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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: afrayem onigwecher who wrote (12075)	9/4/2003 10:18:26 AM
From: StockDung	Read Replies (1) \| Respond to of 19428

HEDGE-FUND HOTTIE By CHRISTOPHER BYRON September 4, 2003 -- According to a Redmond, Wash., hospital nurse named Sandy Hedin, the newest mystery financier in the hedge-fund spotlight - Boston moneyman Treyton L. Thomas - carried on a torrid two-year love affair with her when she was but an under-age junior high-schooler on a U.S. Naval base in Kenitra, Morocco, in the 1970s. Hedin says Thomas was serving as a Marine Corps enlisted man at the base at the time. A decade later, Thomas' first employer in civilian life - Donald Rembert of Falls Church, Va. - reports that the young man turned up at the center of a bizarre case of mistaken identity, travelling internationally for a year and a half in the early 1980s on a U.S. passport, seemingly unaware that it that listed his sex as female. Such was the career track into business for the self-styled head of a $600 million Boston hedge-fund empire called the Pembridge Group, on which the Securities and Exchange Commission is focusing. Both Thomas and Pembridge are in the SEC's sights as it widens its probe of hedge-fund fraud. Others in the Thomas affair include a stock promoter named Altaf Nazerali, and the former head of counter-terrorism for the FBI, Oliver ("Buck") Revell, who now serves as the chairman of a Nazerali-controlled Vancouver penny-stock company called Imagis Technologies Inc. Hedge-fund angst is spreading throughout every level of government, as regulators, law enforcement officials and media outlets alike either rush to grab the shirttails of this suddenly popular issue, or to sound off on themes they've been warning about all along. In Miami, the closely read newsletter Offshore Alert reported unearthing a New Jersey-based hedge fund - Cornell Capital Partners - that has brought investors running with more than 10.5 percent annualized returns from investing in a portfolio of penny stocks noted for their "massive losses, going concern warnings, related-party transactions, name changes, reverse mergers, stock splits and litigation." One Cornell holding, World Wireless Communications, is also a major holding of New York's Lancer Fund, which was closed by the SEC in July on charges of massive market rigging and fraud. Last week, Lancer's founder, Michael Lauer, returned from a sudden visit to Poland to petition a federal court in Miami to free up $93,000 per month in "living expenses" of his impounded net worth of $114 million, so that he can defend himself as he faces multiplying legal problems. In the Thomas matter, as first reported by The Post last week, the Boston Enforcement Division of the SEC has now also become involved, subpoenaing Thomas' personal trading records after questions were raised regarding a proposal that Thomas put forth in March of last year in the name of his Pembridge Group. The proposal: to acquire Vancouver-based Imagis Technologies Inc. for $90 million in cash, or nearly 100 percent over the prevailing market price. Imagis' chairman, Revell, has claimed that Thomas was thoroughly vetted and judged to be an appropriate addition to the company's board of directors, where he assumed a seat in July 2002. Thomas himself was arrested (though not convicted) in 1984 on felony fugitive charges in Georgia. In June 2001, the Bloomberg LP removed its only two terminals in Thomas' apartment and ended its contract with him for failing to pay $12,000 in overdue bills. Phone calls seeking comment from Thomas went unreturned.

To: afrayem onigwecher who wrote (12075)	9/4/2003 12:18:15 PM
From: StockDung	Read Replies (1) \| Respond to of 19428

.SEC Lancer receiver asks to drop Post suit, drops names 2003-09-03 18:56 ET - Street Wire FIELD DAY by Lee M. Webb Marty Steinberg, the court-appointed receiver for the U.S. Securities and Exchange Commission (SEC) target Lancer Group, has filed a motion for authority to discontinue Lancer's libel action against the New York Post and columnist Christopher Byron. Appended to the Aug. 20 motion filed in the U.S. District Court for the Southern District of Florida is a potential bonanza for investigative journalists: the first public disclosure of all presently known Lancer creditors and investors. The SEC shut down the purported $1-billion (U.S.) Lancer fund operation headed by Michael Lauer on July 10 of this year, exactly 10 months after the New York Post published the first of a series of articles by Mr. Byron raising serious questions about Lancer and its high-flying leader. In the wake of the scathing articles, Mr. Lauer and Lancer filed a libel suit against the New York Post and Mr. Byron on Feb. 14. In a July 8 SEC civil complaint against Mr. Lauer and Lancer that led to a July 10 court order freezing the Lancer assets and appointing a receiver, the U.S. regulator corroborated much of what Mr. Byron had written and extensively fleshed out allegations of Lancer's fraudulent activities with more than 1,800 pages of supporting documentation. (As first reported by Stockwatch, more than 18.7 million shares of Calgary-based Zi Corp., approximately 50 per cent of the company's outstanding shares, may be among the frozen Lancer assets. According to court documents, Lancer peeled off more than $97.6-million (all amounts in U.S. dollars) to sponge up the massive undisclosed Zi stake. Zi officials claim that they did not have a clue about Lancer's staggering stake in the company.) Among other things, the SEC alleges that Mr. Lauer's Lancer operation engaged in fraudulent manipulative trading practices, rigging the month-end prices of a number of virtually worthless OTC Bulletin Board and pink sheet stocks, and used bogus valuation opinions on other stocks to fraudulently boost the reported value of the Lancer funds in order to draw new investors and keep existing investors from requesting redemptions. Long before the SEC action, Mr. Byron raised similar concerns about Mr. Lauer and Lancer in his articles. As noted in the Lancer receiver's recently filed motion to discontinue the libel action against the paper and Mr. Byron, in a Sept. 10, 2002, article the New York Post columnist "alleged that Lauer greatly overstated the value of assets under management" in the two principal Lancer funds "and asserted that Lauer appointed acquaintances with tainted reputations to management positions with the funds' investments." On Jan. 13, 2003, the paper published another article in which Mr. Byron restated his earlier allegations and "detailed more alleged links between reputed criminals and Lauer's investment strategies." He also "derided" Mr. Lauer's flagship funds, Lancer Partners LP and Lancer Offshore Inc., "as 'penny-stock' funds." In a Jan. 27 article published less than three weeks before Lancer filed its libel suit, "Byron stated that Lauer and his funds were in 'financial hot water' and compared an alleged recent spate of redemption requests to a depression-style bank run." On April 3, the New York Post and Mr. Byron filed a notice of motion in response to the Feb. 14 Lancer lawsuit indicating that they intended to seek dismissal of the action or a summary judgment in their favour. According to the defendants, "the complained of statements were substantially true, the Defendants were not grossly irresponsible in publishing the statements, and the statements are protected opinion." As noted by the Lancer receiver, Mr. Byron filed an extensive affidavit in support of the April 3 motion. "In the Byron Affidavit, Byron provides testimony detailing his investigation of Lauer and provides substantial detail regarding the research and reporting performed in support of the Articles," the receiver states. "The Receiver has determined, after a careful review of the pleadings and testimony and a thorough analysis by media law specialists, that the Libel Action on behalf of the Lancer Entities lacks sufficient merit to justify its anticipated cost and should be discontinued," the Lancer receiver continues. Deeper into the Aug. 20 motion, the receiver explicitly claims that, based on the merits of the libel action, the lawsuit "lacks any real prospect for success." The Lancer receiver goes on to sketch some of the difficulties that would be encountered in the libel action. Given the legal context, some of the receiver's specific reasons for wanting to abandon the libel case amount to a very favourable assessment of Mr. Byron's research and reporting. First, the receiver acknowledges that Mr. Lauer and the Lancer entities likely qualify as "public figures" due to their wide solicitation of investments in controversial areas and publicity prior to the publication of Mr. Byron's articles. That being so, the plaintiff would "bear the high burden" of proving that any false or defamatory statements in the articles were published with actual malice. In order to satisfy that standard, the plaintiff would have to prove that Mr. Byron and the New York Post actually knew the statements were false or acted with reckless disregard for the truth. "The Byron Affidavit provides extensive documentation of Byron's apparent regard for the truth of his reporting; refutation of Byron's detailed testimony will at the very least require extensive, expensive and voluminous discovery," the receiver states. Even if Mr. Lauer and Lancer did not qualify as public figures, the receiver claims that the probability of success in the action would still be very low. In order to succeed, the plaintiff would have to prove the defendants acted with gross irresponsibility. To satisfy that standard, the plaintiff would have to prove by a preponderance of evidence that any false statements in the articles were published without considering the standards of information gathering and dissemination ordinarily followed by responsible journalists and newspapers. "The Byron Affidavit appears to prima facie refute any claim of 'gross irresponsibility'; refutation thereof will be difficult, costly and time-consuming for the Receiver," the Aug. 20 motion claims. According to the receiver, the libel defence for opinion combined with the requirement that the plaintiff prove falsity presents another difficulty that makes the probability of success very low. "The Post and Byron have asserted that the statements contained in the Articles were not substantially false and that any substantially false statements contained in the Articles were opinions based on facts or hyperbole," the receiver states. "The Byron Affidavit provides evidence in support of this contention." A fourth difficulty outlined by the Lancer receiver concerns "the typically uncompromising and combative approach taken by news organizations in opposition to libel suits" and, apparently, specifically the New York Post. "The Receiver will have to prosecute the Libel Action into the teeth of a vociferous, highly motivated, and very skilled opponent," the Aug. 20 motion states. "Media defendants such as the Post rarely settle libel claims because of the potential threat of such a settlement to the integrity of the organization and its journalists." In the conclusion to the motion to abandon the suit, the Lancer receiver offers a more general assessment of a U.S. libel action. "The Libel Action is no mere tort suit; it requires the Receiver to surmount difficult hurdles set up to protect constitutional interests and it implicates the integrity of a news organization in such a way as to render settlement highly unlikely," the receiver claims. As some journalists know, Canadian libel law is significantly different from U.S. libel law. Indeed, some Canadian journalists marvel at the protection, including constitutional protection, available to their U.S. counterparts. As it happens, Mr. Byron has some firsthand knowledge of the differences between Canadian and U.S. libel law. After Stockwatch had published approximately 20 articles about Vancouver-based Imagis Technologies Inc., Mr. Byron, then a contributing editor to U.S.-based Red Herring magazine, weighed in with his own story about the company and some of its intriguing players. Red Herring first published Mr. Byron's Imagis article on the Internet last August and then republished it in the September 2002 print edition of the magazine. On Sept. 10, 2002, Imagis filed a libel suit against California-headquartered Red Herring and Connecticut-based Mr. Byron in the Supreme Court of British Columbia. While that case has been gathering dust for some time, the early flurry of legal activity provided Mr. Byron with a possibly less than palatable taste of Canadian libel law. Meanwhile, the Aug. 20 motion by the Lancer receiver to abandon the U.S. libel suit against Mr. Byron and the New York Post following on the heels of the disclosure of the SEC investigation into the allegedly fraudulent Lancer operation is certainly a further vindication of the investigative journalist's work. The Aug. 20 motion filed by the Lancer receiver may also be of significant interest to other investigative journalists. Appended to the motion is a list of all known Lancer creditors, investors and other parties in interest. Indeed, the 186 names on that list, the vast majority of them previously undisclosed, may provide journalists who have been following Lancer and associated companies with an absolute field day of leads. Comments regarding this article may be sent to lwebb@stockwatch.com.

