SEC News Digest (Issue 2010-157; August 20, 2010)

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ENFORCEMENT PROCEEDINGS

In the Matter of BCI Telecom Holding, Inc.

On Aug. 20, 2010, an Administrative Law Judge issued an Order Making Findings and Revoking Registrations by Default (Default Order) in BCI Telecom Holding, Inc., Administrative Proceeding No. 3-13888, as to Bonaventure Resources, Inc., British-American Insurance Company, Ltd., BT Energy Corp., and Butterfield Preferred Growth Fund 83. The Default Order finds that these Respondents failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 13a-1 and 13a-13 or 13a-16 because each Respondent failed to make periodic filings with the Commission for a number of years. Based on these findings, the Default Order, pursuant to Section 12(j) of the Exchange Act, revoked the registration of each class of registered securities of Bonaventure Resources, Inc., British-American Insurance Company, Ltd., BT Energy Corp., and Butterfield Preferred Growth Fund 83. (Rel. 34-62747; File No. 3-13888)

In the Matter of Gregory Todd Froning

The Order finds that Froning, age 48, is a resident of Coppell, Texas who, from at least Jan. 1, 2005 through Oct. 29, 2009, was a registered representative associated with broker-dealers and investment advisers registered with the Commission. On Aug. 3, 2010, an Interlocutory Judgment of Permanent Injunction As To Defendant Gregory Todd Froning was entered by consent against Froning, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, in the civil action entitled Securities and Exchange Commission v. Gregory Todd Froning, Civil Action Number 3:10-cv-01503, in the United States District Court for the Northern District of Texas. The Commission's complaint in the civil action alleged, among other things, that, while serving as a registered representative associated with broker-dealers and investment advisers, Froning conducted an unregistered offering of promissory notes to his brokerage and advisory clients without disclosing material information pertaining to the offering or the use of funds.

Based on the above, the Order bars Froning from association with any broker, dealer, or investment adviser pursuant to Section 15(b)(6) of the Exchange Act and Section 203(f) of the Advisers Act. Froning consented to the issuance of the Order without admitting or denying any of the findings except that he admitted the entry of the Interlocutory Judgment of Permanent Injunction. (Rels. 34-62749; IA-3070; File No. 3-14011)

In the Matter of Ronald S. Bloomfield, Robert Gorgia, Victor Labi, John Earl Martin, Sr., and Eugene Miller

On Aug. 20, 2010, the Commission issued an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934 against Eugene Miller (Miller). Miller consented to issuance of the Order without admitting or denying the Commission's findings, in settlement of an administrative proceeding that was commenced on April 27, 2010.

The Order finds that from April 2005 to April 2007, Miller was the president of Leeb Brokerage Services, Inc. (Leeb), a now-defunct broker-dealer, and held significant supervisory responsibilities. During that period, certain Leeb customers routinely delivered into their accounts large blocks of privately obtained shares of penny stocks. Leeb then sold those shares to the public on its customers' behalf, without any registration statements being in effect. The Order finds that despite his supervisory responsibilities, Miller failed to respond to red flags indicating that certain registered representatives were not conducting reasonable inquiries into facts that could indicate unlawful distributions of stock. Accordingly, the Order finds that Miller failed reasonably to supervise with a view to preventing violations of Section 5 of the Securities Act of 1933. The Order also finds that Miller willfully aided and abetted and caused Leeb's failure to file suspicious activity reports, as required by Section 17(a) of the Exchange Act and Rule 17a-8 thereunder, regarding suspicious penny stock trading in certain Leeb customer accounts.

In accordance with an Offer of Settlement submitted by Miller, which the Commission accepted, the Order provides that Miller cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act and Rule 17a-8 thereunder; that Miller be suspended from association in a supervisory capacity with any broker or dealer for a period of twelve months; that Miller pay a civil money penalty in the amount of $50,000; and that Miller comply with certain undertakings as set forth in the Order. (Rels. 34-62750; File No. 3-13871)

In the Matter of L. Cyrus DeBlanc

On Aug. 20, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against L. Cyrus DeBlanc (DeBlanc), (Order). The Order finds that on May 14, 2010, an order of permanent injunction was entered against DeBlanc, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder. The civil action is entitled Securities and Exchange Commission v. Matthew W. Hardey, L. Cyrus DeBlanc and Joe E. Penland, Civil Action Number 09-4414 in the United States District Court for the Eastern District of Louisiana.

Based upon the above, the Order suspends DeBlanc from appearing or practicing before the Commission as an accountant. DeBlanc consented to the issuance of the Order without admitting or denying any of the findings, except as to the entry of the permanent injunction, which he admitted. (Rel. 34-62751; AAE Rel. 3172; File No. 3-14012)

In the Matter of Matthew W. Hardey

On Aug. 20, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Rule 102(e) of the Commission's Rules of Practice, Making Findings, and Imposing Remedial Sanctions against Matthew W. Hardey (Hardey)(Order). The Order finds that on July 29, 2010, an order of permanent injunction was entered against Hardey, permanently enjoining him from future violations of Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5, 13b2-1 and 13b2-2 thereunder and from aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, 13a-13 and 13a-14 thereunder. The civil action is entitled Securities and Exchange Commission v. Matthew W. Hardey, L. Cyrus DeBlanc and Joe E. Penland, Civil Action Number 09-4414 in the United States District Court for the Eastern District of Louisiana.

