SEC NEWS DIGEST Issue 2005-110 June 9, 2005 COMMISSION ANNOUNCEMENTS ORDER OF SUSPENSION OF TRADING ENTERED AGAINST U.S. WINDFARMING, INC. The Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934, of over-the-counter trading in the securities of U.S. Windfarming, Inc. (Windfarming), a company with offices in Orland Park, Illinois, at 9:30 a.m. EDT on June 9, 2005, and terminating at 11:59 p.m. EDT on June 22, 2005. The Commission temporarily suspended trading in the securities of Windfarming because of concerns that the company may have unjustifiably relied on Rule 504 of Regulation D of the Securities Act of 1933 in conducting unlawful distributions of their securities that failed to comply with the resale restrictions of Regulation D. Further, the Commission questions the following company disclosures: (1) statements regarding the company’s president’s background that were posted on Windfarming’s website; and (2) statements in press releases that remain posted on the company’s website regarding financial projections and business agreements that Windfarming purportedly has with other entities. (Rel. 34-51806) RULES AND RELATED MATTERS REGULATION NMS ADOPTED The Securities and Exchange Commission has adopted Regulation NMS, which includes the following rules and amendments to the joint industry plans for disseminating market information: (1) Rule 611 of Regulation NMS, which requires trading centers to obtain the best price for investors when such price is represented by automated quotations that are immediately accessible; (2) Rule 610 of Regulation NMS, which promotes fair and non- discriminatory access to quotations through a private linkage approach and establishes a limit on access fees to harmonize the pricing of quotations across different trading centers; (3) Rule 612 of Regulation NMS, which establishes a uniform pricing increment of no less than one penny for orders, quotations, or indications of interest equal to or greater than $1.00 per share, to provide greater price transparency and consistency; (4) Amendments to Rules 11Aa3-1 and 11Ac1-2 under the Securities Exchange Act of 1934 (redesignated as Rule 601 and 603 of Regulation NMS), which update the requirements for consolidating, distributing, and displaying market information, and amendments to the joint industry plans for disseminating market information that modify the formulas for allocating plan revenues and broaden participation in plan governance; and (5) Redesignation of the national market system (“NMS”) rules adopted under the Exchange Act and inclusion of those rules, as well as Rules 610, 611, and 612, under Regulation NMS. Regulation NMS also includes a separate definitional rule that (i) retains most of the definitions currently used in the NMS rules, (ii) includes new definitions related to the rules being considered for adoption, and (iii) updates or eliminates obsolete definitions in the NMS rules. (Rel. 34-51808) ENFORCEMENT PROCEEDINGS MARK STEVEN LYNCH, CPA, REINSTATED TO APPEAR AND PRACTICE BEFORE THE COMMISSION AS AN ACCOUNTANT RESPONSIBLE FOR THE PREPARATION OR REVIEW OF FINANCIAL STATEMENTS REQUIRED TO BE FILED WITH THE COMMISSION Pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice, Mark Steven Lynch, CPA, has applied for and been granted reinstatement of his privilege to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission. Mr. Lynch, who was denied the privilege of appearing or practicing before the Commission on January 17, 2001, pursuant to a settled proceeding, has represented that he has complied and will continue to comply with the terms of the order that denied him from appearing or practicing before the Commission as an accountant. Mr. Lynch’s reinstatement is effective immediately. (Rel. 34-51802; AAE Rel. 2255; File No. 3-10406) IN THE MATTER OF CARLOS A. SHIBATA On June 8, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers, Making Findings and Imposing Remedial Sanctions (Order) against Carlos A. Shibata. The Order finds that on March 21, 2005, Mr. Shibata pled guilty to two counts of wire fraud before the United States District Court for the Southern District of Florida. According to the counts of the indictment, during the time Mr. Shibata was a registered representative for Smith Barney (a division of Citigroup Global Markets, Inc.), he defrauded a customer of Smith Barney and obtained money and property by means of materially false and fraudulent statements. Based on the above, the Order bars Carlos A. Shibata from association with any broker, dealer or investment adviser. (Rels. 34-51804; IA- 2393; File No. 3-11946) COMMISSION REVOKES REGISTRATION OF SECURITIES OF CONSOLIDATED GENERAL CORP. FOR FAILURE TO MAKE REQUIRED PERIODIC FILINGS On June 9, the Commission revoked the registration of each class of registered securities of Consolidated General Corp. (CGPT) (f/k/a Java Group, Inc.) for failure to make required periodic filings with the Commission. Without admitting or denying the findings of the order, except as to jurisdiction, which it admitted, CGPT consented to the entry of an order 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- 13 thereunder and revoking the registration of each class of CGPT’s securities pursuant to Section 12(j) of the Exchange Act. This order settled the charges brought against it in In the Matter of Affinity International Travel Systems, Inc., et al., Administrative Proceeding File No. 3-11913. 