SEC News Digest

COMMISSION ANNOUNCEMENTS

Commission Meetings

Closed Meeting - Thursday, January 27, 2011 at 2:00 p.m.

The subject matter of the Closed Meeting scheduled for Thursday, Jan. 27, 2011 will be: institution and settlement of injunctive actions; institution and settlement of administrative proceedings; and other matters relating to enforcement proceedings.

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 Joseph R. Porche

On Jan. 19, 2011, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Notice of Hearing (Order) against Joseph R. Porche (Porche or Respondent) based upon the entry of a permanent injunction entered against him in the United States District Court for the Central District of California (SEC v. Joseph R. Porche, et al., Civil Action No. SACV 10-01165).

In the Order, the Division of Enforcement alleges that on Dec. 29, 2010, the United States District Court for the Central District of California entered a judgment of permanent injunction and other relief against Porche, which permanently enjoined 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 Exchange Act, and Rule 10b-5 thereunder.

A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations contained in the Order are true, and to provide the Respondent 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 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-63733; File No. 3-14197)

In the Matter of Dale J. Engelhardt

On Jan. 19, 2011, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Notice of Hearing (Order) against Dale J. Engelhardt (Engelhardt or Respondent) based upon the entry of a permanent injunction entered against him in the United States District Court for the Central District of California (SEC v. Joseph R. Porche, et al., Civil Action No. SACV 10-01165).

In the Order, the Division of Enforcement alleges that on December 29, 2010, the United States District Court for the Central District of California entered a judgment of permanent injunction and other relief against Engelhardt, which permanently enjoined him from future violations of Sections 5(a) and 5(c) of the Securities Act of 1933, and Section 15(a) of the Exchange Act.

A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations contained in the Order are true, and to provide the Respondent 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 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-63734; File No. 3-14198)

In the Matter of Gary K. Juncker

On Jan. 19, 2011, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Exchange Act) and Notice of Hearing (Order) against Gary K. Juncker (Juncker or Respondent) based upon the entry of a permanent injunction entered against him in the United States District Court for the Central District of California (SEC v. Joseph R. Porche, et al., Civil Action No. SACV 10-01165).

In the Order, the Division of Enforcement alleges that on December 29, 2010, the United States District Court for the Central District of California entered a judgment of permanent injunction and other relief against Juncker, which permanently enjoined him from future violations of Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 15(a) of the Exchange Act.

A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations contained in the Order are true, and to provide the Respondent 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 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-63735; File No. 3-14199)

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

On Jan. 19, 2011, 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 seven companies for failure to make required periodic filings with the Commission:

• Enter Tech Corp.
• Entertainment Trends Corp. (f/k/a Daljama, Inc.)
• Eonnet Media, Incchro
• Equorumnet
• Esesis, Inc.
• European American Resources, Inc. (EPAR)
• eVision International, Inc. (EVIS)

In this Order, the Division of Enforcement (Division) alleges that the seven 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. 34-63738; File No. 3-14200)

Commission Revokes Registration of Securities of Ardeo PLC for Failure to Make Required Periodic Filings

On Jan. 20, 2011, the Commission revoked the registration of each class of registered securities of Ardeo PLC 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, Ardeo PLC 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 Ardeo PLC finding that it had failed to comply with Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 13a-1 and 13a-16 thereunder and revoking the registration of each class of Ardeo PLC's securities pursuant to Section 12(j) of the Exchange Act. This order settled the proceedings brought against Ardeo PLC in In the Matter of Apex Capital Group, Inc., et al., Administrative Proceeding File No. 3-14151.

Brokers and dealers should be alert to the fact that Exchange Act Section 12(j) provides, in pertinent part, as follows:

No member of a national securities exchange, broker, or dealer shall make use of the mails or any means or instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked . . . .

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 Apex Capital Group, Inc., et al., Administrative Proceeding File No. 3-14151, Exchange Act Release No. 63438, Dec. 6, 2010. (Rel. 34-63739; File No. 3-14151)

SEC Charges Offshore Company With Massive Life Settlement Bonding Fraud

U.S. Attorney and DOJ File Simultaneous Criminal Action

The Commission today filed an enforcement action against Provident Capital Indemnity, Ltd. (PCI), its president Minor Vargas Calvo (Vargas), and its purported outside auditor, Jorge L. Castillo (Castillo) seeking to halt a massive, ongoing fraud by PCI, an offshore company located in Costa Rica that provides financial guarantee bonds on life settlements and claims to protect investors' interests in life insurance policies by promising to pay the death benefit if the insured lives beyond his or her estimated life expectancy. According to the complaint, from at least 2004 through March 2010, PCI issued approximately 197 bonds backstopping numerous bonded offerings of investments in life insurance policies with a face value of more than $670 million.

