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RULES AND RELATED MATTERSXBRL Requirement for NRSROs Pusuant to Rule 17g-2(d)On August 27, the Commission provided notice that the List of XBRL Tags for NRSROs is published and that NRSROs subject to the disclosure provisions of paragraph (d) of Rule 17g-2 must satisfy the requirement to make publicly available ratings history information in an XBRL format by using the List of XBRL Tags beginning 60 days after publication of the list in the Federal Register. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62784) COMMISSION ANNOUNCEMENTSJohn Ramsay Named Deputy Director in Division of Trading and MarketsOn August 30, the Securities and Exchange Commission announced that John Ramsay has been named a Deputy Director in the Division of Trading and Markets. Mr. Ramsay will oversee several of the Division's core regulatory functions, focusing in particular on broker-dealer financial responsibility and clearance and settlement. Mr. Ramsay also will play a key role in the Division's contribution to the SEC-wide implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act. "John's broad experience in the securities markets and at regulatory agencies will be a tremendous asset as we implement regulatory reform and work to enhance investor protection," said Robert Cook, Director of the Division of Trading and Markets. "I am pleased that we can benefit from his insights, leadership, and creativity at such a critical time." Mr. Ramsay said, "It's a privilege to return to the Commission at a time of such critical importance for the country's investors and markets. I'm also thrilled to have the chance to work with Robert and all of the other tremendously dedicated professionals who work at this agency." Mr. Ramsay joins the Division's other Deputy Director, James Brigagliano, who has served in that role since March 2009. Between 1989 and 1994, Mr. Ramsay served with the SEC as Deputy Chief Counsel for the Division of Market Regulation (now the Division of Trading and Markets) and as Counsel to then-Commissioner Mary L. Schapiro. His other regulatory experience includes service in key positions at the Commodity Futures Trading Commission and the National Association of Securities Dealers (now the Financial Industry Regulatory Authority). In the private sector, Mr. Ramsay has worked as a partner at the law firm of Morgan Lewis and Bockius, and at the Bond Market Association (now part of the Securities Industry and Financial Markets Association), Citigroup Global Markets, and most recently the Regulatory Fundamentals Group — a private consulting firm. Mr. Ramsay received his JD from the University of Michigan in 1984. He graduated summa cum laude with a BA from the University of Texas at Austin in 1981. (Press Rel. 2010-156) Christopher R. Conte, Associate Director of Enforcement, to Leave After Nearly 18 Years at SECOn August 30, the Securities and Exchange Commission announced that Christopher R. Conte, an Associate Director in the Division of Enforcement, will leave the SEC next month after nearly 18 years of public service at the agency. Mr. Conte has overseen many significant enforcement cases ranging from accounting fraud and disclosure violations to unlawful market timing. For example, Mr. Conte played a lead role in the SEC's enforcement actions against Dell Inc. and its senior officers and against former executives at Comverse Technology. He also helped guide the SEC's cases against Morgan Stanley, J.P. Morgan, and Robertson Stephens, Inc involving unlawful IPO allocation practices. "Chris's extensive experience and deep commitment to investor protection made him a strong force in the effort to hold accountable those who violate the securities laws," said Robert Khuzami, Director of the SEC's Division of Enforcement. "After a long and fruitful career at the SEC we wish Chris the very best." Mr. Conte said, "It has been an honor and a privilege to work for nearly 18 years with colleagues at the Commission whose talents, dedication, and professionalism represent the very best in government service. I am truly grateful and proud to have had this opportunity to serve the Commission and its mission to protect investors and safeguard capital markets." Mr. Conte will join the law firm of Steptoe & Johnson LLP in September as a partner in the firm's Washington, D.C., office. Mr. Conte, 49, joined the SEC as a staff attorney in November 1992. He was promoted to the positions of Branch Chief in 1997, Deputy Assistant Director in 1999, and Assistant Director in 2000. Mr. Conte became an Associate Director in October 2006. Prior to joining the SEC, Mr. Conte was in private practice. During his SEC tenure, Mr. Conte has overseen and conducted enforcement investigations involving illicit payments under the Foreign Corrupt Practices Act, manipulative short selling practices, and insider