SEC News Digest

RULES AND RELATED MATTERS

Order Granting Conditional Exemptions From Section 15(A)(1) and Section 36 of the Exchange Act

On June 18, 2009, the Commission issued an Order granting CIBC Mellon Trust Company ("CIBC Mellon Trust") a conditional exemption from the broker-dealer registration requirement of Section 15(a)(1) of the Exchange Act to the extent CIBC Mellon Trust acts, subsequent to the entry of this order, as a broker as defined in Section 3(a)(4) of the Exchange Act in connection with its administration of dividend reinvestment and stock purchase plans, employee stock purchase plans, employee stock option plans, and odd-lot programs with U.S. resident investors. Pursuant to Section 36 of the Exchange Act, the Commission also is granting CIBC Mellon Trust a conditional exemption from the reporting and other requirements specifically imposed by the Exchange Act, and the rules and regulations thereunder, on a broker or dealer that is not registered with the Commission to the extent CIBC Mellon Trust acts, subsequent to the entry of this order, as a broker under Section 3(a)(4) of the Exchange Act in connection with its administration of Stock Plans with U.S. resident investors. (Rel. 34-60136)

ENFORCEMENT PROCEEDINGS

In the Matter of Ruben Serrano

The United States Securities and Exchange Commission (Commission) announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Section 203(f) of the Investment Advisers Act of 1940, Making Findings, and Imposing Remedial Sanctions (Order) against Ruben Serrano (Serrano). The Order finds that in or about and between May 2005 and January 2006, Serrano was associated with Maxim Group LLC, a broker-dealer registered with the Commission that also operated a registered investment advisor, Maxim Financial Advisors LLC. The Order further finds that, on May 19, 2009, Serrano pled guilty to conspiracy to commit securities fraud in violation of Title 18 United States Code, Section 371, and securities fraud in violation of Title 15, United States Code, Sections 78j(b), 78ff, and 17 C.F.R. 240.10b-5 before the United States District Court for the Southern District of New York, in United States v. Dennis Michael Nouri, et al., Crim. Information No. 07-CR-1029. The counts of the criminal indictment to which Serrano pled guilty alleged, inter alia, that Serrano, while associated with Maxim, knowingly and willfully employed devices, schemes, and artifices to defraud and engaged in acts, practices, and courses of business which would and did operate as a fraud and deceit upon members of the investing public, in connection with the purchases and sales of securities, and by use of the means and instrumentalities of interstate commerce and the mails.

Based on the above, the Order bars Serrano from association with any broker, dealer, or investment adviser. Serrano consented to the issuance of the Order without admitting or denying any of the findings in the Order, except with respect to the findings that on May 19, 2009 Serrano pled guilty to conspiracy to commit securities fraud in violation of Title 18 United States Code, Section 371, and securities fraud in violation of Title 15, United States Code, Sections 78j(b), 78ff, and 17 C.F.R. 240.10b-5 before the United States District Court for the Southern District of New York, in United States v. Dennis Michael Nouri, et al., Crim. Information No. 07-CR-1029. (Rel 34-60157; IA-2895: File No. 3-13526)

SEC Issues Notice of Proposed Distribution Plan and Opportunity for Comment in the Matter of Morgan Stanley & Co. Incorporated

The Commission announced today that it has given notice, pursuant to Rule 1103 of the Securities and Exchange Commission's Rules on Fair Fund and Disgorgement Plans, 17 C.F.R. ° 201.1103, that the Division of Enforcement has filed a proposed plan (Distribution Plan) for the distribution of monies in the matter of Morgan Stanley & Co. Incorporated.

The Distribution Plan provides for distribution of the disgorgement and prejudgment interest of $6,457,200 paid by Morgan Stanley & Co. Incorporated plus any accumulated interest, less any federal, state or local taxes on the interest. The Distribution Plan provides that the calculation of amounts to be distributed to investors will be based on records of MS & Co., its affiliated broker-dealer and certain other third-party entities. Accordingly, the funds are not being distributed according to a claims-made process. The Distribution Plan provides for the distribution of the monies to Eligible Investors who were harmed by MS & Co.'s best execution violations. Eligible Investors include those investors whose order(s): (1) were handled by MS & Co's automated order-handling programs from October 24, 2001, through December 8, 2003; (2) were executed on a riskless principal basis; (3) were subject to certain automated programming features of the order-handling programs; and (4) received execution prices that were inferior to the execution prices MS & Co. received on the transactions. Each Eligible Investor shall receive the difference between the execution price MS & Co. received and the execution price MS & Co. reported to the Eligible Investor. Pursuant to the Distribution Plan, MS & Co. is responsible for all costs and expenses of the distribution.

