I am busy a little bit. As little as the only toilet at a rock concert. Because of audit, bless him… What audit is? … um, for simplicity’s sake imagine … well, for instance a man who shovels coal. It doesn’t matter where he shovels it. In a pile for instance.
And then two or three clerks appear. Completely smooth, with laptops – unbelievably serious. In short, auditors. They walk up to a fellow and say:
Washington, D.C., May 23, 2008 — The Securities and Exchange Commission announced today thatSecurity Exchange CommissionSecretary Nancy Morris is leaving the Commission to become an Executive Vice President at Allianz Global Investors of America, where she will have broad U.S. legal compliance responsibilities.
Since she was appointedSecurity Exchange CommissionSecretary bySecurity Exchange CommissionChairman Christopher Cox in early 2006, Ms. Morris has overseen the legal review of allSecurity Exchange Commissiondocuments submitted to and approved by the Commission, including rulemaking releases and enforcement orders. She also has provided advice to the Commission and its staff on practice and procedure.
Ms. Morris also has led an ongoing effort to help investors gain easier and quicker access to currentSecurity Exchange Commissioninformation and historic documents and records. Under her leadership, theSecurity Exchange Commissionsignificantly enhanced search capabilities on theSecurity Exchange CommissionWeb site, launched RSS document feeds, and archived online several historic collections includingSecurity Exchange CommissionAnnual Reports and speeches by Commissioners and staff. Ms. Morris also established a newSecurity Exchange CommissionArchivist position to help oversee and enhance the records management process. Today is her final day of work at the SEC.
“The Secretary is central to the Commission’s operations, and in this key role, Nancy Morris has set an exemplary standard for public service on behalf of America’s investors and capital markets,” said Chairman Cox. “Nancy’s legal acuity, professionalism, and management skills have been matched by her cheerful manner and bright sense of humor. The Commission, and the investors and markets we serve, owe a profound debt of gratitude for Nancy’s service. We wish her every success and happiness in the next phase of her remarkable career.”
Ms. Morris said, “It has been my high honor and privilege to have served this great agency and the everyday Americans who depend on the SEC’s vigorous commitment to fair markets, capital formation, and investor protection. I am grateful to Chairman Cox and his fellow Commissioners past and present for their leadership, and for affording me this opportunity to work with the SEC’s extraordinary staff on behalf of investors.”
Prior to becoming Secretary, Ms. Morris had been an Attorney-Fellow in the SEC’s Division of Investment Management from May 2004 to January 2006. In that capacity, she was responsible for developing rules, interpretations, policy, and research to support Commission action.
During a previous tour of duty with theSecurity Exchange Commissionfrom 1985 to 1992, Ms. Morris served as an attorney in the Office of General Counsel (1985-1987), Counsel to Commissioner Joseph Grundfest (1987-1988), and Deputy Chief Counsel for the Division of Investment Management (1988-1992).
In the private sector, Ms. Morris served more than a decade as Vice President and Associate Legal Counsel to T. Rowe Price Associates, and as an attorney for Fidelity Investments. She also was an associate for Sutherland, Asbill & Brennan in Washington D.C.
Ms. Morris holds a J.D. from the University of Idaho College of Law, where she was Editor-in-Chief of the Idaho Law Review. She holds a B.A. (cum laude) from Hartwick College in Oneonta, N.Y. She is a Member of the District of Columbia Bar.
http://www.sec.gov/news/press/2008/2008-96.htm
Source: SEC site
Washington, D.C., May 23, 2008 — The Securities and Exchange Commission today signed protocols to share information on the application of International Financial Reporting Standards (IFRS) with financial regulators in four European countries.
The arrangements with regulators in Belgium, Bulgaria, Norway and Portugal are in line with the Work Plan previously agreed to between theSecurity Exchange Commissionand the Committee of European Securities Regulators (CESR).
The most recent protocols follow on one signed recently with the UK Financial Reporting Council and the UK Financial Services Authority. The protocols are based on a model protocol developed between the Commission and CESR and provide for the confidential exchange of issuer-specific information. The Commission anticipates signing additional protocols with other CESR member jurisdictions in the future.
These protocols join the growing list of arrangements for regulatory, enforcement and supervisory cooperation between the Commission and its foreign counterparts.
