SEC News Digest

ENFORCEMENT PROCEEDINGS

In the Matter of Brian Travis

On April 7, 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 Brian Travis (Travis). The Order finds that: between at least March 2003 and October 2005, Travis worked as a back-office clerk at JLF Asset Management, LLC (JLF), an unregistered investment adviser to three hedge funds; in his capacity as back-office clerk, Travis was responsible for clearing all of JLF's trades on behalf of its fund clients through its prime broker; Travis also had the primary responsibility for both tracking the JLF fund clients' trading positions, and tracking the amount of commissions paid to the broker-dealers executing JLF's trades; Travis' responsibilities additionally included organizing the foregoing information about portfolio holdings and trading activities, which was used for dissemination to JLF's fund clients; on March 26, 2010, a final judgment was entered by consent against Travis, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Brian Travis, et al., Civil Action Number 09-CV-2288 (PKC), in the United States District Court for the Southern District of New York; the Commission's complaint alleged that, while employed by JLF, Travis directed that hedge fund trades of securities, and the associated commissions, be routed to certain broker-dealers in exchange for the payment of personal expenses; these personal expenses included rent and travel costs for Travis, his relatives, and his pet; Travis concealed the bribery scheme, and the material conflicts of interest that it created, from the investment adviser's hedge fund clients, which operated as a fraud and deceit on investors.

Based on the above, the Order bars Travis from association with any investment adviser. Travis consented to the issuance of the Order without admitting or denying any of the findings except as to the entry of the final judgment. (Rel. IA-3010; File No. 3-13848)

In the Matter of Nicholas Vulpis

On April 7, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against Nicholas Vulpis (Vulpis). The Order finds that: between March 2003 and December 2005, Vulpis worked as the only trader for JLF Asset Management, LLC (JLF), an unregistered investment adviser to three hedge funds; in his capacity at JLF, Vulpis possessed and exercised the authority to purchase and sell securities for JLF's fund clients and, generally, to select broker-dealers to execute those trades; during that period, Vulpis worked from office space in Manhattan, New York; on March 26, 2010, a final judgment was entered by consent against Vulpis, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Brian Travis, et al., Civil Action Number 09-CV-2288 (PKC), in the United States District Court for the Southern District of New York; the Commission's complaint alleged that, while employed by JLF, Vulpis directed that hedge fund trades of securities, and the associated commissions, be routed to certain broker-dealers in exchange for the payment of personal expenses, including car service for Vulpis' daily commute; Vulpis concealed the bribery scheme, and the material conflicts of interest that it created, from the investment adviser's hedge fund clients, which operated as a fraud and deceit on investors.

Based on the above, the Order bars Vulpis from association with any broker, dealer, or investment adviser. Vulpis consented to the issuance of the Order without admitting or denying any of the findings except as to the entry of the final judgment. (Rel. 34-61867; IA-3011; File No. 3-13849)

In the Matter of Amalgamated Explorations, Inc.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Five Respondents (Default Order) in Amalgamated Explorations, Inc., Administrative Proceeding No. 3-13804. The Order Instituting Proceedings alleged that Respondents each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission.

The proceeding has ended as to Respondent Amalgamated Explorations, Inc. Amalgamated Explorations, Inc., Exchange Act Release No. 61845 (April 6, 2010). Respondent World Transport Authority, Inc., has filed an Answer and is actively defending the proceeding.

The Default Order finds the allegations to be true as to the remaining five Respondents. It revokes the registrations of each class of registered securities of Areawide Cellular, Inc., Genomed, Inc., Global Maintech Corp., Military Resale Group, Inc., and Verado Holdings, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-61870; File No. 3-13804)

In the Matter of Platinum & Gold, Inc.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Eight Respondents (Default Order) in Platinum & Gold, Inc., Administrative Proceeding No. 3-13783. The Order Instituting Proceedings (OIP) alleged that ten 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 as to eight Respondents. It revokes the registrations of each class of registered securities of Platinum & Gold, Inc., PNI Technologies, Inc., Pride Business Development Holdings, Inc., Probex Corp., Property Capital Trust (CIK No. 80718), Protech, Inc., Provell, Inc., and PSINet, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934.