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 . . . . (Rel. 34-51807; File No. 3-11913) SEC SUES TAKE-TWO INTERACTIVE SOFTWARE, INC. AND FOUR SENIOR EXECUTIVES FOR ACCOUNTING FRAUD ALL PARTIES AGREE TO SETTLE AND PAY $8.75 MILLION IN PENALTIES AND OVER $5.1 MILLION IN DISGORGEMENT AND PREJUDGMENT INTEREST The Commission filed a civil action in federal district court against: Take-Two Interactive Software, Inc., a New York-based publisher and distributor of video and computer games; the company's former Chairman and Chief Executive Officer, Ryan Brant; its former Executive Vice President and Chief Operating Officer, Larry Muller; its former Chief Financial Officer, James David, Jr.; and its current Vice President of Sales, Robert Blau for fraudulent accounting practices designed to inflate its reported revenue during fiscal years 2000 and 2001. Those practices allowed Take-Two to consistently meet or exceed analysts’ predictions regarding its earnings per share during all four quarters of fiscal year 2000 and to meet certain financial targets which triggered the payment of substantial bonuses to Brant, Muller and David. The Commission has also issued an order in a related administrative proceeding against Blau. SEC COMPLAINT According to the Commission’s complaint, Take-Two systematically recognized sales revenue from approximately 180 “parking” transactions in which the company, at or near the end of fiscal quarters or year end, shipped hundreds of thousands of video games to distributors who had no obligation to pay for the product, fraudulently recorded the shipments as if they were sales, and then accepted return of the games in subsequent reporting periods. In many cases, Take-Two created fraudulent invoices to disguise the returns as “purchases of assorted product.” Take-Two also improperly recognized sales revenue for games that were still being manufactured and could not in fact be shipped, and in fiscal year 2000, improperly accounted for the acquisition of two video game publishers. In addition, from fiscal year 2000 through the third quarter of fiscal year 2003, Take-Two failed to establish proper reserves for reductions in the prices of its games at the retail level (referred to in the industry as “price protection” or “price concessions”). The SEC’s complaint alleges: Muller was the principal architect of the fraudulent parking transactions. At Muller’s direction, Blau arranged and executed several of those transactions. For example, Muller instructed Blau to arrange a large parking transaction at the end of Take-Two’s fiscal year 2000 with Capitol Distributing, a distributor formerly based in Virginia. On October 31, 2000, Take-Two’s fiscal year-end, Blau arranged a shipment of 230,000 video games to Capitol with the understanding that the shipment would be returned. Take-Two improperly recorded $5.4 million in revenue from the shipment – which at that time was Take-Two’s largest sale ever. Capitol subsequently returned the entire shipment. In an effort to hide the return from Take-Two’s auditors, Blau arranged, at Muller’s direction, for the return to be made through an affiliate of Capitol and to disguise the return as a purchase of “assorted product” from that Capitol affiliate. David knew about the fraudulent sales and parking transactions during 2000 and 2001 -- including the disguising of returns as purchases of new inventory, and the impact of those transactions on Take-Two’s reported financials. Brant was similarly aware that Take-Two was making certain shipments to Capitol and he knew that some games from those shipments were being returned. He also discussed with Muller and David treating some of those returns as purchases of new inventory. Consequently, Brant knew, or was reckless in not knowing, that Take-Two’s reported financial results in 2000 and 2001 were materially inflated by the transactions with Capitol. Yet Brant and David signed Take-Two’s Form 10-K for fiscal-year 2000 (filed on January 29, 2001) and David signed its Form 10-Q filed on April 30, 2001. Take-Two’s fraudulent accounting practices allowed it to improperly recognize approximately $60 million in revenue during 2000 and 2001, and report after-tax fiscal year 2000 earnings that were inflated by $20 million. Take-Two’s quarterly revenue and/or earnings were materially overstated in nine of fifteen quarters from 2000 through the third quarter of 2003. On December 14, 2001, after press accounts appeared regarding concern that the Company would have to restate its earnings for fiscal year 2001, the price of Take-Two shares declined 31 percent on trading volume of 20.3 million shares, more than ten times the average trading volume for Take-Two shares during the previous three months. In February 2002, Take-Two restated its financial statements for its fiscal year ended October 31, 2000 and the first three quarters of its fiscal year 2001 to correct for approximately 90 parking transactions during the period that the Company