SEC NEWS DIGEST Issue 2003-09 January 14, 2003 COMMISSION ANNOUNCEMENTS ADDITIONAL PUBLIC APPEARANCE OF SENIOR COMMISSION OFFICIAL - JANUARY 2003 The following is an addition to the schedule for January 2003 of the public appearances of SEC officials. For additional information on events hosted by groups other than the Commission, please call the contact numbers listed. As events are subject to change, please confirm them with the SEC's Office of Public Affairs or the sponsoring organizations. When: Wednesday, Jan. 22 Who: Alan L. Beller, Director, Division of Corporation Finance What: American Bar Association Presidential Showcase Program Where: Park Hyatt Hotel, Washington, DC Contact: Marcia Yarbrough, (312) 988-5653 COMMISSION MEETINGS CHANGES IN THE MEETING: TIME CHANGE The closed meeting scheduled for Tuesday, Jan. 7, at 10:00 a.m. was changed to 10:45 a.m., and the closed meeting scheduled for Thursday, Jan. 9, at 9:00 a.m. was changed to 10:00 a.m. CHANGE IN THE MEETING: DELETION OF ITEM The following item will not be considered during the open meeting scheduled for Wednesday, Jan. 15, but will be considered at a later meeting to be announced: Regulation AC (Analyst Certification) 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) 942-7070. ENFORCEMENT PROCEEDINGS IN THE MATTER OF ROBERT SEARS An Administrative Law Judge has issued a default order in the Matter of Robert C. Sears. The Order Instituting Proceedings (OIP) alleged that a United States District Court permanently enjoined Sears from violating various antifraud provisions of the Securities Act of 1933, the Securities Exchange Act of 1934, and the Investment Advisers Act of 1940. The order finds the allegations in the OIP to be true and, pursuant to Section 203(f) of the Investment Advisers Act of 1940, bars Sears from acting as an investment adviser and from associating with an investment adviser. (Rel. IA-2099; File No. 3-10929) SEC INSTITUTES ADMINISTRATIVE AND CEASE-AND-DESIST PROCEEDINGS AGAINST FORMER ANDERSEN PARTNER JOHN CANEPA On Jan. 13, the Commission instituted administrative and cease-and- desist proceedings against John J. Canepa, a certified public accountant and former audit partner at Andersen, for his role in connection with the improper recognition of revenue by Anika Therapeutics, Inc. (Anika). In the Order Instituting Proceedings (Order), the Division of Enforcement alleges that Canepa caused Anika to improperly recognize approximately $1.3 million in revenue in 1999 and 2000 from certain sales of its product, Orthovisc, to a distributor, in violation of generally accepted accounting principles (GAAP). The Order further alleges that Canepa engaged in improper professional conduct within the meaning of Rule 102(e)(1) of the Commission's Rules of Practice, in connection with this same activity. According to the Order, Anika improperly recorded on its books and records and reported in periodic Commission filings revenue from three large "bill-and-hold" transactions with a distributor. In such transactions, the customer agrees to purchase goods, but the seller retains possession until a later date. Anika improperly recognized revenue at the time of invoicing and prior to delivery of the product to the customer, contrary to GAAP. The Order further alleges that Canepa reviewed and approved Anika's recognition of revenue from its bill-and- hold transactions. Moreover, the Order alleges that Canepa caused Anika to improperly recognize over $300,000 in revenue from a 1998 bill-and- hold transaction in its restatement of revenue in March 2000, which resulted in the company filing a second restatement in September 2001. A hearing will be held before an administrative law judge to determine whether Canepa caused violations of Sections 13(a) and 13(b)(2)(A) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 12b-20, 13a- 1, and 13a-13 thereunder, and whether he engaged in improper professional conduct within the meaning of Rule 102(e)(1) of the Commission's Rules of Practice, and if so, whether he should be ordered to cease and desist from future violations of the above provisions of the Exchange Act, and whether remedial sanctions should be entered against him, including a censure or temporary or permanent denial of the privilege of appearing or practicing before the Commission. In related proceedings, the Commission today instituted settled administrative proceedings against Anika and two of its former officers, J. Mellville Engle and Sean F. Moran. (Rel. 34-47167; AAE Rel. 1699; File No. 3-11006) SEC FILES FRAUD CHARGES AND OBTAINS PRELIMINARY INJUNCTION AND ASSET FREEZE AGAINST OPERATORS OF "ADVANCE FEE" SCHEME On Jan. 9, the Commission obtained preliminary injunctions and asset freezes from the United States District Court for the Central District of California to stop an ongoing type of "advance fee" securities fraud. The relief was obtained against all defendants in an emergency lawsuit the