To: afrayem onigwecher who wrote (12075)	9/8/2003 8:39:44 PM
From: StockDung	Respond to of 19428

Canary in a coal mine->Milberg Weiss Announces the Filing of a Class Action Suit against Bank of America Corp. Defendants and Canary on Behalf of Purchasers of the Securities of the Nations Funds Family of Funds NEW YORK--(BUSINESS WIRE)--Sept. 8, 2003--The law firm of Milberg Weiss Bershad Hynes & Lerach LLP announces that a class action lawsuit was filed on September 8, 2003, on behalf of purchasers of the securities of the Nations Funds family of funds (the "Funds") owned and operated by Bank of America Corp. (NYSE:BAC), and its subsidiaries and affiliates, between October 1, 1998 and July 3, 2003, inclusive, (the "Class Period"), seeking to pursue remedies under the Securities Exchange Act of 1934, the Securities Act of 1933 and the Investment Advisers Act of 1940. A copy of the complaint filed in this action is available from the Court, or can be viewed on Milberg Weiss' website at: milberg.com The Funds, and the symbols for the respective Funds named below, are as follows: *T Nations Capital Growth Fund (Sym: NCGIX, NCGNX, NCAGX, NCGRX) Nations Marisco 21st Century Fund (Sym: NMTAX, NMTBX, NMYCX, NMYAX) Nations Marsico Focused Equities Fund (Sym: NFEAX, NFEBX, NFECX, NFEPX) Nations Marsico Growth Fund (Sym: NMGIX, NGIBX, NMICX, NGIPX) Nations MidCap Growth Fund (Sym: NEGAX, NEGNX, NEMGX, NEGRX) Nations Small Company Fund (Sym: NSCGX, NCPBX, NCPCX, PSCPX) Nations Strategic Growth Fund (Sym: NSGAX, NSIBX, NSGCX NSEPX) Nations Asset Allocation Fund (Sym: PHAAX, NBASX, NAACX, NPRAX) Nations MidCap Value Fund (Sym: NAMAX) Nations SmallCap Value Fund (Sym: NSVAX) Nations Value Fund (Sym: NVLEX, NVLNX, NVALX, NVLUX) Nations Global Value Fund (Sym: NVVAX, NGLBX, NCGLX, NVPAX) Nations International Equity Fund (Sym: NIIAX, NIENX, NITRX, NIEQX) Nations International Value Fund (Sym: NIVLX, NBIVX, NVICX, EMIEX) Nations Marsico International Opportunities Fund (Sym: MAIOX, MBIOX, MCIOX, NMOAX) Nations LargeCap Enhanced Core Fund (Sym: NMIAX, NMIMX) Nations LargeCap Index Fund (Sym: NEIAX, NINDX) Nations MidCap Index Fund (Sym: NTIAX, NMPAX) Nations SmallCap Index Fund (Sym: NMSAX, NMSCX) Nations LifeGoal(R) Balanced Growth Portfolio (Sym: NBIAX, NLBBX, NBICX, NBGPX) Nations LifeGoal(R) Growth Portfolio (Sym: NLGIX, NLGBX, NLGCX, NGPAX) Nations LifeGoal(R) Income and Growth Portfolio (Sym: NLGAX, NLIBX, NIICX, NIPAX) Nations Bond Fund (Sym: NSFAX, NSFNX, NSFCX, NSFIX) Nations Government Securities Fund (Sym: NGVAX, NGVTX, NGVSX, NGOVX) Nations High Yield Bond Fund (Sym: NAHAX, NHYBX, NYICX, NYPAX) Nations Intermediate Bond Fund (Sym: PHBAX, NTBBX, NTBCX, NATAX) Nations Short-Intermediate Government Fund (Sym: NSIGX, NSINX, NSIFX, NSIMX) Nations Short-Term Income Fund (Sym: NSTRX, NSTIX, NSTMX) Nations Strategic Income Fund (Sym: NDIAX, NDVIX, NDVSX, NDIVX) Nations Convertible Securities Fund (Sym: PACIX, NCVBX, PHIKX, NCIAX) Nations CA Intermediate Municipal Bond Fund (Sym: NACMX, NCMAX) Nations CA Municipal Bond Fund (Sym: PHCTX, NCMBX, NCBCX, NCPAX) Nations FL Intermediate Municipal Bond Fund (Sym: NFIMX, NFITX, NFINX, NFLBX) Nations FL Municipal Bond Fund (Sym: NFDAX, NFMNX, NFMBX, NFLMX) Nations GA Intermediate Municipal Bond Fund (Sym: NGMIX, NGITX, NGINX, NGAMX) Nations Intermediate Municipal Bond Fund (Sym: NITMX, NIMMX, NIMNX, NINMX) Nations Kansas Municipal Income Fund (Sym: NKIAX, NKIBX, NKICX, NKSAX) Nations MD Intermediate Municipal Bond Fund (Sym: NMDMX, NMITX, NMINX, NMDBX) Nations Municipal Income Fund, (Sym: NMUIX, NMNNX, NMNIX, NNUNX) Nations NC Intermediate Municipal Bond Fund (Sym: NNCIX, NNITX, NNINX, NNIBX) Nations SC Intermediate Municipal Bond Fund (Sym: NSCIX, NISCX, NSICX, NSCMX) Nations Short-Term Municipal Income Fund (Sym: NSMMX, NSMUX, NSMIX) Nations TN Intermediate Municipal Bond Fund (Sym: NTIMX, NTNNX, NTINX, NTNIX) Nations TX Intermediate Municipal Bond Fund (Sym: NTITX, NTXTX, NTXCX, NTXIX) Nations VA Intermediate Municipal Bond Fund (Sym: NVAFX, NVANX, NVRCX, NVABX) Nations CA Tax-Exempt Reserves (Sym: NATXX) Nations Cash Reserves (Sym: NPRXX, NIBXX, NRSXX) Nations Government Reserves (Sym: NGAXX, NGOXX) Nations Money Market Reserves (Sym: NRBXX, NRTXX) Nations Municipal Reserves (Sym: NMSXX) Nations Tax-Exempt Reserves (Sym: NTEXX, NTXXX) Nations Treasury Reserves (Sym: NTSXX, NTTXX). The action, numbered 03 CV 6847, is pending in the United States District Court for the Southern District of New York, against defendants Bank of America Corp., Banc of America Capital Management, LLC., Bank of America Advisors, LLC, Nations Funds Inc., Robert H. Gordon, Theodore H. Sihpol III., Charles D. Bryceland, Edward J. Stern, Canary Capital Partners, LLC, Canary Investment Management, LLC, Canary Capital Partners, Ltd, each of the Funds, and John Does 1-100. The Complaint alleges that defendants violated Sections 11 and 15 of the Securities Act of 1933; Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder; and Section 206 of the Investment Advisers Act of 1940. The Complaint charges that, throughout the Class Period, defendants failed to disclose that they improperly allowed certain hedge funds, such as Canary, to engage in "late trading" and "timing" of the Funds' securities. Late trades are trades received after 4:00 p.m. EST that are filled based on that day's net asset value, as opposed to being filled based on the next day's net asset value, which is the proper procedure under SEC regulations. Late trading allows favored investors to make use of market-moving information that only becomes available after 4 P.M and has been compared to betting on a horse race that already has been run. Timing is excessive, arbitrage trading undertaken to turn a quick profit and which ordinary investors are told that the funds police. Late trading and timing injure ordinary mutual fund investors -- who are not allowed to engage in such practices -- and are acknowledged as improper practices by the Funds. In return for receiving extra fees from Canary and other favored investors, Bank of America and its subsidiaries allowed and facilitated Canary's timing and late trading activities, to the detriment of class members, who paid, dollar for dollar, for Canary's improper profits. These practices were undisclosed in the prospectuses of the Funds, which falsely represented that the Funds actively police against timing and represented that post-4 P.M. EST trades will be priced based on the next day's net asset value and that premature redemptions will be assessed a charge. If you bought the securities of any of the Funds between October 1, 1998 and July 3, 2003 and sustained damages, you may, no later than November 7, 2003, request that the Court appoint you as lead plaintiff. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff." Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. You may retain Milberg Weiss Bershad Hynes & Lerach LLP, or other counsel of your choice, to serve as your counsel in this action. Milberg Weiss Bershad Hynes & Lerach LLP (http://www.milberg.com) is a 190-lawyer firm with offices in New York City, San Diego, San Francisco, Los Angeles, Boca Raton, Philadelphia and Seattle, and is active in major litigations pending in federal and state courts throughout the United States. Milberg Weiss has taken a leading role in many important actions on behalf of defrauded investors, consumers, and others, and has been responsible for more than $20 billion in aggregate recoveries. Please contact the Milberg Weiss website for more information about the firm. If you wish to discuss this action with us, or have any questions concerning this notice or your rights and interests with regard to the case, please contact the following attorneys: -0- Peter E. Seidman Andrei V. Rado One Pennsylvania Plaza, 49th fl. New York, NY, 10119-0165 Phone number: (800) 320-5081 E-mail: nationsfundscase@milbergNY.com Website: milberg.com CONTACT: Milberg Weiss Bershad Hynes & Lerach LLP Steven G. Schulman Peter E. Seidman Andrei V. Rado 800-320-5081 E-mail: nationsfundscase@milbergNY.com Website: milberg.com TICKERS: NYSE:BAC SOURCE: Milberg Weiss Bershad Hynes & Lerach LLP Today's News On The Net - Business Wire's full file on the Internet with Hyperlinks to your home page. URL: businesswire.com 09/08/2003 19:25 EASTERN

To: afrayem onigwecher who wrote (12075)	9/9/2003 1:40:19 AM
From: StockDung	Respond to of 19428