Based upon the above, the Order suspends Hardey from appearing or practicing before the Commission as an accountant. Hardey consented to the issuance of the Order without admitting or denying any of the findings, except as to the entry of the permanent injunction, which he admitted. (Rel. 34-62752; AAE Rel. 3173; File No. 3-14013)

In the Matter of William H. Center

On Aug. 20, 2010, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Section 203(f) of the Investment Advisers Act of 1940 (Advisers Act), Making Findings and Imposing Remedial Sanctions (Order) against William H. Center. The Order finds that from May 2007 through July 2009, Center, who resides in Richmond, Virginia, was associated with Trade-LLC, an unregistered investment adviser and an unregistered broker-dealer, as a managing member. On Aug. 13, 2010, a judgment was entered against Center enjoining him from violating Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act in the civil action entitled SEC v. Trade-LLC, et al., Civil Action No. 10-cv-80737-HURLEY, in the United States District Court for the Southern District of Florida. The Commission's complaint alleged that Center and others, through Trade-LLC, raised $28 million from clients and informed them that Trade-LLC would generate profits on their behalf. The complaint alleged further that, in fact, Trade-LLC incurred trading losses and operated as a Ponzi scheme.

Based on the above, the Order bars Center from association with any broker, dealer, or investment adviser. Center consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry of the injunction. (Rel. 34-62753; AAE Rel. 3171; File No. 3-14014)

INVESTMENT COMPANY ACT RELEASES

Goldman, Sachs & Co., et al.

The Commission has issued a permanent order to Goldman, Sachs & Co. (Goldman Sachs), et al., under Section 9(c) of the Investment Company Act with respect to an injunction issued against Goldman Sachs by the U.S. District Court for the Southern District of New York on July 20, 2010. The permanent order exempts Goldman Sachs, Goldman Sachs Asset Management, L.P., Goldman Sachs Asset Management International, Goldman Sachs Hedge Fund Strategies LLC, Commonwealth Annuity and Life Insurance Company, First Allmerica Financial Life Insurance Company and Epoch Securities, Inc., as well as companies of which Goldman Sachs is or becomes an affiliated person, from the provisions of Section 9(a) of the Act. (Rel. IC-29382 - August 18)

SELF-REGULATORY ORGANIZATIONS

Designation of Longer Period for Commission Action on Proposed Rule Changes

The Commission has designated a longer period for Commission action under Section 19(b)(2) of the Securities Exchange Act of 1934 on a proposed rule change (SR-FINRA-2010-032) filed by the Financial Industry Regulatory Authority relating to clearly erroneous transactions. Publication is expected in the Federal Register during the week of August 23. (Rel. 34-62729)

The Commission has designated a longer period for Commission action under Section 19(b)(2) of the Securities Exchange Act of 1934 on proposed rule changes (SR-BATS-2010-016; SR-BX-2010-040; SR-CBOE-2010-056; SR-CHX-2010-13; SR-EDGA-2010-03; SR-EDGX-2010-03; SR-ISE-2010-62; SR-NASDAQ-2010-076; SR-NSX-2010-07; SR-NYSE-2010-47; SR-NYSEAmex-2010-60; SR-NYSEArca-2010-58) filed by the BATS Exchange; NASDAQ OMX BX; Chicago Board Options Exchange; Chicago Stock Exchange; EDGA Exchange; EDGX Exchange; International Securities Exchange; The NASDAQ Stock Market; National Stock Exchange; New York Stock Exchange; NYSE Amex; and NYSE Arca relating to clearly erroneous transactions. Publication is expected in the Federal Register during the week of August 23. (Rel. 34-62730)

The Commission has designated a longer period for Commission action under Section 19(b)(2) of the Securities Exchange Act of 1934 on a proposed rule change (SR-NASDAQ-2010-074) filed by The NASDAQ Stock Market, as modified by Amendment No. 1, to adopt Rule 4753(c) as a six month pilot in 100 NASDAQ-listed securities. Publication is expected in the Federal Register during the week of August 23. (Rel. 34-62740)

Proposed Rule Change

The Financial Industry Regulatory Authority filed a proposed rule change (SR-FINRA-2010-044) relating to the expansion of the Order Audit Trail System to all NMS stocks pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of August 23. (Rel. 34-62739)

Approval of Proposed Rule Change

The Commission approved a proposed rule change filed by the Municipal Securities Rulemaking Board (SR-MSRB-2010-05) pursuant to Section 19(b)(2) of the Securities Exchange Act of 1934, relating to the continuing disclosure service of the MSRB Electronic Municipal Market Access (EMMA) System. Publication is expected in the Federal Register during the week of August 23. (Rel. 34-62742)

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