Commission filed on December 30, 2002, which charged Leon Jordan II, Jordan Enterprises, LLC, Jordan Holdings, LLC, Raymond Brown, and Ray Brown & Associates with securities fraud and with operating as unregistered broker-dealers. The Commission's complaint also named Jordan's wife, Sheila S. Jordan, as a relief defendant who was unjustly enriched by receiving proceeds from the defendants' fraudulent scheme. Contemporaneous with the filing of the lawsuit on December 30, the Commission sought and obtained from the Court an order that, among other things, temporarily froze the assets of the defendants and relief defendant, temporarily restrained the defendants from continuing their violations of the securities laws, and ordered the defendants and relief defendant to retain relevant documents. In its order on January 9, the Court granted similar relief to continue until a hearing on the merits, finding that the Commission had demonstrated a strong likelihood that it will prevail at trial on the merits of the case. The Court also ordered the defendants and relief defendant to provide discovery on an expedited basis and to prepare and deliver to the Commission a detailed and complete schedule of all of their personal assets and a description of the sources of all funds they have obtained from the conduct alleged in the complaint. The Commission's complaint alleges that since at least December 2001, the defendants have fraudulently raised at least $850,000 by offering unwitting individuals and entities seeking venture capital (the "participants") the opportunity, for a fee, to receive proceeds from bond offerings that do not exist. According to the complaint, the defendants have falsely represented to participants that: (1) they are the exclusive coordinators and intermediaries of several multi-billion dollar bond offerings in which well known large financial institutions are involved; (2) in exchange for a fee (denominated as a "due diligence" fee), the defendants will assist the participants in obtaining the proceeds of a specific bond offering; and (3) the participants' fees will be refunded if the defendants are unable to secure participation in the proceeds of the bond offering for the participants. The complaint alleges that the well-known financial institutions purportedly involved in the defendants' bond offerings have in fact disclaimed any involvement in any bond offering with the defendants, and that there is no evidence that any of the bond offerings exist, or have ever existed. The complaint further alleges that none of the participants have received any funding from the defendants, that the defendants have not returned any portion of the participants' fees, and that the defendants are continuing to solicit funds from other potential participants. The Commission's complaint charges the defendants with committing securities fraud in violation of Section 17(a) of the Securities Act of 1933, and with operating as unregistered broker-dealers in violation of Section 15(a)(1) of the Securities Exchange Act of 1934. In addition to the relief already ordered by the Court, the Commission is requesting the Court to enjoin the defendants from violating the federal securities laws, order them to disgorge ill-gotten gains with interest, and impose civil penalties against them. The Commission is also requesting the Court to order relief defendant Sheila S. Jordan to disgorge any illegally obtained funds she received from the defendants. [SEC v. Jordan Enterprises LLC, et al., No. CV 02-9889 PA, CTx, C.D. Cal.] (LR- 17925) RICHARD WAAGE AND HAARLEM UNIVERSAL CORPORATION ENJOINED IN "TRI-WEST INVESTMENT CLUB" PRIME BANK SCHEME On Dec. 19, 2002, federal judge William H. Alsup, sitting in San Francisco, issued a judgment against Richard Alyn Waage and Haarlem Universal Corporation for violating the federal securities laws in an investment scam known as the "Tri-West Investment Club." Waage, a Canadian citizen, was recently extradited from Costa Rico to the United States to face related criminal charges in federal court in Sacramento. In the civil action brought by the Commission, the court enjoined Waage from future violations of the antifraud and registration provisions of the securities laws, and ordered him to disgorge $58 million in proceeds, plus interest, and pay a civil penalty of $120,000. Haarlem, a corporation based in Panama, was named in the action as a relief defendant and was also ordered to disgorge $58 million. The Commission's complaint alleged that during 1999 and 2000, Waage used the Internet to solicit investors for the Tri-West Investment Club. The club was promoted as an investment program to trade in fictitious "prime bank" securities. Investors were encouraged to make checks payable to Haarlem and send the checks to various locations in California, Belize, and Costa Rica. The Commission alleged that the program was a fiction, designed only to enrich Waage. Neither Waage nor