SEC NEWS DIGEST Issue 2002-191 October 2, 2002 COMMISSION ANNOUNCEMENTS CORRECTION TO CALENDAR OF PUBLIC APPEARANCES OF SENIOR COMMISSION OFFICIALS - OCTOBER 2002 The calendar entry in yesterday's Digest for the October 2nd speaking engagement for Commissioner Harvey Goldschmid contained incorrect information about event location. It should have appeared as follows: When: Wednesday, October 2, 2002 Who: Commissioner Harvey Goldschmid What: Glasser LegalWorks The Sarbanes-Oxley Act of 2002: New Responsibilities, Liabilities and Penalties Where: The New York Hilton, New York, New York Contact: Enilda Indyk - (973) 890-0008 FINAL DATA QUALITY GUIDELINES In accordance with Section 515 of the Treasury and General Government Appropriations Act for Fiscal Year 2001 (Public Law 106-554; H.R. 5658) and guidelines prepared by the Office of Management and Budget (OMB), the Commission has posted information quality guidelines on its website. The guidelines describe the agency's internal procedures for ensuring and maximizing the quality of certain types of information disseminated by the Commission. In addition, they provide an administrative mechanism for correcting, when appropriate, information that does not comply with the Commission's guidelines or OMB's guidelines. The data quality guidelines: are not a regulation and do not change any existing regulatory requirements or trigger any regulatory obligations; do not create any legal rights or impose any legally binding requirements or obligations on the Commission or the public; do not affect any otherwise available judicial review of agency action; and may be revised periodically. (Rel. 34-46577) ENFORCEMENT PROCEEDINGS IN THE MATTER OF DEAN WITTER REYNOLDS INC., N/K/A MORGAN STANLEY DW, INC., MARK RODGERS, AND PAUL GRANDE On October 1, the Commission instituted and simultaneously settled public administrative and cease-and-desist proceedings against Dean Witter Reynolds, Inc., n/k/a Morgan Stanley DW, Inc. (Dean Witter), Mark Rodgers (Rodgers), formerly a registered representative of Dean Witter, and Paul Grande (Grande), a former Dean Witter branch manager. Dean Witter consented to the entry of an Order by the Commission that requires Dean Witter to pay a civil penalty of $500,000, finds that Dean Witter failed properly to supervise Rodgers, and orders Dean Witter to cease and desist from further violations of certain of the books and records provisions applicable to broker-dealers in the Securities Exchange Act of 1934 (Exchange Act). The Commission's Order also finds that Grande failed reasonably to supervise Rodgers, orders him to pay a civil penalty of $25,000, and suspends him from associating with any broker or dealer in any supervisory capacity for nine months. Finally, the Order bars Rodgers from associating with any broker or dealer and imposes a cease-and-desist order, but waives disgorgement and does not impose civil penalties based on the sworn statements in Rodgers' Statement of Financial Condition. According to the Order, Rodgers, at the time of his misconduct, was one of Dean Witter's highest producing brokers in the over-the-counter NASDAQ market. The Commission found that between January 1998 and August 19, 1998, Rodgers engaged in unsuitable and unauthorized trading in the accounts of several of his customers at Dean Witter. Some of these customers were elderly, and entrusted Rodgers with a substantial amount of their savings. According to the Order, Rodgers used unauthorized trades and margin purchases to acquire for his customers unsuitable amounts of two speculative NASDAQ securities, e-Net, Inc. (e- Net) and MVSI, Inc. (MVSI). Rodgers also used a variety of manipulative devices, including a "short squeeze," in an effort artificially to stabilize the stock price of e-Net. In an effort to conceal his fraud, Rodgers repeatedly falsified Dean Witter's order tickets on transactions in e-Net stock. By the end of September 1998, the value of e-Net stock collapsed, leaving Rodgers' clients with losses in excess of $15 million dollars. The Order finds that Dean Witter failed properly to supervise Rodgers because its compliance procedures failed to detect certain e-Net trades that Rodgers executed on behalf of his customers. In addition, the Order finds that Dean Witter failed to prepare "Securities Concentration Reports" during the height of Rodgers' misconduct, as the firm's compliance procedures required. Had Dean Witter prepared those reports, the firm likely would have placed restrictions on Rodgers' ability to purchase additional shares of e-Net stock for his clients. The Commission also found that Dean Witter, aided and abetted and caused by Rodgers, failed accurately to make and keep for prescribed periods certain records that broker-dealers are required to maintain. With respect to Grande, the Commission's Order finds that he failed reasonably to investigate several "red flags" that should have alerted him to Rodgers' misconduct, including the activity in the accounts of certain of Rodgers' customers and the unusually high number of e-Net transactions in those accounts. In addition to the civil penalties discussed above against Dean Witter and Grande, the Commission's Order censures Dean Witter, orders Dean Witter to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Exchange Act, and Rule 17a- 3 thereunder, and suspends Grande from association in a supervisory capacity with any broker or dealer for a period of nine months. The Order bars Rodgers from association with any broker or dealer and orders him to cease-and-desist