had used to inflate its revenues. The Company’s February 2002 restatement also corrected for its improper accounting for the acquisition of two video game publishers in 2000. In February 2004, Take-Two again restated its financial statements. In its 2004 restatement, Take-Two corrected for its failure to set aside reserves for future price concessions during fiscal year 2000 through the end of the third quarter of fiscal year 2003. The Company’s February 2004 restatement also corrected for the improper accounting treatment of approximately 88 additional sales transactions during 2000 and 2001 that had inflated its revenues. SEC SETTLEMENT Take-Two consented to pay a penalty of $7.5 million. Brant consented to pay a penalty of $500,000 and disgorgement and pre-judgment interest of $3,103,252; Muller consented to pay a penalty of $500,000 and disgorgement and pre-judgment interest of $1,215,720; David consented to pay a penalty of $200,000 and disgorgement and pre-judgment interest of $793,949; and Blau consented to pay a penalty of $50,000 and disgorgement and pre-judgment interest of $64,508. The settlements are without admitting or denying the allegations in the complaint, and are subject to court approval. The penalties may be distributed to harmed investors pursuant to the Sarbanes-Oxley Act of 2002. In addition to the monetary relief described above: * Take-Two consented to entry of a final judgment permanently enjoining it from future violations of Section 17(a) of the Securities Act of 1933 (Securities Act), Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1. * Brant consented to entry of a final judgment permanently enjoining him from violating Section 10(b) of the Exchange Act and Exchange Act Rules 10b-5 and 13b2-1, and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13 and to an order barring him from serving as an officer or director of a public company for five years. * Muller consented to entry of a final judgment permanently enjoining him from violating Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b- 5, 13b2-1 and 13b2-2; and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13a-13; and to entry of an order permanently barring him from serving as an officer or director of a public company. * David consented to entry of a final judgment permanently enjoining him from violating Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, and Exchange Act Rules 10b- 5, 13b2-1 and 13b2-2; and aiding and abetting violations of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13; and to entry of an order barring him from serving as an officer or director of a public company for ten years. David also consented to a suspension from appearing or practicing before the Commission as an accountant for ten years pursuant to Rule 102(e) of the Commission's Rules of Practice, in a related settled administrative proceeding to be instituted once the injunction against David is entered. * Blau consented to entry of a final judgment finding that he violated Section 13(b)(5) of the Exchange Act, and, in a related settled administrative proceeding, to entry of a Commission order to cease and desist from committing or causing any violation and any future violation of Section 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act and Exchange Act Rules 10b-5, 13b2-1 and 13b2-2; and from causing any violation and any future violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, 13a-13. [SEC v. Take-Two Interactive Software, Inc., Ryan Brant, Larry Muller, James David, Jr., and Robert Blau, Civil Action No. 05 CIV 5443, S.D.N.Y. (DLC )] (LR-19260; AAE Rel. 2259; Administrative Proceeding In the Matter of Robert M. Blau -- Rel. 33-8581; Rel. 34-51809; AAE Rel. 2260; File No. 3-11947) THE COMMISSION ORDERS THAT GARY TODD BE BARRED FROM ASSOCIATION WITH ANY BROKER OR DEALER On June 9, the Commission issued an Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 (Order) against Gary Todd. The Order finds that in or about and between October 2000 and October 2003 (Relevant Period), Todd was an undisclosed principal of a branch office of Delta Asset Management LLC, (Delta), a registered broker-dealer with the Commission. The Order further finds that, on March 10, 2005, Todd pled guilty to charges of, among other things, conspiracy to commit securities fraud in violation of Title 18, United States Code, Section 371 and securities fraud in violation of Title 15, United States Code, Sections 78j(b) and 78ff before the United States District Court for the Eastern District of New York, in United States v. Pirgousis, et al., Cr. No. 04-159 (NGG). The counts of the criminal indictment to which Todd pled guilty alleged, inter alia, that Todd, while associated with the Delta branch office, knowingly and willfully employed devices, schemes, and artifices to defraud and engaged in acts, practices, and courses of business which would and did operate as a fraud and deceit upon members of the investing public, in connection with the purchases and sales of securities, and by use of the means and instrumentalities of interstate commerce and the mails. Based on the above, the Order bars Todd from association with any broker or dealer. Todd consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-51811; File No. 3-11921) FORMER GENERAL COUNSEL OF INSO, CORP. CONVICTED OF PERJURY IN TESTIMONY BEFORE THE SECURITIES AND EXCHANGE COMMISSION The Commission announced that on June 6 a federal jury convicted, Bruce Hill, of Belmont, Massachusetts, of committing perjury in his investigative testimony before the Commission, which was investigating whether fraud was committed in connection with the reporting of revenues by the former Inso Corporation, Inc. (later known as eBT International, Inc.), a now defunct software company headquartered in Boston, Massachusetts. Hill, age 41, the former General Counsel of Inso Corporation, was convicted by a jury sitting before U.S. District Judge Douglas P. Woodlock on charges brought by the United States Attorney for the District of Massachusetts. The jury was deadlocked as to the five remaining counts against Hill: one count of securities fraud, two counts of wire fraud, one count of false statements to accountants and a second perjury count. The Court declared a mistrial as to those counts. Evidence was presented at the month-long criminal trial that at the end of September 1998, Inso Corporation arranged a sham transaction whereby a Malaysian software distributor signed a purchase order for roughly $3 million upon assurances that Inso would actually sell the software to another customer within a few days or weeks. At the end of 1998, Hill, who was the Vice President, Secretary, and General Counsel of Inso, played a pivotal role in arranging a series of deals that were designed to create the appearance that the Malaysian software distributor had paid Inso $3 million for software products that Inso had reported as sold during the third quarter of 1998. In sworn testimony during a Commission investigation, Hill disavowed any knowledge about the preparation of a fraudulent certificate which purported to reflect approval by Inso’s Board of Directors of the issuance of approximately $4 million in letters of credit that were used to create the appearance that Inso received $3 million in payment for the reported third quarter sale. The United States presented evidence at the criminal trial that, contrary to his sworn investigative testimony, Hill had personally directed the preparation of the certificate and approved its signing. Judge Woodlock has not yet scheduled a date for sentencing. For his perjury conviction, Hill faces a maximum penalty of 5 years imprisonment to be followed by 3 years of supervised release and a $250,000 fine. Hill is the third individual to face criminal charges arising from revenue overstatement at the former Inso Corporation. On September 30, 2003, Richard Vatcher, Inso's former Vice-President in charge of worldwide sales pled guilty to violations of the securities laws. Charges are still pending against Hill’s co-defendant Graham Marshall, Inso's former Vice President and Manager of the Electronic Publishing Division. Marshall, age 58, of Aslackby, Sleaford Lincolnshire, United Kingdom, is subject to ongoing extradition proceedings. On June 21, 2002, the Commission filed related civil enforcement actions against Hill and certain other senior officers of Inso. The Commission’s action against Hill remains pending. For more information see Litigation Release No. 18467 (November 17, 2003), Litigation Release No. 18394 (October 4, 2003) and Litigation Release No. 17578 (June 21, 2002). [SEC v. BRUCE HILL, ET AL., (United States District Court for the District of Massachusetts, Civil Action No. 02-11244 (EFH)]; [U.S.v. GRAHAM MARSHALL and BRUCE HILL, (United States District Court for the District of Massachusetts, Criminal Action No. 03-10344 (DPW)] (LR-19253; AAE Rel. 2256) SEC CHARGES SIX FORMER OFFICERS AND DIRECTORS OF FISCHER IMAGING FOR ROLE IN ACCOUNTING FRAUD On June 7, the Commission filed civil fraud charges against six individuals formerly associated with Fischer Imaging Corporation (Fischer): chief executive officer (CEO) and president Louis E. Rivelli; chief financial officers (CFOs) Rodney B. Johnson and Stephen G. Burke; chair of the audit committee Teresa W. Ayers; and senior sales executives Craig L. Stevenson and Robert T. Hoffman. The Commission’s complaint, filed in the United States District Court for the District of Colorado, alleges that these six individuals were responsible for Fischer’s reporting of materially false financial results from January 2000 through September 2002. According to the complaint, each of the named defendants was responsible for Fischer’s improper recognition of revenue on sales of equipment that Fischer had not delivered to customers, but instead had shipped to third party warehouses where Fischer controlled the equipment, paid to store it, and insured it. Additionally, Rivelli, Johnson, Stevenson, and Hoffman were involved in formulating or reviewing contingent sales terms, which were documented in side letters, with knowledge that Fischer improperly recognized revenue before the contingencies were resolved. The complaint further alleges that Rivelli, Johnson, and Burke were responsible for Fischer’s material misstatements of its inventory account and its gross profits based on various