Haarlem responded to the complaint in the action. The court granted judgment upon default against each defendant. The Court requested and received assistance from the governments of Costa Rica, Panama and Mexico. The Commission thanks the governments of Canada and Latvia and the Federal Bureau of Investigation and United States Attorney for their assistance in the matter. The Commission's action against Waage alleged violations of Sections 5(a) and (c) and Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. [SEC v. Waage, Case No. C-01-3386 WHA, N.D. Cal.] (LR-17926) WILLIAM GRABSKE, FORMER CEO OF INDUS INTERNATIONAL, ENJOINED IN FINANCIAL FRAUD CASE On Dec. 20, 2002, federal judge Charles R. Breyer, sitting in San Francisco, issued a judgment against William Grabske, former chief executive officer of Indus International Corporation. The court enjoined Grabske, a resident of Tiberon, California, from future violations of the antifraud provisions of the securities laws, prohibited him from serving as a director or officer of any public company, and ordered him to pay a $50,000 penalty. The civil judgment followed a criminal sentencing on Dec. 19, 2002, where the court ordered Grabske to serve 27 months in prison, followed by three years supervised release and a $12,500 fine. A federal jury convicted Grabske on charges of securities fraud, conspiracy to commit securities fraud, and mail and wire fraud. The evidence at trial established that Mr. Grabske engaged in a scheme to overstate Indus' revenue and earnings in the third quarter of 1999 by misreporting revenues from two software sales transactions. Grabske directed other Indus employees to write "side letters" to the two customers, giving each a right to cancel their contracts, and to conceal those side letters from Indus' accounting personnel. The Commission brought a civil action against Grabske for misrepresenting Indus' financial results in the company's quarterly filings, causing the company to make false accounting entries, and making false statements to the company's chief financial officer and its outside auditors. The court granted summary judgment for the Commission following Grabske's criminal conviction. The Commission's action also named Robert Pocsik and Ralph Widmaier as defendants. Pocsik, formerly chief administrative officer at Indus, died while the proceedings were pending. Widmaier, formerly a vice president of sales at Indus, consented to the entry of a judgment in which he was enjoined from future violations of the antifraud provisions, ordered to disgorge $41,000 in trading profits and interest, and ordered to pay a $15,000 penalty. The Commission thanks the Federal Bureau of Investigation and United States Attorney for their assistance in the matter. The Commission's action against Grabske alleged violations of Sections 10(b), 13(a) and 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-13, 13b-2-1, 13b-2-2. [SEC v. Grabske, Case No. C-01-3355 CRB, N.D. Cal.] (LR-17927) CIVIL ACTION AGAINST SANDRA SIMPSON AND DAPHNE PATTEE The Commission announced that on Jan. 9 it filed an Application for an Order Directing Compliance With an Order of the Securities and Exchange Commission in the United States District Court for the Eastern District of Michigan. The defendants in this action, Sandra K. Simpson and Daphne Ann Pattee, were formerly associated with the Flint, Michigan office of Prudential Securities, Inc. In its May 14, 2002 Opinion and Order Imposing Remedial Sanctions and Notice of Finality, the Commission found, among other things, that Simpson and Pattee defrauded a number of their elderly and unsophisticated brokerage customers and wrongfully profited from their fraudulent scheme. The Commission's Application alleges that the defendants, Simpson and Pattee, failed to comply with the terms of the Commission's May 14, 2002 Opinion and Order, which, among other things, required that: (a) Simpson and Pattee jointly and severally pay disgorgement in the amount of $33,769.21, plus prejudgment interest, (b) Simpson pay a $100,000 civil penalty; and (c) Pattee pay a $50,000 civil penalty. In this action, the Commission seeks a federal district court order requiring Simpson and Pattee to comply with the Commission's Order. [SEC v. Sandra K. Simpson and Daphne Ann Pattee, Civil Action No. 03-70125, USDC for the Eastern District of Michigan] (LR-17928) SEC CHARGES FORMER DAY-TRADING PRINCIPALS WITH SECURITIES FRAUD; OTHERS CHARGED WITH FRAUD OR VIOLATING RECORDKEEPING AND REPORTING RULES DEFENDANTS AGREE TO PAY TOTAL OF $70 MILLION The Commission today charged Sheldon Maschler, Jeffrey A. Citron, Michael McCarty, Erik Maschler, and Heartland Securities Corp. with participating in an extensive fraudulent scheme involving the Nasdaq Stock Market's Small Order Execution System (SOES) from 1993 to June 2001. These defendants and others have agreed to pay over $70 million in penalties and disgorgement to settle the