from committing or causing any violation and any future violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and from causing any violation and any future violation of Section 17(a) of the Exchange Act and Rule 17a-3 thereunder. The Commission also ordered Rodgers to pay disgorgement of $631,885, but waived payment of that amount, and did not impose a civil penalty, based upon the sworn representations in Rodgers' Statement of Financial Condition. Each of the Respondents consented to the above relief without admitting or denying the findings in the Commission's Order. (Rel. 34-46578; File No. 3-10905) COMMISSION SANCTIONS INVESTMENT ADVISER AND ITS PRESIDENT FOR CAUSING CLIENTS TO PAY UNNECESSARY EXECUTION COSTS AND FAILING TO SEEK BEST EXECUTION On October 1, the Commission imposed sanctions and a cease-and-desist order against Beverly Hills-based Renberg Capital Management, Inc., a registered investment adviser, and its president, Daniel H. Renberg, age 71, of Los Angeles, California, for causing clients to pay unnecessary execution costs and failing to seek best execution. Best execution generally refers to an investment adviser's obligation to seek to execute securities transactions for clients on terms that are the most favorable to the client under the circumstances. The Order finds that Renberg Capital and Renberg failed to seek best execution because they engaged in an undisclosed trading practice that caused certain clients to pay unnecessary execution costs. According to the Order's findings, the undisclosed trading practice involved cross trades between client accounts. Specifically, Renberg Capital would buy securities in the open market, allocate the shares to a first group of clients, and shortly thereafter sell some of the shares from the first group to a second group of clients in a cross trade. Renberg Capital would determine the price of the cross trade and the commissions paid to effect the trade, and always chose a crossing price that was higher than the initial purchase price paid by the first group of clients. As a result, the second group of clients that purchased in the cross trades paid higher execution costs for their shares than the first group that purchased from the open market. From 1997 through 1999, the second group of clients paid approximately $310,000 in higher prices and commissions than if such clients had acquired the shares at the same per share cost as the first group. Renberg Capital and Renberg agreed to settle the charges, without admitting or denying the Commission's findings, pursuant to a public administrative and cease-and-desist proceeding. As part of the settlement, Renberg Capital and Renberg were censured and ordered to cease and desist from violating the antifraud provisions of Section 206(2) of the Investment Advisers Act of 1940. They also agreed to pay, jointly and severally, a $40,000 civil penalty. Renberg Capital also agreed to retain an independent consultant to conduct a compliance audit of Renberg Capital's policies and procedures for detecting and preventing securities law violations. Finally, as part of the settlement, Renberg Capital agreed to reimburse to clients the $310,000 in unnecessary costs they paid as a result of the undisclosed trading practice. (Rel. IA-2064; File No. 3-10906) COMMISSION FILES CIVIL CONTEMPT CHARGES AGAINST DEFENDANTS CLAUDE LEFEBVRE AND RMO ASSETS MANAGEMENT SA IN SECURITIES FRAUD CASE The Commission announced that on September 30 it filed civil contempt charges against Claude Lefebvre and RMO Assets Management SA, alleging that they violated a federal court order issued in a civil fraud case filed by the Commission. In its complaint, filed on July 31, 2002, the Commission alleged that Lefebvre, a purported bond trader, RMO Assets Management, and others participated in a fraudulent scheme that raised at least $40 million from investors in July 2002. The United States District Court for the Northern District of California issued a temporary restraining order and asset freezes against Lefebvre, RMO Assets Management, and others on August 1, 2002. In its contempt applications, the Commission alleges that Lefebvre and RMO Assets Management failed to comply with the court's order requiring them to identify, among other things, their financial institution accounts and all investors from whom they received funds. On August 30, 2002, Lefebvre was arrested and criminal fraud charges were filed against him by the U.S. Attorney's Office in Colorado in connection with his role in this matter. On September 10, 2002, a U.S. magistrate ordered Lefebvre held without bail and, on September 26, 2002, Lefebvre was indicted by the Colorado U.S. Attorney's Office in connection with the criminal fraud charges. See Litigation Release No. 17759. For further information, please see Litigation Release Numbers 17652 (August 2, 2002) and 17729 (September 17, 2002). [SEC v. Claude Lefebvre, et al., USDC, NDCA, C.A. No. C-02-3704-SBA] (LR-17759) SEC CHARGES FORMER MANAGEMENT OF FLIR SYSTEMS, INC. WITH SCHEME TO INFLATE REVENUE The Commission announced the filing of a complaint on September 30 against four former senior executives of government contractor FLIR Systems, Inc. (FLIR) for engaging in a wide-ranging scheme to inflate earnings in 1998 and 1999. The former executives charged are FLIR's former President and CEO, J. Kenneth Stringer III (Stringer); its former Senior Vice President of Finance and CFO, J. Mark Samper (Samper); its former Vice President of Sales for Airborne Products Worldwide, William N. Martin (Martin); and