SEC News Digest

COMMISSION ANNOUNCEMENTS

SEC, CFTC to Host Joint September Roundtables on Swap and Security-Based Swap Matters

Staff from the Securities and Exchange Commission (SEC) and Commodity Futures Trading Commission (CFTC) will hold two joint public roundtables in September on issues relating to implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

The first roundtable on September 14 will be on issues related to swap data repository (SDR) registration, functions and responsibilities, the mechanics of data reporting, models for real time public reporting and the effect of transparency on liquidity of block trades and large transaction sizes. The second public roundtable on September 15 will be on issues related to swap execution facilities and security-based swap execution facilities.

The September 14 roundtable will be held in the Hearing Room at the CFTC Headquarters located at 1155 21st Street NW in Washington, D.C. The September 15 roundtable will be held in the Auditorium (Room L-002) at the SEC Headquarters located at 100 F Street NE in Washington D.C. The discussions will be open to the public with seating on a first-come, first-served basis. Members of the public also may listen by telephone and should be prepared to provide their first name, last name and affiliation.

The dial-in information for the September 14 roundtable is:

• U.S./Canada Toll-Free: (866) 312-4390
• International Toll: (404) 537-3379
• Conference ID: 98801653

The dial-in information for the September 15 roundtable is:

• U.S./Canada Toll-Free: (877) 732-6722
• Conference ID: 7772

Transcripts of the public roundtable discussions will be published on both agencies' websites.

Members of the public wishing to submit their views on the topics addressed at the discussions may do so through the comment form on the SEC website or through the email addresses provided on the individual rulemaking pages on the CFTC website (http://www.cftc.gov/LawRegulation/OTCDerivatives/otc_rules.html).

All submissions provided to either the CFTC or the SEC in any electronic form or on paper will be published on the website of the respective agency, without review and without removal of personally identifying information.

8:45 a.m. - Opening Statements by CFTC and SEC Staff

9:00 a.m. - Panel One - SDR Registration, Functions, and Responsibilities

• Duties of SDRs in addition to those required by the Dodd-Frank.
• The most efficient and effective way for SDRs to execute their statutory duties.
• How to implement the confirmation function under Dodd-Frank - to what extent and under what circumstances will SDRs be expected to do trade confirmations

10:45 a.m. - Break

11:00 a.m. - Panel Two - Mechanics of Data Reporting

• Type of data reported by SDRs, derivatives clearing organizations (DCOs), designated contract markets (DCMs), swap execution facilities (SEFs), swap dealers and major swap participants (MSPs).
• Parties responsible for reporting of swap and security-based swap data.
• Means by which mandatory reporting may be made.
• Reporting of swap and security-based swap transactions executed or cleared on an electronic platform.
• The time by which swap and security-based swap transactions must be reported.
• Handling of data corrections.
• Reporting of life cycle events.
• Reporting of past transactions.

12:45 p.m. - Lunch Break

1:45 p.m. - Panel Three - Models for Real-Time Transparency and Public Reporting

• Benefits of real time reporting of swaps and security-based swaps transactions.
• Entities responsible for reporting.
• Data elements.
• Ensuring anonymity of market participants.
• The meaning of "real-time".
• Appropriate media for real-time reporting of swap and security-based swap transaction data.
• Feasibility/desirability of a consolidated tape or ticker for swaps and security-based swaps.

3:30 p.m. - Break

3:45 p.m. - P anel Four - Effect of Transparency on Liquidity: Block Trade Exception

• Defining block trades and large transaction sizes for swaps and security based swaps.
• Determining an appropriate delay for reporting block trades and large transactions.
• Effects of transparency on post-trade liquidity.
• Responsibility for determining minimum block sizes and large transaction sizes for reporting purposes.

5:30 p.m. - Roundtable concludes

9:00 a.m. - Opening Statements by SEC and CFTC Staff

Robert Cook, Director, Division of Trading and Markets, SEC
Richard Shilts, Director, Division of Market Oversight, CFTC

9:15 a.m. - Panel One - Swap Execution Facilities ("SEFs") and Security-based Swap Execution Facilities (SB SEFs)

• Definition and scope of SEFs/SB SEFs.
• Scope of exception from mandatory trading requirement.