matter. Of the total penalties, Sheldon Maschler will pay approximately $29.2 million and Citron will pay approximately $22.5 million -- among the largest penalty amounts the SEC has ever obtained from individuals. In a complaint filed in U.S. District Court for the Southern District of New York, the SEC charged Sheldon Maschler, 58, Citron, 32, McCarty, 39, and Erik Maschler, 32, with securities fraud and violations of the Commission's broker-dealer books and records and reporting provisions. Sheldon Maschler, Citron, McCarty, and Erik Maschler devised and orchestrated the unlawful SOES trading scheme at the former Datek Securities Corp. from 1993 to March 1998. Maschler, McCarty, and Erik Maschler continued the scheme from April 1998 through June 2001 while in control of Heartland, which had purchased Datek Securities' day-trading business in March 1998. "Today's action and hard-hitting penalties reinforce the high degree of integrity required of broker-dealers and persons associated with them," said Antonia Chion, Associate Director of Enforcement at the SEC. Until mid-2001, NASD rules restricted use of the SOES system to small retail customer orders, and prohibited broker-dealers from using SOES to trade for their own accounts. According to the complaint, Sheldon Maschler, Citron, McCarty, and Erik Maschler accessed the SOES system to execute millions of unlawful proprietary trades, generating tens of millions of dollars in illegal profits. These defendants hid their fraudulent use of the SOES system from regulators by allocating proprietary trades to dozens of nominee customer accounts, creating fictitious books and records, and filing false reports with the SEC. The SEC's complaint also charged Sheldon Maschler and McCarty in connection with a separate, yet similar, fraudulent scheme involving the conversion of three New York savings and loan institutions from mutual ownership to stock ownership. In violation of federal and state banking regulations, Maschler and McCarty entered into agreements with numerous depositors to obtain their subscription rights and then fraudulently used those rights to purchase shares of the banks' initial public offerings. Maschler and McCarty later sold the conversion stock on the open market, realizing illegal profits of $1,788,472. Defendants Raft Investments Inc. and JES Management Corp., a corporation owned by Sheldon Maschler, aided and abetted the bank conversion scheme by providing the funds used to obtain the depositors' subscription rights. The SEC's Complaint The SEC's federal court complaint includes the following allegations: * The SOES system, established by the NASD in 1984, was an automated trading system designed to benefit small investors by providing automatic execution of small Nasdaq orders at the best available price. * From at least 1993 to March 1998, defendants Sheldon Maschler, Citron, McCarty, and Erik Maschler controlled Datek Securities through its Manhattan branch, then a day-trading operation that was the profit center for the entire firm. The firm used a day-trading software known as "Watcher," the speed and features of which enabled its traders to react quickly to market activity. Although there were other means of executing securities transactions with Nasdaq market makers, only SOES offered automatic execution, thereby increasing the timing advantage offered by Watcher. * Instead of using SOES for its lawful purpose -- to execute trades on behalf of individual investors -- defendants Sheldon Maschler, Citron, McCarty, and Erik Maschler engaged in a massive fraudulent scheme to execute millions of proprietary trades on the SOES system. * To hide their proprietary trading, defendants Sheldon Maschler, Citron, McCarty, and Erik Maschler established dozens of nominee accounts, and paid nominees a guaranteed and fixed rate of return in exchange for the use of their identities and complete discretionary trading authority. * From 1993 to 1994, at the direction of Sheldon Maschler, Citron, McCarty, and Erik Maschler, Datek Securities employees manually allocated Datek Securities' trades among accounts after the close of the market. Beginning in early 1994, the unlawful allocation process was automated and carried out through a sophisticated software program developed for the firm and known as "Wire." Wire dramatically enhanced defendants' ability to conceal their proprietary SOES trading. The software was ultimately refined to allocate trades among nominee customer accounts as the trades occurred. * Beginning in 1997, Sheldon Maschler and Citron began funding nominee accounts with profits generated from the SOES scheme. Defendant Raft Investments Inc., a corporation then controlled by Sheldon Maschler and Citron, provided at least $50 million to fund more than 125 nominee accounts at Datek Securities. * The unlawful proprietary trading scheme resulted in substantial profits, the majority of which were paid to Sheldon