the complaint, to the entry of a final judgment requiring him to pay a civil monetary penalty of $40,000. The entry of that judgment is subject to the Court's approval. In addition, the Commission has issued an administrative order, pursuant to Section 21C of the Exchange Act, directing DeGennaro to cease and desist from causing any violations and any future violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act (Order). DeGennaro consented to the issuance of the Order without admitting or denying the findings contained in the Order.

The Order finds, inter alia, as follows: Symbol, a public company during the relevant period that was later acquired by Motorola, Inc., recorded non-recurring charges in connection with, inter alia, Symbol's: (i) acquisition of Telxon Corporation, which resulted in a $185.9 million restructuring charge recorded in the fourth quarter of 2000; and (ii) relocation of manufacturing operations to new facilities, which resulted in a $59.7 million restructuring charge recorded in the third quarter of 2001 (the Charges). The Charges and certain associated reserves were not recorded in accordance with generally accepted accounting principles (GAAP) because, among other things, they misclassified certain expenses, included amounts unrelated to the purpose of the Charge and, in some cases, were used in later periods for unrelated purposes. As a result, Symbol violated the financial recordkeeping and internal control provisions embodied in Sections 13(b)(2)(A) and (B) of the Exchange Act.

DeGennaro, together with others, determined how the Charges were recorded and accounted for on Symbol's internal books and records and in its financial statements. DeGennaro failed to take requisite steps to ensure that Symbol's internal books and records and financial statements accurately reflected each element of the Charges and the uses of associated reserves, and that the Charges and the uses of associated reserves were accounted for in accordance with GAAP. As a result, DeGennaro was a cause of Symbol's violations of Sections 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. [SEC v. Symbol Technologies, Inc., et al., 04 CV 2276 (SJF)(EDNY)] (LR-21480; AAE Rel. 3126)

INVESTMENT COMPANY ACT RELEASES

WNC Tax Credits 38, LLC, et al.

A notice has been issued giving interested persons until April 26, 2010, to request a hearing on an application filed by WNC Tax Credits 38, LLC, WNC Tax Credits 39, LLC, WNC Housing Tax Credits Manager, LLC and WNC & Associates, Inc. for an order under Sections 6(c) and 6(e) of the Investment Company Act granting relief from all provisions of the Act, except sections 37 through 53 of the Act and the rules and regulations under those sections other than Rule 38a-1. (Rel. IC-29202 - April 2)

SELF-REGULATORY ORGANIZATIONS

Temporary Effectiveness of Amendment to Plan Establishing Procedures Under Rule 605 Of Regulation NMS

The Securities and Exchange Commission has issued notice of filing and an order granting effectiveness (File No. 4-518) of a proposed amendment by EDGA Exchange, Inc. (EDGA) and EDGX Exchange, Inc. (EDGX) to add EDGA and EDGX as participants to the national market system plan that establishes procedures under Rule 605 of Regulation NMS under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 12. (Rel. 34-61824)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by The NASDAQ Stock Market (SR-NASDAQ-2010-040) relating to pricing for option orders routed to away markets has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61830)

A proposed rule change filed by NYSE Arca (SR-NYSEArca-2010-20) to amend Commentary .05 to Rule 6.4 Series of Options for Trading has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61831)

A proposed rule change filed by New York Stock Exchange (SR-NYSE-2010-28) extending the operation of its Supplemental Liquidity Providers Pilot, NYSE Rule 107B until the earlier of the Securities and Exchange Commission's approval to make such Pilot permanent or September 30, 2010 has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61840)

A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2010-33) extending the operation of its Supplemental Liquidity Providers Pilot, Rule 107B - NYSE Amex Equities until the earlier of the Securities and Exchange Commission's approval to make such Pilot permanent or September 30, 2010 has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61841)

The Commission issued notice of filing and immediate effectiveness of proposed rule change (SR-NYSEAmex-2010-30) filed by NYSE Amex pursuant to Rule 19b-4 of the Securities Exchange Act of 1934 amending its fee schedule. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61849)

A proposed rule change filed by the National Stock Exchange (SR-NSX-2010-03) to amend the NSX Fee and Rebate Schedule and Rule 16.4 has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61850)

A proposed rule change (SR-ISE-2010-27) filed by the International Securities Exchange relating to a Market Maker incentive plan for foreign currency options has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61851)

Accelerated Approval of Proposed Rule Changes

The Commission issued notice of Amendment No. 1 and approved on an accelerated basis a proposed rule change (SR-NYSEArca-2010-10), as modified by Amendment No. 1 thereto, submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to listing of the Mars Hill Global Relative Value ETF (f/k/a HTE Global Relative Value ETF). Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61842)

The Commission granted accelerated approval of a proposed rule change (SR-NYSEArca-2010-12) submitted by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 relating to listing of the One Fund under NYSE Arca Equities Rule 8.600. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61843)

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