its former Director of Sales Operations, Steven R. Eagleburger (Eagleburger). Samper, Martin, and Eagleburger settled the Commission's action without admitting or denying the allegations in the complaint. FLIR, based in Portland, Oregon, manufactures infrared imaging equipment. FLIR's customers include government and commercial users, and its products are used for surveillance and reconnaissance, among other things. Its stock is listed on Nasdaq's National Market. FLIR restated its 1998 and 1999 financial statements three times in 2000 and 2001 to correct its financials. The Commission's complaint alleges that Stringer, Samper, Martin, and Eagleburger engaged in fraudulent accounting practices throughout 1998 and 1999 in order to meet revenue and earnings projections. The actions taken by these individuals caused FLIR to report false financial information in FLIR's annual and quarterly reports in 1998 and 1999. The complaint alleges that, as a result of this scheme, FLIR's pre-tax earnings in 1998 and 1999 were overstated by at least 25% to as much as 578%; in one quarter FLIR reported a profit of $411,000 when it actually had a loss of $325,000. In 1998, FLIR reported that it had earned $22.2 million before taxes for the year when in fact FLIR had earned less than half that amount. The complaint alleges that as a result of pressure to meet earnings targets by Stringer, Samper, Martin, and Eagleburger caused FLIR's overstatement of earnings by engaging in six improper revenue recognition practices: * False Sales. FLIR recognized revenue on four transactions in which no customer placed an order. * Placeholders. FLIR recognized revenue on eight transactions in which it shipped units - termed "placeholders" at FLIR - that were not what the customer ordered. FLIR shipped placeholder units to a third party warehouse, recognized revenue on shipment, then brought the units back to be replaced or reworked per customer specifications. * Side Agreements. FLIR recognized revenue on three transactions in which it offered additional terms such as rights or return, special discounts, or extended payment terms documented in side agreements with the customer. * Rentals. FLIR recognized revenue on two transactions that were not sales in substance because title to the product had not passed to the customer. * Contingent Orders and Consignment Sales. FLIR recognized revenue on four transactions that contained unresolved contingencies or were consignment sales. * Improper Bill and Hold Sales. FLIR recognized revenue on six transactions based upon non-binding letters of intent or inadequate purchase commitments from the customer. In addition to these improper revenue practices, the complaint also alleges that Samper caused FLIR to fraudulently overstate assets and understate expenses in each quarter in 1999 by improperly using suspense accounts and by double-booking accounts receivables. The defendants are: * J. Kenneth Stringer III, 49, of Lake Oswego, Oregon, FLIR's former CEO and President. The SEC seeks an injunction, disgorgement of ill-gotten gains, civil money penalties, and an order prohibiting Stringer from acting as an officer or director of a publicly-traded company. The complaint alleges that Stringer participated in fraudulent sales transactions, that he knew or was reckless in not knowing about the revenue recognition schemes perpetrated by management, and that he lied about the schemes to FLIR's independent auditors. The complaint further alleges that Stringer received a 1998 bonus of $180,000 which he would not have received had FLIR accurately reported its earnings. * J. Mark Samper, 41, of Portland, Oregon, FLIR's former CFO and Senior Vice President of Finance. Samper simultaneously settled the SEC's action without admitting or denying the allegations in the complaint. Samper agreed to the entry of a court order enjoining him from committing future violations of the charged federal securities laws, barring him from serving as an officer or director of a publicly-traded company, and ordering him to pay $52,500 in disgorgement (representing his 1998 bonus), $8,859 in prejudgment interest, and $110,000 as a civil money penalty. The complaint alleges that Samper was responsible for FLIR's financial record keeping and reporting, signed FLIR's periodic reports filed with the SEC, authorized revenue recognition for false sales, placeholders, rentals, consignment sales, and bill and hold sales with insufficient commitments from customers, caused the double-booking of two transactions, used suspense accounts to inflate FLIR's results, and lied to the auditors. * William N. Martin, 46, of Lake Oswego, Oregon, FLIR's former Vice President of Sales for Airborne Products Worldwide. Martin simultaneously settled the SEC's action without admitting or denying the allegations in the complaint. Martin agreed to the entry of a court order enjoining him from committing future violations of the charged federal securities laws, barring him bar from serving as an officer or director of a publicly-traded company for a period of ten years, and ordering him to pay $40,000 in disgorgement (representing his 1998 bonus), $7,025 in prejudgment interest, and $40,000 as a civil money penalty. The complaint alleges that Martin authorized and directed sales personnel to obtain non-binding letters of intent, contingent purchase orders, side letters with rights of return, and rental agreements, and that he lied to FLIR's auditors about the scheme. * Steven R. Eagleburger, 55, of West Linn, Oregon, FLIR's former Director of