SEC News Digest

COMMISSION ANNOUNCEMENTS

SEC Charges Family Insider Trading Ring in Million-Dollar Scheme

The Securities and Exchange Commission today charged a pair of freight railway employees and four family members with perpetrating an insider trading scheme that garnered more than $1 million in illegal profits.

The SEC alleges that W. Gary Griffiths and Cliff M. Steffes learned confidential information in early 2007 about the upcoming acquisition of Florida East Coast Industries Inc. (FECI), which owned the freight railway where they worked in Jacksonville, Fla. Griffiths and Steffes tipped family members with the non-public information. The traders collectively purchased more than $1.6 million in company stock and options ahead of the May 8, 2007 announcement of the acquisition of FECI by an affiliate of Fortress Investment Group LLC.

"We allege these individuals exploited their personal and family relationships for monetary gain and that their misuse of confidential information gave them an illegal advantage over other traders in the market," said Merri Jo Gillette, Director of the SEC's Chicago Regional Office.

According to the SEC's complaint filed in U.S. District Court for the Northern District of Illinois, Griffiths is a resident of Elkton, Fla., and vice president and chief mechanical officer of Florida East Coast Railway. Steffes, who currently resides in Lisle, Ill., worked in the rail yard in Jacksonville when the insider trading scheme occurred.

The SEC alleges that in the weeks leading up to the impending acquisition of FECI, the two men tipped Rex C. Steffes, who is Steffes's father and Griffiths's brother-in-law, with the confidential information. Also tipped were the two brothers of Cliff Steffes - Bret Steffes and Rex R. Steffes - and his uncle Robert J. Steffes. The insider trading scheme generated more than $1 million in illicit profits after the acquisition of the company was announced publicly.

The SEC has charged the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Without admitting or denying the SEC's allegations, Robert J. Steffes has consented to a court order that would permanently enjoin him from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and require him to pay disgorgement of $104,981, prejudgment interest of $15,951 and a penalty of $104,981.

This case was investigated by Scott B. Tandy, Kent W. McAllister, Kevin R. Barrett, Rebecca Bernard, John J. Sikora, Jr. and Norman Jones in the SEC's Chicago Regional Office.

The SEC appreciates the assistance of the Financial Industry Regulatory Authority (FINRA) and the Chicago Board Options Exchange (CBOE) in this matter.

For more information about this enforcement action, contact:

Timothy L. Warren, Associate Director, SEC's Chicago Regional Office, 312-353-7394

John J. Sikora, Jr., Assistant Director, SEC's Chicago Regional Office, 312-353-7418

(Press Rel. 2010-178)

Commission Meetings

Closed Meeting - Monday, October 4, 2010 - 10:00 a.m.

The subject matter of the Closed Meeting scheduled for Monday, October 4, 2010 will be: a litigation matter.

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 Konrad C. Kafarski

On September 29, 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 Konrad C. Kafarski (Respondent). The Order finds that on September 17, 2010, a judgment was entered by consent against Respondent in SEC v. Joseph R. Porche, et al. (Civil Action No. SACV 10-01165 DOC (RNBx) (C.D. Cal.)), permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

The Order further finds that the Commission's complaint in SEC v. Porche, et al. alleged that Kafarski, a sales agent for Kensington Resources, Inc. (Kensington), participated in a fraudulent offering of unregistered shares of American Environmental Energy, Inc. (AEEI) stock, in which Kensington raised over $11 million from approximately 200 investors nationwide. The complaint also alleged that when selling shares of AEEI, Kensington's sales staff, including Kafarski, repeatedly made misrepresentations concerning the payment of sales commissions and the use of proceeds. Specifically, the complaint alleged that Kafarski and the other sales agents falsely told investors that commissions were limited to 10% of the funds raised and that 80% of the funds would be used by AEEI to conduct its green energy business. The complaint further alleged that in reality, Kensington paid its sales staff 25% in commissions and only sent AEEI $315,000 of the $11 million raised.

Based on the above, the Order bars Konrad C. Kafarski from association with any broker or dealer. Respondent consented to the issuance of the Order without admitting or denying any of the findings except as to the entry of the order of permanent injunction. (Rel. 34-63015; File No. 3-14080)

In the Matters of Sandra Venetis and Systematic Financial Associates, Inc.