trading by corporate insiders and other professionals. He also supervised enforcement actions involving violations by broker-dealers and investment advisers including e-mail preservation and production failures, audit failures, violations of auditor independence rules, and violations of the SEC's proxy rules, tender offer rules, and rules requiring the reporting of securities holdings. Mr. Conte coordinated numerous enforcement matters with other federal law enforcement agencies, including the U.S. Department of Justice and U.S. Attorney offices as well as self-regulatory organizations including the Financial Industry Regulatory Authority (FINRA). Mr. Conte received his BA from Brown University in 1983 and his JD from The Catholic University of America, Columbus School of Law in 1988. (Press Rel. 2010-157) ENFORCEMENT PROCEEDINGSIn the Matter of Apogee Technology, Inc.On August 27, the Commission issued an Order Terminating Administrative Proceedings Pursuant to Section 12(j) of the Securities Exchange Act of 1934 in the matter of Apogee Technology, Inc. The Order is being issued pursuant to the Order on the Basis of Offer of Settlement of Apogee Technology, Inc., Implementing Settlement, which was issued on Aug. 13, 2010. Based on the above, the Order terminates administrative proceedings that were previously instituted against Apogee Technology, Inc. on April 16, 2010, in an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, in which the Commission alleged that Apogee filed a materially deficient Form 10-K for the 2008 fiscal year and materially deficient Forms 10-Q for the three quarters of 2009, and failed to file a Form 10-K for the 2009 fiscal year in violation of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder. (Rel. 34-62786; File No. 3-13862) Commission Revokes Registration of Securities of United Magazine Co. for Failure to Make Required Periodic FilingsOn August 30, the Commission revoked the registration of each class of registered securities of United Magazine Co. for failure to make required periodic filings with the Commission. Without admitting or denying the findings in the Order, except as to jurisdiction, which it admitted, United Magazine consented to the entry of an Order Making Findings and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 as to United Magazine Co. finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 and Rules 13a-1 and 13a-13 thereunder and revoking the registration of each class of United Magazine's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against United Magazine in In the Matter of UB&T Financial Services Corp., et al., Administrative Proceeding File No. 3-13990. Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:
For further information see Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934, In the Matter of UB&T Financial Services Corp., et al., Administrative Proceeding File No. 3-13990, Exchange Act Release No. 62627, Aug. 2, 2010. (Rel. 34-62789; File No. 3-13990) Delinquent Filers' Stock Registrations RevokedThe registrations of the registered securities of T&W Financial Corp., Talger Management, Inc., TCom Ventures Corp. (f/k/a Telecom Wireless Corp.), TEQ-1 Corp., Tesseract Group, Inc., TexMont, Inc., Thunderbird Mining, Milling & Chemical Corp., and TK Originals, Inc., have been revoked. Each had repeatedly failed to file required annual and quarterly reports with the Securities and Exchange Commission. Thus, each 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 revocations were ordered in an administrative proceeding before an administrative law judge. (Rel. 34-62790; File No. 3-13982) Minneapolis-Based Fraudster Trevor Cook Sentenced to 25 Years in PrisonThe Securities and Exchange Commission announced that on April 24, 2010, the Honorable James M. Rosenbaum of the United States District Court for the District of Minnesota sentenced Trevor Cook to 25 years in prison and ordered him to pay $158 million in restitution on one count of mail fraud and one count of tax evasion for his role in a $190 million foreign currency trading scheme that defrauded approximately 1,000 investors. Cook was charged on March 30, 2010, and pleaded guilty on April 13, 2010. Cook is one of the defendants in a pending civil injunctive action filed by the SEC on Nov. 23, 2009, in the United States District Court for the District of Minnesota. The SEC's action against Cook arises out of the same facts that are the subject of the criminal case. The SEC's complaint alleges that from at least July 2006 through at least July 2009, Cook and co-defendant Patrick J. Kiley of Minneapolis, Minn., raised $190 million from 1,000 investors through the unregistered sale of investments in a purported foreign currency trading venture. According to the SEC's complaint, Cook and Kiley pooled investors' funds in bank and trading accounts in the names of entities they