The following excerpt is from an EPA e-mail:
November 18, 2011
WASHINGTON – Columbus Steel Castings Company, Inc., located on the south side of Columbus, Ohio, was sentenced today to pay $825,000 and install additional devices to prevent air pollution after pleading guilty on July 28, 2011 to six counts of violating the Clean Air Act. The violations include failing to operate air pollution controls, failing to report violations, failing to perform required monitoring, and failing to conduct stack testing to demonstrate compliance with the Clean Air Act.
“EPA is committed to protecting communities from illegal air pollution that threatens people’s health,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance. “Today’s sentence will benefit the local community and shows that companies that fail to operate the necessary air pollution controls will be held accountable.”
“This sentence helps safeguard against further violations,” U.S. Attorney Carter M. Stewart said. “It also provides for environmental education and health care services for residents who live near the plant.”
The company admitted that between 2004 and 2007 it failed to operate air pollution controls for four different emission sources at the plant for varying periods of time. The company also failed to report malfunctions of air pollution control equipment. Daily visual emission checks, designed to determine if the plant was emitting excess dust or smoke, were not conducted on weekends while the facility was operating. Stack tests, which are necessary to ensure compliance with the Clean Air Act, were not conducted as required by the company’s air permit. The company also failed to submit accurate annual compliance certifications.
The company was sentenced to pay a $660,000 fine and a total of $165,000 to two different Columbus charitable organizations, Grange Insurance Audubon Center and Physicians Free Clinic, which serve residents who live near the plant. One project will fund a program that provides environmental education to students. The other project will provide medical services, medications, and transportation services for residents of the south side of Columbus with ailments, including, asthma, and treatments, including medications, related to respiratory illnesses.
The judge also ordered the company to install interlock devices designed to shut down emission sources when the associated air pollution control equipment is not in operation. “
Saturday, November 19, 2011
Friday, November 18, 2011
HEDGEFUNDS AVOIDED ABOUT $30 MILLION IN LOSSES VIA INSIDE TRADING
The following excerpt is from the SEC website:
November 17, 2011
“The Securities and Exchange Commission announced today that on November 16, 2011, the Honorable Deborah A. Batts of the United States District Court for the Southern District of New York entered final judgments against Dr. Joseph F. Skowron III and Dr. Yves M. Benhamou in the SEC’s insider trading case, SEC v. Joseph F. “Chip” Skowron III, et al., Civil Action No. 10-CV-8266-DAB (S.D.N.Y.). The SEC charged Benhamou, a French doctor and medical researcher, with unlawfully tipping material, non-public information to Skowron, a former hedge fund portfolio manager, who was charged with using the inside information to trade ahead of a January 23, 2008 negative announcement, helping the hedge funds he managed avoid losses of approximately $30 million.
At the time of the alleged conduct, Skowron managed six health care-related hedge funds affiliated with FrontPoint Partners LLC. The SEC alleged that Skowron sold hedge fund holdings of Human Genome Sciences Inc. (HGSI) based on tips he received unlawfully from Benhamou, who served on the Steering Committee overseeing HGSI’s clinical trial for Albuferon, a potential drug to treat Hepatitis C. Benhamou tipped Skowron with material, non-public information about the trial as he learned of negative developments that occurred in December 2007 and January 2008. In response, Skowron ordered the sale of the entire position in HGSI stock — approximately six million shares held by the six funds. HGSI announced changes to the trial resulting from the negative developments on January 23, 2008, which led to a 44 percent drop in share price by the end of the day. The hedge funds avoided losses of approximately $30 million by selling their positions in advance of the news. The SEC alleged that, at various points in the relationship, including after the illegal HGSI trades were completed, Skowron gave Benhamou envelopes of cash both in appreciation of his work and to induce Benhamou to lie about their communications.
The final judgments permanently enjoin Skowron and Benhamou from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Skowron was ordered to disgorge $29,017,156 (a joint and several obligation with the relief defendants), plus $1,360,000 (for which he is individually obligated), plus prejudgment interest of $5,142,782, and to pay a civil penalty in the amount of $2,720,000. Benhamou was ordered to disgorge $52,138, plus prejudgment interest of $8,237. The six hedge funds, which were named solely as relief defendants, were ordered to disgorge $29,017,156, plus prejudgment interest of $4,003,669; the final judgment against Skowron provides that his disgorgement and prejudgment interest (but not penalty) obligation shall be credited dollar for dollar by amounts the relief defendants are ordered to disgorge and/or by amounts that Skowron is ordered to forfeit in the related criminal action.