SEC Chairman Christopher Cox said, “These four new international protocols add to the arrangements that theSecurity Exchange Commissionhas concluded within the last year alone with the College of Euronext Regulators, the German Federal Financial Supervisory Authority, the United Kingdom Financial Services Authority and the UK Financial Reporting Council — all aimed at enhancing regulatory, enforcement and supervisory cooperation. International arrangements of this kind are quickly becoming a cornerstone of U.S. securities regulation in today’s global marketplace. As American investors and companies increasingly demand seamless cross-border access to information and capital, theSecurity Exchange Commissionis striving for seamless high-quality regulation across borders. These new avenues for cooperation and coordination represent an important step in our pursuit of that goal.”
Ethiopis Tafara, Director of the SEC’s Office of International Affairs, said, “TheSecurity Exchange Commissionhas long used information sharing arrangements as a tool to facilitate cooperation with foreign regulators in securities enforcement matters. With the proliferation of internationally active firms and the recent interest in cross-border market affiliations, it has become evident that arrangements for regulatory and supervisory cooperation are also becoming critical tools for theSecurity Exchange Commissionand its foreign counterparts. Together such arrangements establish clear frameworks for coordinating with foreign regulators in the interest of ensuring effective and efficient regulation and oversight of global firms and markets.”
The protocols concluded today:
http://www.sec.gov/news/press/2008/2008-95.htm
Source: SEC site
Washington, D.C., May 21, 2008 — The Securities and Exchange Commission today voted unanimously to formally propose that mutual fund investors get access to key information about fees, performance, and strategies through interactive data, which would permit comparison shopping among thousands of funds with all the ease of conducting an Internet search.
The SEC’s proposal would require funds to label data in their public filings using computer tags similar to the bar codes that identify products at stores or packages in the mail. The labeling would allow investors to instantly access and compare investment objectives and strategies, risks, performance, and costs for more than 8,000 mutual funds at the click of a mouse.
“This exciting new technology will enable investors to instantly analyze and compare not just two or three mutual funds, but hundreds or even thousands, and to quickly focus on the particular funds that are right for them,” saidSecurity Exchange CommissionChairman Christopher Cox. “Investors will no longer need to wade through lengthy documents to find the relevant details needed to compare funds one at a time.”
Andrew J. Donohue, Director of the SEC’s Division of Investment Management, said, “This proposal would, if adopted, create an interactive database of key mutual fund information that will enable investors to more easily analyze and compare cost, performance, and other key information across the more than 8,000 available mutual funds. Together with the Commission’s recently proposed summary prospectus, this proposal has the potential to transform information access for mutual fund investors.”
Mutual funds already have been submitting information to theSecurity Exchange Commissionin interactive data format on a voluntary basis. The SEC’s rule proposal would require all mutual funds to provide data-tagged information beginning with registration statement filings that become effective after Dec. 31, 2009. A mutual fund also would be required to post the interactive data on its Web site, if it maintains one.
Mutual funds seeking a head start on data tagging can participate in the SEC’s voluntary program for the submission of interactive data. More information is available at: http://www.sec.gov/spotlight/xbrl.shtml. When the SEC’s interactive data pilot program began in 2005, it initially covered the financial statements of corporate filers. The program was expanded to cover key mutual fund information in August 2007.
Investors can give mutual fund interactive data a “test drive” by using the Mutual Fund Reader on theSecurity Exchange CommissionWeb site to analyze and compare visual charts and graphs of key mutual fund information that has been voluntarily submitted using data tags.
Last week, theSecurity Exchange Commissionproposed a similar rule to help investors by requiring public companies to provide financial information using interactive data beginning next year for the largest companies and within three years for all public companies.
Public comment on the SEC’s proposed rule should be received by the Commission no later than August 1.
* * *
The full text of the rule proposal will be posted to theSecurity Exchange CommissionWeb site as soon as possible.
# # #
http://www.sec.gov/news/press/2008/2008-94.htm
Source: SEC site
Washington, D.C., May 20, 2008 — The Securities and Exchange Commission announced today’s conclusion of an international meeting of regulators to discuss cross-border takeovers of public companies. The meeting was attended by more than 40 officials (from 28 countries) who are responsible for regulating transactions related to attempts to gain control of public companies by acquiring outstanding shares held by investors.
The primary goal of the two-day meeting at the SEC’s Washington, D.C., headquarters was to identify ways to increase the effectiveness of the role of regulators in takeover transactions implicating more than one regulatory scheme. Topics discussed at the meeting included ways to increase the inclusion of U.S. and non-U.S. investors in global takeover transactions and steps that can be employed to identify abusive takeover practices.