On September 29, 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 against Sandra Venetis (Venetis), and an Order Instituting Administrative Proceedings Pursuant to Section 203(e) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions against Systematic Financial Associates, Inc. (Systematic, collectively the Orders).

The Orders find that Venetis was the president, sole owner and sole principal of Systematic, an investment adviser registered with the Commission with its principal place of business in Branchburg, New Jersey. On September 2, 2010, a judgment was entered by consent against Venetis and Systematic, permanently enjoining them from future violations of Sections 5(a) and (c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, and Sections 206(1) and 206(2) of the Investment Advisers Act. The Orders find that the Commission's complaint alleged, among other things, that since at least 1997, Venetis designed and orchestrated an offering fraud and multi-million dollar Ponzi scheme whereby she fraudulently obtained over $11 million from at least 100 investors. The complaint further alleged that Venetis, operating through Systematic and two other entities, fraudulently offered and sold promissory note securities in unregistered transactions. In connection with the sale of the notes, Venetis falsely stated to investors that the notes funded loans to doctors, the investments would generate tax-free annual returns, and the doctors receiving the loans acknowledged their repayment obligations by co-signing the notes. The complaint also alleged that Venetis systematically misapropriated and misused investor funds, falsely stated to investors that their funds were invested, sent out false account statements indicating that investor funds earned the promised returns, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors.

Based on the above, the Orders bar Venetis from asociation with any broker, dealer, or investment adviser and revoke the investment adviser registration of Systematic. Venetis and Systematic consented to the issuance of the Orders without admitting or denying any of the findings in the Orders, except they admitted the entry of the injunction. (In the Matter of Sandra Venetis - Rels. 34-63014; IA-3092; File No. 3-14078 and In the Matter of Systematic Financial Associates - Rel. IA-3093; File No. 3-14079)

In the Matter of John P. Flannery and James D. Hopkins

On September 30, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933, Section 21C of the Securities Exchange Act of 1934, Section 203(f) of the Investment Advisers Act of 1940, and Section 9(b) of the Investment Company Act of 1940 (the Order) against John P. Flannery (Flannery), a former employee of State Street Bank and Trust Company (State Street), and James D. Hopkins (Hopkins) a current employee of State Street.

The Division of Enforcement alleges that State Street established the Limited Duration Bond Fund (Fund) in 2002 and State Street and Hopkins marketed it as an "enhanced cash" investment strategy that was an alternative to a money market fund for certain types of investors. By 2007, however, the Fund was almost entirely invested in subprime residential mortgage-backed securities and derivatives that magnified its exposure to subprime securities. The Division alleges that State Street and Hopkins continued to describe the Fund to prospective and current investors as having better sector diversification than a typical money market fund, while failing to disclose the extent of the Fund's concentration in subprime investments.

The Division also alleges that, beginning in July 2007, Hopkins and Flannery played an instrumental role in drafting a series of misleading communications that State Street sent to investors concerning the effect of the turmoil in the subprime market on the Fund and other State Street funds that invested in the Fund. At the same time, State Street provided certain investors with more complete information about the Fund's subprime concentration and other problems with the Fund. These other investors included clients of State Street's internal advisory groups, which provided advisory services to some of the investors in the Fund and the related funds. The Division alleges that State Street's internal advisory groups, one of which reported directly to Flannery, subsequently decided to recommend that all their clients redeem from the Fund and the related funds, and the pension plan of State Street's publicly-traded parent company (State Street Corporation) was one of those clients. The Division alleges that at the direction of Flannery and State Street's Investment Committee, State Street sold the Fund's most liquid holdings and used the cash it received from these sales to meet the redemption demands of better informed investors, leaving the Fund and its remaining investors with largely illiquid holdings.