Fraud spotlight won't help investors Commentary: It'll soon be business as usual for miscreants By Paul B. Farrell, CBS.MarketWatch.com Last Update: 12:04 AM ET Sept. 9, 2003 LOS ANGELES (CBS.MW) -- Not long ago former SEC chairman Arthur Levitt warned that "America's investors have been ripped off as massively as a bank being held up by a guy with a gun and a mask." Now we find out it was an inside job ... no guns and masks necessary. They even smiled while they were secretly robbing us blind ... our own mutual fund managers, the very people we thought had a fiduciary duty to protect us. But what's all the fuss, folks? This is old news; they've been doing this for years. They just got nabbed this time. Yet, suddenly the New York attorney general is everybody's hero. "God bless Eliot Spitzer," gushed Stephen Cutler, head of the SEC's enforcement division, one of Chairman William Donaldson's minions. "I commend the attorney general for helping to shine a bright light on the murky world of mutual fund fees," trumpeted sweet-talking Congressman Richard Baker. What a bunch of phonies. The truth is, Baker, Cutler, Donaldson and the SEC hate Spitzer. For example, since July 19 Baker's been the hatchet man pushing a new bill specifically designed to cut the legs out from under Spitzer by limiting the enforcement powers of state attorneys general. Except Spitzer beat them to the punch. Once again he caught them with their pants down, failing to do their job. They're red-faced, desperately trying to cover up their embarrassment. Now they're forced to take actions against big political donors that they have been protecting for years. But don't count on more than a couple of band-aids. Their hypocrisy should fool nobody. Nobody's protecting America's investors Under all this drama, investors are being forced to confront a very nasty truth: nobody really cares about protecting us. That's really what this massive fraud has exposed. Nobody puts investors first. Not the SEC. Not Congress. And certainly not your greedy fund managers. They see investors as docile "cash cows" to be milked at will by this huge, silent conspiracy, which favors and protects big political donors (like Wall Street and the fund industry) at the expense of America's 95 million Main Street investors. Unfortunately, the Canary Hedge Fund fraud is only a minor symptom of the pervasive cancer eating away at the fund industry's "conspiracy of silence," as Jack Bogle calls it. Spitzer has only exposed one small corner of the festering, lethal scab gutting the integrity of the fund industry. Congress did make a big show about reform earlier this year. It was a perfect opportunity for an investor revolution because massive reforms were on the table. But the public never got excited (like now). So the fund-industry lobby had an easy time quietly sabotaging it. We've been following the drama closely. A year ago we reported on 25 conflicts of interest in the fund industry. Our list was prepared from information provided by several investor advocates, former Treasury and SEC officials and the work of Arthur Levitt, Jack Bogle and other power-players. From January through July we followed the progress of the proposed Mutual Fund Integrity and Fee Disclosure Act as it moved through the House Financial Services Committee. Then, at the eleventh hour, it fizzled. Bogle, who was initially enthusiastic, said: "If a journey of a thousand miles begins with a single step, I'd say this legislation still leaves us many hundreds of miles to go." After Congress got its photo-op for the re-election campaign, the bill was tabled. Suddenly the sham was over. Congress simply passed the responsibility back to the SEC, which has been doing nothing about these matters for years. We may get band-aids, but Congress and lobbyists have placed the industry beyond meaningful reforms, while greedy fund managers continue skimming money off the top. SEC inaction protects big donors Spitzer's latest move is no isolated bit of evidence. We've seen other signs that the SEC isn't interested in protecting Main Street investors. The fact is, SEC is either incompetent or secretly trying to undermine individual investors for purely political reasons. Neither scenario is encouraging. Remember how Spitzer embarrassed the SEC by spearheading a $1.4 billion settlement with Wall Street's bad boys. The SEC wasn't doing its job prosecuting Wall Street's crooked analysts, so Spitzer stepped in and upstaged the SEC. Then Spitzer brought charges against Morgan Stanley for failing to disclose that its brokers got extra payola for pushing their in-house funds. The SEC was nowhere on that issue either. And last week even the Oklahoma attorney general got in the act, bringing charges against Bernie Ebbers, the CEO whose alleged criminal conduct brought WorldCom down. I asked Jack Bogle what he thinks about this scandal. He's more optimistic than I am: "This scandal is for real, and will have a major and continuing impact on the industry. In a sense, it's a blessing." But don't get your hopes up too high. The pressure to reform will blow over. And when the smoke clears the crooks without "guns and masks" will still be in control of our funds and money. Money talks Besides, there's just too much special interest lobbying money involved that's corrupting these insiders. Remember, Senators, Congressmen and the White House need money. And lobbyists want favors. Especially lobbyists working for fund managers with questionable ethics. At most you'll see some noisy damage control to shut up Spitzer supporters. But mark my words, a year from now we'll be back to "normal" with the fund industry cheating investors by using clever new gimmicks. And they'll still be protected behind their secret "conspiracy of silence" by armies of politicians, lobbyists and a do-nothing SEC. You watch: For the next few months Congress and the SEC will flood us with chest-pounding rhetoric about helping the little guy. But in the end all they'll do is plug the two gapping holes exposed by Spitzer (illegal market timing and trading privileges given to the big-time players). Meanwhile, so many of the other 25 needed reforms will get lost in the noise. Here's a final thought that's bound to gag you ... remember, this was an "inside job." That means all the huge sums of money the fund industry lobbyists are spending to buy protection from the politicians comes out of your pocket. How's that for irony.

To: afrayem onigwecher who wrote (12075)	9/9/2003 1:53:50 AM
From: StockDung	Respond to of 19428

Enron's Former CEOs May Face Criminal Charges Soon, WSJ Says Sept. 9 (Bloomberg) -- U.S. prosecutors hope to decide whether to bring criminal charges against former Enron Corp. CEOs Kenneth Lay and Jeffrey Skilling within two months, the Wall Street Journal reported, citing people familiar with the investigation. According to one such person, federal officials have identified individuals who, they believe, have evidence that could provide the basis for charges against one or both of the men, and they'll try in the next few weeks to persuade those individuals to cooperate, the newspaper said. Investigators have focused particular efforts on Skilling, and believe they're closer to having enough evidence to bring charges against him than against Lay, the Journal said. Both men have denied any wrongdoing in connection with their leadership of Enron, the paper said. Separately, prosecutors may file criminal charges against individuals at banks that worked with Enron, the Journal said. Enron filed for bankruptcy protection in December 2001, weeks after writing off $1 billion in failed investments and admitting it hid $1.2 billion in losses in off-the-books partnerships. The filing was the largest U.S. bankruptcy at the time and remains the largest when measured by debt. (Wall Street Journal Europe 9-9 A1) For the Wall Street Journal's Web site, see {WWSJ <GO>}. Last Updated: September 9, 2003 00:21 EDT

To: afrayem onigwecher who wrote (12075)	9/9/2003 9:30:37 AM
From: StockDung	Read Replies (1) \| Respond to of 19428