Both Skowron and Benhamou pled guilty in parallel criminal cases before the United States District Court for the Southern District of New York, titled United States v. Joseph F. Skowron III, 11-CR-00699-DLC (S.D.N.Y.) and United States v. Yves M. Benhamou, 11-CR-336-GBD (S.D.N.Y.).”
November 17, 2011
“The Securities and Exchange Commission announced today that on November 16, 2011, the Honorable Deborah A. Batts of the United States District Court for the Southern District of New York entered final judgments against Dr. Joseph F. Skowron III and Dr. Yves M. Benhamou in the SEC’s insider trading case, SEC v. Joseph F. “Chip” Skowron III, et al., Civil Action No. 10-CV-8266-DAB (S.D.N.Y.). The SEC charged Benhamou, a French doctor and medical researcher, with unlawfully tipping material, non-public information to Skowron, a former hedge fund portfolio manager, who was charged with using the inside information to trade ahead of a January 23, 2008 negative announcement, helping the hedge funds he managed avoid losses of approximately $30 million.
At the time of the alleged conduct, Skowron managed six health care-related hedge funds affiliated with FrontPoint Partners LLC. The SEC alleged that Skowron sold hedge fund holdings of Human Genome Sciences Inc. (HGSI) based on tips he received unlawfully from Benhamou, who served on the Steering Committee overseeing HGSI’s clinical trial for Albuferon, a potential drug to treat Hepatitis C. Benhamou tipped Skowron with material, non-public information about the trial as he learned of negative developments that occurred in December 2007 and January 2008. In response, Skowron ordered the sale of the entire position in HGSI stock — approximately six million shares held by the six funds. HGSI announced changes to the trial resulting from the negative developments on January 23, 2008, which led to a 44 percent drop in share price by the end of the day. The hedge funds avoided losses of approximately $30 million by selling their positions in advance of the news. The SEC alleged that, at various points in the relationship, including after the illegal HGSI trades were completed, Skowron gave Benhamou envelopes of cash both in appreciation of his work and to induce Benhamou to lie about their communications.
The final judgments permanently enjoin Skowron and Benhamou from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933. Skowron was ordered to disgorge $29,017,156 (a joint and several obligation with the relief defendants), plus $1,360,000 (for which he is individually obligated), plus prejudgment interest of $5,142,782, and to pay a civil penalty in the amount of $2,720,000. Benhamou was ordered to disgorge $52,138, plus prejudgment interest of $8,237. The six hedge funds, which were named solely as relief defendants, were ordered to disgorge $29,017,156, plus prejudgment interest of $4,003,669; the final judgment against Skowron provides that his disgorgement and prejudgment interest (but not penalty) obligation shall be credited dollar for dollar by amounts the relief defendants are ordered to disgorge and/or by amounts that Skowron is ordered to forfeit in the related criminal action.
Both Skowron and Benhamou pled guilty in parallel criminal cases before the United States District Court for the Southern District of New York, titled United States v. Joseph F. Skowron III, 11-CR-00699-DLC (S.D.N.Y.) and United States v. Yves M. Benhamou, 11-CR-336-GBD (S.D.N.Y.).”
Thursday, November 17, 2011
CORPORATE PRINCIPALS PAY $1 MILLION DOLLARS TO SETTLE SEC CHARGES
The following excerpt is from the SEC website:
November 17, 2011
“The Securities and Exchange Commission announced today that the United States District Court for the Southern District of Florida entered final judgments, dated November 10, 2011, against Frank C. Calmes, Lynn D. Rowntree, and James E. Pratt. Calmes and Rowntree had been principals at First Equity Corporation, a Boca Raton company that took small companies public via reverse mergers. Pratt, a lawyer, provided legal opinions regarding the ability to sell stock in the newly public companies.