In February 2010, the Commission filed a settled enforcement action against State Street based on the same facts alleged by the Division in the Order. The settlement with State Street included issuance of a settled order requiring it to cease and desist from committing violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933, and entry of a consent judgment in a civil action ordering it to pay a civil penalty of $50 million, disgorgement of $7,331,020 plus prejudgment interest of $1,019,161 to a Fair Fund established to redress shareholder harm. The judgment also ordered State Street to comply with an undertaking to pay injured investors an additional $255,240,472, resulting in total compensation to injured investors, after a credit for settlements already paid, of $663,191,540. The enforcement action against State Street was filed on February 4, 2010, and the judgment in the civil action was entered on February 25, 2010. The filing of the Commission's enforcement action was announced jointly with the offices of Secretary of the Commonwealth of Massachusetts William F. Galvin and Massachusetts Attorney General Martha Coakley.

A hearing will be held by an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondents an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest. The Order requires the Administrative Law Judge to issue an initial decision no later than 300 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 33-9147; 34-63018; IA-3094; IC-29451; File No. 3-14081).

In the Matter of Jermaine E. Spence, FreedomTree Mutual Funds and Asset Management, LLC, and Spence-Lingo & Company, Ltd.

On September 30, the Commission instituted public administrative and cease-and-desist proceedings pursuant to Sections 15(b), 17A, and 21C of the Securities Exchange Act of 1934, and Sections 203(e), 203(f) and 203(k) of the Investment Advisers Act against FreedomTree Mutual Funds and Asset Management, LLC (FreedomTree), a registered investment adviser, Jermaine E. Spence (Spence), the firm's principal, and Spence-Lingo & Company, Ltd. (Spence-Lingo), an affiliated registered transfer agent (collectively, Respondents).

In this Order, the Division of Enforcement alleges that in August 2008, Spence fraudulently registered FreedomTree as an investment adviser, and, in subsequent Commission filings and on a related website, misrepresented the firm's assets under management, operational history, and performance capabilities. Despite having no clients or advisory revenues, FreedomTree misrepresented that it had a successful 27-year history (Spence's age at the time) and as much as $235 million in assets under management. The Division further alleges that FreedomTree and Spence-Lingo declined to appear and produce documents in connection with routine examinations attempted by the Commission's Office of Compliance Inspections, and Examinations.

A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations are true, to afford the Respondents an opportunity to dispute the allegations, and to determine what remedial action is appropriate and in the public interest. The Commission ordered that the Administrative Law Judge in this proceeding issue an initial decision not later than 300 days from the date of service of the order instituting proceedings.

In a related matter, on September 30, the Commission instituted separate administrative proceedings pursuant to Section 12(j) of the Exchange Act against Spence-Lingo, to determine whether to revoke or to suspend for a period not exceeding twelve months the registration of Spence-Lingo's common stock. (In the Matter of FreedomTree Mutual Funds and Asset Management, LLC - (Rel. 34-63019; File No. 3-14082)

Securities and Exchange Commission Orders Hearing on Registration Revocation or Suspension Against Spence-Lingo & Company, Ltd. for Failure to Make Required Periodic Filings

On September 30, the Commission instituted public administrative proceedings to determine whether to revoke or to suspend for a period not exceeding twelve months the registration of the common stock of Spence-Lingo & Company, Ltd. (Spence Lingo), a Georgia corporation whose stock is registered with the Commission pursuant to Section 12(g) of the Securities Exchange Act of 1934.

In this Order, the Division of Enforcement (Division) alleges that Spence-Lingo failed to make required periodic filings with the Commission since Spence-Lingo's registration became effective in August 2008.

In this proceeding, instituted pursuant to Section 12(j) of the Exchange Act, 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 Respondent 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 registration of Spence-Lingo's common stock 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.

In a related matter, on September 30, 2010, the Commission instituted separate administrative and cease-and-desist proceedings against Spence-Lingo, a registered transfer agent, Jermaine E. Spence (Spence), the company's principal, and FreedomTree Mutual Funds and Asset Management, LLC (FreedomTree), an affiliated registered investment adviser. In those proceedings, the Division alleges that Spence and FreedomTree misrepresented FreedomTree's assets under management, operational history, and performance capabilities, and that FreedomTree and Spence-Lingo declined to appear and produce documents in connection with routine examinations attempted by the Commission's Office of Compliance Inspections, and Examinations. (In the Matter of Spence-Lingo & Company, Ltd. - Rel. 34-63020; File No. 3-14083)