The proceeding remains pending as to PT. Inti Indorayon Utama (n/k/a PT. Toba Pulp Lestari Tbk) and PT. Riau Andalan Pulp & Paper, the other two Respondents named in the OIP. (Rel. 34-61871; File No. 3-13783)

In the Matter of Michael Weidgans

On April 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Michael Weidgans. The Order finds that Weidgans was a sales agent for 3001 AD, LLC, a North Carolina company based in Delray Beach, Florida, from June 2006 through January 2008, and that during that time he solicited investors in 3001 AD and received commissions based on his sales of the securities of 3001 AD and its affiliates. The Order also finds that on Sept. 18, 2009 Weidgans pled guilty to one count of conspiracy to commit securities fraud committed during his time with 3001 AD, for which the United States District Court for the Southern District of Florida sentenced him to thirty months in prison and three years of supervised release, and ordered him to pay $1,965,000 in restitution on Feb. 26, 2010.

Based on the above, the Order bars Weidgans from association with any broker or dealer. Weidgans consented to the issuance of the Order without admitting or denying any of the findings in the Order except for his conviction and sentencing, which he admitted. (Rel. 34-61873; File No. 3-13850)

In the Matter of Jimmy L. Barker

On April 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Jimmy L. Barker. The Order finds that Barker was the principal and CEO of 3001 AD, LLC, a North Carolina company based in Delray Beach, Florida from 1999 through September 2008, and that during that time he solicited and oversaw sales agents who solicited investors in 3001 AD. The Order also finds Barker determined what commissions sales agents received and compensated himself and paid his own personal expenses from the proceeds of the sales of 3001 AD's securities. The Order further finds that on December 4, 2009 Barker pled guilty to one count of conspiracy to commit mail and wire fraud committed during his time with 3001 AD, for which the United States District Court for the Southern District of Florida sentenced him to 152 months in prison and three years of supervised release, and ordered him to pay $19,596,029.21 in restitution on March 2, 2010.

Based on the above, the Order bars Barker from association with any broker or dealer. Barker consented to the issuance of the Order without admitting or denying any of the findings in the Order except for his conviction and sentencing, which he admitted. (Rel. 34-61874; File No. 3-13851)

In the Matter of Marc S. Rifkin

On April 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions (Order) against Marc S. Rifkin. The Order finds that Rifkin was the sales manager, sales agent, and, at one time, president and vice-president for 3001 AD, LLC, a North Carolina company based in Delray Beach, Florida, from 1999 through October 2007, and that during that time he solicited investors in 3001 AD and received commissions based on his sales of the securities of 3001 AD and its affiliates. The Order also finds that on Oct. 15, 2009 Rifkin pled guilty to one count of conspiracy to commit mail fraud committed during his time with 3001 AD, for which the United States District Court for the Southern District of Florida sentenced him to sixty months in prison and three years of supervised release, and ordered him to pay $4,603,552.06 in restitution on February 26, 2010.

Based on the above, the Order bars Rifkin from association with any broker or dealer. Rifkin consented to the issuance of the Order without admitting or denying any of the findings in the Order except for his conviction and sentencing, which he admitted. (Rel. 34-61875; File No. 3-13852)

In the Matter of Arthur Nadel

On April 8, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940 and Notice of Hearing (Order) against Arthur Nadel. In the Order, the Division of Enforcement (Division) alleges that from April 2001 through January 2009, Nadel was the president and a director of Scoop Management, Inc., an unregistered investment adviser. The Division also alleges that from June 2001 through January 2009, Nadel was the managing member of Scoop Capital, LLC, an unregistered investment adviser.