10:45 a.m. - Break

11:00 a.m. - Panel Two - Compliance with Core Principles for SEFs and SB SEFs

• Block trades
• Surveillance, investigation, and enforcement of SEF/SB SEF rules.
• Cross-market issues.
• Obligation of SEFs /SB SEFs to provide impartial access

12:30 p.m. - Roundtable concludes

(Press Rel. 2010-166)

ENFORCEMENT PROCEEDINGS

Securities and Exchange Commission Orders Hearing on Registration Suspension or Revocation Against Eight Public Companies for Failure to Make Required Periodic Filings

On September 7, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:

• Microwave Laboratories, Inc.
• Millionaire.com, Inc. (MLRE)
• Mirador Diversified Services, Inc.
• ML Direct, Inc.
• MLH Properties Ltd. Partnership
• Modena 4, Inc.
• Motor Cars Auto Group, Inc. (MAGI)
• Multi Solutions, Inc. (MULT)

In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-62859; File No. 3-14034)

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Eight Public Companies for Failure to Make Required Periodic Filings

On September 7, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:

• Team America, Inc. (TMOSQ)
• Teldar Financial, Inc. (n/k/a Harlem Business Development Corp.)
• Telecomm Industries, Inc. (TCMM)
• TeleHubLink Corp. (THLC)
• Terra Firma Technologies, Inc.
• Texon Energy Corp.
• Thatlook.com, Inc.
• THC Communications, Inc. (THCR)

In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-62860; File No. 3-14035)

Securities and Exchange Commission Orders Hearing on Registration Revocation Against Eight Public Companies for Failure to Make Required Periodic Filings

On September 7, the Commission instituted public administrative proceedings to determine whether to revoke or suspend for a period not exceeding twelve months the registrations of each class of the securities of eight companies for failure to make required periodic filings with the Commission:

• The Tag Group, Inc. (TGGP)
• T.C.B. Enterprises, Inc.
• Technology International, Ltd.
• Telelink International Corp.
• Teletimer International, Inc.
• Telmed, Inc.
• Texas American Resources, Inc.
• Texas Equipment Corp.

In this Order, the Division of Enforcement (Division) alleges that the eight issuers are delinquent in their required periodic filings with the Commission.

In this proceeding, instituted pursuant to Exchange Act Section 12(j), a hearing will be scheduled before an Administrative Law Judge. At the hearing, the Administrative Law Judge will hear evidence from the Division and the Respondents to determine whether the allegations of the Division contained in the Order, which the Division alleges constitute failures to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder, are true. The Administrative Law Judge in the proceeding will then determine whether the registrations pursuant to Exchange Act Section 12 of each class of the securities of these Respondents should be revoked or suspended for a period not exceeding twelve months. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 120 days from the date of service of the order instituting proceedings. (Rel. 34-62861; File No. 3-14036)

In the Matter of Jason Hertz

On September 7, the Commission issued an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Jason Hertz, a resident of Tarzana, California, based on the entry of a permanent injunction against him in the civil action entitled Securities and Exchange Commission v. Delta Onshore Management, LLC, et al., Civil Action No. 08-1278 MLB-DWB in the United States District Court for the District of Kansas, Wichita Division.

In the Order, the Commission finds that, on April 21, 2010, a final judgment by default was entered against Hertz, permanently enjoining him from future violations of Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 15(a)(1) of the Securities Exchange Act of 1934. The Commission further finds in the Order that on Sept. 19, 2008, the Commission filed a Complaint against Hertz, alleging that between February 2008 and July 2008, he participated in an unregistered securities offering in which approximately $2.8 million was raised from over 50 investors from the sale of interests in a purported oil-and-gas equipment leasing joint venture. According to the Complaint, Hertz, along with two other defendants, supervised two sales offices which offered and sold interest in the venture on a commission basis.

Based on the above, the Order bars Jason Hertz from association with any broker or dealer. Jason Hertz consented to the issuance of the Order without admitting or denying any of the findings in the Order, except he admitted the entry to the injunction. (Rel. 34-62862; File No. 3-13893)

In the Matter of Kevin J. Schott, CPA

On September 8, 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 Kevin J. Schott, CPA. The Order finds that on August 16, 2010, a final judgment was entered by consent against Schott, permanently enjoining him from violating Section 13(b)(5) of the Exchange Act and Rules 13a-14, 13b2-1 and 13b2-2 thereunder and requiring him to pay a $20,000 civil penalty in a civil action entitled U.S. Securities and Exchange Commission v. Kevin J. Schott, Civil Action Number 4:10-cv-01500-AGF, in the United States District Court for the Eastern District of Missouri.

