COLUMBUS COMPANY TO PAY $825,000 FOR VIOLATING CLEAN AIR ACT

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. “

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.).”

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.”

COMPANY PUFFED UP AMOUNT OF ONLINE SERVICES AVAILABLE

November 4, 2011

The following excerpt is from the SEC website:
“The United States District Court for the Southern District of Florida has entered final judgments against defendants Christopher M. Dubeau and Atlantis Technology Group, enjoining them from violating the antifraud provisions of the federal securities laws. The Court’s final judgments, issued on October 31, 2011, enjoin Dubeau and Atlantis from violations of Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934, and also enjoin Dubeau from violations of Section 17(a) of the Securities Act of 1933. In addition to granting injunctive relief, the Court permanently barred Dubeau from participating in an offering of a penny stock and from acting as an officer or director of any public company. The Court also ordered Dubeau to disgorge his ill-gotten gains of $312,000.00, plus prejudgment interest in the amount of $12,947.93, and pay a civil penalty of $100,000.00.The Commission’s Complaint against Dubeau and Atlantis, filed September 30, 2010, alleges that from at least August 7, 2009 through April 5, 2010, they issued numerous false press releases claiming, among other things, that Atlantis’ subsidiary, Global Online Television Corporation (GOTV), offered internet protocol television and video phone services to consumers, and claiming that GOTV had relationships with television networks to offer their content to Atlantis subscribers. The Complaint further alleges these claims were not true because, at the time Atlantis issued its press releases, GOTV was not able to offer internet protocol television services to consumers or video phone service, and it did not have relationships with television networks to offer content to its subscribers.”

MF GLOBAL FINANCIAL CRISIS

The following excerpt is from the SEC website:

"Washington, D.C., Oct. 31, 2011 – The Securities and Exchange Commission and Commodity Futures Trading Commission today made the following joint statement:
"For several days, the SEC, CFTC and other regulators had been closely monitoring developments affecting MF Global, Inc., a jointly registered futures commission merchant and broker-dealer, in anticipation of a transaction that would include the transfer of customer accounts to another firm. Early this morning, MF Global informed the regulators that the transaction had not been agreed to and reported possible deficiencies in customer futures segregated accounts held at the firm. The SEC and CFTC have determined that a SIPC-led bankruptcy proceeding would be the safest and most prudent course of action to protect customer accounts and assets.
SIPC announced today that it is initiating the liquidation of MF Global under the Securities Investor Protection Act (SIPA)."

COMPANY OWNER CHARGED WITH WIRE FRAUD

October 31, 2011

The following excerpt comes from the SEC website:
“The Securities and Exchange Commission today announced that the U.S. Attorney for the District of Massachusetts has charged Andrey C. Hicks of Boston, Mass., in a criminal complaint unsealed on Friday, October 28, 2011. Hicks was charged with committing wire fraud, attempting to commit wire fraud, and aiding and abetting wire fraud, in violation of 18 U.S.C. Sections 1343, 1349, and 2.
On October 26, 2011, the SEC filed an emergency enforcement action charging Hicks and Locust Offshore Management, LLC, his investment advisory firm, with fraud in connection with misleading prospective investors about their supposed quantitative hedge fund and diverting investor money to the money manager’s personal bank account. The SEC alleges in its complaint that Hicks and his advisory firm made misrepresentations about his education, work experience, and the hedge fund’s auditor, prime broker/custodian, and corporate status when soliciting individuals to invest in the purported hedge fund, called Locust Offshore Fund, Ltd. By making these representations and creating other indicia of legitimacy, the SEC alleged that Hicks may have obtained at least $1.7 million from 10 investors and may have misappropriated at least a portion of these funds for personal expenses. In the Commission’s action, the U.S. District Court in Massachusetts issued a temporary restraining order on October 26 that, among other things, freezes the assets of the money manager, his advisory firm, and the hedge fund. On October 28, 2011, the Court converted the temporary restraining order into a preliminary injunction that will continue the asset freeze and other relief until further order of the Court.”

HOUSING DEVELOPMENT COMPANY SETTLES WITH DOJ OVER REQUIRED DISABLED HOUSING FEATURES

The following is from the Department of Justice website:
Thursday, October 27, 2011
“WASHINGTON – The Justice Department today announced a settlement of its lawsuit alleging that Equity Homes Inc, PBR LLC, BBR LLC and Shane Hartung violated the Fair Housing Act (FHA) by failing to provide features that would make their multi-family housing developments in Sioux Falls accessible to people with disabilities as required by the Fair Housing Act.
The case originated from discrimination complaints filed with the U.S. Department of Housing and Urban Development (HUD), concerning six Sioux Falls complexes - East Briar Apartments, West Briar Apartments, Kensington Apartments, Beverly Gardens Apartments, Sertoma Hills Apartments and Sertoma Hills Villas. After investigating, HUD issued a charge of discrimination and referred the matter to the Justice Department, which filed this lawsuit in May 2009. In its complaint, the Justice Department named Equity Homes Inc., PBR LLC, BBR LLC and Shane Hartung as defendants liable for violations of the FHA. The complaint also names Scott Snoozy, Myron R. Van Buskirk, Wayne Hansen, Martin McGee and Sertoma Hills Villas Association Inc., the current owners of the properties who were named in order to obtain complete relief.
The settlement filed today, along with a prior consent order entered in this case on July 20, 2011, now fully resolves this matter. Today’s agreement must still be approved by the court. According to the settlement, defendants Equity Homes Inc., BBR LLC and Shane Hartung will modify the six apartment complexes to make them accessible to persons with disabilities and will pay $41,500 in monetary damages to those harmed by the inaccessible housing. The settlements in this case also require these defendants to undergo training on the requirements on the Fair Housing Act and provide periodic reports to the government.
“Building apartments and condominiums that are accessible to persons with disabilities is not an option, it is the law,” said Thomas E. Perez, Assistant Attorney General for the Civil Rights Division. “Builders, architects and others who build or design multi-family housing need to consider accessibility at the outset, or they risk much greater expenses to fix the problem later.”
“My office is committed to ensuring that South Dakota’s disabled citizens receive the reasonable accommodations they need to function and live as others do,” said Brendan Johnson, U.S. Attorney for the District of South Dakota. “We will remain vigilant in enforcing our nation’s fair housing laws so that our citizens are not excluded from housing opportunities.”
“Access to a unit brings access to self-sufficiency and independence for people with disabilities,” stated John Trasviña, HUD Assistant Secretary for Fair Housing & Equal Opportunity. “Through industry training and legal compliance, we will make this a reality across the nation.”