SEC Charges ABB for Bribery Schemes in Mexico and Iraq - ABB to Pay $39 Million in Disgorgement and Civil Penalties

The Securities and Exchange Commission announced today that it filed a settled civil action against ABB Ltd (ABB) in the United States District Court for the District of Columbia, charging the company with violations of the Foreign Corrupt Practices Act. ABB is a Swiss corporation that provides power and automation products and services worldwide. The SEC alleges that ABB, through its subsidiaries, paid bribes to government officials in Mexico to obtain business with government owned power companies, and paid kickbacks to the former regime in Iraq to obtain contracts under the United Nations Oil for Food Program. As alleged in the complaint, ABB's subsidiaries made at least $2.7 million in illicit payments in these schemes to obtain contracts that generated more than $100 million in revenues for ABB.

In the Mexican bribery scheme, the SEC alleges that from 1999 through 2004, ABB Network Management (ABB NM), a business unit within ABB's U.S. subsidiary, ABB, Inc., bribed officials in Mexico to obtain and retain business with two government owned electric utilities, Comision Federal de Electricidad (CFE) and Luz y Fuerza del Centro (LyFZ). According to the complaint, the bribes were funneled through ABB NM's agent and two other companies in Mexico. The complaint alleges that ABB failed to conduct due diligence on these payments and entities and improperly recorded the bribes on its books as payments for commissions and services on projects in Mexico. Examples of illicit payments in the complaint include checks and wire transfers to relatives of CFE officials, cash bribes to CFE officials, and payment of a Mediterranean cruise vacation for CFE officials and their wives. The SEC alleges that, as a result of this bribery scheme, ABB NM was awarded contracts with CFE and LyFZ that generated over $90 million in revenues, and $13 million in profits, for ABB.

The SEC further alleges that from approximately 2000 to 2004 ABB participated in the United Nations Oil for Food Program (Program). The Program was intended to provide humanitarian relief for the Iraqi population, which faced hardship under the international trade sanctions that followed Iraq's 1990 invasion of Kuwait. According to the complaint, ABB participated in the Program through six subsidiaries: ABB Near East Trading Ltd. ("ABB Jordan"), ABB Automation, ABB Industrie AC Machines and ABB Solyvent-Ventec (collectively referred to as ABB France), ABB AG (ABB Austria), and ABB Elektrik Sanayi AS (ABB Turkey). The SEC alleges that these subsidiaries developed various schemes to pay secret kickbacks to Iraq to obtain contracts under the Program. ABB's Jordanian subsidiary acted as a conduit for other ABB subsidiaries by making the kickback payments on their behalf. Some of the kickbacks were made in the form of bank guarantees and cash payments. ABB improperly recorded the kickbacks on its books as legitimate payments for after sales services, consultation costs, and commissions. According to the complaint, the Oil for Food contracts obtained as a result of the kickback schemes generated $13.5 million in revenues, and $3.8 million in profits, for ABB.

Without admitting or denying the allegations in the complaint, ABB has agreed to settle the SEC's action by consenting to the entry of a final judgment that permanently enjoins the company from future violations of Sections 30A, 13(b)(2)(A), and 13(b)(2)(B) of the Securities Exchange Act of 1934, orders the company to pay $22,804,262 in disgorgement and prejudgment interest, orders the company to pay a $16,510,000 civil penalty, and requires the company to comply with certain undertakings regarding its FCPA compliance program.

In related criminal proceedings, ABB has reached a settlement with the United States Department of Justice in which ABB has agreed to pay a criminal fine of $30,420,000.

The Commission acknowledges the assistance of the Department of Justice, Criminal Division, Fraud Section, the Federal Bureau of Investigation, and the United Nations Independent Inquiry Committee. [SEC v. ABB Ltd, Civil Action No. 1:10-CV-01648 (DDC) (PLF)] (LR-21673; AAE Rel. 3191)

SEC Brings Action Against Florida-Based Company and Its CEO for Fraud

The Securities and Exchange Commission announced today that on September 30, it filed a complaint against Atlantis Technology Group (Atlantis), a company headquartered in Ft. Lauderdale, Florida, and its CEO, Christopher Dubeau, a resident of Weston, Florida. The Commission's complaint alleges that Atlantis and Dubeau violated the antifraud provisions of the securities laws in connection with Atlantis's issuance of a series of false press releases.