HOW THE GOVERNMENT IS USING A SHELL GAME TO FOOL YOU By JOHN CRUDELE September 9, 2003 -- WAS the nation's productivity miracle a hoax? nypost.com The supposed rise in productivity was the silver lining in the economic cloud of the last three years. Fed chief Alan Greenspan has spoken proudly of it, saying the United States was becoming a more efficient producer of goods. But the slip of a tongue may call the whole productivity miracle into question. Here's part of what Sen. Robert Bennett, chairman of the Joint Economics Committee, had to say on CNBC on Friday. Bennett, a Republican, was discussing how he didn't believe the U.S. was bleeding jobs and that it was simply a calculation mistake, then he got off the topic. "If you go back into the '90s and Alan Greenspan's examination of where the economy was, the productivity numbers that he was getting through traditional means all indicated productivity was down. And Greenspan gathered the economists . . . and the Fed together and said this cannot be right." "They said, 'We are doing it the way we've always done it, so the numbers have to be right.' And [Greenspan] challenged them and said if you look at the other data they make it very clear that productivity has got to be going up. "They went back and recalculated and discovered that their productivity numbers had been wrong for months if not years," Bennett concluded. So, let me get this straight. The Fed chairman doesn't like an economic statistic, so he tells some lowly economists to take a mulligan and do the calculations over. Amazingly, they discover exactly what the Fed wants them to discover - the politically important productivity miracle. The Soviets had a habit of calculating their wheat crops in such a sloppy manner until the starving citizens wouldn't take it anymore. * As Wall Street continues to re-inflate the bubble, this one troubling question lingers for the those who are blowing air into stocks: Why aren't any jobs being created if the economy is improving as much as it is? You already know what I think about the government's employment figures - they aren't trustworthy. Let me put it more bluntly: They stink. But when you have a seventh straight month of job losses - including the 93,000 positions eliminated in August - you have to figure that, at the very least, the trend is accurate. Washington says the economy is growing at better than 3 percent a quarter, as measured by the gross domestic product. Expectations are that the figure will improve during the period that ends Sept. 30. Growth like that should be producing 200,000 to 300,000 new jobs each and every month. So, not only are we not adding to payrolls but we are still declining. Perplexed big thinkers like the folks down at the New York Federal Reserve are publicly wondering if there is something new (and wrong) happening to the economy. I suggested in a column a few weeks back that the economy is "broken," because of a lot of historical actions and reactions that I don't want to repeat here. But here's an even better answer to the missing jobs question: Maybe the economy really isn't growing as fast as Washington would have you believe. (I know you don't want to hear this, but it's better than believing a lie.) I've written about this before. The subterfuge is quite simple. The government comes up with the GDP number by taking the amount it thinks the economy is expanding and then subtracting the rate of inflation. In the first quarter of 2003, for instance, the growth rate was 1.4 percent after an annualized inflation of 2.4 percent was subtracted. If the inflation rate had been zero, then growth would have been 3.8 percent. You got that? The 3.1 percent growth that was reported in the quarter ended in June assumes annualized inflation of only 0.8 percent. Has inflation actually dropped that much - from 2.4 percent in the first quarter to just 0.8 percent? Where? Home prices? Gasoline? Heating oil? Insurance? College costs? You get the point: Most big-ticket items are still rising steadily in cost. Yet Washington thinks inflation fell from an already unbelievably low annualized rate of 2.4 percent earlier this year to an incomprehensibly low 0.8 percent. If the government had used the same inflation rate that it did in the first quarter, the last three month's annual economic growth would have been just 1.5 percent (compared with 1.4 percent in the first quarter). Maybe there are no jobs being created because economic growth is still dismal. * Please send e-mail to: jcrudele@nypost.com

To: afrayem onigwecher who wrote (12075)	9/11/2003 5:23:38 PM
From: StockDung	Respond to of 19428

Canary hedge fund administrator faces fraud claim Reuters, 09.11.03, 4:17 PM ET By Tim McLaughlin and Svea Herbst-Bayliss BOSTON, Sept 11 (Reuters) - A Bermuda-based company that provides essential administrative services to a hedge fund at the center of an illegal mutual fund trading scandal faces fraud claims from a former business partner, court records show. Olympia Capital International, among the most powerful players in the booming hedge fund administration business, counts Canary Capital as a client, said Carolynn Hiron, a lawyer for one of Olympia's affiliates. Secaucus, New Jersey-based Canary Capital last week agreed to pay $40 million to settle charges that it broke securities laws by trading mutual fund shares after the close of trading. The fund, whose triple-digit returns raised eyebrows in the secretive $600 billion industry, neither admitted nor denied wrongdoing. Like most of the world's estimated 6,000 hedge funds, Canary uses a fund administrator and picked Bermuda-based Olympia Capital, which was formed in 1990 by former Drexel Burnham Lambert Inc. executive Oskar Lewnowski. Last year Olympia Capital ranked as the world's seventh largest fund administrator, handling $5.8 billion in assets for 38 funds, according to hedge fund data group HedgeWorld. Fund administrators often provide an array of back office services ranging from calculating a fund's net asset value to providing financing for a fund. Hiron declined to detail what Olympia does for Canary Capital. She also declined to comment on whether her office has been contacted by regulators in connection with the widening illegal trading probe. FRAUD CLAIMS Three months before New York's attorney general filed the complaint citing Canary Capital, Lewnowski and Olympia Capital were accused of operating a criminal enterprise in an attempt to take control of companies run by real estate executive Thomas B. Donovan and his family. The real estate family is claiming more than $100 million in damages. The allegations are described in a civil lawsuit filed in New York's Eastern U.S. District Court. Lewnowski and the lawyer handling the case for him did not return telephone calls seeking comment. Donovan, whose companies buy and sell distressed real estate mortgages, claimed Olympia and affiliated companies offered to finance his ventures with money provided by Vanderbilt University and European banks. The funding promises were false and part of a scheme to induce Donovan to agree to exclusive arrangements that would make his company financially vulnerable to the defendants, according to the lawsuit. Part of the scheme relied on using offshore trusts and companies to receive funds from investors and then make investments in distressed mortgages, tax liens and lottery winnings, the lawsuit said. "The defendants would 'blend' the offshore trusts to further obscure and obfuscate the true source of the funds and render them untraceable," Donovan and his family said in the lawsuit. As an administrator to hedge funds, Olympia Capital operates in a fragmented industry and handles about 2 percent of the industry's assets, according to HedgeWorld. Administrators are paid a percentage of a hedge fund's assets, so performing tasks for only a few small funds can be very profitable. For example, the industry's largest administrator, Citco Fund Services, administers only 9 percent of all hedge fund assets, according to HedgeWorld data. At the end of 2002, Citco had $44 billion under administration and worked for 189 funds. Off-shore hedge funds long were exempt from paying U.S. taxes as long as services were performed abroad. The fund industry probe is picking up speed as state and federal regulators try to determine how widespread the practice of after-hours trading and market timing was. Copyright 2003, Reuters News Service

To: afrayem onigwecher who wrote (12075)	9/11/2003 6:44:41 PM
From: StockDung	Respond to of 19428