John White, Director of the SEC’s Division of Corporation Finance, said, “Following prior meetings in Australia and South Africa, we are very pleased to have had the opportunity to host this meeting and to communicate with our fellow regulators on issues we commonly face. As our securities markets become increasingly globalized, such contacts become increasingly important as a means to meet our goals of protecting U.S. investors and promoting best practices for effective cross-border transaction oversight.”
The meeting follows the May 6 publication by theSecurity Exchange Commissionof proposed rules applicable to cross-border business combination transactions. The proposed rule amendments are intended to facilitate participation by U.S. investors in cross-border business combination transactions.
Jurisdictions represented at the meeting were Austria, Australia, Belgium, Brazil, Canada, Chile, Colombia, Denmark, France, Germany, Hong Kong, India, Ireland, Israel, Italy, Japan, The Netherlands, New Zealand, Norway, Peru, Portugal, Spain, Switzerland, South Africa, Thailand, Trinidad and Tobago, United States and United Kingdom.
http://www.sec.gov/news/press/2008/2008-93.htm
Source: SEC site
Washington, D.C., May 19, 2008 — The Securities and Exchange Commission today filed settled charges against Brooks Automation, Inc., alleging that the Chelmsford, Mass. semiconductor capital equipment company overstated its income and understated employee compensation expenses in its financial statements by $64.5 million during a 10-year period due to its failure to properly account for employee stock options.
The transactions alleged in the SEC’s complaint also were the subject of a separate enforcement action the Commission filed in 2007 against the company’s former President and CEO Robert J. Therrien. In that suit, theSecurity Exchange Commissionalleges that Therrien received millions of dollars in undisclosed compensation by fraudulently backdating his exercise of an option to purchase company stock. Therrien also is alleged to have engaged in a broader fraudulent scheme from 1999 to 2001 to grant himself and other Brooks employees and executives undisclosed, in-the-money stock options.
“Investors have the right to complete and accurate information about the financial condition of public companies and the compensation their executives receive,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “Here, the alleged conduct of Brooks’ then-CEO resulted in its repeated reporting of incorrect financial information to the public.”
The SEC’s settlement with Brooks was based in part on the company’s swift, extensive, and extraordinary cooperation in the Commission’s investigation.
David Bergers, Director of the SEC’s Boston Regional Office, said, “Brooks’ cooperation greatly facilitated the government’s investigation.”
According to the SEC’s complaint against Brooks, filed in the District of Massachusetts, the backdating by Therrien and improper accounting by Brooks resulted in misleading disclosures from 1996 to 2005. Brooks overstated its net income by as much as 30 percent in fiscal year 2000 alone. Brooks misstated that all stock options were granted at or above the fair market value of the stock on the date of the award, when that was not the case. Brooks also filed misstated financial statements with theSecurity Exchange Commissionin its annual and quarterly reports, failing to recognize compensation expense for the company’s stock option grants as required by generally accepted accounting principles.
Brooks, without admitting or denying the allegations in the SEC’s complaint, has agreed to settle the matter by consenting to a permanent injunction against violations of the reporting, books and records, and internal controls provisions of the federal securities laws.
# # #
For more information, contact:
John T. Dugan
Associate Regional Director, SEC’s Boston Regional Office
(617) 573-8936
http://www.sec.gov/news/press/2008/2008-92.htm
Source: SEC site
Washington, D.C., May 16, 2008 — The Securities and Exchange Commission has charged an Italian machinery engineer with insider trading and obtained an emergency asset freeze of the more than $2.1 million illicit profit that he made only days ago from highly suspicious trading in his U.S. brokerage account in the securities of DRS Technologies, Inc., prior to the public disclosure of advanced merger negotiations.
The SEC’s complaint, filed yesterday in U.S. District Court for the District of New York, alleges that while in possession of material, nonpublic information regarding merger talks between DRS and Finmeccanica S.p.A, Cristian De Colli purchased shares and call options of DRS common stock and liquidated all of his call options for an illicit profit of five times the amount of his original investment once the information was reported publicly and later confirmed by the company. De Colli is a resident of Rome, Italy.
Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement, said, “In today’s global markets, we will act quickly and decisively against violations of the U.S. securities laws, no matter where that conduct occurs, to protect our securities markets and investors.”