The Commission's complaint filed in the Southern District of Florida, from at least August 7, 2009 through April 5, 2010, Atlantis claimed in numerous press releases that, among other things:

• its subsidiary, Global Online Television Corporation (GOTV), offered internet protocol television services to consumers;
• GOTV offered video phone services to consumers; and
• GOTV had relationships with television networks and others to offer their content to Atlantis subscribers.

The complaint alleges that these claims were grossly misleading because, among other things:

• GOTV was not able to offer internet protocol television services to consumers;
• GOTV was not able to offer video phone services to consumers; and
• GOTV did not have relationships with television networks to offer content to Atlantis subscribers.

The Commission's complaint alleges that Dubeau alone drafted, reviewed, and approved the misleading press releases. In December 2009, while Atlantis was issuing some of its false press releases, Dubeau repeatedly sold Atlantis stock into the inflated market, earning at least $240,000 from the sale of the stock.

The Commission's complaint alleges that Atlantis violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder and that Dubeau violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission's complaint seeks relief in the form of permanent injunctions against Atlantis and Dubeau enjoining them from future violations of the provisions charged, an order requiring that Dubeau disgorge his ill-gotten gains, with prejudgment interest, and imposing civil penalties against Dubeau. The Commission also seeks a penny stock bar and an officer and director bar against Dubeau.

The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in connection with this matter. [SEC v. Atlantis Technology Group and Christopher Dubeau, Civil Action No. 10-CV-23513 (S.D. Fla.)] (LR-21674)

SEC Brings Action Against Purported Florida Mining Company and Its President for Fraud

The Securities and Exchange Commission announced today that on September 30, it filed a complaint against Quri Resources, Inc. (Quri), a purported mining company headquartered in Miami, Florida, and operating in Ecuador, and its CEO, Jaime Santiago Gomez, a resident of Miami, Florida and Quito, Ecuador. The Commission's complaint alleges that Quri and Gomez violated the antifraud provisions of the securities laws in connection with Quri's issuance of a series of false press releases and other misleading public statements and that Gomez also violated the registration provisions of the securities laws by selling Quri stock in unregistered transactions.

The Commission's complaint, filed in the Southern District of Florida, alleges that, from February to July 2009, Quri claimed in several press releases that, among other things:

• it was ready to begin drilling on a mining project in Ecuador with a probable gold reserve worth over $1 billion;
• it had signed letters of intent to acquire two valuable mining projects in Arizona;
• it had acquired a second mining project in Ecuador and anticipated producing gold within three months; and
• it had signed a letter of intent to acquire a third valuable mining project in Ecuador.

The complaint also alleges that, at the same time, Quri's website and other public statements described Quri as having ongoing operations, employees worldwide, and an impressive management team.

The complaint alleges that these claims were grossly misleading because, among other things:

• the exact value of the gold reserves in Ecuador could not be known without further detailed exploration;
• Quri never acquired any mining projects in Arizona, and it acquired, at most, only one project in Ecuador;
• Quri never developed any of its purported mining projects and was never in a financial position to do so; and
• Quri had no money, was never able to raise any funds, had no reasonable expectation of any funding, and was heavily indebted.
• The complaint also alleges that Quri did not have any ongoing operations, employees worldwide, or an impressive management team.

The Commission's complaint further alleges that, from February to July 2009, taking advantage of Quri's artificially inflated stock price, Gomez, through an entity he controlled, dumped over half a million shares of Quri stock on the unsuspecting public, selling Quri stock in unregistered transactions, earning at least $17,500 from the sale of the stock.

The Commission's complaint alleges that Quri violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder and that Gomez violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Commission seeks a final judgment against Quri and Gomez, enjoining Quri from future violations of the foregoing antifraud laws and enjoining Gomez from future violations of the foregoing antifraud and registration laws, ordering civil penalties and disgorgement of all ill-gotten gains, including prejudgment interest, against Gomez, and barring Gomez from participating in any offering of penny stock.