Sales Operations. Eagleburger simultaneously settled the SEC's action without admitting or denying the allegations in the complaint. Eagleburger agreed to the entry of a court order enjoining him from committing future violations of the charged federal securities laws and to pay a civil money penalty of $25,000. The complaint alleges that Eagleburger facilitated the fraudulent scheme by authorizing and ordering manufacturing personnel to ship placeholder units and directing the entry of sales orders with insufficient or no documentation. The Commission charged Stringer, Samper, Martin, and Eagleburger with violating or aiding and abetting violations of numerous provisions of the federal securities laws, including the antifraud provisions (Section 10(b) of the Securities and Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and additionally as to Samper and Stringer, Section 17(a) of the Securities Act of 1933), reporting provisions (Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder, and additionally as to Stringer, Samper, and Martin, Rule 13a-13 of the Exchange Act), the record-keeping provisions (Section 13(b)(2)(A) of the Exchange Act, and Rule 13b2-1 thereunder), internal controls provisions (Sections 13(b)(2)(B) and 13(b)(5) of the Exchange Act) and as to Stringer, Samper, and Martin, the lying-to-an-accountant provision (Rule 13b2-2 of the Exchange Act). [SEC v. J. Kenneth Stringer III, J. Mark Samper, William N. Martin, and Steven R. Eagleburger, (U.S. District Court for the District of Oregon, Civil Action No. CV02-1341 (ST)] (LR-17760; AAE Rel. 1639) PRELIMINARY INJUNCTION ENTERED AGAINST DAVID CHEN YU AND QUEST CAPITAL STRATEGIES, INC. FOR VIOLATION OF COMMISSION-ORDERED SUPERVISORY BAR On September 25, Judge Paul L. Friedman of the United States District Court for the District of Columbia issued an Order of Preliminary Injunction against David Chen Yu and Quest Capital Strategies, Inc. (Preliminary Injunction). The Preliminary Injunction arose out of Yu's alleged violation of a supervisory bar the Commission imposed on him last October (Quest Capital Strategies, Inc. and David Chen Yu, Exchange Act Release No. 44935, October 15, 2001). In a memorandum opinion issued the same day, Judge Friedman found that the Commission had made the required strong "prima facie" case that Yu had violated the supervisory bar by retaining a significant degree of supervisory control of Quest, a registered broker-dealer with which he is associated. The opinion cited evidence that Yu remained involved in decisions regarding hiring and firing of key personnel at the broker- dealer, including brokers and compliance personnel, and retained at least secondary responsibility for advising on the termination of brokers and the hiring and supervision of compliance personnel. Judge Friedman also found that Yu and Quest had violated Section 15(b)(6)(B) of the Securities Exchange Act of 1934 in that Yu had associated with a broker-dealer (Quest) in violation of a Commission bar and Quest had permitted him to do so although aware of the bar. Finally, the judge found that there was a reasonable likelihood that the violations would continue. The Preliminary Injunction enjoins Quest and Yu from future violations pending the outcome of the court action. The court action was commenced on July 31, 2002 with the filing of a complaint and an application for a preliminary injunction (SEC v. David Chen Yu and Quest Capital Strategies, Inc, Civil Action No. 02-1512, PLF). For more information about the Commission's complaint and the prior proceedings against Quest, Yu, and Nakoski, see SEC v. David Chen Yu and Quest Capital Strategies, Inc., Litigation Release No. 17644 (July 31, 2002 ); Quest Capital Strategies, Inc. and David Chen Yu, Release Nos. 34-44935 and 40-1990 (October 15, 2001), and SEC v. John T. Nakoski, Litigation Release No. 14515 (May 30, 1995). [SEC v. Quest Capital Strategies, Inc., and David Chen Yu, Civil Action No. CV-02- 01512, D.D.C., PLF] (LR-17761) SEC CHARGES FASTOW, FORMER ENRON CFO, WITH FRAUD Seeks disgorgement of all ill-gotten gains, including compensation, civil money penalties, a permanent bar from acting as a director or officer of a publicly held company, and injunction from future violations of federal securities laws The Commission filed a civil enforcement action today against Andrew S. Fastow, the former chief financial officer of Enron Corp., alleging violations of the anti-fraud, periodic reporting, books and records, and internal controls provisions of the federal securities laws. The Commission is seeking disgorgement of all ill-gotten gains, including all compensation received subsequent to the commencement of the alleged fraud, civil money penalties, a permanent bar from acting as a director or officer of a publicly held company, and an injunction from future violations of the federal securities laws. The Commission brought this action in coordination with the Justice Department's Enron Task Force, which filed a related criminal complaint against Fastow. "Mr. Fastow's actions, along with the actions of others at Enron and elsewhere, have undermined investor confidence in our markets and our system of financial reporting," said SEC Enforcement Division Director Stephen M. Cutler. "Our lawsuit today is a message to all who think that they can get away with defrauding investors. No matter how sophisticated or complex their schemes might be, we will figure it out, we will pursue them, and we will make them answer for their wrongdoing." Added Deputy Director Linda Chatman