other improper accounting practices. The complaint alleges that each of the defendants provided false or misleading documents or information to Fischer’s accountants or auditors in an attempt to conceal Fischer’s improper accounting practices. The complaint seeks final judgments enjoining the defendants from future violations of the anti-fraud and various other provisions of the Federal securities laws, and ordering each defendant to disgorge ill-gotten gains and pay civil money penalties. The Commission also seeks an order barring Rivelli, Johnson, Burke and Ayers from serving as an officer or director of a public company. On November 15, 2004, with Fischer’s consent, the Commission ordered Fischer to cease-and-desist from violating the antifraud, reporting, and recordkeeping provisions of the federal securities laws based on the same accounting misstatements. The Commission’s investigation is continuing. [SEC v. Louis E. Rivelli, Rodney B. Johnson, Stephen G. Burke, Teresa W. Ayers, Craig L. Stevenson, and Robert T. Hoffman (United States District Court for the District of Colorado, CV- 05-CV- 1039 (RPM))] (LR-19255; AAE Rel. 2257) SEC CHARGES TWO FORMER OFFICERS OF MOUNT SINAI MEDICAL CENTER WITH FRAUD The Commission announced today that it filed a complaint charging Bruce M. Perry (Perry) and M. Brooks Turkel (Turkel) with securities fraud in connection with the offer and sale of municipal bonds issued in May 2001, by Mount Sinai Medical Center of Florida, Inc. (Mount Sinai or the hospital), a hospital based in Miami Beach, Florida. Perry and Turkel were senior officers of Mount Sinai. Specifically, Perry was the hospital’s chief executive officer from January 1999 through October 2001, and Turkel was its chief financial officer from December 1999 through July 2001 and then its chief planning officer from July 2001 until October 2001. The complaint alleges that Perry and Turkel made material misrepresentations and omissions in the Official Statements and other documents disseminated to investors in connection with a series of three bonds issued by Mount Sinai in May 2001, through the City of Miami Beach Health Facilities Authority, totaling approximately $184 million (the 2001 bond offerings). Specifically, the complaint alleges that Mount Sinai, through Perry and Turkel, made material misrepresentations and omissions in connection with the 2001 bond offerings because it failed to disclose in the Official Statements that the hospital was experiencing a significant deterioration in its cash position, and was in the midst of a severe liquidity problem. Further, the complaint alleges that the Official Statements misrepresented that eight of Mount Sinai’s high volume managed care contracts had been renegotiated, and that the renegotiated contracts were expected to contribute approximately $10 million annually of additional revenue for the hospital beginning in 2001. According to the complaint, the Official Statements also contained baseless projections of the hospital’s anticipated revenue. As alleged in the complaint, Perry and Turkel re-iterated the above misrepresentations to institutional investors and bond rating agencies prior to the 2001 bond issue. Moreover, the complaint alleges that Mount Sinai, through Perry and Turkel, made additional misrepresentations and omissions in its second quarter report for the quarter ended June 30, 2001, which was filed with various repositories in accordance with the terms of the bond covenants. The complaint alleges that, as a result of the foregoing, Perry and Turkel violated 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. The Commission seeks a permanent injunction against Perry and the imposition of civil money penalties against Perry and Turkel. Turkel has consented, without admitting or denying, to the entry of a Final Judgment imposing a civil money penalty of $35,000 against him. In a separate administrative action, the Commission issued an Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing Cease-and-Desist Order (Order) against Mount Sinai, Turkel and another former senior officer of Mount Sinai. The Order, which makes findings based on the same conduct alleged in the Commission’s complaint against Perry and Turkel, orders Mount Sinai, Turkel and the other former senior officer to each cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. Mount Sinai, Turkel and the other former senior officer each consented to the issuance of the Order without admitting or denying any of its findings. [SEC v. Bruce M. Perry and M. Brooks Turkel, Civil Action No. 05-21525-CIV-Martinez (S.D. Florida)] (LR-19256) IN THE MATTER OF FOCUS FINANCIAL ASSOCIATES, INC. The Commission filed a civil injunctive action against Focus Financial Associates, Inc. and Focus Development Center, Inc. (collectively, the Focus Companies), and their principals Max Francois, Aiby Pierre-Louis, and Jean Fritz Montinard. According to the Complaint, the defendants engaged in an affinity fraud that targeted members of the Haitian- American community in Miami through local radio programs and presentations to Haitian-American church congregations. The case, filed in the United States District Court for the Southern District