According to the complaint, the PCI bonds were a material component of numerous third-party life settlement offerings in the United States and abroad. Without a bond, a life settlement investment is illiquid and open-ended because the investment's pay-out date and return are dependent upon the date of the insured's death. PCI's bonds offered a fixed maturity date for the investments because PCI's bond obligated PCI to pay investors (directly or indirectly through the life settlement issuer) the face value of the underlying insurance policy by a date certain if the insured lived past his life expectancy date.

The complaint alleges that the defendants misrepresented PCI's ability to satisfy its obligations under its bonds by making material misrepresentations about:

• whether PCI's financial statements had been audited,

• the assets that backed PCI's bonds;

• PCI's credit rating; and

• the availability of reinsurance to cover claims on PCI's bonds.

The Commission charged the defendants with violations of Section 17(a) of the Securities Act of 1933 (Securities Act) [15 U.S.C. § 77q(a)], Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) [15 U.S.C. § 78j(b)], and Exchange Act Rule 10b-5 [17 C.F.R. § 240.10b-5] and alternatively charged Castillo with aiding and abetting PCI's and Vargas's violations of Securities Act Section 17(a) and Exchange Act Section 10(b) and Exchange Act Rule 10b-5. The Commission also named Desarrollos Comerciales Ronim S.A., PCI's managing general agent, as a relief defendant.

The Commission also issued an update to its Investor Alert on life settlement investments. The Commission's Alert was published following the release of the Commission's Life Settlements Task Force on July 22, 2010. The Investor Alert is accessible through this link: http://www.sec.gov/investor/alerts/lifesettlements-bulletin.htm.

The United States Attorney's Office for the Eastern District of Virginia and the Fraud Section of the Department of Justice's Criminal Division also announced simultaneously a parallel criminal action against the defendants.

The Commission thanks the United States Attorney for the Eastern District of Virginia, the Fraud Section of the Department of Justice's Criminal Division, the Virginia Financial and Securities Fraud Task Force, the United States Postal Inspection Service, the Federal Bureau of Investigation, the Internal Revenue Service Criminal Investigation Division, the Costa Rican Unidad de Analisis Financiero, the Ontario Securities Commission, the Gibraltar Financial Services Commission, the Texas State Securities Board, The Texas Department of Insurance, and the New Jersey Bureau of Securities.

The Commission's investigation in this matter is ongoing. [SEC v. Provident Capital Indemnity, Ltd.,Minor Vargas Calvo, Jorge L. Castillo, and Relief Defendant Desarrollos Comerciales Ronim, S.A., Civil Action No. 3:11-cv-045 (E.D. Va.)] (LR-21818)

In the Matter of Eric J. Bur, CPA

On January 20, 2011, 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 (Order) against Eric J. Bur. The Order finds that on January 18, 2011, a Final Judgment was entered by consent against Bur, permanently enjoining him from future violations of Exchange Act Rules 13a-14 and 13b2-1, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 14(a) of the Exchange Act and Rules 12b-20, 13a-1, 14a-3, and 14a-9 thereunder, in the civil action entitled Securities and Exchange Commission v. NIC Inc., et al., Civil No. 2:11-cv-02016 (EFM-JPO) (D. Kansas). Bur was also ordered to pay a $75,000 civil money penalty.

The Order further finds that the Commission's civil complaint alleged, among other things, that NIC's former CEO (the CEO) received more than $1.18 million in undisclosed perquisites from at least 2002 to 2007; Bur, NIC's CFO and a member of NIC's disclosure committee, had responsibility, along with NIC's Chief Accounting Officer, for NIC's internal controls, books and records, and executive compensation disclosures in public filings; Bur was informed that the CEO was not submitting documentation supporting a business purpose for his expenses as required by NIC's policies; a subordinate raised concerns to Bur that some of the CEO's expenses were not business related; Bur permitted NIC to pay the CEO's expenses, which caused NIC's books, records and accounts to falsely characterize the CEO's perquisites as business expenses; and Bur was aware of the Commission's rules requiring the disclosure of perquisites in proxy statements and annual reports, yet he reviewed, signed, and/or certified NIC's filings with the Commission for 2002 through 2006, which failed to disclose the CEO's perquisites and contained false statements concerning the CEO's compensation.