The Division alleges that on Feb. 24, 2010, Nadel pleaded guilty to six counts of securities fraud in violation of Title 15 United States Code, Sections 78j(b) and 78ff, one count of mail fraud in violation of Title 18 United States Code, Sections 1341 and 1342, and eight counts of wire fraud in violation of Title 18 United States Code, Sections 1342 and 1343, before the United States District Court for the Southern District of New York, in United States v. Arthur G. Nadel, Criminal Indictment No. 09-CRIM-433.

The Division alleges that the counts of the criminal indictment to which Nadel pleaded guilty alleged, among other things, that from at least 1999 through January 2009, Nadel perpetrated a scheme to defraud investors by soliciting hundreds of millions of dollars of funds from them under false pretenses, failing to invest their money as promised, falsely claiming that his purchases and sales of securities resulted in high rates of returns, and misappropriating and converting investor funds for his own benefit and the benefit of others.

The Commission previously filed an emergency civil injunctive action against Nadel in January 2009, which was derived from the same activity that led to the indictment against Nadel.

A hearing will be scheduled to determine whether the allegations in the Order are true and what, if any, remedial action is appropriate in the public interest against Nadel. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of the Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. IA-3012; File No. 3-13853)

Court Enters Final Judgments Against Meridean, Idaho Resident John E. Tencza and His Company American Elder Group, L.L.C.

The Securities and Exchange Commission announced today that on April 5, 2010, Judge Elaine Bucklo of the United States District Court for the Northern District of Illinois entered a final judgment against John E. Tencza, of Meridian, Idaho and formerly of Scottsdale, Arizona, and American Elder Group, L.L.C. (AEG), Tencza's business. The final judgment: (1) enjoined Tencza and AEG from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934, Rules 10b-5 and 10b-10 promulgated thereunder and enjoined Tencza from aiding and abetting violations of Rule 10b-10 of the Exchange Act; (2) ordered Tencza and AEG to pay disgorgement in the amount of $1,661,837.07, plus prejudgment interest of $759,082.71, for a total of $2,420,919.78; and (3) ordered Tencza to pay a civil penalty in the amount of $120,000 and AEG to pay a civil penalty in the amount of $600,000.

The SEC's complaint in this matter charges that Michael E. Kelly and 25 other defendants, including Tencza and AEG, participated in a massive fraud on U.S. investors that involved the offer and sale of securities in the form of Universal Leases. Universal Lease investments were structured as timeshares in several hotels in Cancun, Mexico, coupled with a pre-arranged rental agreement that promised investors a high, fixed rate of return. The SEC's complaint alleges that from 1999 until 2005, Kelly and others, including Tencza and AEG, raised at least $428 million through the Universal Lease scheme from investors throughout the United States, with more than $136 million of the funds invested coming from IRA accounts. The SEC further alleges that a nationwide network of unregistered salespeople who sold the Universal Leases, including Tencza and AEG, collected undisclosed commissions totaling more than $72 million. The SEC also alleges that Kelly and others ran the scheme from Cancun, Mexico, through a number of foreign entities in Mexico and Panama. According to the SEC's complaint, Kelly and others told investors that Universal Leases would generate guaranteed income through the leasing of investor timeshares by a large, independent leasing agent. In fact, the complaint alleges, the leasing agent was a small Panamanian travel agency controlled by Kelly, and for most of the scheme its payments to investors came from accounts funded by money raised from new investors. Further, the complaint alleges that Kelly and the other defendants, including Tencza and AEG, failed to disclose key facts about the Universal Lease investment, including the risks of the investment and that Kelly was paying commissions as high as 27% to the selling brokers. The SEC's action against the remaining defendants is pending.