of Florida, has been assigned to Judge Moore. The SEC’s Complaint alleges that, as a result of their conduct, Defendants violated 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. In addition to permanent injunctions, the Commission is seeking an order that the defendants disgorge all ill-gotten gains, with pre-judgment interest, and an order imposing civil money penalties. The Commission has translated into Creole and posted on its website its press release announcing this action (www.sec.gov), and certain of its investor education brochures (http://www.sec.gov/investor/pubs/affinity_creole.htm; and (http://www.sec.gov/investor/ pubs/affinity_creole.pdf). In addition, the Commission’s Southeast Regional Office is currently planning to hold an investor assistance program to answer questions about this case in particular and also to provide information that investors can use to help them avoid similar affinity scams in the future. The date and location of the meeting will be posted in the near future on the SEC’s website at www.sec.gov. [SEC v. Focus Financial Associates, Inc., Civil Action No. 05-21527-CIV-Moore/Garber (S.D. FL)] (LR-19258; Press Rel. 2005-86) POYIADJIS PAYS APPROXIMATELY $200 MILLION Roys Poyiadjis (Poyiadjis), a former Chief Executive Officer at AremisSoft Corporation (AremisSoft), which was a software company with offices in New Jersey, London Cyprus, and India, has consented to final resolution of the Commission’s securities fraud charges against him brought in October 2001. Poyiadjis agreed to disgorge approximately $200 million of unlawful profit from his trading in AremisSoft stock, and to entry of a final judgment that prohibits him from acting as an officer or director of a public company. The judgment, which was entered on April 20, 2005, permanently enjoins him from future violation, or conduct giving rise to violation, of the antifraud, reporting, and other provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), and 16(a) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-1, 13a- 13, 16a-2, and 16a-3 under that Act). The disgorged funds will be distributed to defrauded investors pursuant to a distribution plan for beneficiaries of the AremisSoft post-bankruptcy estate. Poyiadjis’ consent is without admitting or denying the allegations in the Commission’s complaint. The Commission’s complaint, filed in the United States District Court for the Southern District of New York on October 4, 2001, charged that AremisSoft, its co-chairmen and co-CEOs Poyiadjis and Lycourgos Kyprianou, made fraudulent statements in public filings and press releases, including: 1) reporting in AremisSoft’s 2000 financial statements millions of dollars in sales to entities that either did not exist as operating businesses or did not purchase product from AremisSoft; 2) reporting in AremisSoft’s 1999 and 2000 financial statements that the company paid a total of $32.7 million to acquire three software companies, when in fact the actual purchase prices paid ranged from approximately $100,000 to $300,000; and 3) misrepresenting the value of and revenue earned from a contract with Bulgaria’s Health Insurance Fund in press release and public filings. The complaint further alleged that Poyiadjis and Kyprianou, acting through offshore entities, engaged in massive insider trading during the period of the fraud, selling millions of shares of AremisSoft stock. Olympus Capital Investments, Inc. and Oracle Capital, Inc. were charged as relief defendants. For more information, see Litigation Release Nos. 17862 (November 25, 2002), 17641 (July 31, 2002) and 17172 (October 4, 2001). [SEC v. Roys Poyiadjis, Lycourgos Kyprianou et al., Civil Action No. 01 CV 8903 (S.D.N.Y.)] (LR-19259; AAE Rel. 2258; Press Rel. 2005-87) JEAN JANU SENTENCED FOR OBSTRUCTION OF SEC INVESTIGATION On May 31, 2005, The Hon. Margaret M. Morrow, U.S. District Judge for the Central District of California, sentenced Jean Janu, 58, to 21 months in federal prison based on her guilty plea to obstructing the SEC’s enforcement investigation of Reed E. Slatkin and to misprision of a felony for concealing Slatkin’s scheme in an attempt to deceive the SEC regarding the authenticity of Slatkin’s account statements. From approximately 1986 until May 2001, Slatkin operated a massive Ponzi scheme in which he raised more than $593 million from approximately 800 investors. In her plea agreement, Janu admitted that, at Slatkin’s direction, she created and revised account statements and other documents that supported Slatkin’s claim that he held over $500 million in securities in brokerage accounts at the fictitious entity “NAA Financial” of Zurich, Switzerland. Janu knew these documents were to be submitted to the SEC. Janu created these bogus statements on her computer and printed the NAA account statements on blank, European-sized stationary provided to her by Slatkin that contained NAA’s name and purported Swiss address. Slatkin then instructed Janu to erase the account statements from her computer. During the SEC investigation, Janu falsely testified under oath that she did not have any knowledge of any foreign accounts held by Slatkin. In addition, Janu falsely testified that