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COMMISSION ANNOUNCEMENTSCommission MeetingsClosed Meeting - Thursday, April 16, 2009 - 2:00 p.m.The subject matter of the Closed Meeting scheduled for Thursday, April 16, will be: consideration of amicus participation; institution and settlement of injunctive actions; institution and settlement of administrative proceedings of an enforcement nature; an adjudicatory matter; and other matters relating to enforcement proceedings. At times, changes in Commission priorities require alterations in the scheduling of meeting items. For further information and to ascertain what, if any, matters have been added, deleted or postponed, please contact: The Office of the Secretary at (202) 551-5400. ENFORCEMENT PROCEEDINGSIn the Matter of Global 1 Investment Holdings CorporationAn Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default (Default Order) in Global 1 Investment Holdings Corporation, Administrative Proceeding No. 3-13359. The Order Instituting Proceedings alleged that Respondent Global 1 Investment Holdings Corporation failed repeatedly to file required annual and quarterly reports while its securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of Global 1 Investment Holdings Corporation pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-59730; File No. 3-13359) In the Matter of L Rex International, Inc.An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default (Default Order) in L Rex International, Inc., Administrative Proceeding No. 3-13361. The Order Instituting Proceedings alleged that seven Respondents failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registrations of each class of registered securities of L Rex International, Inc., Lakshmi Enterprises, Inc., Lamaur Corp., Laminco Resources, Inc. (n/k/a Zaruma Resources, Inc.), Landis & Partners, Inc., Las Americas Broadband, Inc., and Laser Precision Corp. (n/k/a NetTest, Inc.) pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-59732; File No. 3-13361) Proceedings Instituted Against Douglas F. SamuelsOn April 8, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Douglas F. Samuels (Samuels or Respondent). In the Order, the Division of Enforcement alleges that on Nov. 8, 2007, Samuels pled guilty to one count of wire fraud under 18 U.S.C. SS 1343 and 1346 before the United States District Court for the Northern District of Illinois, in United States v. Cho, et al., Crim. Indictment No. 04-CR-166. The Division of Enforcement alleges that from 1979 to 1998, Samuels worked for John Dawson & Associates, Inc. (JDAI), a broker-dealer registered with the Commission, beginning as an accountant and eventually becoming JDAI's Chief Financial Officer. The Division of Enforcement alleges that the counts of the criminal indictment to which Respondent pled guilty alleged, inter alia, that Respondent, for the purpose of executing a scheme to defraud, caused and directed fraudulent "trade allocations" by creating, assigning, and/or transferring profitable securities and options trades to certain firm, employee, and customer accounts, and losing trades to other accounts. The Division of Enforcement further alleges that on June 19, 2008, a judgment in the criminal case was entered against Samuels. The Division of Enforcement alleges that Samuels was sentenced to a term of imprisonment of 12 months and one day, ordered to pay restitution in the amount of $2,312,484 and placed on 3 years probation following his release from prison. A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-59734; File No. 3-13433) Proceedings Instituted Against Ravi YanamadulaOn April 8, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing (Order) against Ravi Yanamadula (Yanamadula or Respondent). In the Order, the Division of Enforcement alleges that on August 3, 2007, Yanamadula pled guilty to six counts of wire fraud under 18 U.S.C. SS 1343 and 1346 before the United States District Court for the Northern District of Illinois, in United States v. Cho, et al., Crim. Indictment No. 1:04-CR-166. The Division of Enforcement alleges that from 1993 through February 1998, Yanamadula worked for John Dawson & Associates, Inc. (JDAI), a broker-dealer registered with the Commission, as JDAI's Head Trader. The Division of Enforcement alleges that the counts of the criminal indictment to which Respondent pled guilty alleged, inter alia, that Respondent for the purpose of executing a scheme to defraud, caused favorable trades to be reallocated from certain JDAI proprietary firm accounts to his account at JDAI and that these after-the-fact trade allocations either profited Respondent's account or served to avoid losses in his account. The Division of Enforcement further alleges that on June 2, 2008, a judgment in the criminal case was entered against Yanamadula. The Division of Enforcement alleges that Yanamadula was sentenced to a term of imprisonment of 42 months, ordered to pay restitution in the amount of $3,695,032 and placed on 3 years probation following his release from prison. A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide the Respondent an opportunity to dispute these