Study: Illegal fund trades widespread Spitzer charges only scratch the surface, professor says By Jonathan Burton, CBS.MarketWatch.com Last Update: 5:46 PM ET Sept. 11, 2003 While New York Attorney General Eliot Spitzer said last week that Bank of America (BAC: news, chart, profile) illegally allowed trades after the market closed, many more funds saw large cash inflows on days when market-moving news after hours would have made it profitable, said Stanford University Prof. Eric Zitzewitz. The practice cost fund investors about $400 million in 2001 and was on a similar pace this year, according to the study of daily cash flows at more than 100 fund families. The cost to individual shareholders is estimated at about a nickel for every $100 invested in international funds, and less than a penny for domestic funds. "It certainly is an eye-opener to think it could be more common," said Russel Kinnel, director of fund analysis at investment research firm Morningstar. "It's very difficult to imagine more sizeable fund shops falling prey to that, but there's already one more than I would have thought." The study drew fire from a top fund company executive because Zitzewitz analyzed daily cash flow rather than actual records of trades and order executions. "This alleges things based on very circumstantial evidence," said Paul Haaga, chairman of the Investment Company Institute, an industry trade group, and an executive vice president at Capital Research and Management, which runs the American Funds family. In late trading, certain investors are allowed to buy or sell a fund after 4 p.m. Eastern time. This violates securities laws and prevents other investors in the fund from reaping the same profits. Spitzer said last week that Bank of America helped a hedge fund trade after hours at the expense of shareholders in its Nations Funds. At least one BofA employee implicated in the scandal has left the firm. See full story. Zitzewitz said he studied cash flow data from 104 fund families and found evidence of illegal late trades at 16. The incidence was higher among international funds, with 15 of the 50 that offer those funds showing signs of late trades, he added. "It's more than just the ones mentioned" in regulators' investigations, Zitzewitz said in a telephone interview. "Some household names are in there." Not naming names Zitzewitz declined to name specific fund companies, citing the terms of his agreement with TrimTabs Investment Research, a Santa Rosa, Calif. firm that reports fund flows and provided the data. Using five years of data from TrimTabs, Zitzewitz searched daily trading patterns among the fund families that TrimTabs covers, representing 10 percent to 15 percent of long-term fund assets. The research excludes fund families that accommodate short-term fund trading, including Rydex Funds, Potomac Funds and ProFunds, and focused instead on firms, Zitzewitz said, "that cater to long-term investors." Several prominent fund firms also could not have been included in the study because they report monthly -- rather than daily -- fund flows, according to TrimTabs. These include Fidelity Investments, the Vanguard Group, Janus Capital Group (JNS: news, chart, profile) and MFS Investment Management. "He didn't find any late trades," Haaga said. "All he found was activity on days when there was also activity in the futures market. The flows could have been consistent with late trading, and it could have been consistent with a hell of a lot of other things. I think it's irresponsible." The survey methodology rules out other causes such as corporate insider-trading activity, said Zitzewitz, who is currently a visiting faculty member at Columbia University. "The magnitude is so large, it can't just be people with inside information," he explained. "If people were trading on inside information, they'd be trading in small-cap funds focused on one stock, and that doesn't seem to be where I'm finding it." Late trades clearly illegal Spitzer's allegations last week outlined two disreputable practices. In addition to the illegal late trades through Bank of America, he said that BofA's Nations Funds, Janus, Bank One's (ONE: news, chart, profile) One Group, and privately held Strong Capital Management each allowed hedge fund Canary Capital Partners to profit from market-timing trades that, according to the funds' prospectuses, individual shareholders were not supposed to make. In return, Canary funneled investments to those fund companies. While the rules surrounding market timing vary among fund companies, late trading is clearly illegal. Zitzewitz's findings don't make clear whether the fund companies involved were complicit in the late trading or simply failed to notice that it was being done by one of the many intermediaries that routinely handle daily fund orders. But Mercer Bullard, a securities law professor at the University of Mississippi and founder of Fund Democracy, a shareholder advocacy group, said fund directors should have been conducting their own periodic tests to ensure that no late trades were impacting their funds. "Willful ignorance is not a defense in this case," Bullard said. "Fund directors have an obligation to protect the fund from these kinds of abuses." Spitzer's complaint alleges that Canary struck a late-trading deal with Security Trust, a Phoenix go-between for funds and retirement plans, institutions and financial advisers. STC has arrangements with more than 200 fund families giving it access to roughly 5,200 funds, according to the company's Web site. Some of the biggest fund families are represented, including Fidelity, Vanguard, Pimco, American Funds, Franklin Resources (BEN: news, chart, profile) and T. Rowe Price Group (TROW: news, chart, profile). Through a profit-sharing arrangement with STC, Canary was able to conduct after-hours trades among funds in the STC network, Spitzer said. But since Canary's trades were commingled with other orders received during the trading day, they could have been made without the funds' knowledge. "I can't be certain they all knew about it," Zitzewitz said. "It is possible to place these late trades through a transfer agent or custodian. All I can say is it was going on in their funds." Zitzewitz based his latest findings on TrimTabs data he used to examine how short-term traders exploit international- and small-capitalization stock funds at the expense of long-term shareholders. In October 2002 he published another research paper, "Who Cares About Shareholders? Arbitrage-Proofing Mutual Funds." It charged that fund shareholders lose between 1 percent and 2 percent of annual returns to this market-timing practice, and it helped spark Spitzer's investigation into fund trading abuses. Zitzewitz is also a consultant to FT Interactive Data, a company that manages mutual-fund data and offers services designed to help funds combat market timing. (FT Interactive Data is part of Pearson plc, a significant shareholder in MarketWatch.com, the publisher of this report.) Jonathan Burton covers the mutual fund industry for CBS MarketWatch.com

To: afrayem onigwecher who wrote (12075)	9/12/2003 11:06:33 AM
From: StockDung	Read Replies (1) \| Respond to of 19428

