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ENFORCEMENT PROCEEDINGSSEC Action Stops Hillsborough, California Investment Adviser Defrauding Millions of Dollars from ClientsThe Commission today filed fraud charges against a Hillsborough, California investment adviser, and his sole proprietorship Trebor Company, alleging that Robert C. Brown, Jr. misappropriated more than $20 million from investors who Brown falsely promised that their money would be invested in the stock market. At the SEC's request, the federal court for the Northern District of California issued an order freezing Brown's assets and prohibiting him from, among other things, further transferring or dissipating his clients' assets. According to the Commission's complaint, Brown promised clients that he would invest their money risk-free in stock or options, but instead helped himself to millions of dollars of client money to pay for lavish personal expenses, such as upkeep on his Ferrari, limousine services and shopping trips. The Commission's complaint also alleges that, in a classic Ponzi scheme tactic, Brown often transferred money from new investors to favored clients to create the illusion of profitable trading. The Commission's complaint further alleges that since at least 2000 and continuing to the present, Brown (previously of Vallejo, Calif.) offered a variety of investment programs that falsely promised astronomical returns. One program promised, for example, to double investor money in eight months. The SEC alleges that Brown raised more than $20 million, but transferred millions of dollars to himself and his family members for personal use. Only approximately $4 million went to any brokerage account, however it was a personal brokerage account that Brown treated as his own piggy bank. In order to perpetuate the scheme, the Commission alleges that Brown transferred newly-raised funds to older investors as purported profits on securities trading. The SEC's complaint likewise alleges that Brown provided false account statements to investors that showed their investments were earning the returns he had promised. When Brown failed to repay his clients, he concocted elaborate excuses, blaming delays on "the Patriot Act" while representing that the SEC had "cleared" him of wrongdoing. The Commission's complaint charges Brown and Trebor with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Eddings, CDC Global, Inc. and Wise Investors Simply Excel, LLC are charged solely as relief defendants. The Commission is seeking injunctive relief, disgorgement of ill-gotten gains, and monetary penalties, as well as preliminary and emergency relief. The Commission further seeks disgorgement of all investors funds disbursed to relief defendants Eddings, CDC Global, Inc. and Wise Investors Simply Excel, LLC, and an order freezing their assets. [SEC v. Robert C. Brown, Jr. and Trebor Company, Case No. CV-08-3517-CW (N.D. Cal. filed July 23, 2008)] (LR-20653) INVESTMENT COMPANY ACT RELEASESMinnesota Life Insurance Company, et al.An order has been issued pursuant to Section 6(c) of the Investment Company Act of 1940 (Act) to Minnesota Life Insurance Company (Minnesota Life), Variable Annuity Account (Separate Account), and Securian Financial Services, Inc. (collectively, Applicants), granting exemptions from the provisions of Sections 2(a)(32) and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to the extent necessary to permit recapture of certain credit enhancements applied to cumulative net purchase payments that reach certain aggregate amounts in accordance with the formula described in the application, made under (i) new deferred variable annuity contracts and certificates, including data pages, riders and endorsements, described in the application (the New Contracts) and under (ii) any deferred variable annuity contracts and certificates, including data pages, riders and endorsements, that Minnesota Life may issue in the future (the Future Contracts) through the Separate Account and any other separate accounts of Minnesota Life and its successors in interest, provided that any such Future Contracts are substantially similar in all material respects to the New Contracts (New Contracts and Future Contracts referred to collectively as the Contracts). The exemptive relief extends to any Financial Industry Regulatory Authority member broker-dealer controlling, controlled by, or under common control with any Applicant, whether existing or created in the future, that in the future, may act as principal underwriter for the Contracts. (Rel. IC-28334 - July 22) Orders of Deregistration Under the Investment Company Act of 1940Orders have been issued under Section 8(f) of the Investment Company Act of 1940 declaring that each of the following has ceased to be an investment company:
COVA Variable Annuity Account FourAn order has been issued on an application filed by COVA Variable Annuity Account Four declaring that it has ceased to be an investment company. (Rel. IC-28340 - July 23) JOINT INDUSTRY PLANSOrder Approving on a Permanent Basis a Proposed Amendment to the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized OptionsThe Commission granted permanent approval to Amendment No. 1 to the Plan for the Purpose of Developing and Implementing Procedures Designed to Facilitate the Listing and Trading of Standardized Options (File No. 4-443) submitted pursuant to Section 11A of the Securities Exchange Act of 1934 and Rule 608 thereunder by the American Stock Exchange, the Boston Stock Exchange, Chicago Board Options Exchange, the International Securities Exchange, the NASDAQ Stock Market, NYSE Arca, the Philadelphia Stock Exchange, and the Options Clearing Corporation. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58205) SELF-REGULATORY ORGANIZATIONSApproval of Proposed Rule ChangesThe Commission approved a proposed rule change (SR-OCC-2007-20) filed by the Options Clearing Corporation under Section 19(b)(1) of the Securities Exchange Act of 1934 to permit the incorporation of certain forms of collateral into the System for Theoretical Analysis and Numerical Simulations risk management methodology. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58158) The Commission approved a proposed rule change submitted by the American Stock Exchange (SR-Amex-2008-44) under Rule 19b-4 of the Securities Exchange Act of 1934 modifying the provisions governing contacts between specialists and issuers. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58199) The Commission granted approval to a proposed rule change, as modified by Amendment No. 1, submitted by the NASDAQ Stock Market (SR-NASDAQ-2008-043) under Section 19(b)(1) of the Securities Exchange Act of 1934 to amend the definition of "Non-Industry Director" in the By-Laws of The NASDAQ OMX Group, Inc. and The NASDAQ Stock Market LLC. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58201) The Commission granted approval to a proposed rule change (SR-NYSEArca-2008-57) submitted by NYSE Arca, pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, amending NYSE Arca Rule 5.3 and Rule 5.4 to enable the listing and trading of options on index-linked securities. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58203) The Commission granted approval to a proposed rule change (SR-CBOE-2008-26) submitted by the Chicago Board Options Exchange to list and trade options on the BXM Index (1/10th Value). Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58207) The Commission granted approval to a proposed rule change, as modified by Amendment No. 1 thereto, filed by NYSE Arca (SR-NYSEArca-2008-56) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend the pilot program expiring on November 30, 2008 for listing standards to provide that currently traded issuers will be required to meet each of the $5 per share closing price requirement and the $150 million market value of listed securities requirement on the basis of a 90 trading day average of the closing price of the issuer's common stock prior to applying for initial listing. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58212) Immediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by the Boston Stock Exchange (SR-BSE-2008-39) to extend a pilot program that allows no minimum size order requirement and certain premature terminations under the price improvement period process on the Boston Options Exchange Facility until November 18, 2008 has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58195) A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2008-76) to extend two pilot programs related to the exchange's automated improvement mechanism until July 18, 2009 has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58196) A proposed rule change (SR-ISE-2008-60) filed by the International Securities Exchange relating to the extension of the Price Improvement Mechanism pilot program has become effective under Section 19(b)(3)(A) under the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58197) A proposed rule change (SR-CBOE-2008-77) filed by the Chicago Board Options Exchange relating to the Interim Trading Permit access fee has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58200) A proposed rule change filed by the NASDAQ Stock Market (SR-NASDAQ-2008-064) to permit the NASDAQ Options Market to participate in the Quarterly Options Series Pilot Program has become immediately 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 July 28. (Rel. 34-58209) Accelerated Approval of Proposed Rule ChangeThe Commission granted accelerated approval to a proposed rule change, as modified by Amendment No. 1 thereto (SR-CBOE-2008-64), submitted by the Chicago Board Options Exchange pursuant to Rule 19b-4 under the Securities Exchange Act of 1934, amending CBOE Rule 5.3 and Rule 5.4 to enable the listing and trading of options on index-linked securities. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58204) Proposed Rule ChangesThe Financial Industry Regulatory Authority has filed a proposed rule change (SR-FINRA-2008-022) pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, relating to the membership waive-in process for certain New York Stock Exchange Members. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58206) The Commission issued notice of filing of a proposed rule change (SR-NYSEArca-2008-77) filed by NYSE Arca through its wholly owned subsidiary, NYSE Arca Equities, Inc., pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to list and trade the Barclays Middle East Equities (MSCI GCC) Non Exchange Traded Notes due 2038. Publication is expected in the Federal Register during the week of July 28. (Rel. 34-58208) SECURITIES ACT REGISTRATIONSRECENT 8K FILINGS
http://www.sec.gov/news/digest/2008/dig072408.htm
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