Maschler and Citron. Defendants Aaron Elbogen, 54, then Datek Securities' chief executive officer, and Moishe Zelcer, 56, the firm's former chief compliance officer and financial operations principal, aided and abetted certain books and records and reporting violations by falsely classifying payments of the firm's trading profits to entities controlled by Sheldon Maschler and Citron, and by failing to disclose that Sheldon Maschler and Citron were control persons of the firm. * On March 30, 1998, Datek Securities sold its day-trading operations to Heartland, a registered broker-dealer then owned by Erik Maschler and Elbogen. Sheldon Maschler, McCarty, and Erik Maschler controlled Heartland, and continued the unlawful SOES trading scheme from April 1998 through June 2001. Nearly all of the nominee accounts at Datek Securities were transferred to Heartland, and the methods used to conceal the scheme continued unabated. The Settlement Defendants have agreed to settle this matter without admitting or denying the allegations in the complaint. The settlement terms are subject to court approval. Sheldon Maschler, Citron, McCarty, Erik Maschler, and Heartland have consented to final judgments permanently enjoining each from violating the antifraud provisions of the federal securities laws: Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. They have also agreed to be enjoined from aiding and abetting violations of certain broker-dealer books and records and reporting provisions of the Exchange Act. In addition, Sheldon Maschler has agreed to pay $29,201,808, Citron $22,462,929, Heartland $7,000,000, McCarty $1,497,529, and Erik Maschler $5,990,114 in civil penalties. Sheldon Maschler also has agreed to pay $2,355,304 and McCarty $69,664 in disgorgement of profits and prejudgment interest for their participation in the savings and loan scheme. Elbogen and Zelcer have consented to final judgments enjoining each from aiding and abetting violations of certain books and records and reporting provisions of the Exchange Act. In addition, Elbogen has agreed to pay $1,422,652 and Zelcer $150,000 in civil penalties. Raft Investments Inc. and JES Management Corp. have consented to final judgments enjoining each from aiding and abetting violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Defendants have also agreed to settle administrative proceedings that the SEC will institute based on the entry of the final judgments. Sheldon Maschler, Citron, McCarty, and Erik Maschler have agreed to the institution of proceedings and SEC orders that permanently bar each from associating with any broker or dealer. Heartland has agreed to an SEC order censuring the firm. Elbogen and Zelcer have agreed to SEC orders barring each from associating with any broker or dealer, with the right to reapply after two years in non-supervisory and non-proprietary capacities. Finally, the SEC today acknowledged the assistance provided by the Office of the U.S. Attorney for the Southern District of New York and the Federal Bureau of Investigation's New York Field Office in the investigation of this matter. [SEC v. SHELDON MASCHLER, JEFFREY A. CITRON, MICHAEL MCCARTY, ERIK MASCHLER, HEARTLAND SECURITIES CORPORATION, AARON ELBOGEN, MOISHE ZELCER, RAFT INVESTMENTS, INC., AND JES MANAGEMENT CORPORATION, Civil Action No. 03 CV 0264 (S.D.N.Y.)] (LR- 17929); (Press Rel. 2003-5) SEC CHARGES JOSHUA LEVINE IN CONNECTION WITH FALSIFICATION OF RECORDS The Commission today filed a civil action against Joshua M. Levine for his role in developing software programs used by the former Datek Securities Corporation to conceal its improper trading activities on the Nasdaq Stock Market's Small Order Execution System (SOES) from 1994 to 1997. Levine, 34, was the primary software developer for the firm during that period. Levine has agreed to settle the charges by paying a $1 million penalty and consenting to an injunction for aiding and abetting violations of certain broker-dealer books and records provisions of the federal securities laws. In a complaint filed in U.S. District Court for the Southern District of New York, the Commission alleged that Levine knowingly developed, implemented, and refined software programs that substantially assisted Datek Securities in the falsification and fabrication of its books and records. The complaint alleged that: At the time, NASD rules prohibited broker-dealers from using the SOES system to trade for their own accounts. Nevertheless, Datek Securities executed millions of proprietary trades using the SOES system. Initially, the firm concealed its proprietary trading by manually allocating the trades among dozens of nominee accounts at the end of each day. After the trades were allocated, the information was used to generate additional firm books and records that falsely recorded the proprietary trades as those of individual retail customers. Levine aided and abetted the firm's scheme to falsify its books and