Thomsen, "Mr. Fastow bears substantial responsibility for the Enron debacle and for the damage it has caused. However, our investigation does not end here. We, together with the Justice Department's Enron Task Force, will continue investigating until all have been brought to justice." The complaint allegations stem from Fastow's conduct relating to six transactions. Three of the transactions, RADR, Chewco, and Southampton, were the subject of the Commission's earlier settled action against Michael Kopper. Those transactions were part of an alleged scheme to hide Fastow's and Kopper's interest in and control of certain entities in order to keep those entities off Enron's balance sheet. This was done, according to the complaint, for self-enrichment and to mislead analysts, rating agencies, and others about Enron's true financial condition. As to Fastow's role in RADR, Chewco, and Southampton, the complaint alleges that Fastow secretly nominated certain of the owners of these entities, funded certain of their investments through undisclosed loans, collected undisclosed fees, and demanded and received under-the-table payments, including payments to himself and his family members disguised as yearly $10,000 non-taxable gifts. Two of the remaining three transactions, the Nigerian barges and the Cuiaba transactions, are alleged to have been sham sales - best described as secret asset-parking arrangements. In one of these sales, a sale of an interest in certain Nigerian barges to a financial institution, Fastow is alleged to have personally promised that the financial institution would be taken out of its so-called investment and later arranged for an entity he controlled to buy the financial institution's interest at a pre-arranged rate of return on a pre- arranged time table. In the second sale, Enron entered into a transaction with an off-balance- sheet entity controlled by Fastow to sell an interest in a severely troubled power plant in Cuiaba, Brazil, in order to avoid consolidation of project debt and recognize earnings. In connection with this transaction, Fastow allegedly entered into an unwritten side agreement with Enron requiring Enron to buy back the interest it just sold to Fastow at a guaranteed profit. The last set of allegations included in the complaint relate to an alleged instance of backdating documents to avoid diminution in Enron's investment in the stock of a technology company. Specifically, according to the complaint, in September 2000, Fastow and others created documents that purported to lock in the value of Enron's investment in that company back in August of 2000, when that company's stock was trading at its all-time high price. Throughout the period of his alleged fraudulent conduct, Fastow sold millions of dollars worth of Enron securities. Specifically, the Commission's complaint further alleges as follows: * RADR: In early 1997, Enron needed to divest itself of certain electricity-generating windmill farms to maintain certain financial benefits under applicable energy regulations. A sale to independent third-party investors would have entailed relinquishing control over these windmill farms, an eventuality Enron wanted to avoid. To maintain control of these assets, Fastow selected certain individuals to act as nominee investors in the entities (collectively referred to as "RADR") that purchased the windmill farms. To provide the funds for the purchase, Fastow made a secret personal loan to Kopper, who in turn made loans to the nominee investors. Between August 1997 and July 2000, these entities generated approximately $2.7 million in unlawful profits. In July 2000, Enron repurchased the facilities from the entities, generating an additional gain of approximately of $1.8 million. Between 1997 and 2000, Kopper made substantial payments to Fastow from these unlawful profits. One mechanism employed to funnel to Fastow money generated by this scheme was a "gifting" program whereby Kopper and Kopper's domestic partner made annual "gifts" of $10,000 to each member of Fastow's immediate family. Fastow chose the $10,000 amount to avoid IRS reporting rules. * Chewco: In 1997, Enron and the California Public Employees' Retirement System (CalPERS) were joint venture partners in an off-balance-sheet investment vehicle called Joint Energy Development Limited Partnership (JEDI). When CalPERS wanted to cash out its investment in JEDI prior to investing in a larger Enron venture, Fastow and others at Enron formed a special purpose entity called Chewco to buy CalPERS' interest in JEDI thereby allowing Enron to continue accounting for JEDI as an off-balance- sheet entity. Initially, Fastow planned to serve as Chewco's general partner and as an equity investor, but was advised that his involvement would require disclosure by Enron. Fastow then selected Michael Kopper to fill the Chewco general partner role. Fastow secretly controlled Chewco and Kopper and, by virtue of that control, received a share of Chewco's profits as kickbacks from Kopper. In addition, Fastow siphoned funds from Enron by using his position as Enron's CFO to funnel funds to Chewco for his own benefit. As a result of these various machinations, Chewco was improperly kept off Enron's balance sheet because it did not have the third-party equity at risk required by the applicable accounting rules. Improper deconsolidation of Chewco caused material overstatement of Enron's reported net income and a material understatement of its debt. * Southampton: Fastow unlawfully enriched himself and others using another off-balance-sheet