SEC News Digest

COMMISSION ANNOUNCEMENTS

Schedule Announced for Completion OF U.S.-Canadian Mutual Recognition Process Agreement

The Chairmen of four Canadian securities regulators and the Chairman of the U.S. Securities and Exchange Commission (SEC), following a series of meetings coinciding with the annual conference of the International Organization of Securities Commissions (IOSCO), announced today a schedule for the completion of a process agreement that would open the way for discussions of a potential U.S.-Canada mutual recognition arrangement.

Canada has a system of securities regulation in which 13 separate provincial and territorial securities regulators administer and enforce highly harmonized laws and regulations. In order to facilitate discussions between Canada and the United States and more closely coordinate their systems of securities regulation, the SEC and the Canadian Securities Administrators (CSA) are working on an agreement setting forth the process to be followed in discussing mutual recognition arrangements.

Under the schedule announced today, the process agreement would be concluded in mid-June 2008.

The process agreement, once concluded, would open the way for substantive discussions between the CSA and the SEC on the subject of mutual recognition. Mutual recognition could provide Canadian securities exchanges and certain other Canadian financial service providers with greater freedom to operate in the United States under Canadian regulatory oversight, while U.S. securities markets and certain other U.S. financial service firms could gain greater freedom to operate in Canada under SEC oversight. In this manner, dual regulation, redundancy, and regulatory overlap could be eliminated.

"The work that we have accomplished with our Canadian regulatory counterparts over many months has brought us to a significant milestone in our ongoing discussions on the subject of mutual recognition," said Chairman Cox. "The process agreement we hope to execute next month will provide an efficient means to focus the U.S.-Canada discussions. That, in turn, could pave the way for an eventual arrangement with our Canadian counterparts that would deepen cooperation among securities regulators in North America and strengthen the regulation of ongoing cross-border securities activity, while reducing the barriers investors face in connection with cross-border investment opportunities," said Chairman Cox. "The bonds we have strengthened during these months of discussions have already led to closer enforcement and regulatory coordination among U.S. and Canadian securities regulators, and investors are the clear winners."

Mr. Jean St-Gelais, Chairman of the CSA, stated that he was pleased with the progress of the discussions and the workplan. Mr. St-Gelais noted that the CSA continues to be committed to establishing a well-designed process with the SEC.

In March 2008, the SEC announced that it would explore the possibility of a limited mutual recognition arrangement with one or more foreign regulatory counterparts, and that those arrangements could provide the basis for the development of a more general approach to mutual recognition through rulemaking. Since then, in addition to the work underway with Canada, the SEC has announced that it is in discussions concerning a possible mutual recognition arrangement with Australia, and that it is pursuing a process agreement, similar to the proposed agreement announced today with Canada, with the European Commission and the Committee of European Securities Regulators. Any eventual mutual recognition arrangement with any individual country would be based upon a comparability assessment by the SEC and by the foreign authority of each other's securities regulatory regime.

The SEC has a long-standing and close relationship with its Canadian counterparts in the areas of regulatory and enforcement cooperation. Since 1988, Canadian securities regulators and the SEC have had formal mechanisms in place to assist each other in enforcement investigations. Since 1990, the SEC and Canada's securities regulators have participated in the Multi-Jurisdictional Disclosure System that permits issuers in the United States and Canada to use the same disclosure forms when selling securities in each other's markets.

The CSA, the council of the securities regulators of Canada's provinces and territories, co-ordinates and harmonizes regulation for the Canadian capital markets. (Press Rel. 2008-98)

SEC Promotes Long-Time Enforcement Attorney Marc Fagel to Director of San Francisco Region

Securities and Exchange Commission Chairman Christopher Cox today announced the appointment of Marc Fagel as Regional Director of the Commission's San Francisco Regional Office. As Regional Director he will oversee the office's enforcement and examination functions in Northern California and the Pacific Northwest. Mr. Fagel has been Co-Acting Regional Director of the office since the departure of Helane Morrison last year.

Since 2005, Mr. Fagel has served as Associate Regional Director for Enforcement in the San Francisco Regional Office. In that position he oversaw the office's enforcement program. Mr. Fagel has been a member of the San Francisco enforcement staff for more than a decade, having joined in 1997 after several years in private practice.