allegations, and to determine what, if any, remedial sanctions are appropriate and in the public interest. The Order requires the Administrative Law Judge to issue an initial decision no later than 210 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. (Rel. 34-59735; File No. 3-13434) In the Matter of Charles F. LewisOn April 9, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, and Notice of Hearing (Order) against Charles F. Lewis. In the Order, the Division of Enforcement alleges that, on December 29, 2008, a judgment was entered against Lewis permanently enjoining him from future violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 (Securities Act) and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in the civil action entitled Securities and Exchange Commission v. Capital Holdings, L.L.C., et al., Civil Action No. 03-cv-00923-REB-CBS, in the United States District Court for the District of Colorado. The Division alleges that the Commission's complaint alleged, among other things, that Capital Holdings, LLC, and several other entities and individuals, including Lewis, defrauded investors in a securities offering by falsely promising that: (1) investor funds would be used as collateral to facilitate leveraged trading of financial instruments issued by major banks and governments and that investors would share in the trading profits; (2) investors would earn a fixed monthly return ranging from 2% to 15%; (3) the safety of invested principal would be guaranteed; and (4) investors' funds would be fully insured. The Complaint also alleged that there was no such trading program and that the defendants regularly paid undisclosed sales commissions, Ponzi payments and personal expenses with investor funds. A hearing will be scheduled before an Administrative Law Judge to determine whether the Division's allegations in the Order are true, to provide Respondent an opportunity to dispute the allegations, and to determine what sanctions, if any, are appropriate in the public interest. The Commission directed that an Administrative Law Judge issue an initial decision in this matter within 210 days from the date of service of the Order pursuant to Rule 360(a)(2) of the Commission's Rules of Practice. For further information see LR- 18166. (Rel. 34-59738; File No. 3-13435) In the Matter of Mark TuminelloOn April 9, the Commission issued an Order Instituting Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions and A Cease-and-Desist Order as to Mark Tuminello. The Order finds that Tuminello, a Managing Director at Wachovia Capital Markets, LLC (Wachovia), headed the Commercial Aviation Team of Wachovia's Structured Asset Finance Group. In that role, he supervised two others in connection with Wachovia's underwriting of a private securities offering backed by a portfolio of regional aircraft manufactured by Bombardier, Inc. (Bombardier). RASPRO Trust 2005 (RASPRO), a special purpose entity created by Bombardier, sponsored the $1.67 billion offering. On Sept. 23, 2005 the offering closed. The Order finds that within the first three months after closing, Bombardier discovered that RASPRO would have to draw on a liquidity reserve to make the first payment on one of the three tranches of securities involved in the offering, the B Notes, and that a guarantor would have to step in and purchase the B Notes in the fifth year of the 18 year transaction. The Order finds that despite learning in July 2005 of the early draw on the B Note guarantee in the base case, Tuminello did not report this fact to anyone outside of the Commercial Aviation Team that he led. Instead he gave the directive that the models could not show an early draw in the base case. The Order finds that Tuminello was aware of the changes that the Team subsequently made on the liability side of the transaction and that those changes were being made to conceal the fact that an early draw on the B Note guarantee would occur. According to the Order, Tuminello knew that:
The Order finds that, although he knew them to be faulty, Tuminello decided to incorporate these changes into the cash flow models and into the cash flow model outputs that were used in the offering memorandum in order to mask the early draw. According to the Order, Tuminello thereafter made no effort to correct the model or disclose these changes or the early draw to anyone outside of the Commercial Aviation team that he supervised. Based on the above, the Order imposes the following sanctions: that Tuminello 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; that Tuminello be barred from association with any broker or dealer, with a right to reapply after two years; and that Tuminello pay a civil money penalty in the amount of $25,000. Tuminello consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rels. 33-9023; 34-59739; File No. 3-13436) In the Matter of Woodbury Financial Services, Inc.On April 9, the Commission issued an Order Instituting Administrative Proceedings Pursuant to Sections 15(b) and 21C of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order (Order) against Woodbury Financial Services, Inc. The Order finds that Woodbury