A. S. GOLDMAN ROUNDUP. UNITED STATES OF AMERICA Before the SECURITIES AND EXCHANGE COMMISSION SECURITIES EXCHANGE ACT OF 1934 Release No. 48483 / September 11, 2003 ADMINISTRATIVE PROCEEDING File No. 3-11256 -------------------------------------------------------------------------------- In the Matter of ROBERT F. FOXKARIM M. LAMARTICHARLES S. PIPIACHARLES J. PRINCIPATO, JR.JAMES A. SAMMARTANOMARK SANFILIPPOANGELO M. SCIFO, JR.SHAWN J. SMITHJ. VINCENT TARANTINOCLYDE ANTHONY WILLIAMS Respondents -------------------------------------------------------------------------------- : : : : : : : : : : : : : : : : : : ORDER INSTITUTING PROCEEDINGS PURSUANT TO SECTION 15(b)(6) OF THE SECURITIES EXCHANGE ACT OF 1934, MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS I. The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest that a public administrative proceeding be, and hereby is, instituted pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against Robert F. Fox ("Fox"), Karim M. Lamarti ("Lamarti"), Charles S. Pipia ("Pipia"), Charles J. Principato, Jr. ("Principato"), James A. Sammartano ("Sammartano"), Mark Sanfilippo ("Sanfilippo"), Angelo M. Scifo, Jr. ("Scifo"), Shawn J. Smith ("Smith"), J. Vincent Tarantino ("Tarantino"), and Clyde Anthony Williams ("Williams") ("collectively Respondents"). II. Respondents have submitted Offers of Settlement ("Offers") that the Commission has determined to accept. On the basis of the foregoing, Respondents hereby: A. Admit the jurisdiction of the Commission over them and over the matters set forth in the Order Instituting Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934, Making Findings and Imposing Remedial Sanctions; B. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission or to which the Commission is a party, and without admitting or denying the Commission's findings contained in the Order, except as to the fact of their criminal convictions set forth in Section III.B. below, which is admitted, consent to the entry of an Order by the Commission containing the following findings and remedial sanctions set forth below: III. On the basis of this Order and Respondents' Offers, the Commission finds that: A. Respondents 1. Fox, age 38, was a registered representative at A.S. Goldmen & Co., Inc. ("Goldmen"), a broker-dealer registered with the Commission, from November 1993 to April 1996. Fox was also a registered representative at the following broker-dealers registered with the Commission: Allegiance Securities, Inc. (December 1988 to August 1989); Davis & Kahn Equities, Inc. (August 1989 to September 1989); Paine Webber Incorporated (November 1989 to March 1990); D.H. Blair & Co., Inc. (April 1990 to August 1991); Hanover Sterling & Company Ltd. (August 1991 to January 1992); GKN Securities Corp. (January 1992 to November 1993); Meyers Pollock Robbins, Inc. (April 1996 to August 1996); Global Equities Group Inc. (August 1995 to January 1997); and Alden Capital Markets, Inc. (March 1997 to August 1997). Fox is a resident of New Jersey. 2. Lamarti, age 33, was a registered representative at Goldmen from March 1996 to October 1998. Lamarti is a resident of New York. 3. Pipia, age 33, was a registered representative at Goldmen from October 1993 to May 1997. From May 1997 to July 1999, Pipia was a registered representative at R.D. White & Co., Inc., a broker-dealer registered with the Commission. Pipia is a resident of New York. 4. Principato, age 41, was a registered representative at Goldmen from July 1990 to April 1996 and was a manager in Goldmen's New York office. Principato was also a registered representative at the following broker-dealers registered with the Commission: Madison, Chapin Associates, Inc. (February 1990 - May 1990); First Fidelity Capital Corp. (May 1990 - June 1990); and R.D. White & Co., Inc. (April 1996 - July 1999). 5. Sammartano, age 31, was a registered representative Goldmen from April 1997 to April 1998. Sammartano has also been a registered representative at the following broker-dealers registered with the Commission: First Hanover Securities, Inc. (November 1995 - April 1997); LCP Capital Corp. (June 1998 - November 1998); Mayer & Schweitzer, Inc. (October 1998 - July 1999); and M.H. Meyerson & Co., Inc. (December 1999 - October 2000). Sammartano is a resident of New York. 6. Sanfilippo, age 33, was an employee of Goldmen from May 1989 to October 1998. Sanfilippo was a registered representative at Goldmen and ultimately become an assistant trader. Sanfilippo is a resident of New York. 7. Scifo, age 31, was a registered representative at Goldmen from July 1995 to September 1998. Scifo has also been a registered representative at the following broker-dealers: R.D. White & Co., Inc. (April 1996 - June 1996); H.J. Meyers & Co., Inc. (September 1998); Lloyd Wade Securities Inc. (September 1998 - November 1998); and Redstone Securities, Inc. (May 1999 - June 2000). Scifo is a resident of the State of New York. 8. Smith, age 29, was a registered representative at Goldmen from July 1995 to May 1997. From May 1997 to December 1997, Smith was a registered representative at R.D. White & Co., Inc., and from December 1997 to July 1999 was a registered representative at Cantone Research Inc. Smith is a resident of New Jersey. 9. Tarantino, age 30, was a registered representative at Goldmen from April 1997 to October 1998. Tarantino is a resident of New York. 10. Williams, age 31, was a registered representative at Goldmen from January 1997 to October 1998. He has also been a registered representative at the following broker-dealers: Americorp Securities, Inc. (August 1995 - January 1996); First Hanover Securities (January 1996 - January 1997); and, Continental Broker-Dealer Corp. (October 1998 - July 1999). Williams is a resident of New Jersey. B. State Criminal Convictions 1. On June 18, 1999, Fox was criminally convicted of the crime of attempted enterprise corruption by the entry of his plea of guilty by the Supreme Court of the State of New York. Fox was sentenced to probation and to pay forfeiture in the amount of $10,000. According to the plea allocution upon which his conviction was based, Fox had knowledge of the existence of a criminal enterprise and the nature of its activities, and, being employed by and associated with such enterprise, intentionally attempted to conduct and participate in the affairs of an enterprise by participating in a pattern of criminal activity. Specifically, Fox, while acting as a registered representative at Goldmen, and others, engaged in fraud by engaging in conduct constituting at least three of the criminal acts included in the pattern of criminal activity as follows: (1) refusing to execute customer sell orders; (2) executing unauthorized transactions in customer accounts; (3) failing to comply with lawful regulatory requests; (4) misleading regulators conducting investigations; (5) lying under oath and suppressing customer complaints by improper compensation to avoid required regulatory reporting; and (6) falsifying business records to conceal prohibited transactions in brokerage accounts in which he had a beneficial interest. 2. On June 10, 1999, Lamarti was criminally convicted of attempted enterprise corruption upon the entry of his plea of guilty by the Supreme Court of the State of New York. Lamarti was sentenced to probation. According to the plea allocution upon which his conviction was based, Lamarti had knowledge of the existence of a criminal enterprise and the nature of its activities, and, being employed by and associated with such enterprise, intentionally attempted to conduct and participate in the affairs of an enterprise by participating in a pattern of criminal activity. Specifically, Lamarti, while acting as a registered representative at Goldmen, and others, engaged in fraud by engaging in conduct constituting at least three of the criminal acts included in the pattern of criminal activity as follows: (1) making misrepresentations and false statements regarding the nature and value of certain securities that he sold to investors; (2) making misrepresentations and failing to disclose material facts concerning the business, business plans, profitability, and financial stability of certain securities that he sold to investors; (3) misrepresenting and failing to disclose material facts concerning the true market, liquidity, safety and suitability of certain securities that he sold to investors; (4) making and causing to be made false entries in the business records of two enterprises with respect to the purported purchases of certain securities in nominee accounts maintained at Goldmen; and (5) refusing to execute customer sell orders. 3. On May 10, 2002, Pipia was criminally convicted of the crime of attempted enterprise corruption upon the entry of his plea of guilty by the Supreme Court of the State of New York. He was sentenced to 5 years probation and to pay forfeiture in the amount of $100,000. According to the plea allocution upon which his conviction was based, Pipia, acting as a registered representative of Goldmen, and others, had knowledge of the existence of a criminal enterprise and the nature of its activities, and being employed by and associated with such enterprise, engaged in a pattern of criminal activity that included: (1) making misrepresentations and false statements regarding the nature and value of certain securities that he sold to investors; (2) failing to disclose the extent to which certain securities distributed in an initial public offering had been placed into nominee and controlled accounts for no or nominal consideration; (3) misrepresenting and failing to disclose the extent to which employees of Goldmen were scheming to control, and were controlling, the market for those securities; (4) misrepresenting and failing to disclose the extent to which prices of certain securities were dependent on the continued existence of that scheme; and (5) misrepresenting and failing to disclose the extent to which customers had been, were being, and would be discouraged and restrained from selling certain securities. In addition, Respondent made and caused to be made a false entry in certain business records and undertook other unlawful activities including refusals to execute customer sell orders, manipulation of securities prices, and making unauthorized transactions in customer accounts. 