Antonia Chion, Associate Director of the SEC’s Division of Enforcement, added, “We are dedicated to preserving the integrity of the securities markets. This action, brought just days after the alleged suspicious trading occurred, demonstrates that we will not allow this integrity to be undermined by the misuse of material, nonpublic information for personal gain.”
According to the SEC’s complaint, De Colli purchased 5,700 shares of DRS common stock from April 10 to April 29, 2008, and 3,116 call options for the common stock of DRS between April 15 and May 7, 2008. De Colli purchased more than 2,400 of the call options on May 6 and May 7, including certain options that were out-of-the-money by over $6 and which expired 10 days after purchase. On April 28, 2008, De Colli liquidated securities that he had purchased in two other companies a week earlier in order to purchase additional DRS options. At that point, 100 percent of the holdings in De Colli’s U.S.-based brokerage account consisted of DRS call options and DRS stock.
The SEC’s complaint further alleges that immediately following a May 8 Wall Street Journal article reporting the advanced merger negotiations and after confirmation by DRS that it was engaged in talks regarding a potential strategic transaction, De Colli liquidated all of his call options and made his ill-gotten profit of more than $2.1 million on his initial investment of approximately $422,000. Finmeccanica later announced on May 12, 2008, that it would acquire DRS for $5.2 billion, or $81 a share.
The Commission’s complaint further alleges that, in an interview withSecurity Exchange Commissionstaff, De Colli stated that no family members, friends, or anyone else he knew had ever worked for Finmeccanica. Contrary to his statement, however, De Colli’s older brother worked for Finmeccanica between 2004 and 2005.
Upon application of the Commission, the Honorable Paul A. Crotty, U.S. District Judge in the Southern District of New York, issued a temporary restraining order freezing De Colli’s assets in the U.S., including his brokerage account, containing more than $2.1 million in ill-gotten gain from his insider trading. The order also grants expedited discovery, an order permitting alternative means of service, and an order preventing the alteration or destruction of documents.
By virtue of the conduct described above, the Commission alleges in its complaint that De Colli violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks a permanent injunction, disgorgement of ill-gotten gains with prejudgment interest, and civil money penalties.
The Commission acknowledges the assistance of the New York Stock Exchange and the Chicago Board Options Exchange in this matter.
The Commission’s investigation is continuing.
# # #
For more information, contact:
Antonia Chion, Associate Director
SEC Division of Enforcement
(202) 551-4842
Daniel Chaudoin, Assistant Director
SEC Division of Enforcement
(202) 551-4952
http://www.sec.gov/news/press/2008/2008-91.htm
Source: SEC site
Washington, D.C., May 15, 2008 — The Securities and Exchange Commission today broadened small business financing opportunities by adopting a rule amendment under the Investment Company Act to increase the availability of capital to certain smaller companies that may not have ready access to the public capital markets or other forms of conventional financing.
“Small businesses are the backbone of the U.S. economy,” saidSecurity Exchange CommissionChairman Christopher Cox. “Today’s action will help retail investors broaden their participation in small business financing. That will improve opportunities for investors and small businesses alike, and contribute directly to the health of our nation’s capital markets.”
Congress in 1980 established business development companies (BDCs), a type of publicly traded investment company, to help make capital more readily available to small, developing, and financially troubled businesses. To accomplish this purpose, the Investment Company Act generally prohibits a BDC from making any investment unless, at the time of the investment, at least 70 percent of its total assets are invested in securities of certain specific types of companies, including “eligible portfolio companies.”
The Commission has amended Rule 2a-46 to expand the definition of eligible portfolio company to include any domestic operating company with securities listed on a national securities exchange, if the company has a market capitalization of less than $250 million.
The Investment Company Act defines eligible portfolio company to include a domestic operating company that, among other things, does not have any class of securities that are marginable under rules issued by the Federal Reserve Board. In 1998, for reasons unrelated to small business capital formation, the Federal Reserve Board amended its margin rules to include all publicly traded equity securities and most debt securities. These 1998 amendments had the unintended consequence of substantially reducing the number of companies that met the definition of eligible portfolio company.