Chairman Cox said, "Marc is a strong and energetic leader who is passionate about investor protection. His enthusiasm for our mission is contagious, and not only our entire team in San Francisco but investors across the nation are fortunate to have him in this leadership role. I look forward to continuing to work with him on behalf of investors."

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, said, "It has been a privilege and a pleasure to work with Marc. He and his teams have consistently brought timely and important cases. I look forward to working with him in this new role."

Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, added, "Marc has been instrumental in the success of the San Francisco office's enforcement program. He is a tireless leader and manager, and a passionate advocate for investors. He will ably serve investors in the region."

Mr. Fagel said, "During my decade with the Commission, I have had the opportunity to work with some of the most talented and dedicated professionals in government, tackling cutting-edge issues arising out of Silicon Valley and the Pacific Northwest. I consider it a great privilege to serve the Commission's commitment to vigorous securities law enforcement and to lead our office's continuing efforts on behalf of investors throughout the region."

Mr. Fagel graduated from Princeton University in 1988 and received his J.D. degree from the University of Chicago Law School in 1991. (Press Rel. 2008-99)

SEC Veteran Rosalind Tyson Tapped to Lead Los Angeles Region

Securities and Exchange Commission Chairman Christopher Cox today announced the appointment of Rosalind Tyson as Regional Director of the Commission's Los Angeles Regional Office. As Regional Director she will oversee the office's enforcement and examination functions in Southern California, Arizona, Nevada, and Hawaii. Ms. Tyson has been Acting Regional Director of the office since the departure of Randall Lee last year.

Since 1993, Ms. Tyson has served as Associate Regional Director for Examinations in the Los Angeles Regional Office. In that position she oversaw the office's examination program, which conducts inspections of broker-dealers, investment advisers, mutual funds, and transfer agents, as well as its bankruptcy program. Ms. Tyson is a veteran of the Commission staff; she joined the Los Angeles Regional Office in 1982 as an enforcement lawyer after several years of private practice. Since that time she has held a number of positions of increasing responsibility within the Los Angeles office.

Chairman Cox said, "Roz is a consummate professional whose over 25 years of experience with the SEC makes her exceptionally well-qualified to take on this responsibility. Her steadfast commitment to our nation's investors is unparalleled. Her knowledge not only of the Commission's enforcement program, but also our examination program for broker-dealers, investment advisers, and mutual funds, will be an important asset to both the Los Angeles office staff and the investing public."

Lori Richards, Director of the SEC's Office of Compliance Inspections and Examinations, said, "It has been my pleasure to work with Roz for many years. She is a wonderful leader and an experienced regulator. She has unparalleled knowledge of the securities industry and is a dedicated advocate for investors. I'm delighted that she will lead the Los Angeles Office."

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, added, "For years, Roz has demonstrated her excellent judgment and strong management skills. Those attributes, combined with her wealth of SEC experience, make her an ideal choice to lead the Los Angeles office."

Ms. Tyson said, "It will be a privilege to serve as Regional Director for the Los Angeles Regional Office's team of superbly talented professionals. The Commission is deeply committed to effective investor protection, and I greatly appreciate the trust the agency has placed in me. I intend to emphasize swift and vigorous enforcement of the securities laws and to reinforce our cooperative working relationships with our fellow regulators at the federal, state and local levels.

Ms. Tyson graduated from Georgetown University's School of Languages and Linguistics in 1970, received her Master's degree in 1972 from the University of Hawaii, and received her J.D. degree from Stanford Law School in 1978. (Press Rel. 2008-100)

ENFORCEMENT PROCEEDINGS

Settled Order Against Robert Okin

On May 28, the United States Securities and Exchange Commission issued a settled order (Order) against Robert Okin in a previously instituted administrative proceedings.

Without admitting or denying the findings of the Order, Okin consented to the entry of the Order finding that he failed reasonably to supervise certain registered representatives (the brokers) with a view to preventing their violations of the federal securities laws. In the Order, the Commission found that Okin, who had supervisory authority over the brokers at CIBC World Markets Corp. and Fahnestock & Co., Inc., knew of the brokers' use of deceptive tactics to evade market timing restrictions imposed by mutual fund companies, and failed reasonably to investigate or respond appropriately to red flags that should have alerted him to the brokers' conduct.