controlled. The SEC's complaint alleges that the foreign currency trading they did conduct resulted in millions of dollars in losses, and they misused approximately one half of the investor funds raised to make Ponzi-like payments to earlier investors and pay for, among other things, Cook's gambling losses and the purchase of the historic Van Dusen Mansion in Minneapolis. The SEC's complaint charges Cook and Kiley with violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commodity Futures Trading Commission also filed an action on Nov. 23, 2009, against Cook, Kiley and others for their roles in the scheme. On Nov. 23, 2009, the Court entered a preliminary injunction order against Cook and froze all of his assets. On Jan. 25, 2010, the Court found Cook in civil contempt of the asset freeze order for failing to surrender more than $35 million in assets and ordered Cook jailed until he is in compliance with the Court's orders. Cook has not complied with those orders and has remained incarcerated. [SEC v. Trevor G. Cook, et al., Case No. 09 cv 3333 (D. Minn.)] (LR-21633) SEC Charges Former Dell Senior Executives With Accounting FraudFormer Chief Accounting Officer Robert Davis to Pay $175,000 Penalty; Former Corporate Assistant Controller Randall Imhoff to Pay $25,000 PenaltyOn August 27, the Securities and Exchange Commission charged former Dell Inc. Chief Accounting Officer Robert W. Davis for his role in the company's accounting fraud. Last month, the SEC charged Dell with fraud for materially misstating its operating results from fiscal year 2002 to fiscal year 2005. The SEC's complaint against Davis alleges that he materially misrepresented Dell's financial results by using various "cookie jar" reserves to cover shortfalls in operating results and engaged in other reserve manipulations from FY2002 to FY2005. Davis agreed to pay a $175,000 penalty and to pay disgorgement and pre-judgment interest to settle the SEC's charges. The SEC also separately charged former Dell Assistant Controller Randall D. Imhoff with aiding and abetting Dell's improper accounting. Imhoff agreed to pay a $25,000 penalty and to pay disgorgement and pre-judgment interest to settle the SEC's charges. The SEC's complaint against Davis, filed in federal district court in Washington, D.C., alleges that he directed the use of "cookie jar" reserves to cover shortfalls in operating results to make it appear that Dell was consistently meeting Wall Street earnings targets through the company's management and operations. The SEC's complaint further alleges that the reserve manipulations allowed Dell to materially misstate its operating expenses as a percentage of revenue — an important financial metric that Dell highlighted to investors. The manipulations also enabled Dell to materially misstate the operating income of its Europe, Middle East and Africa segment. The SEC's complaint alleges that Davis directed that Dell maintain cookie jar reserves — which he referred to as "contingencies" — to cover future liabilities. The SEC alleges that an example of this misconduct related to Dell's use of excess tax reserves identified in its Japanese business unit. The complaint alleges that Dell identified an excess tax reserve in Dell Japan in the fourth quarter of FY2003. Rather than releasing the entire excess to its income statement, as required by Generally Accepted Accounting Principles (GAAP), Dell transferred the bulk of the excess to a cookie jar reserve account in its corporate division that Davis tracked. Two quarters later, Dell released this excess to offset the income statement impact to Dell from a litigation settlement and otherwise provide a boost to Dell's operating results. In another example, the SEC's complaint alleges that Davis improperly manipulated Dell's bonus and profit sharing accounts by "bleeding down" the amounts of excess accruals over time, rather than recording the entire excess in its income statement when it was first identified as required by GAAP. In a separate complaint also filed in federal district court in Washington, D.C., the SEC alleges that Imhoff aided and abetted Dell's improper use of "cookie jar" reserves and other reserve manipulations to cover shortfalls in Dell's operating results from FY2002 to FY2004. The SEC's complaint alleges that Imhoff, acting under his supervisors' general direction, planned and issued instructions regarding Dell's build-up and use of cookie jar reserves. In an example of his involvement in Dell's other improper reserve manipulations, the SEC's complaint alleges that Imhoff failed to ensure that Dell increased its reserves, as required by GAAP, after learning that an accrual to cover the costs of closing a Dell facility in Texas was inadequate. Without admitting or denying the SEC's allegations, Davis consented to the entry of an order that permanently restrains and enjoins him from