In 2006, the Commission adopted new rules under the Investment Company Act to address the effect of the Federal Reserve Board’s 1998 amendments on the definition of eligible portfolio company. The Commission adopted Rule 2a 46 to include in the definition of eligible portfolio company all private companies and public companies whose securities are not listed on a national securities exchange. This is the rule that the Commission has amended today. The Commission in 2006 also adopted Rule 55a-1 to conditionally permit a BDC to include in its 70 percent basket any follow on investments in a company that met the new definition of eligible portfolio company at the time of the BDC’s initial investment in it.
The amendment to Rule 2a-46 will become effective in July 2008, 60 days after its publication in the Federal Register.
The full text of the detailed release concerning this rule amendment has been posted to theSecurity Exchange CommissionWeb site at: http://www.sec.gov/rules/final/2008/ic-28266.pdf.
http://www.sec.gov/news/press/2008/2008-90.htm
Source: SEC site
Washington, D.C., May 15, 2008 — Conrad W. Hewitt, the Commission’s Chief Accountant, announced today the selection of Donal Byard, Susan Krische, and Roger Martin as Academic Accounting Fellows for fixed terms beginning this summer.
“Academic fellows have been very valuable to the Office of the Chief Accountant, and I look forward to working with the incoming academic fellows,” said Mr. Hewitt.
Academic Accounting Fellows serve as research resources for Commission staff by interpreting and communicating research materials as they relate to the SEC. In addition, Academic Accounting Fellows have been assigned to ongoing projects in the Chief Accountant’s office that include rulemaking, serving as a liaison with the professional accounting standards-setting bodies, and consulting with registrants on accounting, auditing, independence and reporting matters.
Mr. Byard is an Associate Professor of Accounting in the Zicklin School of Business of Baruch College, part of the City University of New York (CUNY). He earned his Ph.D. from the University of Maryland in 1998, a B.B.S. degree in Accounting from the University of Limerick, and an M.B.S. degree in Finance from University College Dublin. Mr. Byard teaches both undergraduate and graduate financial accounting. His research primarily focuses on the role of financial analysts as information intermediaries in capital markets, specifically their processing of financial disclosures. His work has been published in the Journal of Accounting Research, The Accounting Review, the Journal of Accounting and Public Policy, and the Journal of Accounting, Auditing, and Finance. His current research focuses on financial analysts’ use of voluntary disclosures, the impact of alternative voluntary disclosures on trading volume around earnings announcements, and issues relating to IFRS adoption in Europe.
Ms. Krische is an Assistant Professor of Accountancy at the University of Illinois at Urbana-Champaign, where she teaches both undergraduate and Ph.D. students. Effective August 16th, Ms. Krische will be promoted to the rank of Associate Professor of Accountancy at the University of Illinois. In her research, she focuses on how financial accounting information affects investors’ and analysts’ judgments. Bridging financial accounting and behavioral finance issues, her research has been published in top academic journals, including The Accounting Review and The Journal of Finance. She currently serves on the editorial boards for Contemporary Accounting Research and Behavioral Research in Accounting, as well as on the American Academic Association’s Competitive Manuscript Award Committee. In addition, Ms. Krische is qualified as a Chartered Accountant in Canada, having worked at Ernst & Young and having lectured at the University of Waterloo prior to earning her Ph.D. from Cornell University.
Mr. Martin is an Associate Professor of Commerce and Director of the M.S. in Accounting Program at the University of Virginia’s McIntire School of Commerce. His research focuses primarily on how auditing and the role of auditors affect financial statement quality. Mr. Martin’s research has been published in top accounting journals including The Accounting Review, Journal of Accounting Research, Contemporary Accounting Research and Auditing: A Journal of Practice and Theory. He has been active in the Auditing Section of the American Accounting Association, serving on and chairing several committees, including the Auditing Standards Committee. He teaches financial accounting and graduate auditing courses at McIntire. Mr. Martin earned his B.S. in Accounting and Finance at the University of Kansas and his Ph.D. from the University of Texas at Austin. Prior to joining the McIntire School of Commerce Mr. Martin served on the faculties at Southern Methodist University, Michigan State University and Indiana University.
Mr. Byard, Ms. Krische and Mr. Martin will replace three current Academic Accounting Fellows. Stephen Brown will be joining the accounting faculty at the University of Maryland at College Park, William Kinney will return to the University of Texas at Austin, and K. Ramesh will return to Michigan State University.
http://www.sec.gov/news/press/2008/2008-89.htm
Source: SEC site
Washington, D.C., May 14, 2008 — The Securities and Exchange Commission today filed securities fraud charges against the promoters of an $18 million real estate investment scheme targeting the African-American community in the Los Angeles area and other locations in Nevada and Georgia.