partnership he controlled called LJM Cayman, L.P. ("LJM1"). In approximately February 2000, Fastow and others caused Enron to buy out the partnership interests of LJM1's two limited partners, Credit Suisse First Boston and National Westminster Bank (NatWest). In connection with this transaction, Fastow and others told Enron that NatWest wanted $20 million for its interest in the partnership assets, but paid NatWest only $1 million of that sum and pocketed the rest. A purported charitable foundation in the name of the Fastow's family received $4.5 million in proceeds of this fraud. * Nigerian Barges: In December 1999, Enron and a financial institution entered into a sham "sale" transaction that enabled Enron to book approximately $12 million in earnings in 1999. In the transaction, the financial institution agreed to "buy" from Enron an interest in certain power-producing barges in Nigeria based on an express oral promise from Fastow that Enron would arrange to take the financial institution out of the investment within six months. Enron also agreed to a specified profit for the financial institution's "investment." The transaction closed at the end of December 1999. Six months later, Fastow fulfilled his promise to take the financial institution out of the deal. He arranged for a partnership he controlled, LJM2 Co-Investment, L.P. ("LJM2") to purchase the financial institution's interest on the previously-agreed terms. * Raptor I/Avici: Enron and LJM2 engaged in complex transactions with an entity called Raptor I. Raptor I was used to manipulate Enron's balance sheet and income statement and to generate profits for LJM2 and Fastow at Enron's expense. In September 2000, Fastow and others used Raptor I to effectuate a fraudulent hedging transaction and thus avoid a decrease in the value of Enron's investment in the stock of a public company called Avici Systems Inc. Specifically, Fastow and others back-dated documents to make it appear that Enron locked in the value of its investment in Avici in August of 2000, when Avici's stock was trading at its all time high price. * The Cuiaba Project: To avoid consolidation of debt related to a power- plant project in Cuiaba, Brazil, and to recognize earnings, Enron entered into a sham sale with LJM1. Fastow arranged for LJM1 to buy an interest in the plant despite significant cost overruns, completion delays, and operational problems, after Enron failed to secure an independent buyer. However, in connection with this transaction, Fastow had entered into an unwritten side agreement with Enron (which Enron later honored) requiring Enron to buy back the interest it sold to LJM1 at a guaranteed profit regardless of the risks associated with the project. The Commission's investigation is continuing. For additional information see Litigation Release No. 17692 (August 21, 2002). [SEC v. Andrew S. Fastow, Civil Action No. H-02-3666, K.Hoyt, SDTX] (LR17762; Press Rel. 2002-143) SELF-REGULATORY ORGANIZATIONS DELISTING GRANTED An order has been issued granting the application of the American Stock Exchange to strike from listing and registration certain call and put options contracts issued by The Options Clearing Corporation respecting certain underlying securities, effective at the opening of business on October 2, 2002. (Rel. 34-46583) 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-3 AUTOZONE INC, 123 SOUTH FRONT ST, MEMPHIS, TN, 38103, 9014956500 - 0 ($500,000,000.00) Non-Convertible Debt, (File 333-100205 - Oct. 1) (BR. 02) S-8 AIR PRODUCTS & CHEMICALS INC /DE/, 7201 HAMILTON BLVD, ALLENTOWN, PA, 18195-1501, 6104814911 - 0 ($109,172,678.00) Equity, (File 333-100210 - Oct. 1) (BR. 02) S-4 ON SEMICONDUCTOR CORP, 5005 EAST MCDOWELL ROAD, PHOENIX, AZ, 85008, 6022446600 - 300,000,000 ($300,000,000.00) Non-Convertible Debt, (File 333-100212 - Oct. 1) (BR. 36) S-8 AMB PROPERTY CORP, PIER 1 BAY 1, SAN FRANCISCO, CA, 94111, 4153949000 - 15,000,000 ($15,000,000.00) Equity, (File 333-100214 - Oct. 1) (BR. 08) S-8 ALAMOSA HOLDINGS INC, 5225 S LOOP 289, LUBBOCK, TX, 79424, 8067221100 - 1,000,000 ($320,000.00) Equity, (File 333-100215 - Oct. 1) (BR. 37) F-6 TELIA AB, MARBACKAGATAM 11, FARSTA, SWEDEN, V7, 00000, 0 ($5,000,000.00) ADRs/ADSs, (File 333-100216 - Oct. 1) (BR. ) S-8 YARDVILLE NATIONAL BANCORP, 3111 QUAKERBRIDGE RD, MERCERVILLE, NJ, 08619, 6095855100 - 250,000 ($4,110,000.00) Equity, (File 333-100217 - Oct. 1) (BR. 07) N-2 NUVEEN ARIZONA DIVIDEND ADVANTAGE MUNICIPAL FUND 3, 333 WEST WACKER DRIVE, CHICAGO, IL, 60606, 3129178146 - 0 ($1,000,000.00) Equity, (File 333-100218 - Oct. 1) (BR. 18) N-2 NUVEEN CONNECTICUT DIVIDEND ADVANTAGE MUNICIPAL FUND 3, 333 WEST WACKER DRIVE, CHICAGO, IL, 60606, 3129178146 - 0 ($1,000,000.00) Equity, (File 333-100219 - Oct. 1) (BR. 18) N-2 NUVEEN GEORGIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2, 333 WEST WACKER DRIVE, CHICAGO, IL, 60606, 3129178146 - 0 ($1,000,000.00) Equity, (File 333-100220 - Oct. 1) (BR. 18) N-2 NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3, 333 WEST WACKER DRIVE, CHICAGO, IL, 60606, 3129178146 - 0 ($1,000,000.00) Equity, (File 333-100221 - Oct. 1) (BR. 18) N-2 NUVEEN NORTH CAROLINA DIVIDEND ADVANTAGE MUNICIPAL FUND 3, 333 WEST WACKER DRIVE, CHICAGO, IL, 60606, 3129178146 - 0 ($1,000,000.00) Equity, (File 333-100222 - Oct. 1) (BR. 18) S-8 PEP BOYS MANNY MOE & JACK, 3111 W ALLEGHENY AVE, PHILADELPHIA, PA, 19132, 2152299000 - 1,100,000 ($13,904,000.00) Equity, (File 333-100224 - Oct. 1) (BR. 02) F-1 PEPC WORLDWIDE N V, ALEXANDERSTRAAT 18, 2514 JM THE HAGUE, NETHERLANDS, P7, 00000, 