For further information, see Litigation Release Nos. 20267 (Sept. 5, 2007), 20573 (May 14, 2008) , 20578 (May 15, 2008), 20579 (May 15, 2008), 20664 (July 31, 2008), 20679 (August 12, 2008), 20708 (Sept. 9, 2008); 20709 (Sept. 9, 2008), 20799 (Nov. 6, 2008) and 21003 (April 15, 2009). [SEC v. Michael E. Kelly, et al., Case No. 1:07-CV-4979 in the United States District Court for the Northern District of Illinois] (LR-21481) [SEC v. Michael E. Kelly, et al., Civil Action No. 07-cv-4979 (N.D. Ill.] (LR-21481)

INVESTMENT COMPANY ACT RELEASES

Integrity Life Insurance Company, et al.

An order has been issued on an application filed by Integrity Life Insurance Company, Separate Account I of Integrity Life Insurance Company, Separate Account II of Integrity Life Insurance Company, National Integrity Life Insurance Company, Separate Account I of National Integrity Life Insurance Company, and Separate Account II of National Integrity Life Insurance Company under Section 26(c) of the Investment Company Act, as amended approving the proposed substitution of shares of certain portfolios of the Variable Insurance Products Fund III held by the Separate Accounts for shares of other portfolios of Variable Insurance Products Fund III and, in the case of one portfolio, the Fidelity Contrafund, shares of Variable Insurance Products Fund II. (Rel. IC-29204 - April 7)

Jackson National Life Insurance Company, et al.

A notice has been issued giving interested persons until April 29, 2010, to request a hearing on an application filed by Jackson National Life Insurance Company (Jackson National), Jackson National Separate Account - I, Jackson National Life Insurance Company of New York (JNL New York), JNLNY Separate Account I, and Jackson National Life Distributors LLC (collectively, Applicants). Applicants seek an order under Section 6(c) of the Investment Company Act to exempt certain transactions from the provisions of Sections 2(a)(32), 22(c), and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to the extent necessary to permit the recapture, under specified circumstances, of certain contract enhancements applied to purchase payments made under deferred variable annuity contracts issued by Jackson National and JNL New York. (Rel. IC-29205 - April 7)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NYSE Amex (SR-NYSEAmex-2010-34) amending NYSE Amex Equities Rule 70 in order to update functionality relating to the entry of d-Quotes and pegging e-Quotes 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. 34-61847)

A proposed rule change filed by New York Stock Exchange (SR-NYSE-2010-31) amending Rule 70 in order to update functionality relating to the entry of d-Quotes and pegging e-Quotes 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. 34-61848)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2010-034) relating to temporary membership status and interim trading permit access fees 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. 34-61852)

A proposed rule change filed by The NASDAQ Stock Market to modify fees for members using the NASDAQ Market Center (SR-NASDAQ-2010-044) 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. 34-61854)

A proposed rule change (SR-CBOE-2010-030) filed by the Chicago Board Options Exchange to add a note to Rule 4.11 advising the delta-based equity hedge exemption is not currently available for customers 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. 34-61857)

Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities Pursuant to Rule 17d-2

The International Securities Exchange and the Financial Industry Regulatory Authority filed with the Commission a proposed plan for the allocation of regulatory responsibilities pursuant to Rule 17d-2 under the Securities Exchange Act of 1934 (File No. 4-596). Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61853)

Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities

The Securities and Exchange Commission has issued notice of filing of Proposed Plan for the Allocation of Regulatory Responsibilities between EDGA Exchange and the Financial Industry Regulatory Authority (File No. 4-597) pursuant to Rule 17d-2 under the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61860)

Notice of Filing of Proposed Plan for the Allocation of Regulatory Responsibilities

The Securities and Exchange Commission has issued notice of filing of Proposed Plan for the Allocation of Regulatory Responsibilities between EDGX Exchange and the Financial Industry Regulatory Authority (File No. 4-598) pursuant to Rule 17d-2 under the Securities Exchange Act of 1934. Publication of this notice is expected in the Federal Register during the week of April 12. (Rel. 34-61861)

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