4. On December 18, 2000, Principato was criminally convicted of the crimes of enterprise corruption based on conduct arising during Principato's association with Goldmen, and for securities fraud based upon conduct arising during Principato's association with R.D. White & Co., Inc., upon the entry of his plea of guilty by the Supreme Court for the State of New York. Principato was sentenced to a term of imprisonment of 4 to 12 years. According to Part One of the plea allocution upon which his conviction was based, Principato, acting as a registered representative and manager at Goldmen, and others, directly or through accomplices acting at their direction and control, engaged in a pattern of criminal activity that included: (1) making misrepresentations and false statements regarding the nature and value of certain securities that he sold to investors and failing to disclose the extent to which the securities distributed in an initial public offering had been placed into nominee and controlled accounts; (2) misrepresenting and failing to disclose the extent to which employees of Goldmen were scheming to control, and were controlling, the market for those securities; misrepresenting and failing to disclose the extent to which the prices of certain securities were dependant on the continuation of that scheme; (3) misrepresenting and failing to disclose the extent to which Goldmen brokers were being compensated for selling those securities; (4) misrepresenting and failing to disclose the extent to which customers had been, were being, and would be discouraged and restrained from selling those securities. According to Part Two of the plea allocution upon which his conviction was based, Principato, acting as a registered representative at R.D. White & Co., engaged in the conduct including the following: (1) making fraudulent misrepresentations of material facts concerning the nature of certain securities that he sold to investors; (2) failing to disclose material facts concerning the nature of certain securities that he sold to investors; (3) making misleading statements to investors including unreasonable price predictions and statements about his expected compensation; (4) imparting or intimating that he possessed material nonpublic information; and (5) otherwise engaging in fraudulent conduct. 5. On September 10, 2001, Sammartano was criminally convicted of the crime of scheme to defraud in connection with the sale of securities upon the entry of his plea of guilty by the Supreme Court for the State New York. Sammartano was sentenced to probation. Based on the plea allocution upon which his conviction was based, Sammartano, while a registered representative of Goldmen, engaged in fraud by: (1) making misrepresentations about the value and certain securities that he sold to investors; (2) providing investors with untrue information about the company's financial prospects; (3) failing to disclose material information to investors about certain securities he was selling to them, or about the unlawfully high sales commissions he was receiving, and that certain stocks sold by Goldmen were essentially controlled and manipulated by Goldmen. 6. On November 20, 2001, Sanfilippo was criminally convicted of the crime of perjury upon the entry of his plea of guilty by the Supreme Court for the State of New York. Sanfilippo was sentenced to probation. Based upon the plea allocution upon which his conviction was based, Sanfilippo provided false testimony to a Grand Jury investigating the business and affairs of Goldmen. Specifically, Sanfilippo testified that he had never heard of instances of false or "nominee" accounts at his employer, Goldmen. In fact, Sanfilippo had specific knowledge of, and participated in discussions regarding, nominee accounts at Goldmen. In addition, Sanfilippo had personally benefited from unlawful securities transactions in nominee accounts at Goldmen, and by so doing made and caused to be made false entries in business records. According to the plea allocution upon which his conviction was based, Sanfilippo, while a registered representative and assistant trader at Goldmen, also engaged in the following: (1) unlawfully controlling securities through nominee and other controlled accounts; (2) falsifying business records; (3) refusing to comply with customers' orders to sell securities; (4) charging undisclosed and excessive markups and commissions; (5) systematically violating "blue sky" registration laws; (6) unlawfully failing to report certain transactions to NASDAQ; (7) making misleading and false statements to investors; and (8) suppressing regulatory action based on customer complaints by executing transactions through which injured customers received payments via controlled transactions in IPO warrants. 7. On September 10, 2001, Scifo was criminally convicted of the crime of scheme to defraud in connection with the sale of securities upon the entry of his plea of guilty by the Supreme Court for the State of New York. Scifo was sentenced to probation. According to the plea allocution upon which his conviction was based, Scifo, acting as a registered representative of Goldmen, engaged in fraud by: (1) making misrepresentations and false statements regarding the nature and value of certain securities that he sold to investors; (2) misrepresenting and failing to disclose purchases and sales of securities based on material non-public information by employees and associates of Goldmen; (3) misrepresenting and failing to disclose the extent to which Goldmen brokers were compensated for selling securities to investors, and; (4) misrepresenting and failing to disclose material facts concerning the true nature, safety and suitability of certain securities that he sold to investors. 8. On May 3, 2002, Smith was criminally convicted of the crime of attempted enterprise corruption, and was sentenced to probation and to pay forfeiture of $10,000. According to the plea allocution upon which his conviction was based, Smith, acting as a registered representative of Goldmen, and others, directly or through accomplices acting at their direction and control, engaged in a pattern of criminal activity that included: (1) making misrepresentations and false statements regarding the nature and value of certain securities that he sold to investors and failing to disclose the extent to which the securities distributed in an initial public offering had been placed into nominee and controlled accounts; (2) misrepresenting and failing to disclose the extent to which employees of Goldmen were scheming to control, and were controlling, the market for those securities; misrepresenting and failing to disclose the extent to which the prices of certain securities were dependant on the continuation of that scheme; (3) misrepresenting and failing to disclose the extent to which Goldmen brokers were being compensated for selling those securities; (4) misrepresenting and failing to disclose the extent to which customers had been, were being, and would be discouraged and restrained from selling those securities. 9. On November 2, 2001, Tarantino was criminally convicted of the crime of scheme to defraud in connection with the sale of securities upon the entry of his plea of guilty by the Supreme Court of the State of New York, and sentenced to probation. Based on the plea allocution upon which his conviction was based, Tarantino, while a registered representative at Goldmen, engaged in fraud by: (1) misrepresenting and failing to disclose material facts concerning the nature and value of certain securities he sold to investors; and (2) misrepresenting and failing to disclose the extent to which Goldmen brokers were being compensated for selling those securities. 10. On October 3, 2001, Williams was criminally convicted of the crime of scheme to defraud and was sentenced to probation. Based on the plea allocution upon which his conviction was based, Williams, while a registered representative at Goldmen, engaged in fraud by: (1) misrepresenting and failing to disclose material facts concerning the nature and value of certain securities he sold to investors; (2) misrepresenting and failing to disclose the extent to which Goldmen and other persons were scheming to control and were controlling, certain securities; (3) misrepresenting and failing to disclose certain purchases and sales of securities by Goldmen associates based on material, non-public information; (4) misrepresenting and failing to disclose that Goldmen was purchasing and exercising certain securities for its own account at prices lower than were being offered to investors; (5) misrepresenting and failing to disclose the extent to which Goldmen brokers were being compensated for selling those securities; and (6) misrepresenting and failing to disclose material facts concerning the true market, liquidity, safety and suitability of certain securities that he sold to investors. IV. Based on the foregoing, the Commission deems it appropriate and in the public interest to accept Respondents' Offers and to impose the sanctions that are set forth in the Offers. ACCORDINGLY, IT IS ORDERED that, pursuant to Section 15(b)(6) of the Exchange Act, Respondents be, and hereby are, barred from association with any broker or dealer. By the Commission. Jonathan G. Katz Secretary sec.gov -------------------------------------------------------------------------------- Home \| Previous Page Modified: 09/12/2003