The Order suspends Eric J. Bur from appearing or practicing before the Commission as an accountant, with the right to apply for reinstatement after one year. Bur consented to the issuance of the Order without admitting or denying the findings in the Order, except he admitted the entry of the injunction. (34-63743; AAE Rel. 3233)

In the Matter of Dohan + Company CPAs, Steven H. Dohan, and Nancy L. Brown

On January 20, 2011, the United States Securities and Exchange Commission (Commission) announced the issuance of an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 4C of the Securities Exchange Act of 1934 and Rule 102(e) of the Commission's Rules of Practice as to Dohan + Company CPAs, Steven H. Dohan, CPA, and Nancy L. Brown, CPA (Order).

The Order finds that Dohan + Company CPAs (Dohan + Co.), Dohan, and Brown (collectively, Respondents) engaged in improper professional conduct during their audit of International Commercial Television, Inc.'s (ICTV) 2007 financial statements. During fiscal year 2007, ICTV improperly recognized revenue and incorrectly recorded product returns, resulting in a material overstatement of revenue and net income. Respondents' audit of ICTV's 2007 financial statements failed to comply with numerous Public Company Accounting Oversight Board (PCAOB) auditing standards, according to the Commission's Order. These included failing to demonstrate the required level of proficiency, failing to exercise due care and professional skepticism, failing to obtain sufficient evidential matter, failing to plan the audit, and failing to supervise the audit staff. As a result, Dohan and Brown caused Dohan + Co. to issue an unqualified audit report for ICTV's 2007 Form 10-K/SB that incorrectly stated that the audit had been conducted in accordance with the PCAOB's auditing standards and that ICTV's financial statements were fairly reported in conformity with Generally Accepted Accounting Principles (GAAP). The Order thus finds that Respondents' conduct constituted improper professional conduct within the meaning of the federal securities laws.

Respondents, without admitting or denying the findings, consented to the issuance of the Order, which suspends Dohan and Brown from appearing or practicing before the Commission as accountants with the right to apply for reinstatement after three years from the date of the Order. The Order also censures Dohan + Co. pursuant to Rules 102(e)(1)(ii) and 102(e)(1)(iv)(B)(2) of the Commission's Rules of Practice and Section 4C of the Exchange Act. In consenting to the Order, Dohan + Co. is required to have its professional accounting and auditing personnel to undergo training in specific GAAP and PCAOB auditing standards, to retain an independent consultant to ensure that the firm implements the undertakings set forth in the Order, and to not accept new public company audit clients prior to the later of one year, or the date the independent consultant certifies compliance with the undertakings. The Order resolves the pending administrative proceeding as against Dohan + Co., Dohan, and Brown instituted on August 9, 2010. (See Release No. 34-62666) (Rel. 34-63740; AAE Rel. 3232; File No. 3-13997)

SELF-REGULATORY ORGANIZATIONS

Order Granting Approval of Proposed Rule Change

The Commission granted approval of a proposed rule change (SR-NYSEArca-2010-107) submitted by NYSE Arca, Inc. under Rule 19b-4 of the Securities Exchange Act of 1934 relating to listing and trading of shares of the AdvisorShares Active Bear ETF under NYSE Arca Equities Rule 8.600. Publication is expected in the Federal Register during the week of January 24. (Rel. 34-63737)

Order Granting Approval of Proposed Rule Change

The Commission approved a proposed rule change (SR-NYSE-2010-74), submitted by the New York Stock Exchange LLC, pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, to establish a twelve-month pilot program to create a bond trading license for member organizations that desire to trade only debt securities on the Exchange and establish a new class of NYSE market participants, "Bonds Liquidity Providers." Publication of the proposal is expected in the Federal Register during the week of January 24. (Release No. 34-63736)

Notice of Filing and Immediate Effectiveness of Proposed Rule Change

A proposed rule change filed by The NASDAQ Stock Market LLC (SR-NASDAQ-2011-007) to impose a quarterly maximum on the listing of additional shares fees payable by Closed-End Funds 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 January 24. (Rel. 34-63732)

Order Granting Approval of Proposed Rule Change

The Commission approved a proposed rule change filed by NASDAQ OMX BX, Inc. (SR-BX-2010-083) relating to the Price Improvement Period to permit an Initiating Participant to designate a PIP Surrender Quantity. Publication is expected in the Federal Register during the week of January 24. (Rel. 34-63731)

Immediate Effectiveness of a Proposed Rule Change

A proposed rule change filed by Financial Industry Regulatory Authority, Inc. extending the pilot period regarding the use of multiple MPIDs on FINRA facilities (SR-FINRA-2011-003) 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 January 24. (Rel. 34-63729).

Immediate Effectiveness of Proposed Rule Change

A proposed rule change filed by The NASDAQ Stock Market LLC regarding a clerical change to NASDAQ Rules (SR-NASDAQ-2011-009) 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 January 24. (Rel. 34-63728)

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