The SEC’s complaint, filed in U.S. District Court in Los Angeles, charges Jeanetta M. Standefor, a 40-year-old resident of Altadena, Calif., and her Pasadena, Calif.-based company Accelerated Funding Group (AFG) for operating a fraudulent “foreclosure reinstatement” scheme that attracted more than 600 investors between 2005 and 2007. The scheme purported to use investors’ funds to cure defaults on distressed properties owned by others. TheSecurity Exchange Commissionalleges that while soliciting investor money and promising returns of up to 50 percent within 30 to 45 days, Standefor and AFG were instead operating a Ponzi-like scheme that used money from new investors to pay previous investors. Standefor also used more than $1.9 million of investor funds for personal expenses such as her lavish wedding and honeymoon, cars, jewelry, tickets to entertainment events, and home renovations. Standefor and AFG also misused investor funds to pay $121,000 in “consulting fees” to Standefor’s husband, Darrell R. Dansby.
In a related action today, the U.S. Attorney’s Office for the Central District of California announced that Standefor was arrested by special agents with the Federal Bureau of Investigation on criminal charges related to the AFG offering. Yesterday, a federal grand jury in Los Angeles returned an 11-count indictment charging Standefor with wire fraud, mail fraud, and money laundering. She is expected to make her initial court appearance this afternoon in U.S. District Court in Los Angeles. If convicted of the criminal charges in the indictment, Standefor faces a statutory maximum sentence of 180 years in federal prison.
“Today’s action demonstrates that theSecurity Exchange Commissionmaintains its vigilant effort to fight affinity frauds,” said Linda Chatman Thomsen, Director of the SEC’s Division of Enforcement. “As alleged in our complaint, this case provides an egregious example of someone exploiting the trust of members of her own community.”
Rosalind R. Tyson, Acting Director of the SEC’s Los Angeles Regional Office, added, “As our complaint alleges, investors were lured into believing they were investing in notes on specific distressed properties, under a deal with homeowners that never existed. This case illustrates the SEC’s commitment to work with other federal and state agencies to bring wrongdoers to justice.”
United States Attorney Thomas P. O’Brien said, “Ms. Standefor unscrupulously tried to benefit from the pain felt by those affected by the downturn in the housing market. This case once again reminds us that promises of huge returns from investments should be thoroughly investigated by those considering making an investment.”
Affinity frauds prey upon members of identifiable groups, such as religious or ethnic communities, the elderly, or professional groups. The fraudsters frequently are — or pretend to be — members of the group themselves.
According to the SEC’s complaint, Standefor and AFG solicited investors in the African-American community through a now-defunct Web site, word of mouth, and testimonials by other seemingly successful African-American investors. Standefor claimed investor funds would be used to cure defaults on distressed properties. AFG offering materials touted the foreclosure reinstatement program as “virtually risk free” and promised investors that their principal would be safely returned within 72 hours at their request. However, theSecurity Exchange Commissionalleges that Standefor and AFG did not use investor funds to cure defaults on any residential properties, and investors’ requests for returns of their investments have been ignored.
The SEC’s complaint charges Standefor and AFG with violating the antifraud and registration provisions of the federal securities laws, and seeks permanent injunctions, disgorgement of ill-gotten gains, and civil penalties. The complaint also names Dansby as a relief defendant, alleging he received ill-gotten gains from Standefor’s and AFG’s fraudulent conduct.
The California Department of Corporations today also issued a desist-and-refrain order to Standefor and AFG.
TheSecurity Exchange Commissioncontinues to remind investors to exercise healthy skepticism and thoroughly investigate any promises of unusually high returns that seem to be too good to be true. The SEC’s “Affinity Fraud” Investor Alert provides investors with tips about how to avoid being a victim of affinity fraud: http://www.sec.gov/investor/pubs/affinity.htm.
For more information, contact:
Andrew G. Petillon
Associate Regional Director, SEC’s Los Angeles Regional Office
(323) 965-3214
Finola Halloran Manvelian
Assistant Regional Director, SEC’s Los Angeles Regional Office
(323) 965-3980
John M. McCoy III
Regional Trial Counsel, SEC’s Los Angeles Regional Office
(323) 965-4561
http://www.sec.gov/news/press/2008/2008-88.htm
Source: SEC site
