SEC News Digest

ENFORCEMENT PROCEEDINGS

Gary L. Seidelman, CPA Reinstated to Appear and Practice Before the Commission as an Accountant Responsible for the Preparation or Review of Financial Statements Required to Be Filed with the Commission

Pursuant to Rule 102(e)(5)(i) of the Commission's Rules of Practice, Gary L. Seidelman, CPA has applied for and been granted reinstatement of his privilege to appear and practice before the Commission as an accountant responsible for the preparation or review of financial statements required to be filed with the Commission. Mr. Seidelman was suspended from appearing or practicing before the Commission on Aug. 11, 2004. His reinstatement is effective immediately. (Rel. 34-59047; AAE Rel. 2904; File No. 3-11582)

SEC Charges Silicon Valley Venture Capitalist William J. "Boots" Del Biaggio III With Defrauding Clients and Banks Out of $65 Million

The Commission filed today a civil injunctive action against Silicon Valley venture capitalist, William J. "Boots" Del Biaggio III, in federal district court in the Northern District of California alleging that he engaged in two distinct securities fraud schemes, defrauding investors, banks and private lenders out of $65 million. Del Biaggio used the funds to maintain a lavish lifestyle, which included buying an interest in a professional hockey team, satisfying substantial gambling debts, and paying expenses on his family's luxury home. Without admitting or denying the complaint's allegations, Del Biaggio has agreed to a permanent injunction from further violations of the antifraud provisions of the federal securities laws. In addition, Del Biaggio has consented to the institution of public administrative proceedings against him in which he will be barred permanently from serving as an investment adviser. Finally, Del Biaggio also has agreed that, at a later date, the court in this matter shall determine the amount of ill-gotten gains (disgorgement) and civil monetary penalties that Del Biaggio shall be required to pay.

According to the Commission's complaint, Del Biaggio engaged in two distinct securities fraud schemes. First, Del Biaggio fraudulently pledged securities owned by innocent customers of a San Francisco-based broker dealer as collateral for more than $45 million in personal loans. Beginning in August 2007, Del Biaggio obtained brokerage account statements of unknowing customers with the help of a friend who was a managing director at a San Francisco brokerage firm, and then falsified the account statements to make it appear that Del Biaggio owned the assets in the accounts. To obtain more than $45 million in loan proceeds, Del Biaggio supplied the forged account statements to multiple banks and private lenders and signed agreements pledging the securities in the innocent customers' accounts. As alleged in the complaint, Del Biaggio used $25 million of the loan proceeds to purchase an interest in the Nashville Predators professional hockey team, and used the rest for other personal expenses.

In the second scheme, according to the Commission's complaint, Del Biaggio misappropriated more than $19 million from individual investors he advised. The Commission alleges that between 2003 and 2008, Del Biaggio used his reputation as a prominent venture capitalist and role as the founder and CEO of established venture firm Sand Hill Capital L.P. to entice dozens of his advisory clients to invest in three investment funds he formed. The complaint alleges that Del Biaggio then misappropriated the money or used it to buy stocks which he then pledged as collateral for personal loans. The Commission alleges that Del Biaggio used the proceeds of his fraud to pay for other business and personal expenses. [SEC v. William J. "Boots" Del Biaggio III, Case No. CV- 08-05450 (JCS) (N.D. Cal.](LR-20820)

SELF-REGULATORY ORGANIZATIONS

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by NYSE Alternext US to implement a revenue sharing program for ETF quoting participants (SR-NYSEALTR-2008-04) 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 December 8. (Rel. 34-59019)

A proposed rule change (SR-ISE-2008-91) filed by the International Securities Exchange relating to complex orders 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 December 8. (Rel. 34-59021)

A proposed rule change filed by the NASDAQ Stock Market regarding enhancements to the Nasdaq Regulation Reconnaissance Service (SR-NASDAQ-2008-090) 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 December 8. (Rel. 34-59023)

A proposed rule change filed by BATS Exchange (SR-BATS-2008-011) to make certain market maker quoting violations punishable under its Minor Rule Violation Plan 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 December 8. (Rel. 34-59029)

A proposed rule change filed by the NASDAQ OMX PHLX (SR-Phlx-2008-80) relating to XLE® fees 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 December 8. (Rel. 34-59030)

The Stock Clearing Corporation of Philadelphia filed a proposed rule change (SR-SCCP-2008-02) under Section 19(b)(1) of the Securities Exchange Act, which proposed rule change was effective upon filing, relating to the collection of Financial Industry Regulatory Authority section 3 regulatory fees. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59031)

A proposed rule change filed by the Chicago Board Options Exchange (SR-CBOE-2008-121) relating to temporary membership status and interim trading permit access fees 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 December 8. (Rel. 34-59032)

Accelerated Approval of Proposed Rule Changes

The Commission has noticed and granted accelerated approval to a proposed rule change submitted by NYSE Alternext US (SR-NYSEALTR-2008-06), under Section 19(b)(1) of the Securities Exchange Act of 1934, for the retroactive application of a previously adopted revenue sharing program for ETF quoting participants. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59020)

The Commission granted accelerated approval of a proposed rule change (SR-OCC-2008-06) filed by the Options Clearing Corporation under Section 19(b)(1) of the Exchange Act relating to the Stock Loan/Hedge Program. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59036)

Approval of Proposed Rule Changes

The Commission approved a proposed rule change (SR-DTC-2008-08) filed by the Depository Trust Company under Section 19(b)(1) of the Exchange Act. The approved rule change modifies its Withdrawal-by-Transfer (WT) service to eliminate the ability of participants to receive through the WT service physical certificates for securities positions withdrawn from participants' accounts at DTC when the issue of such securities is eligible and participating in the Direct Registration System. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59033)

The Commission granted approval of a proposed rule change (SR-NSCC-2007-08) filed by the National Securities Clearing Corporation under Section 19(b)(1) of the Exchange Act that allows NSCC to amend its rules as they relate to membership disqualification criteria in an effort to create more uniformity between the rules of NSCC and the rules of NSCC's affiliates, Fixed Income Clearing Corporation and The Depository Trust Company. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59044)

Proposed Rule Change

The Commission issued notice of filing of a proposed rule change (SR-CBOE-2008-118) submitted by the Chicago Board Options Exchange related to obvious error rules. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59038)

JOINT INDUSTRY PLAN RELEASES

Immediate Effectiveness of an Amendment to a National Market System Plan

A proposed amendment to the National Market System Plan for the Selection and Reservation of Securities Symbols filed by the International Securities Exchange, in order to become a party to the plan, has become effective pursuant to Section 11A(a)(3) of the Securities Exchange Act of 1934 and Rule 608 thereunder. Publication is expected in the Federal Register during the week of December 8. (Rel. 34-59024)

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http://www.sec.gov/news/digest/2008/dig120408.htm