The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) in connection with this matter. [SEC v. Quri Resources, Inc. and Jaime Santiago Gomez, Civil Action No. 10-CV-61824 (S.D. Fla.)] (LR-21675)

SEC v. Raymond Thomas and Strictly Stocks Investment Company Inc.

The Securities and Exchange Commission announced that on September 23, the Honorable John R. Adams of the United States District Court for the Northern District of Ohio sentenced Raymond Thomas to 6 years in prison and ordered Thomas to pay almost $1 million in restitution in connection with his conviction for one count of mail fraud and one count of filing a false tax return. Thomas's conviction stemmed from his role in a fraudulent offering scheme that defrauded at least 26 investors. Thomas was charged on June 3, 2010 and pleaded guilty on July 6, 2010.

Previously, on October 22, 2008, the SEC filed a civil injunctive complaint alleging that Thomas and his company, Strictly Stocks Investment Company, Inc. ("Strictly Stocks") operated a fraudulent offering scheme that raised at least $620,000 from at least 26 investors, many of whom were retired police officers and firefighters, while acting as unregistered investment advisers. The complaint alleged that Thomas and Strictly Stocks told investors that their funds would be invested in stocks and options. The complaint also alleged that Thomas instead misappropriated the funds and, among other things, used the funds to support his own private business ventures, including a limousine company and a title company, and for his own personal use. The complaint alleged violations of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 (Advisers Act).

On February 23, 2009, the Court entered a judgment against Thomas and Strictly Stocks. The Order permanently enjoined Thomas and Strictly Stocks from violating Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Advisers Act. The Order further required Thomas and Strictly Stocks to pay disgorgement in the amount of $621,000, plus prejudgment interest of $95,406.67. Thomas and Strictly Stocks were also each ordered to pay a civil penalty in the amount of $130,000 and $650,000, respectively. Subsequently, on June 10, 2009, the SEC issued an administrative order barring Thomas from association with any investment adviser. [SEC v. Raymond Thomas and Strictly Stocks Investment Company, Inc., Civil Action No. 1:08-cv-02503-CAB (N.D. Ohio) (Boyko, J.)] (LR-21676)

INVESTMENT COMPANY ACT RELEASES

Notices of Deregistration Under the Investment Company Act

For the month of September 2010, a notice has been issued giving interested persons until October 19, 2010, to request a hearing on any of the following applications for an order under Section 8(f) of the Investment Company Act declaring that the applicant has ceased to be an investment company:

• Ashport Mutual Fund Trust [File No. 811-10301]
• First Trust Value Line R & Ibbotson Equity Allocation Fund [File No. 811-21517]
• First Trust Value Line R 100 Fund [File No. 811-21336]
• First Trust Value Line Dividend Fund [File No. 811-21381]
• M&I Special Institutional Funds, Inc. [File No. 811-22232]
• DWS Advisor Funds III [File No. 811-6576]
• DWS Investments Trust [File No. 811-8006]
• DWS RREEF Securities Trust [File No. 811-9589]
• DWS Advisor Funds II [File No. 811-7347]
• OFI Tremont Core Strategies Hedge Fund [File No. 811-21110]
• Sycuan Funds [File No. 811-21401]
• SGM Funds [File No. 811-22247]
• National Retail Fund I [File No. 811-22197]
• Federated International Small Company Opportunity Fund [File No. 811-10131]
• MLIG Variable Insurance Trust [File No. 811-21038]
• Modern Woodmen of America Variable Account [File No. 811-10497]
• Kemper Investors Life Insurance Company Separate Account - 3 [File No. 811-22161]

Rel. IC-29440 - September 24)

Elfun Trusts, et al.