caused violations of Regulation S-P by encouraging registered representatives to bring their current customers with them. To help ensure the registered representative transferred his or her current customers, Woodbury devoted a team of employees to assist with the account transfer process. Registered representatives were encouraged to provide Woodbury with all current customer information, including nonpublic personal information, prior to leaving their current firm. This was done without first obtaining the customer's consent. Woodbury also violated Regulation S-P by allowing departing registered representatives to take nonpublic personal customer information without first obtaining the customer's consent. Customers were not notified that Woodbury registered representatives took copies of all customer documents when leaving the firm; nor were Woodbury customers given a chance to opt out of Woodbury's sharing of nonpublic personal information with nonaffiliated third parties. Based on the above, Woodbury Financial Services, Inc. was censured and ordered to cease and desist from committing or causing any violations and any future violations of Rules 4, 6 and 10 of Regulation S-P. Woodbury Financial Services, Inc. consented to the issuance of the Order without admitting or denying any of the findings in the Order. (Rel. 34-59740; File No. 3-13437) SEC v. Robert P. CopelandOn April 9, the Securities and Exchange Commission filed a Complaint for Injunctive and Other Relief (Complaint) in the United States District Court for the Northern District of Georgia against Robert P. Copeland (Copeland). The Complaint sets forth a classic Ponzi scheme operated by Copeland, in which he used new investor funds to make payment obligations to earlier investors. The Complaint alleges that from at least 2004 through January 2009 Copeland, a Georgia resident and an attorney licensed to practice in the State of Georgia, fraudulently raised over $35 million from at least 140 investors in several states, including Georgia. The Complaint further alleges that Copeland promoted investments orally and through written materials claiming to earn 15-18 percent interest per year, and claiming that investor funds would be loaned in connection with real estate transactions, including private mortgage lending. Through entities which he controlled, Copeland directed the unregistered offer and sale of promissory notes evidencing the investor loans. The notes were often collateralized by security deeds to which Copeland signed the names of fictitious persons. The Complaint alleges that Copeland represented to investors that the loans were safe and secured by real estate. In reality, Copeland used comparatively few of the investor funds in connection with real estate acquisition or development. The Complaint also alleges that Copeland promised, among other things, a current rate of return of 15 percent and represented to investors past returns as high as 18 percent. In reality, the representations were false and misleading because Copeland never consistently generated 15 percent annual returns and was not investing the funds as represented. The Complaint further alleges that Copeland deposited investor funds into four bank accounts in the name of his law firm, and that he misappropriated millions of dollars of investor funds for his personal use, spending the funds in connection with his personal residence, vehicles, and expensive artwork, among other things. The Complaint alleges that Copeland has violated the registration and antifraud provisions of the federal securities laws, Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission's Complaint seeks (i) a permanent injunction against future violations; (ii) disgorgement of ill-gotten gains plus prejudgment interest; and (iii) imposition of civil penalties. The Commission thanks the United States Attorney's Office for the Northern District of Georgia for its assistance in this matter. [SEC v. Robert P. Copeland, Civil Action No. 1:09-cv-0943 (N.D. Ga.)] (LR-20994)INVESTMENT COMPANY ACT RELEASESAutomated Trading Desk Specialists, LLC, et al.The Commission has issued an order to Automated Trading Desk Specialists, LLC, et al. (ATDS) under Section 9(c) of the Investment Company Act exempting applicants and companies of which ATDS is or becomes an affiliated person from the provisions of Section 9(a) of the Act with respect to an injunction issued by the U.S. District Court for the Southern District of New York on March 11, 2009. (Rel. IC-28688 - April 7) E*TRADE Capital Markets LLC, et al.The Commission has issued an order to E*TRADE Capital Markets LLC, et al. (ETCM) under Section 9(c) of the Investment Company Act exempting applicants and companies of which ETCM is or becomes an affiliated person from the provisions of Section 9(a) of the Act with respect to an injunction issued by the U.S. District Court for the Southern District of New York on March 11, 2009. (Rel. IC-28689 - April 7) BlackRock International Growth and Income Trust, et al.A notice has been issued giving interested persons until May 4, 2009 to request a hearing on an application filed by