310703465056 - 2,645,000 ($33,258,115.00) Equity, (File 333-100225 - Oct. 1) (BR. 05) S-8 APO HEALTH INC /NV/, 3590 OCEANSIDE ROAD, -, OCEANSIDE, NY, 11572, 8003652839 - 1,000,000 ($60,000.00) Equity, (File 333-100226 - Oct. 1) (BR. 01) S-8 SHOP AT HOME INC /TN/, 5388 HICKORY HOLLOW PARKWAY, PO BOX 305249, ANTIOCH, TN, 37013, 6152638000 - 3,000,000 ($6,825,000.00) Equity, (File 333-100227 - Oct. 1) (BR. 02) S-8 LOOKSMART LTD, 625 SECOND STREET, SAN FRANCISCO, CA, 94107, 4153487000 - 0 ($7,275,000.00) Equity, (File 333-100228 - Oct. 1) (BR. 03) S-8 MAXXZONE COM INC, 1770 N GREEN VALLEY PARKWAY ST 3214, HENDERSON, NV, 89014, 702-616-7337 - 300,000 ($30,000.00) Equity, (File 333-100229 - Oct. 1) (BR. 08) SB-2 IWIZARD HOLDING INC, 8043 EAST MERCER LANE, SCOTTSDALE, AZ, 85260, 6023400090 - 1,733,000 ($866,500.00) Equity, (File 333-100230 - Oct. 1) (BR. ) S-3 SANDISK CORP, 140 CASPIAN COURT, SUNNYVALE, CA, 94089, 4085620500 - 0 ($1.00) Debt Convertible into Equity, (File 333-100231 - Oct. 1) (BR. 03) S-8 CAREDECISION CORP, 2 PENN PLAZA, 15TH FLOOR SUITE 1500-53, NEW YORK, NY, 10121, 2122924959 - 4,127,093 ($288,896.51) Equity, (File 333-100232 - Oct. 1) (BR. 09) S-8 I FLOW CORP /DE/, 20202 WINDROW DRIVE, LAKE FOREST, CA, 92630, 9292062700 - 0 ($2,919,750.00) Equity, (File 333-100233 - Oct. 1) (BR. 36) S-8 MARSHALL & ILSLEY CORP/WI/, 770 N WATER ST, MILWAUKEE, WI, 53202, 4147657801 - 764,390 ($14,020,093.75) Equity, (File 333-100234 - Oct. 1) (BR. 07) S-8 CIMAREX ENERGY CO, 1579 EAST 21ST STREET, TULSA, OK, 74114, 9187425531 - 0 ($104,523,765.00) Equity, (File 333-100235 - Oct. 1) (BR. 04) S-8 SANMINA-SCI CORP, 2700 N FIRST ST, SAN JOSE, CA, 95134, 4089643500 - 0 ($2,400,000.00) Equity, (File 333-100236 - Oct. 1) (BR. 36) SB-2 FIRST SHARES BANCORP INC, 996 SOUTH STATE ROAD 135, GREENWOOD, IN, 46143, 3178824780 - 0 ($1,050,000.00) Equity, (File 333-100237 - Oct. 1) (BR. 07) S-8 BIOSANTE PHARMACEUTICALS INC, 175 OLDE HALF DAY ROAD, SUITE 123, LINCOLNSHIRE, IL, 60069, 8477932458 - 0 ($1,230,000.00) Equity, (File 333-100238 - Oct. 1) (BR. 01) S-4 TRUSTCOMPANY BANCORP, 35 JOURNAL SQ, JERSEY CITY, NJ, 07306, 2014202500 - 20,199,941 ($497,928,546.00) Equity, (File 333-100239 - Oct. 1) (BR. ) 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 ------------------------------------------------------------------------------------ AK STEEL HOLDING CORP DE X X 10/01/02 ALAMOSA DELAWARE INC DE X X 09/26/02 ALAMOSA HOLDINGS INC DE X X 09/26/02 ALLBRITTON COMMUNICATIONS CO DE X 09/16/02 ALLIANCE LAUNDRY SYSTEMS LLC X X 10/01/02 ALLIED HEALTHCARE PRODUCTS INC DE X X 09/25/02 AMERICAN ACHIEVEMENT CORP DE X 07/15/02 AMEND AMERICAN RETIREMENT CORP TN X X 09/30/02 ANADARKO PETROLEUM CORP DE X X 09/30/02 APA OPTICS INC /MN/ MN X X 10/01/02 APPLEBEES INTERNATIONAL INC DE X 10/01/02 ARRHYTHMIA RESEARCH TECHNOLOGY INC /D DE X X 08/31/02 ARTISOFT INC DE X 10/01/02 ASSET BACKED FUNDING CORP ASSET BK FU DE X X 09/25/02 ASSET BACKED SECURITIES CORP DE X X 08/15/02 ASSET BACKED SECURITIES CORP DE X X 09/15/02 ATNG INC TX X X X 09/30/02 AUTOZONE INC NV X 10/01/02 AVISTA CORP WA X 09/23/02 BEAR STEARNS COMMERCIAL MORTGAGE SECU DE X X 09/27/02 BIOGAN INTERNATIONAL INC DE X 07/19/02 AMEND BLUEFLY INC DE X X 09/30/02 BURLINGTON INDUSTRIES INC /DE/ DE X 09/24/02 C & F FINANCIAL CORP VA X X 09/03/02 AMEND C BASS MORTGAGE LOAN ASSET BACKED CER DE X X 09/25/02 CABOT CORP DE X X 09/27/02 CAL DIVE INTERNATIONAL INC MN X 09/17/02 AMEND CALLON PETROLEUM CO DE X X 10/01/02 CAPITAL AUTO RECEIVABLES INC DE X X 10/01/02 CARRIAGE SERVICES INC DE X X 10/01/02 CARSUNLIMITED COM INC NV X 09/15/02 CENDANT MORTGAGE CAPITAL LLC DE X X 09/27/02 CENTERPOINT ENERGY INC X X 09/30/02 CHANNELL COMMERCIAL CORP DE X X 09/25/02 CHARTER COMMUNICATIONS INC /MO/ DE X X 10/01/02 CHASE CREDIT CARD MASTER TRUST NY X 09/01/02 CHASE MANHATTAN BANK /NY/ NY X X 09/16/02 CHASE MANHATTAN BANK USA DE X X 09/16/02 CHASE MANHATTAN BANK USA DE X X 09/16/02 CHASE MANHATTAN BANK USA DE X X 09/16/02 CHASE MANHATTAN HOME EQUITY LOAN TRUS NY X X 09/16/02 CHASE MANHATTAN MARINE OWNER TRUST 19 NY X X 09/16/02 CHASE MANHATTAN RV OWNER TRUST 1997-A DE X X 09/16/02 CHEC FUNDING CENTEX HOME EQ LN ASST B DE X X 09/25/02 CHECKERS DRIVE IN RESTAURANTS INC /DE DE X 09/20/02 CHINA BROADBAND CORP NV X X 09/30/02 CIRCUIT CITY STORES INC VA X X 10/01/02 CIRCUIT RESEARCH LABS INC AZ X 10/01/02 CLAIBORNE LIZ INC DE X 09/30/02 COAST BANCORP/CA X X 09/27/02 COMBINED PROFESSIONAL SERVICES INC NV X X 09/27/02 COMMERCIAL MORTGAGE PASS THROUGH CERT DE X X 06/15/01 COMMONWEALTH BANCORP INC PA X X 09/30/02 CONOCOPHILLIPS DE X X 08/30/02 AMEND CORNING INC /NY NY X X 09/30/02 CREDIT SUISSE FIRST BOSTON MORT ACCEP DE X X 09/25/02 CROSSWALK COM DE X X X 10/01/02 CSFB MORTGAGE BACKED PASS THROUGH CER DE X X 09/25/02 CSFB MORTGAGE BACKED PASS THROUGH CER DE X X 09/25/02 CSFB MORTGAGE BACKED PASS THROUGH CER DE X X 09/25/02 CSFB MORTGAGE BACKED PASS THRU CERTS DE X X 09/25/02 CSFB MORTGAGE PASS THRU CERT SERIES 2 CO X X 09/25/02 CSFB MORTGAGED BACKED PASS THRU CERTI DE X X 09/25/02 CWABS INC DE X X 09/30/02 CWABS INC DE X X 09/30/02 AMEND CWMBS INC DE X X 09/26/02 CWMBS INC DE X X 09/30/02 DAVE & BUSTERS INC MO X X X 09/30/02 DIAL CORP /NEW/ DE X X 10/01/02 DIAMOND OFFSHORE DRILLING INC DE X X 09/30/02 DISCOVER CARD MASTER TRUST I DE X 09/30/02 DOTRONIX INC MN X X 09/27/02 DSTAGE COM INC DE X X X 10/01/02 EBIX COM INC DE X X 09/30/02 ELAMEX SA DE CV X X 10/01/02 ENCOMPASS SERVICES CORP TX X X 10/01/02 ENTERNET INC NV X X 09/28/02 EOS INTERNATIONAL INC DE X X 09/30/02 ESTEE LAUDER COMPANIES INC DE X 10/01/02 