records. In 1994, Levine, with assistance from others, developed a software program known as "Wire" that automated the unlawful trade allocation process. Among other things, Levine programmed Wire to give the firm's books and records the appearance that they complied with federal securities laws and NASD rules. Levine continually made refinements to Wire. By 1995, Levine had developed "Real Time Wire," which allocated trades among nominee customer accounts as the trades occurred. Thus, Levine created and refined software programs that falsely recorded the proprietary securities transactions as customer transactions. Levine has agreed to settle this matter, without admitting or denying the allegations in the complaint, by consenting to a final judgment ordering him to pay a $1 million penalty and permanently enjoining him from aiding and abetting violations of the following broker-dealer books and records provisions: Section 17(a)(1) of the Securities Exchange Act of 1934 and Rules 17a-3(a)(1), 17a-3(a)(2), 17a-3(a)(3), and 17a-3(a)(7) promulgated thereunder. The settlement terms are subject to court approval. [SEC v. JOSHUA M. LEVINE, Civil Action No. 03 CV 0265, SDNY] (LR-17930) INVESTMENT COMPANY ACT RELEASES ROBERTSON STEPHENS, INC., ET AL. The Commission has issued a temporary order to Robertson Stephens, Inc., et al., under Section 9(c) of the Investment Company Act. The temporary order exempts applicants from Section 9(a) of the Act, with respect to a securities-related injunction, until the Commission takes final action on the application for a permanent order. A notice has been issued giving interested persons until Feb. 4, 2003 to request a hearing on the application filed by applicants for a permanent order under Section 9(c) of the Act. (Rel. IC-25887 - Jan. 10) HOLDING COMPANY ACT RELEASES TXU US HOLDINGS COMPANY A notice has been issued giving interested persons until Feb. 4, 2003, to request a hearing on a proposal by TXU US Holdings Company (TXU Holdings), a Texas corporation and a subsidiary of TXU Corporation, an exempt holding company under Section 3(a)(1) of the Act. TXU Holdings is engaged in a restructuring to comply with Texas electric-utility restructuring legislation. TXU Holdings requests an order for an exemption under Section 3(a)(1) of the Act on the basis that TXU Holdings and Oncor Electric Delivery Company (Oncor), its only public- utility subsidiary, are both incorporated in Texas, the state in which Oncor conducts all of its public-utility operations. (Rel. 35-27637) SELF-REGULATORY ORGANIZATIONS PROPOSED RULE CHANGES A proposed rule change (SR-Phlx-2002-79) filed by the Philadelphia Stock Exchange relating to its Application Fee and ETP Application Fee has been filed under Section 19(b)(1) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47148) The Chicago Stock Exchange file a proposed rule change (SR-CHX-2001-33) relating to cancellation of orders otherwise eligible for automatic execution. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47152) The Commission published for comment a proposed rule change (SR-PCX-2002- 09) filed by the Pacific Exchange, Inc. to transfer the responsibility for making certain decisions with respect to Auto-Ex from the Options Floor Trading Committee to two floor officials. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47165) The American Stock Exchange filed a proposed rule change (SR-Amex-2002- 102) under Rule 19b-4 that would create a new percentage order type to be called "Immediate Execution or Cancel Election." Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47177) ACCELERATED APPROVAL OF A PROPOSED RULE CHANGE The Commission has granted accelerated approval of a proposed rule change (SR-Amex-2002-117) by the American Stock Exchange to extend for an additional 90 days its pilot program relating to facilitation cross transactions. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47153) The New York Stock Exchange filed a proposed rule change (SR-NYSE-2002- 63) amending certain Exchange rules to permit single stock futures hedging by NYSE specialists. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47160) IMMEDIATE EFFECTIVENESS OF PROPOSED RULE CHANGES A proposed rule change filed by National Association of Securities Dealers (SR-NASD-2002-178) relating to short interest reporting has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47158) A proposed rule change submitted by the Chicago Stock Exchange (SR-CHX- 2002-39) relating to changes to its membership dues and fees schedule has become immediately effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34- 47163) A proposed rule change (SR-CBOE-2002-73) filed by the Chicago Board Options Exchange relating to pass-through of periodic license or royalty fees to Designated Primary Market-Makers has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47169) A proposed rule change (SR-CBOE-2002-72) filed by the Chicago Board Options