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To: rrufff who wrote (2289)	7/6/2006 9:30:32 PM
From: StockDung	Respond to of 2595

UPDATE: SEC Wed Meeting On Soft Dollars, Delivery Failures (Updates with detail on proposals to amend Regulation SHO, starting in the third paragraph.) WASHINGTON -(Dow Jones)- The Securities and Exchange Commission announced it will meet Wednesday to vote on whether to issue an interpretive release on "soft-dollar" transactions. The SEC issued the release for public comment last fall. If approved, it would provide updated guidance on soft-dollar arrangements in which money managers pay above-average brokerage commissions in exchange for receiving research or other materials. At the same open meeting, the SEC said it will consider whether to propose amendments to Regulation SHO, a package of rules on short-selling. One change being eyed would be aimed at reducing delivery failures by revisiting an exception for options market-makers and a "grandfather" clause that shielded older delivery failures from corrective action to close out the position. A second change would affect an exception for unwinding net short index-arbitrage positions, which isn't allowed if the stock market declined by 2% or more from the prior day's close. The SEC will consider whether to change the market-decline limitation index from the Dow Jones Industrial Average to the New York Composite Index. Short sellers sell borrowed shares, which are supposed to be delivered within two days of settlement, but critics say the stock-borrow system doesn't work well, evidenced by instances where short sellers don't borrow shares, or cannot obtain them to borrow. Regulation SHO, adopted by the SEC in 2004, sought to liberalize some older restrictions on short-selling while cracking down on abuses such as "naked" short-selling, in which shares aren't borrowed, and delivery failures. -By Judith Burns, Dow Jones Newswires; 202-862-6692; judith.burns@dowjones.com - 07/07/2006 \| 00:02 -

To: rrufff who wrote (2289)	7/7/2006 11:00:41 AM
From: StockDung	Respond to of 2595

Eagletech CEO: Stock deregistration to be appealed South Florida Business Journal - 3:51 PM EDT Thursday by John T. Fakler Eagletech Communications, which has attempted to turn its regulatory woes into a forum against naked short selling, has lost its fight to remain a publicly traded company. The Securities and Exchange Commission, Wednesday, ruled the Fort Lauderdale-based company failed to file required financial reports since 2001, and that Eagletech's securities will be deregistered. Eagletech Chief Executive Officer Rod Young said Thursday he would "definitely" exercise his right to appeal the SEC order in front of a U.S. court of appeals. "There are a lot of doors opening for me right now, and I plan to walk through them," he said. The agency had issued a deregistration order last year. However, Eagletech had appealed the move, blaming its failure to file financial reports on alleged criminal conduct by third parties. Eagletech is one of several small companies represented by a legal consortium led by Texas class action lawyer John O'Quinn. They generally claim short sellers, through failures to timely deliver stock to close out securities transactions, have illegally depressed their stocks. Short sellers typically borrow shares to sell them, hoping they later will be able to replace the shares with stock bought at a lower price. Trading without a borrowing agreement is called naked short selling. It's illegal for most investors, but legal for firms that make markets in stocks and bring liquidity to the market. So far, O'Quinn and his corporate clients have come up short with most cases thrown out of court, though several still linger. Eagletech acknowledged its failure to file required financial reports, but argued two separate manipulations, including alleged naked short selling, led to financial difficulties and its failure to file. In an opinion issued Wednesday, the SEC noted although Eagletech blames others for its financial crisis, "alleged criminal activity does not alter the fact of Eagletech's failure to file its quarterly and annual reports or its present inability to cure these deficiencies." In its opinion the SEC also rebuked Eagletech's claim a deregistration of its stock would constitute unconstitutional "taking of property." Eagletech had argued that Regulation SHO, a short selling rule adopted by the SEC early last year, deprived its shareholders of property, violating the Fifth Amendment of the U.S. Constitution, when it excluded earlier failure to deliver stock from stricter settlement rules.