To: afrayem onigwecher who wrote (12075)	9/12/2003 1:32:08 PM
From: StockDung	Respond to of 19428

GETTING A BREAK September 11, 2003 stockpatrol.com The NASD has discovered that brokerage firms - more than 600 of them – have been failing to deliver promised discounts on mutual funds purchases. The failure was widespread. In roughly one-third of the cases examined by the NASD, investors didn't get the discounts to which they were entitled, an average of $364 per transaction. As a result, investors stand to recover tens of millions of dollars in refunds. These findings came as the result of routine examinations conducted by the NASD in 2002, which revealed that customers were not receiving promised “breakpoint” discounts when they purchased Class A shares in Mutual Funds. Mutual funds consisting of Class A shares charge a “front-end load”, or fee at the time of the investment. Class B mutual funds, or no-load funds, do not charge the upfront fee but have other costs – some of which may not be obvious to investors – which make them more expensive to the investor in the long run. The Class A funds in question were supposed to offer commission discounts at certain breakpoints. Commission rates typically would decrease as the amount of the investment increased; for example, a $50,000 investment would pay a lower commission rate than a $25,000 investment. Somewhere along the line, however, the brokerage firms forgot to grant those discounts. Now the NASD is directing its members to refund all of the excessive interest payments, with interest of at least 2.5 %. Customers who receive the refunds may want to look at this as forced savings – with an interest rate higher than they are currently receiving in most banks. The faux pas will prove to be a costly mistake for brokerage firms, who will be forced to repay many of the nation’s approximately 95 million fund investors who have a total of $4.28 trillion invested in stock and bond funds. Serious questions remain to be answered, beginning with the most obvious one; how could 600 brokerage firms make the same mistake? That is, if it truly was a mistake. ©2003 Stock Patrol.com. All rights reserved. WE'RE BACK ON PATROL