Exchange relating to exchange fees for Designated Primary Market- Makers with respect to options on the Russell 2000r Index has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47170) A proposed rule change (SR-CBOE-2002-71) filed by the Chicago Board Options Exchange to reduce certain telecommunication fees has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47171) A proposed rule change (SR-NYSE-2002-66) filed by the New York Stock Exchange relating to fee increases and new fees applicable to members and member organizations has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34- 47174) A proposed rule change (SR-CHX-2002-38) filed by the Chicago Stock Exchange relating to membership dues and fees has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47175) A proposed rule change (SR-NASD-2003-01) filed by the National Association of Securities Dealers relating to refunds of member surcharges in arbitration has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34- 47176) APPROVAL OF PROPOSED RULE CHANGES The Commission approved a proposed rule change (SR-NYSE-2001-46) and Amendment Nos. 1 and 2 thereto submitted by the New York Stock Exchange pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 amending Section 804 to the NYSE Listed Company Manual and NYSE Rule 499 regarding the Exchange's appeal procedures for delisting an issuer. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47161) The Commission approved a proposed rule change (SR-BSE-2002-04) submitted by the Boston Stock Exchange to amend the Exchange's Minor Rule Violation Plan. Publication of the proposal is expected in the Federal Register during the week of Jan. 13. (Rel. 34-47164) DELISTING GRANTED An order has been issued granting the application of the American Stock Exchange to strike from listing and registration the Common Stock, $.001 par value, of Security Associates International, Inc., at the opening of business on Jan. 14. (Rel. 34-47179) SECURITIES ACT REGISTRATIONS The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue. Registration statements may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . S-8 FONAR CORP, 110 MARCUS DR, MELVILLE, NY, 11747, 5166942929 - 5,000,000 ($5,150,000.00) Equity, (File 333-102463 - Jan. 13) (BR. 01) N-2 PIMCO CORPORATE OPPORTUNITY FUND, 10 ($250,000.00) Equity, (File 333-102464 - Jan. 13) (BR. 22) S-8 US MICROBICS INC, 5922 B FARNSWORTH COURT, CARLSBAD, CA, 92008, 7609181860 - 10,000,000 ($400,000.00) Equity, (File 333-102480 - Jan. 13) (BR. 01) S-8 TESSA COMPLETE HEALTH CARE INC/GA, PMB 202, 11575 SW PACIFIC HIGHWAY, TIGARD, OR, 97223, 503-750-5633 - 50,000,000 ($12,500.00) Equity, (File 333-102481 - Jan. 13) (BR. 09) S-8 TESSA COMPLETE HEALTH CARE INC/GA, PMB 202, 11575 SW PACIFIC HIGHWAY, TIGARD, OR, 97223, 503-750-5633 - 50,000,000 ($12,500.00) Equity, (File 333-102482 - Jan. 13) (BR. 09) S-3 LIGAND PHARMACEUTICALS INC, 10275 SCIENCE CENTER DRIVE, SAN DIEGO, CA, 92121-1117, 8585507500 - 25,149,025 ($155,250,000.00) Debt Convertible into Equity, (File 333-102483 - Jan. 13) (BR. 01) S-4 MIDWEST BANC HOLDINGS INC, 501 W NORTH AVE, MELROSE PARK, IL, 60160, 7088651053 - 0 ($59,432,000.00) Equity, (File 333-102484 - Jan. 13) (BR. 07) S-3 CELLEGY PHARMACEUTICALS INC, 349 OYSTER POINT BLVD., SUITE 200, SO. SAN FRANCISCO, CA, 94080, 6506262200 - 2,200,000 ($10,406,000.00) Equity, (File 333-102485 - Jan. 13) (BR. 01) S-3 INSIGNIA SYSTEMS INC/MN, 5025 CHESHIRE LANE NORTH, PLYMOUTH, MN, 55446, 7633926200 - 1,101,732 ($10,934,690.00) Equity, (File 333-102486 - Jan. 13) (BR. 02) N-2 RYDEX CAPITAL PARTNERS SPHINX FUND, 9601 BLACKWELL ROAD, SUITE 500, ROCKVILLE, MD, 20850, 0 ($25,000,000.00) Equity, (File 333-102487 - Jan. 13) (BR. 16) S-3D HIBERNIA CORP, 313 CARONDELET ST, NEW ORLEANS, LA, 70130, 5045335333 - 0 ($69,405,000.00) Equity, (File 333-102488 - Jan. 13) (BR. 07) S-3 STRUCTURED ASSET SECURITIES CORP, 3 WORLD FINANCIAL CENTER, NEW YORK, NY, 10285, 2125267000 - 1 ($1,000,000.00) Equity, (File 333-102489 - Jan. 13) (BR. 05) S-11 WACHOVIA PREFERRED FUNDING CORP, 301 SOUTH COLLEGE ST, CHARLOTTE, NC, 28288, 7043746558 - 12,000,000 ($300,000,000.00) Equity, (File 333-102490 - Jan. 13) (BR. 08) N-2 FIRST AMERICAN MINNESOTA MUNICIPAL INCOME FUND II INC, 800 NICOLLETT MALL, MINNEAPOLIS, MN, 55402, 6123031606 - 80 ($2,000,000.00) Equity, (File 333-102491 - Jan. 13) (BR. 16) SB-1 CFB BANCSHARES INC, P O BOX 1189, WARBURG, TN, 37887, 4233462265 - 291,667 ($7,000,008.00) Equity, (File 333-102492 - Jan. 13) (BR. ) S-3 NYFIX INC, 333 LUDLOW STREET, STAMFORD, CT, 06902, 2034258000 - 210,000 ($972,300.00) Equity, (File 333-102493 - Jan. 13) (BR. 03) N-2 GABELLI CONVERTIBLE & INCOME SECURITIES FUND INC, ONE CORPORATE CENTER, RYE, NY, 10580, 2123098408 - 40,100 ($3,500,000.00) Equity, (File 333-102494 - Jan. 13) (BR. 22) RECENT 8K FILINGS Form 8-K is used by companies to file current reports on the following events: Item 1. Changes in Control of Registrant. Item 2. Acquisition or Disposition of Assets. Item 3. Bankruptcy or Receivership. Item 4. Changes in Registrant's Certifying Accountant. Item 5. Other Materially Important Events. Item 6. Resignations of Registrant's Directors. Item 7. Financial Statements and Exhibits. Item 8. Change in Fiscal Year. Item 9. Regulation FD Disclosure. The following companies have filed 8-K reports for the date indicated and/or amendments to 8-K reports previously filed, responding to the item(s) of the form specified. 