she had never heard the name NAA Financial. On June 7, 2001, in the SEC’s action, the U.S. District Court for the Central District of California entered a judgment of permanent injunction against Slatkin. Slatkin, without admitting or denying the allegations in the complaint, consented to the entry of an injunction from future violations of the federal securities laws. Slatkin has also been barred by the Commission from associating with any investment adviser. On September 3, 2003, Judge Morrow sentenced Slatkin to 14 years in prison for his role in the massive Ponzi scheme. Slatkin pleaded guilty to 15 counts, including conspiracy to obstruct justice during an SEC enforcement investigation. Additional information can be found in Litigation Release Nos. 16998 (May 11, 2001), 17033 (June 11, 2001), 17444 (March 27, 2002), 17796 (September 12, 2002), 17796 (October 22, 2002), 18107 (April 25, 2003), 18323 (September 4, 2003), 18499 (December 10, 2003), and Advisers Act Release 2006 (January 2, 2002). [U.S. v. Jean Janu, CR 02-1222 (C.D. Cal.)] (LR-19261) SEC SUES STOCK PROMOTER RICHARD SPRADLING FOR FRAUD, ILLEGAL TOUTING AND SCALPING On June 9, the Commission filed a civil injunctive action in the United States District Court for the District of Columbia against Richard G. Spradling, a penny stock promoter who distributed newsletters under various titles including “Market News Alert.” The Complaint alleges that, through his newsletters and websites, Spradling illegally touted stocks without adequately disclosing the amount and nature of his compensation. In fact, Spradling’s compensation most often came from the very companies he promoted or persons associated with the companies that he promoted. The Complaint also alleges that Spradling “scalped” stocks he promoted by selling into the demand that his newsletters and website promotions created. Specifically, the Complaint alleges that between April 2001 and September 2003, Spradling promoted more than 44 penny stock issues by faxing newsletters to hundreds of thousands of individuals. The Complaint further alleges that Spradling received compensation in the form of stock for at least 36 of the penny stocks he promoted and that he sold at least 32 of the stocks during the promotion of the stock. By his conduct, Spradling yielded net proceeds of over $1.6 million. The Complaint also alleges that Spradling falsely stated that “Market News Alert is an independent research firm with paid subscribers.” In fact, the production and dissemination of each newsletter was paid for by the subject company or a related promoter and Spradling’s newsletter had no paid subscribers. The Complaint also alleges that Spradling disseminated fraudulent annual revenues and revenue forecasts on behalf of at least one company. Specifically, the Complaint alleges that, in May 2002, Spradling wrote and disseminated a promotion of THC Communications (“THCR”) in his Market News Alert newsletter. Prior to disseminating the newsletter, Spradling met with the officers of THCR, obtained a copy of THCR’s business plan, and its 2001 financial statements filed with the Commission. THCR’s 2001 financial statements reflected $739,065 of audited revenues and its business plan projected 2002 revenues of $12 million. The Complaint further alleges that Spradling’s May 2002 newsletter listed THCR’s audited 2001 revenues as $11.1 million, which was fifteen times greater than THCR’s actual 2001 audited revenues filed with the Commission. The newsletter also listed THCR’s projected 2002 revenue as $25 million, which was twice the amount projected in the company’s business plan given to Spradling. The Complaint alleges that in exchange for the promotion, Spradling received compensation of approximately $400,000 from the company and individuals whom Spradling knew were the CEO and CFO of the company. The Complaint seeks to permanently enjoin Spradling from violating the antifraud provisions of the Securities Exchange Act of 1934, specifically Section 10(b) and Rule 10b-5 thereunder and the anti- touting provision of the Securities Act of 1933, specifically Section 17(b). The Complaint further seeks to permanently bar Spradling from any future participation in the offering of penny stocks; disgorgement of ill-gotten gains Spradling received as a result of his wrongful conduct, plus prejudgment interest thereon; and civil monetary penalties. [SEC v. Richard G. Spradling, Civil Action No. 05-01150 (D.D.C.)] (LR-19263) HOLDING COMPANY ACT RELEASES THE SOUTHERN COMPANY, ET AL. A notice has been issued giving interested persons until June 27, 2005, to request a hearing on a proposal by The Southern Company (Southern), a registered holding company, Southern Company Holdings Inc., a subsidiary of Southern, and certain other utility and non-utility subsidiaries of Southern to enter into various financing transactions commencing on the effective date of an order issued under this filing and ending June 30, 2007. (Rel. 35-27981) 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 GENERAL GROWTH PROPERTIES INC, 110 N WACKER DRIVE, STE 3100, CHICAGO, IL, 60606, 3129605000 - 0 ($317,600,000.00) Equity, (File 333-125605 - Jun. 8) (BR. 08B) S-4 MOHEGAN