A notice has been issued giving interested persons until October 22, 2010 to request a hearing on an application filed by Elfun Trusts, et al., for an order under Section 6(b) of the Investment Company Act of exempting applicants from Sections 15(a) and 15(c) of the Act. The order would permit certain employees' securities companies to enter into and materially amend subadvisory agreements without shareholder approval, and subject to the approval of a board of trustees all the members of which are "interested persons" within the meaning of Section 2(a)(19) of the Act, and would grant relief from certain disclosure requirements. (Rel. IC-29441 - September 27)

Aston Funds and Aston Asset Management, LP

An order has been issued on an application filed by Aston Funds and Aston Asset Management, LP 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 (a) permits certain registered open-end management investment companies that operate as "funds of funds" to acquire shares of certain registered open-end management investment companies and unit investment trusts that are within and outside the same group of investment companies as the acquiring investment companies, and (b) permits funds of funds relying on Rule 12d1-2 under the Act to invest in certain financial instruments. (Rel. IC-29443 - September 27)

American Fidelity Dual Strategy Fund and the American Fidelity Assurance Company

A notice has been issued giving interested persons until October 22, 2010 to request a hearing on an application filed by the American Fidelity Dual Strategy Fund and the American Fidelity Assurance Company for an order exempting them from Section 15(a) of the Investment Company Act. The order would permit the applicants to enter into and materially amend subadvisory agreements without shareholder approval and would grant relief from certain disclosure requirements. (Rel. IC-29444 - September 27)

Highland Capital Management, L.P. and Highland Funds I

A notice has been issued giving interested persons until October 25, 2010 to request a hearing on an application filed by Highland Capital Management, L.P. and Highland Funds I for an order exempting them 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 and would grant relief from certain disclosure requirements. (Rel. IC-29445 - September 27)

RIEF RMP LLC and Renaissance Technologies LLC

A notice has been issued giving interested persons until October 25, 2010, to request a hearing on an application filed by RIEF RMP LLC and Renaissance Technologies LLC (RTC). Applicants request an order to exempt certain limited liability companies and other investment vehicles formed for the benefit of eligible employees of RTC 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-29446 - September 28)

Transamerica Asset Management, Inc., et al.

An order has been issued on an application filed by Transamerica Asset Management, Inc., et al. for an exemption under Section 12(d)(1)(J) of the Investment Company Act 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 (a) permits 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) permits 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-29447 - September 28)

SELF-REGULATORY ORGANIZATIONS

Accelerated Approval of Proposed Rule Change

The NASDAQ Stock Market filed, and the Commission approved on an accelerated basis, a proposed rule change (SR-NASDAQ-2010-114) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 to prohibit members from voting uninstructed shares on certain matters. Publication is expected in the Federal Register during the week of October 4. (34-62992)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by Financial Industry Regulatory Authority relating to FINRA Trade Reporting Notice on price validation and price-override protocol (SR-FINRA-2010-048) 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 October 4. (34-62995)

A proposed rule change filed by Chicago Board Options Exchange related to dates for pilot programs (SR-CBOE-2010-088) 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 October 4. (34-62997)

A proposed rule change filed by the Chicago Board Options Exchange to modify the fees for the CBOE Stock Exchange (SR-CBOE-2010-089) 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 October 4. (34-63000)

A proposed rule change (SR-CBOE-2010-085) filed by the Chicago Board Options Exchange to increase the class quoting limit in one option class 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 October 4. (34-63001)

A proposed rule change filed by NASDAQ OMX PHLX (SR-Phlx-2010-126) regarding individual stock trading pauses 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 October 4. (34-63004)

A proposed rule change filed by the National Securities Clearing Corporation (SR-NSCC-2010-10) to provide that an Alternative Investment Product (AIP) Service prospective member is not required to designate a settling bank in order to become an AIP member has become effective upon filing pursuant to Section 19(b)(3)(A)(iii) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of October 4. (34-63005)

A proposed rule change filed by the NASDAQ Stock Market to modify fees for members using the NASDAQ Market Center (SR-NASDAQ-2010-121) 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 October 4. (34-63007)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-ISE-2010-81) submitted by International Securities Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 relating to trading options on a reduced value of the DAX Index, including long-term options. Publication is expected in the Federal Register during the week of October 4. (34-63002)

The Commission approved a proposed rule change by the Financial Industry Regulatory Authority (SR-NASD-2003-140) relating to the prohibition of certain abuses in the allocation and distribution of shares in initial public offerings. Publication is expected in the Federal Register during the week of October 4. (34-63010)

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http://www.sec.gov/news/digest/2010/dig093010.htm