A copy of the Distribution Plan may be obtained by submitting a written request to Elaine C. Greenberg, Associate Regional Director, United States Securities and Exchange Commission, 701 Market Street, Suite 2000, Philadelphia, PA 19106. Interested parties may also print a copy of the proposed Distribution Plan from the Commission's public website, http://www.sec.gov. Any person or entity wishing to comment on the Distribution Plan must do so in writing by submitting their comments within 30 days of the date of the notice (i) to the Office of the Secretary, United States Securities and Exchange Commission, 100 F Street, N.E., Washington, DC 20549-1090; or (ii) via the Commission's Internet comment form (www.sec.gov/litigation/admin.shtml); or (iii) by sending an e-mail to rule-comments@sec.gov. Comments submitted by e-mail or via the Commission's web site should include the Administrative Proceeding File Number (Admin. Proc. File No. 3-11676) in the subject line. Comments received will be publicly available. Persons should submit only information that they wish to make publicly available. (Rel. 34-60160; File No. 3-12631)

In the Matter of FCF, Inc., et al.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Three Respondents (Default Order) in FCF, Inc., Administrative Proceeding No. 3-13471. The Order Instituting Proceedings (OIP) alleged that four Respondents failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission (Commission). The Default Order finds these allegations to be true as to three Respondents and revokes the registrations of each class of registered securities of FCF, Inc., FI Liquidating Co., Inc., and Fields Aircraft Spares, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934.

The Commission has previously accepted an Offer of Settlement from First Dynasty Mines, Ltd. (n/k/a Sterlite Gold Ltd.), the other Respondent named in the OIP. (Rel. 34-60161; File No. 3-13471)

In the Matter of Advanced Monitoring Systems, Inc., et al.

An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Six Respondents (Default Order) in Advanced Monitoring Systems, Inc., Administrative Proceeding No. 3-13475. The Order Instituting Proceedings alleged that Advanced Monitoring Systems, Inc., Air L.A., Inc. (n/k/a Clean Energy, Inc.), Alexander International, Ltd., All the Way, Inc., Alliance Northwest Industries, Inc., and Alpha Centari, Inc., each failed repeatedly to file required annual and quarterly reports while their securities were registered with the Securities and Exchange Commission.

The Default Order finds the allegations to be true as to the six Respondents. It revokes the registrations of each class of registered securities of Advanced Monitoring Systems, Inc., Air L.A., Inc. (n/k/a Clean Energy, Inc.), Alexander International, Ltd., All the Way, Inc., Alliance Northwest Industries, Inc., and Alpha Centari, Inc., pursuant to Section 12(j) of the Securities Exchange Act of 1934. (Rel. 34-60162; File No. 3-13475)

SEC Brings Fraud Charges Against Gary S. Becker, Gregory S. Schaefer, and Dillon Scott Securities, Inc.

On June 22, the Securities and Exchange Commission charged Gary S. Becker, Gregory S. Schaefer, and the brokerage firm they controlled, Dillon Scott Securities, Inc., with conducting three fraudulent, unregistered offerings of Gold Rush Technologies, Inc., the parent company of Dillon Scott. The SEC's complaint alleges that from January 2001 through July 2007, defendants raised at least $1.3 million from 29 investors through this scheme. Becker and Schaefer, in offering memoranda, direct solicitations, and solicitations by two of their salespersons, represented that the money raised would be used to form and expand a brokerage firm, Dillon Scott, but instead they diverted approximately 79% of the offering proceeds to enrich themselves and others. The victims of the scheme include at least 10 individuals who are sixty years of age or older and at least 10 individuals who were brokerage customers of Dillon Scott.

The complaint further alleges that Dillon Scott, with knowledge and assistance from Becker and Schaefer, also violated broker-dealer registration and books and records provisions by concealing Becker's control over Dillon Scott in the firm's regulatory filings; by permitting Becker and another Gold Rush salesperson to effect transactions in Gold Rush securities while they were not registered with FINRA; and by failing to keep and maintain a current Form U-4 or other questionnaire or application for employment for Becker and the salesperson.

The SEC's complaint charges Becker, Schaefer, and Dillon Scott with violating the securities registration and antifraud provisions of the Securities Act of 1933, the general antifraud and broker-dealer antifraud provisions of the Securities Exchange Act of 1934, and broker-dealer books and records and registration provisions of the Exchange Act. The SEC seeks permanent injunctive relief, disgorgement of ill-gotten gains with prejudgment interest, civil penalties, and penny stock bars.

[SEC v. Gary Becker, et al., Civil Action No. 09-CV-5707 (SAS)(S.D.N.Y.)](LR-21100)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change (SR-Phlx-2009-35) filed by the NASDAQ OMX PHLX to clarify the definition of "Narrow-Based Index" 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 June 22. (Rel. 34-60150)

A proposed rule change filed by the NYSE Amex (SR-NYSEAmex-2009-29) to include floor broker agency interest containing pegging and/or discretionary instructions, eligible for execution in the closing transaction, in the NYSE Amex Order Imbalance Information datafeed disseminated prior to the closing transaction 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 22. (Rel 34-60151)

A proposed rule change filed by the New York Stock Exchange (SR-NYSE-2009-49) to include floor broker agency interest containing pegging and/or discretionary instructions, eligible for execution in the closing transaction, in the NYSE Order Imbalance Information datafeed disseminated prior to the closing transaction 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 22. (Rel. 34-60153)

Proposed Rule Change

The International Securities Exchange has filed a proposed rule change (SR-ISE-2009-35), pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 and Rule 19b-4 thereunder relating to qualified contingent cross orders. Publication is expected in the Federal Register during the week of June 22. (Rel. 34-60147)

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http://www.sec.gov/news/digest/2009/dig062309.htm