EUROTECH LTD DC X 09/30/02 EZCORP INC DE X X 09/30/02 FANSTEEL INC DE X 08/31/02 FIRST FINANCIAL BANKSHARES INC TX X 10/01/02 FLIR SYSTEMS INC OR X X 09/30/02 FOCUS ENTERTAINMENT INTERNATIONAL INC GA X 09/25/02 FORD MOTOR CO DE X X 10/01/02 FORD MOTOR CREDIT CO DE X X 10/01/02 FRONT PORCH DIGITAL INC NV X X 09/30/02 GE CAPITAL COM MORT CORP COM MORT PAS DE X X 03/16/01 GENERAL MOTORS CORP DE X 10/01/02 GILLETTE CO DE X X 09/24/02 GLOBAL ASSETS & SERVICES INC FL X X X 10/01/02 GLOBAL PATH INC DE X X 09/20/02 GOLD ENTERTAINMENT GROUP INC NV X X 09/30/02 GOODYS FAMILY CLOTHING INC /TN TN X X 09/30/02 GRANITE CITY FOOD & BREWERY LTD MN X 10/01/02 GREENE COUNTY BANCSHARES INC TN X X 09/30/02 GS MORTGAGE SECURITIES CORP MOR PASS DE X X 09/25/02 GS MORTGAGE SECURITIES CORP MORT PAS DE X X 09/25/02 GSR MORTGAGE LOAN TRUST 2001-1 X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-1 X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-2 X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-3F X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-4 X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-5 X X 09/25/02 GSR MORTGAGE LOAN TRUST 2002-7 X X 09/25/02 GSV INC DE X 09/30/02 GUILFORD MILLS INC DE X 10/01/02 HA LO INDUSTRIES INC IL X X 09/30/02 HALLIBURTON CO DE X X 09/30/02 HIV VAC INC X X 09/11/02 AMEND IMMUNOMEDICS INC DE X X 09/27/02 INDYMAC MBS INC X X 09/27/02 INDYMAC MBS INC RESIDENTIAL ASSET SEC X X 06/28/02 INTERACTIVE MOTORSPORTS & ENTERTAINME IN X 08/02/02 AMEND INTERLIANT INC DE X X 09/26/02 INTERSTATE BAKERIES CORP/DE/ DE X 09/30/02 INTEST CORP DE X X 10/01/02 KEY PRODUCTION CO INC DE X 09/30/02 KITTY HAWK INC DE X X 09/30/02 LAWRENCE FINANCIAL HOLDINGS INC MD X X 09/30/02 LNR PROPERTY CORP DE X 10/01/02 LONE STAR TECHNOLOGIES INC DE X X 09/30/02 LYNCH CORP IN X X 10/01/02 MANCHESTER TECHNOLOGIES INC NY X 09/27/02 MATEC CORP/DE/ MD X X 09/30/02 MEADOW VALLEY CORP NV X 10/01/02 MEADOWBROOK INSURANCE GROUP INC MI X X 09/25/02 MEIER WORLDWIDE INTERMEDIA INC NV X X 05/21/02 MERA PHARMACEUTICALS INC DE X X X X 09/16/02 MERRILL LYNCH & CO INC DE X X 10/01/02 MMCA AUTO OWNER TRUST 2000-2 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2001 2 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2001-1 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2001-3 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2001-4 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2002-1 DE X X 09/16/02 MMCA AUTO OWNER TRUST 2002-2 X X 09/16/02 MMCA AUTO OWNER TRUST 2002-3 X X 09/16/02 MORTGAGE ASSET SECURITIZATION TRANSAC DE X X 09/18/02 NABORS INDUSTRIES LTD X X 10/01/02 NATIONAL PROCESSING INC OH X 10/01/02 NATIONAL RV HOLDINGS INC DE X 09/30/02 NATIONAL SEMICONDUCTOR CORP DE X 08/26/02 NATIONWIDE FINANCIAL SERVICES INC/ DE X X 10/01/02 NATUS MEDICAL INC DE X X 09/30/02 NAVISTAR INTERNATIONAL CORP DE X 10/01/02 NEMCO INC DE X X X 08/16/02 NEOTHERAPEUTICS INC DE X X 09/30/02 NEWMONT MINING CORP /DE/ DE X 10/01/02 NEXT LEVEL COMMUNICATIONS INC DE X X 09/26/02 OCCAM NETWORKS INC/DE DE X 09/27/02 ON SEMICONDUCTOR CORP DE X X 09/25/02 OPENWAVE SYSTEMS INC DE X X 09/30/02 OPTELECOM INC DE X X X 09/30/02 OSI PHARMACEUTICALS INC DE X X 08/19/02 PALATIN TECHNOLOGIES INC DE X 09/30/02 PATINA OIL & GAS CORP DE X 09/30/02 PIEDMONT NATURAL GAS CO INC NC X 10/01/02 PILOT THERAPEUTICS HOLDINGS INC DE X X 09/24/02 PONCA ACQUISITION NV X X 09/23/02 PORTLAND GENERAL ELECTRIC CO /OR/ OR X 09/12/02 PRESTIGE GROUP NET INC NV X X 09/24/02 PROVIDIAN MASTER TRUST X X 09/16/02 PSF GROUP HOLDINGS INC NC X X 09/30/02 QUEPASA COM INC NV X X 09/18/02 R H DONNELLEY CORP DE X X 09/21/02 RADIAN GROUP INC DE X X 10/01/02 RANGE RESOURCES CORP DE X 09/30/02 READERS DIGEST ASSOCIATION INC DE X X 10/01/02 REGISTER COM INC DE X X 09/29/02 SAFEGUARD HEALTH ENTERPRISES INC DE X X 09/19/02 SAN JUAN BASIN ROYALTY TRUST TX X X 09/30/02 SEACOR SMIT INC DE X X 09/27/02 SEIBELS BRUCE GROUP INC SC X X 09/30/02 SEQUOIA MORTGAGE FUNDING CORP MD X X 09/19/02 SEQUOIA MORTGAGE FUNDING CORP MD X X 09/20/02 SEQUOIA RESIDENTIAL FUNDING INC X X 07/01/02 SEQUOIA RESIDENTIAL FUNDING INC X X 07/01/02 SEREFEX CORP DE X X 10/01/01 SEREFEX CORP DE X X 10/01/01 SEREFEX CORP DE X X 10/01/01 AMEND SIGMA ALDRICH CORP DE X 09/30/02 SIPEX CORP MA X X 09/27/02 SOLOMON MORTGAGE LN TR SER 2002-CB3 C DE X X 09/25/02 STATE STREET CORP MA X X 09/30/02 STREICHER MOBILE FUELING INC FL X X 10/01/02 STRUCTURED ASSET SEC CORP MORT PAS TH DE X X 09/25/02 STRUCTURED ASSET SEC CORP MORT PAS TH DE X X 09/25/02 STRUCTURED ASSET SEC CORP MORT PASS T DE X X 09/25/02 STRUCTURED ASSET SECURITIES CORP DE X 09/27/02 STRUCTURED ASSET SECURITIES CORP MORT DE X 09/01/02 STRUCTURED ASSET SECURITIES CORP MORT DE X X 09/25/02 STRUCTURED ASSET SECURITIES CORP MORT DE X X 09/25/02 STUDENT ADVANTAGE INC DE X X 09/30/02 SUPERGEN INC DE X X 09/23/02 TARGET CORP MN X 10/01/02 TECHLABS INC X X 09/30/02 TEREX CORP DE X 10/01/02 TRW INC OH X 06/18/02 U S WIRELESS DATA INC CO X 09/30/02 UNITED RENTALS INC /DE DE X 09/30/02 UTAH MEDICAL PRODUCTS INC UT X 10/01/02 VALENTIS INC DE X 09/30/02 VENTURE HOLDINGS CO LLC MI X 10/01/02 VENTURELIST COM INC NV X X X 09/12/02 AMEND VENTURES NATIONAL INC UT X X 09/16/02 AMEND WALT DISNEY CO/ DE X 10/01/02 WARNACO GROUP INC /DE/ DE X X 10/01/02 WAYNE SAVINGS BANCSHARES INC /DE/ DE X 10/01/02 AMEND WELLS FARGO ASSET SECURITIES CORP MOR DE X X 07/29/02 WELLS FARGO MORTGAGE BACKED SECURITIE DE X X 06/28/02 WELLS REAL ESTATE INVESTMENT TRUST IN MD X X 09/16/02 WESTAR ENERGY INC /KS KS X X 09/27/02 XEROX CORP NY X X 09/26/02 ZEPPELIN SOFTWARE INC DE X 10/01/02