TRIBAL GAMING AUTHORITY, ONE MOHEGAN SUN BOULEVARD, UNCASVILLE, CT, 06382, 860-862-8000 - 0 ($150,000,000.00) Non-Convertible Debt, (File 333-125607 - Jun. 8) (BR. 05B) S-4 NEWALLIANCE BANCSHARES INC, C/O NEW HAVEN SAVINGS BANK, 195 CHURCH STREET, NEW HAVEN, CT, 06510, 203-789-2639 - 2,557,953 ($34,528,931.00) Equity, (File 333-125608 - Jun. 8) (BR. 07) S-4 MOHEGAN TRIBAL GAMING AUTHORITY, ONE MOHEGAN SUN BOULEVARD, UNCASVILLE, CT, 06382, 860-862-8000 - 0 ($250,000,000.00) Non-Convertible Debt, (File 333-125609 - Jun. 8) (BR. 05B) S-8 Citi Trends Inc, 102 FAHM STREET, SAVANNAH, GA, 31401, 912-236-1561 - 3,117,594 ($22,648,529.34) Equity, (File 333-125611 - Jun. 8) (BR. 02) S-3 Capital One Auto Receivables LLC, 140 EAST SHORE DRIVE, ROOM 1052-D, GLEN ALLEN, VA, 23059, 804.290.6736 - 0 ($1,000,000.00) Asset-Backed Securities, (File 333-125612 - Jun. 8) (BR. 05) S-8 LAKELAND BANCORP INC, 250 OAK RIDGE RD, OAK RIDGE, NJ, 07438, 9736972000 - 0 ($11,793,855.00) Equity, (File 333-125616 - Jun. 8) (BR. 07A) S-8 CHEVIOT FINANCIAL CORP, 3723 GLENMORE AVE, CHEVIOT, OH, 45211-4711, 5136610457 - 680,426 ($7,540,168.26) Equity, (File 333-125620 - Jun. 8) (BR. 07A) S-8 CIMAREX ENERGY CO, 1700 LINCOLN STREET, SUITE 1800, DENVER, CO, 80203-4518, 303-295-3995 - 0 ($226,814,000.00) Equity, (File 333-125621 - Jun. 8) (BR. 04A) S-8 KOS PHARMACEUTICALS INC, 1 CEDAR BROOK DRIVE, CRANBURY, NJ, 08512, 609-495-0500 - 0 ($290,400,000.00) Equity, (File 333-125622 - Jun. 8) (BR. 01B) S-8 CORGENIX MEDICAL CORP/CO, 12061 TEJON STREET, 303-751-4831, WESTMINSTER, CO, 80234, 3034574345 - 1,500,000 ($397,500.00) Equity, (File 333-125623 - Jun. 8) (BR. 01A) S-8 COMTECH TELECOMMUNICATIONS CORP /DE/, 105 BAYLIS RD, MELVILLE, NY, 11747, 6317778900 - 1,200,000 ($44,916,000.00) Equity, (File 333-125625 - Jun. 8) (BR. 11B) S-1 Commercial Vehicle Group, Inc., 6530 WEST CAMPUS WAY, NEW ALBANY, OH, 43054, 614 289 5360 - 0 ($172,151,764.83) Equity, (File 333-125626 - Jun. 8) (BR. 05) S-8 MANHATTAN SCIENTIFICS INC, 641 FIFTH AVENUE, SUITE 36F, NEW YORK, NY, 10022, 2127520505 - 28,420,000 ($1,591,520.00) Equity, (File 333-125627 - Jun. 8) (BR. 10B) S-8 PHOENIX TECHNOLOGIES LTD, 915 MURPHY RANCH ROAD, MILPITAS, CA, 95035, (408) 570-1000 - 1,190,000 ($9,014,250.00) Equity, (File 333-125628 - Jun. 8) (BR. 03B) S-11 REDWOOD MORTGAGE INVESTORS VIII, 900 VETERANS BLVD SUITE 500, REDWOOD CITY, CA, 94063, 6503655341 - 100,000,000 ($100,000,000.00) Limited Partnership Interests, (File 333-125629 - Jun. 8) (BR. 07) S-8 CASH TECHNOLOGIES INC, 1434 WEST 11TH STREET, LOS ANGELES, CA, 90015, 2137452000 - 95,000 ($110,000.00) Equity, (File 333-125630 - Jun. 8) (BR. 08A) S-3 REGIS CORP, 7201 METRO BLVD, MINNEAPOLIS, MN, 55439, 6129477000 - 0 ($2,907,846.00) Equity, (File 333-125631 - Jun. 8) (BR. 11A) S-8 WIEN GROUP INC, 525 WASHINGTON BLVD, STE. 3600, JERSEY CITY, NJ, 07310, 2012160100 - 100,000 ($15,000.00) Equity, (File 333-125633 - Jun. 8) (BR. 09B) S-8 UNITED BANCORP INC /MI/, 205 E CHICAGO BLVD, PO BOX 248, TECUMSEH, MI, 49286, 5174238373 - 0 ($3,361,795.00) Equity, (File 333-125635 - Jun. 8) (BR. 07A) S-3 MILLS CORP, 1300 WILSON BLVD, STE 400, ARLINGTON, VA, 22209, 7035265000 - 0 ($10,026,047.00) Equity, (File 333-125636 - Jun. 8) (BR. 08B) S-3 COSTCO WHOLESALE CORP /NEW, 999 LAKE DRIVE, ISSAQUAH, WA, 98027-, 4253138100 - 1,326,325 ($60,427,367.00) Equity, (File 333-125637 - Jun. 8) (BR. 02A) S-3 MILLS CORP, 1300 WILSON BLVD, STE 400, ARLINGTON, VA, 22209, 7035265000 - 316,250 ($316,250,000.00) Debt Convertible into Equity, (File 333-125638 - Jun. 8) (BR. 08B) S-3 BROADVISION INC, 585 BROADWAY, REDWOOD CITY, CA, 94063, 6502615100 - 0 ($30,601,226.50) Equity, (File 333-125640 - Jun. 8) (BR. 03C) S-11 WELLS REAL ESTATE INVESTMENT TRUST II INC, 6200 THE CORNERS PARKWAY, SUITE 250, NORCROSS, GA, 30092, 7704497800 - 0 ($3,000,000,000.00) Equity, (File 333-125643 - Jun. 8) (BR. 08C) S-8 TRIDENT MICROSYSTEMS INC, 1090 E ARQUES AVENUE, SUNNYVALE, CA, 94085-4601, 4089918800 - 0 ($4,606,223.00) Equity, (File 333-125644 - Jun. 8) (BR. 10C) S-1 Texas Roadhouse, Inc., 6040 DUTCHMANS LANE, SUITE 400, LOUISVILLE, KY, 40205, 5024269984 - 0 ($92,140,500.00) Equity, (File 333-125646 - Jun. 8) (BR. 05) S-8 JDS UNIPHASE CORP /CA/, 1768 AUTOMATION PARKWAY, SAN JOSE, CA, 95131, 4085465000 - 238,747 ($47,749.40) Equity, (File 333-125647 - Jun. 8) (BR. 10B) S-4 CELLDEX THERAPEUTICS INC, 0 ($20,000,000.00) Other, (File 333-125648 - Jun. 8) (BR. 01A) S-4 BEMIS CO INC, 222 S 9TH ST STE 2300, MINNEAPOLIS, MN, 55402-4099, 6123763000 - 0 ($300,000,000.00) Other, (File 333-125649 - Jun. 8) (BR. 04A) S-11 NEW YORK MORTGAGE TRUST INC, 1301 AVENUE OF THE AMERICAS, NEW YORK, NY, 10019, 2126349400 - 0 ($67,275,000.00) Equity, (File 333-125650 - Jun. 8) (BR. 08B) S-3 CITADEL SECURITY SOFTWARE INC, 5420 LYNDON B. JOHNSON FREEWAY, SUITE 1600, DALLAS, TX, 75240, 214-520-2449 - 0 ($12,080,498.00) Equity, (File 333-125651 - Jun. 8) (BR. 03B) S-4 HUNTSMAN INTERNATIONAL LLC, 500 HUNTSMAN WAY, SALT LAKE CITY, UT, 84108, 8015845700 - 0 ($340,739,500.00) Other, (File 333-125652 - Jun. 8) (BR. 06A) S-8 SITEWORKS INC /FL, 2534 N MIAMI AVE, ., MIAMI, FL, 33127, 3055739339 - 25,000,000 ($500,000.00) Equity, (File 333-125653 - Jun. 8) (BR. 09B)