In the Order, Okin agreed to be suspended from association in a supervisory capacity with any broker or dealer for a period of 12 months and to pay disgorgement of $1. In addition, Okin agreed to pay a civil money penalty in the amount of $150,000.

For further information see also: Rel. 33-8592 (July 20, 2005); File No. 3-12554 (Jan. 31, 2007); Rel. 34-55209 (Jan. 31, 2007). (Rel. 34-57879; File No. 3-12554)

Settled Order Against Robert Abry

On May 28, 2008, the United States Securities and Exchange Commission issued a settled order (Order) against R. Scott Abry in a previously instituted administrative proceeding.

Without admitting or denying the findings of the Order, Abry consented to the entry of the Order finding that he failed reasonably to supervise certain registered representatives (the brokers) with a view to preventing their violations of the federal securities laws. In the Order, the Commission found that Abry, who had supervisory authority over the brokers at CIBC World Markets Corp. and Fahnestock & Co., Inc., knew or became aware of the brokers' use of deceptive tactics to evade market timing restrictions imposed by mutual fund companies, and failed reasonably to investigate or respond appropriately to red flags that should have alerted him to the brokers' conduct.

In the Order, Abry agreed to be suspended from association in a supervisory capacity with any broker or dealer for a period of 12 months and to pay disgorgement of $1. In addition, Abry agreed to pay a civil money penalty in the amount of $125,000.

For further information see also: Rel. 33-8592 (July 20, 2005); File No. 3-12554 (Jan. 31, 2007); Rel. 34-55209 (Jan. 31, 2007). (Rel. 34-57880; File No. 3-12554)

Commission Declares Initial Decision as to Warren Lammert, Lars Soderberg, and Lance Newcomb

The Commission has declared final an initial decision of an administrative law judge with respect to Warren Lammert, Lars Soderberg, and Lance Newcomb (Respondents). The law judge found that Respondents Lammert, an officer of Janus Capital Management LLC, an investment adviser, and Soderberg, a Janus officer and registered representative associated with Janus Distributors, Inc., a registered broker-dealer, caused Janus' violations of Sections 17(a)(2) and 17(a)(3) of the Securities Act, Section 206(2) of the Advisers Act, and Section 34(b) of the Investment Company Act. The law judge dismissed the administrative proceeding against Lance Newcomb.

The initial decision found that the violations resulted from Respondents' roles in "market timing" transactions in mutual funds managed by Janus. Janus' prospectuses represented that its Funds did not permit market timing. Despite this language, Janus in fact permitted certain traders to market time. The initial decision found that Lammert granted permission to Trautman Wasserman & Co., Inc. and Brean Murray & Co., Inc. to market time, and Soderberg failed to stop Trautman Wasserman from market timing. The initial decision concluded that Lammert and Soderberg negligently caused Janus' prospectuses to include material misstatements and omissions. (Rels. 33-8921; 34-57882; IA-2737; IC-28290; File No. 3-12386)

SEC Charges Former Partner of Big Four Accounting Firm and a Registered Securities Professional With Repeated Instances of Insider Trading

The Securities and Exchange Commission alleged in an insider trading case filed today that from at least the summer of 2006 through the fall of 2007, a partner at a Big Four accounting firm tipped his friend concerning the identities of at least seven different acquisition targets of clients who sought valuation services from the partner's firm in connection with those acquisitions. According to the complaint, knowing the confidential nature of this information, the friend used the information to trade in the securities of the target companies, and made recommendations to others who traded as well, resulting in total illegal trading profits of $596,000.