violation of Section 17(a)(2) and (3) of the Securities Act of 1933 and Section 13(b)(5) of the Securities Exchange Act of 1934 (Exchange Act), and Rules 13b2-1 and 13b2-2 thereunder, and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20, 13a-1, and 13a-13. Davis also agreed to pay a penalty of $175,000, disgorgement of $19,080, and prejudgment interest of $9,078. In his settlement offer, Davis also consented to the issuance of an administrative order pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the SEC as an accountant, with the right to apply for reinstatement after five years. Without admitting or denying the SEC's allegations, Imhoff consented to the entry of an order that permanently restrains and enjoins him from violation of Exchange Act Section 13(b)(5) and Rules 13b2-1 and 13b2-2, and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) and Rules 12b-20, 13a-1, and 13a-13. Imhoff also agreed to pay a penalty of $25,000, disgorgement of $12,852, and prejudgment interest of $6,197. In his settlement offer, Imhoff also consented to the issuance of an administrative order pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the SEC as an accountant, with the right to apply for reinstatement after three years. James Blenko, Shelby Hunt, Jonathan Jacobs, Ian Rupell, Robert Peak, Brian Palechek and Jeffrey Anderson conducted the SEC's investigation in this matter. [SEC v. Robert W. Davis, Civil Action No. 1:10-cv-01464 (D.D.C.); SEC v. Randall D. Imhoff, Civil Action No. 1:10-cv-01465 (D.D.C.)] (LR-21634; AAE Rel. 3177) INVESTMENT COMPANY ACT RELEASESGE Asset Management Incorporated and GE Investment Distributors, Inc.The Commission has issued an order to GE Asset Management Incorporated and GE Investment Distributors, Inc. under Section 9(c) of the Investment Company Act exempting applicants and any other company of which General Electric Company, Ionics, Inc., or Amersham plc is or becomes an affiliated person from Section 9(a) of the Act with respect to an injunction entered by the U.S. District Court for the District of Columbia on July 30, 2010. (Rel. IC-29385 - August 25) Millington Securities, Inc., et al.An order has been issued on an application filed by Millington Securities, Inc. and Millington Unit Investment Trusts for an order under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A), (B) and (C) of the Act and under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act. The order permits certain registered unit investment trusts to acquire shares of registered management investment companies both within and outside the same group of investment companies. (Rel. IC-29386 - August 25) Orders of Deregistration Under the Investment Company Act of 1940Orders have been issued under Section 8(f) of the Investment Company Act declaring that each of the following has ceased to be an investment company:
The Integrity Funds, et al.A notice has been issued giving interested persons until Sept. 20, 2010, to request a hearing on an application filed by The Integrity Funds, et al., for an order exempting applicants from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order would permit the applicants to enter into and materially amend subadvisory agreements without shareholder approval. (Rel. IC-29399 - August 25) Aston Funds, et al.A notice has been issued giving interested persons until Sept. 20, 2010, to request a hearing on an application filed by Aston Funds, et al. for an order under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, under Sections 6(c) and 17(b) of the Act for an exemption from Sections 17(a)(1) and 17(a)(2) of the Act and under Section 6(c) of the Act for an exemption from Rule 12d1-2(a) under the Act. The requested order would permit certain registered open-end management investment companies to acquire shares of other registered open end management investment companies and unit investment trusts that are within and outside the same group of investment companies. (Rel. IC-29400 - August 26) Metropolitan Life Variable Annuity Separate Account IAn order has been issued on an application filed by Metropolitan Life Variable Annuity Separate Account I pursuant to Section 8(f) of the Investment Company Act declaring that it has ceased to be an investment company. (Rel. IC-29402 - August 26) Metlife Investors Variable Life Account FiveAn order has been issued on an application filed by Metlife Investors Variable Life Account Five pursuant to Section 8(f) of the Investment Company Act declaring that it has ceased to be an investment company. (Rel. IC-29403 - August 26) The New England Variable AccountAn order has been issued on an application filed by The New England Variable Account pursuant to Section 8(f) of the Investment Company act declaring that it has ceased to be an investment company. (Rel. IC-29404 - August 26) SELF-REGULATORY ORGANIZATIONSDesignation of Longer Period for Commission Action on Proposed Rule ChangesThe 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-2010-018; SR-BX-2010-044; SR-CBOE-2010-065; SR-CHX-2010-14; SR-EDGA-2010-05; SR-EDGX-2010-05; SR-FINRA-2010-033; SR-ISE-2010-66; SR-NYSE-2010-49; SR-NYSEAmex-2010-63; SR-NYSEArca-2010-61; SR-NASDAQ-2010-079; SR-NSX-2010-08) filed by the BATS Exchange; Chicago Board Options Exchange; Chicago Stock Exchange; EDGA Exchange; EDGX Exchange; Financial Industry Regulatory Authority; International Securities Exchange; NASDAQ OMX BX; The NASDAQ Stock Market; National Stock Exchange; New York Stock Exchange; NYSE Amex; and NYSE Arca, which relate to trading pauses due to extraordinary market volatility. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62763) Immediate Effectiveness of Proposed Rule ChangesA proposed rule change (SR-Phlx-2010-117) filed by NASDAQ OMX PHLX relating to routing fees, the monthly cap and electronic auctions 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 August 30. (Rel. 34-62776) A proposed rule change filed by The NASDAQ Stock Market LLC to amend Rule 2260 to reflect changes to corresponding FINRA Rule (SR-NASDAQ-2010-102) 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 August 30. (Rel. 34-62771) A proposed rule change filed by NASDAQ OMX BX, Inc. to amend Rule 2260 to reflect changes to corresponding FINRA rule (SR-BX-2010-058) 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 August 30. (Rel. 34-62774) A proposed rule change filed by NASDAQ OMX PHLX, Inc. to, among other things, eliminate broker discretionary voting for all elections of directors, except for companies registered under the Investment Company Act (SR-PHLX-2010-115) 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 August 30. (Rel. 34-62775) A proposed rule change filed by NASDAQ OMX PHLX, Inc. relating to the conversion of NASDAQ OMX PHLX, Inc. to a limited liability company (SR-Phlx-2010-104) 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 August 30. (Rel. 34-62783) A proposed rule change filed by The NASDAQ Stock Market LLC to modify fees assessed to members using the NASDAQ Market Center (SR-NASDAQ-2010-106) 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 August 30. (Rel. 34-62785) The Financial Industry Regulatory Authority, Inc. has filed a proposed rule change (SR-FINRA-2010-045) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to adopt a supplement to the security futures risk disclosure statement to accommodate proposed changes by OneChicago, LLC to list a class of security futures for which adjustments will be made for ordinary dividends. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62787) Accelerated Approval of Proposed Rule ChangeThe Commission has issued notice of Amendment No. 1 and granted accelerated approval of a proposed rule change (SR-FINRA-2009-042) filed by the Financial Industry Regulatory Authority relating to outside business activities of registered persons. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62762) Proposed Rule ChangesThe Fixed Income Clearing Corporation filed a proposed rule change (File No. SR-FICC-2010-04) under Section 19(b)(1) of the Exchange Act to provide clarity with respect to the close out netting of the Government Securities Division in the event of FICC's default or insolvency. Publication is expected in the Federal Register during the week of August 30. (Release No. 34-62767) NYSE Arca, Inc. has filed a proposed rule change (SR-NYSEArca-2010-78) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 relating to listing and trading of Jefferies Commodity Real Return ETF. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62768) The International Securities Exchange, LLC has filed a proposed rule change (SR-ISE-2010-91) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to adopt a pilot program to list additional expiration months for each class of options opened for trading on the exchange. Publication of the proposal is expected in the Federal Register during the week of August 30. (Rel. 34-62772) The NASDAQ Stock Market LLC has filed a proposed rule change (SR-NASDAQ-2010-107), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to modify the eligibility criteria for the second compliance period for a bid price deficiency on the Nasdaq Capital Market. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62782) Approval of Proposed Rule ChangesThe Commission approved a proposed rule change (SR-Phlx-2010-91), as modified by Amendment No. 1 thereto, submitted by NASDAQ OMX PHLX, Inc., pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, relating to registration and qualification requirements for PSX. Publication is expected in the Federal Register during the week of August 30. (Rel. 34-62776) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2010/dig083010.htm
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