According to the SEC’s Complaint, Calmes, Rowntree, and Pratt, along with co-defendant Manny J. Shulman, illegally sold millions of shares of unregistered securities in violation of the registration provisions of the Securities Act of 1933 (“Securities Act”). In addition, Calmes, Rowntree, and Shulman were alleged to have committed fraud in selling securities, in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. Calmes, Rowntree, and Pratt entered into bifurcated settlements with the SEC in May of 2011, just before a jury trial was to begin. Under the bifurcated settlements, Calmes and Rowntree agreed to be permanently enjoined from violating Sections 5(a) and 5(c) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, while Pratt agreed to be permanently enjoined from violating Sections 5(a) and 5(c) of the Securities Act. All three agreed to be barred from participating in any penny stock offering, and to cancel any shares of the corporations at issue in their possession or control. In addition, Defendant Calmes consented to be permanently barred from acting as an officer or director of any public issuer.
The bifurcated settlements left open, and the final judgments entered last week addressed, defendants’ liability for disgorgement of ill-gotten gains, prejudgment interest thereon, and the imposition of penalties. The final judgments imposed the following relief: against Calmes, $1,886,918 in disgorgement, $468,441 in prejudgment interest, and a $5,000 penalty; against Rowntree, $693,948 in disgorgement, $157,411 in prejudgment interest, and a $5,000 penalty; and against Pratt, $258,796 in disgorgement, $64,247 in prejudgment interest, and a $5,000 penalty.
Shulman proceeded to trial and on May 9, 2011 the jury returned a verdict finding him liable for violating Sections 5(a) and 5(c) of the Securities Act by selling uregistered securities and for violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by issuing materially false and misleading press releases regarding a company whose shares he was selling. On July 12, 2011, the Court enjoined Shulman from further violations of the federal securities laws, permanently barred Shulman from participating in any penny stock offering or acting as an officer or director of any public issuer, ordered disgorgement of $273,152, ordered payment of prejudgment interest of $95,633.44, and imposed a $5,000 penalty. The Court further ordered Shulman’s wife, Krystal Becnel, who was named as a relief defendant in the SEC’s Complaint, to disgorge $131,914.”
November 17, 2011
“The Securities and Exchange Commission announced today that the United States District Court for the Southern District of Florida entered final judgments, dated November 10, 2011, against Frank C. Calmes, Lynn D. Rowntree, and James E. Pratt. Calmes and Rowntree had been principals at First Equity Corporation, a Boca Raton company that took small companies public via reverse mergers. Pratt, a lawyer, provided legal opinions regarding the ability to sell stock in the newly public companies.
According to the SEC’s Complaint, Calmes, Rowntree, and Pratt, along with co-defendant Manny J. Shulman, illegally sold millions of shares of unregistered securities in violation of the registration provisions of the Securities Act of 1933 (“Securities Act”). In addition, Calmes, Rowntree, and Shulman were alleged to have committed fraud in selling securities, in violation of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Rule 10b-5 thereunder. Calmes, Rowntree, and Pratt entered into bifurcated settlements with the SEC in May of 2011, just before a jury trial was to begin. Under the bifurcated settlements, Calmes and Rowntree agreed to be permanently enjoined from violating Sections 5(a) and 5(c) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder, while Pratt agreed to be permanently enjoined from violating Sections 5(a) and 5(c) of the Securities Act. All three agreed to be barred from participating in any penny stock offering, and to cancel any shares of the corporations at issue in their possession or control. In addition, Defendant Calmes consented to be permanently barred from acting as an officer or director of any public issuer.
The bifurcated settlements left open, and the final judgments entered last week addressed, defendants’ liability for disgorgement of ill-gotten gains, prejudgment interest thereon, and the imposition of penalties. The final judgments imposed the following relief: against Calmes, $1,886,918 in disgorgement, $468,441 in prejudgment interest, and a $5,000 penalty; against Rowntree, $693,948 in disgorgement, $157,411 in prejudgment interest, and a $5,000 penalty; and against Pratt, $258,796 in disgorgement, $64,247 in prejudgment interest, and a $5,000 penalty.
Shulman proceeded to trial and on May 9, 2011 the jury returned a verdict finding him liable for violating Sections 5(a) and 5(c) of the Securities Act by selling uregistered securities and for violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder by issuing materially false and misleading press releases regarding a company whose shares he was selling. On July 12, 2011, the Court enjoined Shulman from further violations of the federal securities laws, permanently barred Shulman from participating in any penny stock offering or acting as an officer or director of any public issuer, ordered disgorgement of $273,152, ordered payment of prejudgment interest of $95,633.44, and imposed a $5,000 penalty. The Court further ordered Shulman’s wife, Krystal Becnel, who was named as a relief defendant in the SEC’s Complaint, to disgorge $131,914.”
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