The complaint alleges that defendant James E. Gansman (Gansman), a lawyer and a former partner in Ernst & Young LLP's (E&Y's) Transaction Advisory Services (TAS) department in New York, learned of each of the pending acquisitions, and the identity of the target companies, through his work at E&Y advising the acquirers. According to the complaint, on numerous occasions, in breach of a duty of confidentiality he owed to E&Y and the firm's clients, Gansman misappropriated the information about pending acquisitions by tipping defendant Donna B. Murdoch (Murdoch). Murdoch was a registered securities professional and Managing Director of a Philadelphia-based broker-dealer and investment banking firm. The complaint alleges that Gansman provided Murdoch material, nonpublic information, including information concerning the identities of target companies and the existence of acquisition talks involving those companies.

The SEC complaint charges that each of the three defendants violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and that defendants Gansman and Murdoch also violated Section 14(e) of the Exchange Act and Rule 14e-3 thereunder. The SEC seeks injunctions against future violations of the federal securities laws, disgorgement of unlawful trading profits with prejudgment interest, and civil monetary penalties.

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation, the Chicago Board of Options Exchange, the Options Regulatory Surveillance Authority, and the Financial Industry Regulatory Authority. The Commission's investigation in this matter is ongoing. [SEC v. James E. Gansman, et al., Civil Action No. 08-CV-4918 (S.D.N.Y.)] (LR-20603)

INVESTMENT COMPANY ACT RELEASES

Fidelity Rutland Square Trust, et al.

An order has been issued on an application filed by Fidelity Rutland Square Trust, et al., under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act. The order permits certain registered open-end management investment companies to acquire shares of other registered open-end management investment companies and unit investment trusts that are within and outside the same group of investment companies. The order supersedes a prior order. (Rel. IC-28287 - May 28)

The RBB Fund, Inc. and Abundance Technologies, Inc.

An order has been issued on an application filed by The RBB Fund, Inc. and Abundance Technologies, Inc. (the Adviser) for an order under Section 12(d)(1)(J) of the Investment Company Act for an exemption from Sections 12(d)(1)(A) and (B) of the Act, and under Sections 6(c) and 17(b) of the Act for an exemption from Section 17(a) of the Act. The order amends a prior order that permits certain series of a registered open-end management investment company advised by the Adviser to acquire shares of other registered open-end management investment companies and unit investment trusts that are outside the "same group of investment companies" (Underlying Funds). The amended order also will permit investments in Underlying Funds that operate as feeder funds in a master-feeder structure in reliance on Section 12(d)(1)(E) of the Act and are part of the "same group of investment companies" as their corresponding master funds. (Rel. IC-28288 - May 28)

The Bessemer Group, Incorporated, et al.

An order has been issued on an application filed by The Bessemer Group, Incorporated (Bessemer), et al. to exempt certain limited liability companies and other investment vehicles formed for the benefit of eligible employees of Bessemer and its affiliates from certain provisions of the Investment Company Act. Each limited liability company or other investment vehicle will be an "employees' securities company" within the meaning of Section 2(a)(13) of the Act. (Rel. IC-28289 - May 28)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by the New York Stock Exchange to amend NYSE Rule 13 to extend the definition of Routing Broker and effect conforming changes to NYSE Rule 17 (SR-NYSE-2008-37) 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 June 2. (Rel. 34-57870)

The Commission issued notice of immediate effectiveness of a proposed rule change (SR-Phlx-2008-37) filed by the Philadelphia Stock Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 relating to the definition of exchange-traded fund share. Publication is expected in the Federal Register during the week of June 2. (Rel. 34-57871)

A proposed rule change filed by the NASDAQ Stock Market relating to trading the two-character ticker symbol "HA" (SR-NASDAQ-2008-047) 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 June 2. (Rel. 34-57875)

Approval of Proposed Rule Change

The Commission granted approval to a proposed rule change (SR-Phlx-2008-27), filed by the Philadelphia Stock Exchange under Rule 19b-4 of the Securities Exchange Act of 1934 relating to access to XLE, Phlx's electronic equity trading system, on Phlx's Options Floor. Publication is expected in the Federal Register during the week of June 2. (Rel. 34-57872)

Accelerated Approval of Proposed Rule Change

The Commission granted accelerated approval to a proposed rule change (SR-NASDAQ-2008-044) submitted by the NASDAQ Stock Market pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend Nasdaq Rule 4420(g). Publication is expected in the Federal Register during the week of June 2. (Rel. 34-57873)

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