8-K reports may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . STATE 8K ITEM NO. NAME OF ISSUER CODE 1 2 3 4 5 6 7 8 9 DATE COMMENT ------------------------------------------------------------------------------------ 3W CYBER LOGISTICS INC NV X 01/13/02 ABFS MORT LOAN TRUST 2002-4 MORT PASS DE X X 09/26/02 ABRAXAS PETROLEUM CORP NV X 01/13/03 ACORN PRODUCTS INC DE X X 01/07/03 AIRPLANES LTD DE X 01/13/03 APACHE CORP DE X X X 01/13/03 APPLEBEES INTERNATIONAL INC DE X X 01/13/03 ARV ASSISTED LIVING INC DE X X 01/10/03 ARV ASSISTED LIVING INC DE X X 01/10/03 ASIAN STAR DEVELOPMENT INC /NV NV X X X 12/30/02 ATLANTIC CITY ELECTRIC CO NJ X X 01/13/03 BANC OF AMERICA COMMERCIAL MORTGAGE I DE X X 01/13/03 BANK OF GRANITE CORP DE X X 01/13/03 BANKATLANTIC BANCORP INC FL X 01/13/03 BB&T CORP NC X 12/31/02 BEAR STEARNS COMPANIES INC DE X X 01/08/03 BFC FINANCIAL CORP FL X X 01/06/03 BORLAND SOFTWARE CORP DE X X 01/09/03 BOUNCEBACKTECHNOLOGIES COM INC MN X 01/10/03 BROADWING INC OH X 01/13/03 CELLEGY PHARMACEUTICALS INC CA X X 01/13/03 CENTER TRUST INC MD X X 01/13/03 CENTURYTEL INC LA X 09/30/02 CLASSICA GROUP INC NY X X 12/31/02 AMEND COINSTAR INC DE X X 01/13/03 COLUMBIA BANCORP \OR\ OR X X 01/13/03 COMMSCOPE INC DE X 01/13/03 COMMUNITY BANCORP /VT VT X 01/10/03 CONCEPTS DIRECT INC DE X 01/13/03 CONECTIV DE X X 01/13/03 CONSOLIDATED CAPITAL INSTITUTIONAL PR CA X X 12/27/02 CONSTELLATION BRANDS INC DE X 01/13/03 DIOMED HOLDINGS INC NV X X 01/13/03 DSP GROUP INC /DE/ DE X X 01/13/03 AMEND EMERSON ELECTRIC CO MO X 01/13/03 EMMIS COMMUNICATIONS CORP IN X 01/13/03 ESCO TECHNOLOGIES INC MO X X 01/13/03 ESTEE LAUDER COMPANIES INC DE X 01/13/03 FAR EAST ENERGY CORP X 12/30/02 FEDERATED DEPARTMENT STORES INC /DE/ DE X 01/13/03 FERRO CORP OH X 01/10/03 FIBERNET TELECOM GROUP INC\ DE X X 01/10/03 FIDELITY NATIONAL INFORMATION SOLUTIO DE X X 10/29/02 AMEND FIRST CONSULTING GROUP INC DE X X 01/10/03 FRANKLIN BANCORP INC MI X X 01/13/03 FX ENERGY INC NV X 01/13/03 GATEWAY INTERNATIONAL HOLDINGS INC NV X 10/23/02 AMEND GEOWORKS /CA/ DE X X 01/08/03 GLATFELTER P H CO PA X 01/13/03 GOAMERICA INC DE X X X 01/09/03 GROUP MANAGEMENT CORP DE X X X 01/13/03 AMEND GS MORTGAGE SECURITIES CORP DE X X 01/10/03 GS MORTGAGE SECURITIES CORP MORT PAS DE X X 11/08/02 AMEND GST NETWORK FUNDING INC DE X 01/10/03 GST TELECOMMUNICATIONS INC DE X 01/10/03 GST USA INC DE X 01/10/03 HALLIBURTON CO DE X 01/13/03 IASIS HEALTHCARE CORP DE X X 01/13/03 IDINE REWARDS NETWORK INC DE X X 12/24/02 IMH ASSETS CORP IMPAC CMB TRUST SERIE DE X 12/27/02 IMH ASSETS CORP IMPAC CMB TRUST SERIE DE X X X 12/27/03 IMH ASSETS CORP IMPAC CMB TRUST SERIE DE X X 12/27/02 INCOME GROWTH PARTNERS LTD X CA X 01/06/03 INNSUITES HOSPITALITY TRUST OH X X 01/06/03 INTEGRATED TELECOM EXPRESS INC/ CA X X 01/09/03 INTERLAND INC /MN/ MN X X 01/10/03 INTERNATIONAL LEASE FINANCE CORP CA X 01/08/03 INTERNET SECURITY SYSTEMS INC/GA DE X X 10/30/02 AMEND KEYSPAN CORP NY X X 01/13/03 LABARGE INC DE X 01/13/03 AMEND LANGER INC NY X X 01/13/03 LCA VISION INC DE X X 01/13/03 LEVI STRAUSS & CO DE X X 01/13/03 LOCATEPLUS HOLDINGS CORP X X 01/08/03 MITCHAM INDUSTRIES INC TX X X 12/30/02 MS STRUCTURED SATURNS SERIES 2002-1 DE X 01/01/03 NATIONAL CITY CORP DE X 01/13/03 NAVIGATION TECHNOLOGIES CORP DE X 12/30/02 NAVISITE INC DE X X 12/31/02 NEFF CORP DE X 12/31/02 NETWOLVES CORP NY X 01/08/03 NETWORK ENGINES INC DE X X X 12/27/02 NEW CENTURY EQUITY HOLDINGS CORP DE X X 01/10/03 NTL INC DE X 01/13/03 OFFSHORE LOGISTICS INC DE X X 01/10/03 PANERA BREAD CO DE X 01/13/03 PEOPLES FINANCIAL SERVICES CORP/ PA X 01/13/03 PEPCO HOLDINGS INC DE X X 01/13/03 PORTOLA PACKAGING INC DE X 01/10/03 PROTECTION ONE INC DE X X 01/09/03 ROYAL PRECISION INC DE X X 02/13/03 SAMESSA HOLDING CORP NV X 01/13/03 SEMOTUS SOLUTIONS INC NV X X 12/31/02 SHELTER PROPERTIES I LTD PARTNERSHIP SC X X 12/27/02 SMITH INTERNATIONAL INC DE X X 01/13/03 STRUCTURED ASSET MORTGAGE INVESTMENTS DE X 12/30/02 SYNERGY FINANCIAL GROUP INC X X 01/10/03 TAUBMAN CENTERS INC MI X X 01/13/03 TECHTEAM GLOBAL INC DE X X 01/13/03 TEL VOICE COMMUNICATIONS INC NV X 01/10/03 UGOMEDIA INTERACTIVE CORP NV X 01/08/03 UNITED BANCSHARES INC/OH OH X 01/13/03 UNIVERSAL ACCESS GLOBAL HOLDINGS INC DE X 01/13/03 UNIZAN FINANCIAL CORP OH X X 01/13/03 UNUMPROVIDENT CORP DE X X 01/13/03 WELLS FARGO ASSET SECURITIES CORP DE X X 01/13/03 WELLS FARGO ASSET SECURITIES CORP DE X X 01/13/03 WESTAR ENERGY INC /KS KS X X 01/09/03 WORONOCO BANCORP INC DE X X 01/10/03