BlackRock International Growth and Income Trust, et al., under Section 6(c) of the Investment Company Act for an exemption from Section 19(b) of the Act and Rule 19b-1 under the Act. The order would permit certain registered closed-end management investment companies to make periodic distributions of long-term capital gains (i) with respect to their common stock as part of a managed distribution plan as frequently as twelve times each year, and (ii) with respect to their preferred stock as frequently as required by the terms of such preferred stock. (Rel. IC-28690 - April 7) SELF-REGULATORY ORGANIZATIONSImmediate Effectiveness of Proposed Rule ChangesA proposed rule change filed by NASDAQ OMX PHLX (SR-PHLX-2009-28) relating to the Option Floor Broker Subsidy 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 April 13. (Rel. 34-59705) A proposed rule change filed by the NASDAQ Stock Market to modify fees for members using the NASDAQ Market Center (SR-NASDAQ-2009-029) 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 April 13. (Rel. 34-59706) A proposed rule change filed by the BATS Exchange (SR-BATS-2009-008) relating to fee changes 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 April 13. (Rel. 34-59709) A proposed rule change filed by New York Stock Exchange implementing revised liquidity credits for Supplemental Liquidity Providers (SR-NYSE-2009-39) 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 April 13. (Rel. 34-59710) A proposed rule change filed by the Financial Industry Regulatory Authority relating to trade reporting transfers of proprietary securities positions in connection with certain corporate control transactions (SR-FINRA-2009-024) 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 April 13. (Rel. 34-59713) A proposed rule change filed by Chicago Stock Exchange relating to participant fees and credits (SR-CHX-2009-03) 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 April 13. (Rel. 34-59714) A proposed rule change filed by NYSE Amex implementing a new transaction fee for floor brokers (SR-NYSEAmex-2009-08) 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 April 13. (Rel. 34-59715) A proposed rule change filed by Financial Industry Regulatory Authority to codify the Extended Hours Trading Risk Disclosure Obligation as new FINRA Rule 2265 (SR-FINRA-2009-021) has become immediately 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 April 13. (Rel. 34-59717) A proposed rule change (SR-NYSEAmex-2009-09) filed by NYSE Amex to revise fees payable by member organizations for which the Exchange is the Designated Examining Authority 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 April 13. (Rel. 34-59720) A proposed rule change (SR-NSX-2009-02) filed by the National Stock Exchange to amend the Fee and Rebate Schedule relating to liquidity adding rebates 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 April 13. (Rel. 34-59723) A proposed rule change filed by Financial Industry Regulatory Authority to amend Incorporated NYSE Rules 2, 2A and 325 to conform to amendments made by NYSE (SR-FINRA-2009-025) 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 April 13. (Rel. 34-59726) Approval of Proposed Rule ChangesThe Commission approved a proposed rule change (SR-NYSEArca-2009-12) submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by NYSE Arca relating to SPDR Barclays Capital Convertible Bond ETF. Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59708) The Commission approved a proposed rule change (SR-NYSEArca-2009-11) submitted by NYSE Arca pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to amend Rule 6.69 - Reporting Duties. Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59716) Proposed Rule ChangesThe Commission noticed a proposed rule change (SR-NASDAQ-2009-028) submitted by the NASDAQ Stock Market pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to reduce fees for NASDAQ Basic data feeds. Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59712) A proposed rule change (SR-Phlx-2009-32) has been filed by NASDAQ OMX PHLX relating to the Exchange's enhanced electronic trading platform for options, Phlx XL II, pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59721) Accelerated Approval of Proposed Rule ChangesThe Commission granted accelerated approval to a proposed rule change (SR-FINRA-2009-022) filed by the Financial Industry Regulatory Authority pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder, relating to FINRA's Regulatory Notice on the FINRA Rule 9520 Series (Eligibility Proceedings). Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59722) The Commission granted accelerated approval to a proposed rule change (SR-ISE-2009-18), as modified by Amendment No. 1, submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the International Securities Exchange that lowers the liquidity rebate that Direct Edge ECN passes through to non-ISE member subscribers of Direct Edge ECN. Publication is expected in the Federal Register during the week of April 13. (Rel. 34-59724) RECENT 8K FILINGS
http://www.sec.gov/news/digest/2009/dig040909.htm
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