The Order finds that the Commission's complaint alleged that Schott circumvented Zoltek's internal accounting controls and caused Zoltek to make two payments totaling $250,000 to an outside consultant who had raised funds for Zoltek in the past, despite an instruction from Zoltek's CEO not to make the payments. Instead of following Zoltek's internal controls which required the CEO to approve all wire transfers, Schott instructed the controller of Zoltek's foreign subsidiary in Hungary to wire the payments to the consultant from the subsidiary's account. According to the complaint, Schott told the Hungarian controller that the payments were for another purpose. Schott then further concealed the payments by creating a false document which he gave to Zoltek's CEO. By mischaracterizing the payments to the consultant, the complaint alleges that Schott caused Zoltek to make false entries into its books and records. The complaint further alleges that Schott made false and misleading representations in his certifications to the public and to Zoltek's external auditor for the fourth quarter of 2007 and the first quarter of 2008.

Based on the above, the Order suspends Schott from appearing or practicing before the Commission as an accountant with the right to reapply for reinstatement after one year. Schott consented to the issuance of the Order without admitting or denying any of the findings in the Order, except as to the entry of the permanent injunction against him, which he admitted. (Rels. 34-62865; AAE Rel. 3181; File No. 3-14037)

In the Matter of Theodore W. Urban

An Administrative Law Judge issued an Initial Decision in Theodore W. Urban, Admin. Proc. 3-13655 (Sept. 8, 2010). The Initial Decision finds that Theodore W. Urban (Urban), former General Counsel and Executive Vice President of Ferris, Baker Watts, Inc., did not fail reasonably to supervise Stephen Glantz (Glantz), a broker, with a view to detecting and preventing Glantz's violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rule 10b-5. Based on findings that Urban acted reasonably under the facts and circumstances presented, the Administrative Law Judge found no remedial action appropriate as recommended by the Division of Enforcement pursuant to Section15(b) and 21B of the Exchange Act and Sections 203(f) and 203(i) of the Investment Advisers Act of 1940, and dismissed the proceeding. (Initial Decision No. 402; File No. 3-13655)

INVESTMENT COMPANY ACT RELEASES

Tudor Employee Investment Fund LLC and Tudor Investment Corporation

A notice has been issued giving interested persons until Sept. 28, 2010, to request a hearing on an application filed by Tudor Employee Investment Fund LLC and Tudor Investment Corporation (Tudor). Applicants request an order to exempt certain limited liability companies and other investment vehicles formed for the benefit of eligible employees of Tudor and its affiliates from certain provisions of the Investment Company Act. Each limited liability company and other investment vehicle will be an "employees' securities company" within the meaning of Section 2(a)(13) of the Act. (Rel. IC-29409 - September 3)

Transamerica Asset Management, Inc., et al.

A notice has been issued giving interested persons until Sept. 27, 2010, to request a hearing on an application filed by Transamerica Asset Management, Inc., 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 Section 17(a) of the Act, and under Section 6(c) of the Act for an exemption from Rule 12d1-2(a) under the Act. The order would (a) permit certain series of registered open-end management investment companies to acquire shares of other registered open-end management investment companies or unit investment trusts that are within or outside the same group of investment companies as the acquiring companies, and (b) permit certain series of registered open-end management investment companies relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-29410 - September 3)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

The Commission issued notice of filing and immediate effectiveness of proposed rule change (SR-NYSEArca-2010-81) filed by NYSE Arca under Rule 19b-4 of the Securities Exchange Act of 1934 amending its fee schedule. Publication is expected in the Federal Register during the week of September 6. (Rel. 34-62843)

A proposed rule change (SR-NYSEArca-2010-80) filed by NYSE Arca to adopt Commentary .04 to Rule 6.47A related to the exposure of Reserve Orders 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 September 6. (Rel. 34-62850)

Proposed Rule Change

The Options Clearing Corporation filed a proposed rule change (SR-OCC-2010-14) under Section 19(b)(1) of the Exchange Act that would revise its Rules to expand the forms of collateral eligible for incorporation in the System for Theoretical Analysis and Numerical Simulations risk management methodology. Publication is expected in the Federal Register during the week of September 6. (Rel. 34-62854)

SECURITIES ACT REGISTRATIONS

• Latest Securities Act registrations (TXT)

RECENT 8K FILINGS

• Latest 8-K filings (TXT)

http://www.sec.gov/news/digest/2010/dig090810.htm