KARA N. BROCKMEYER NAMED CHIEFOF FCPA UNIT FORCUSED ON ANTI-BRIBERY PARTS OF FEDERAL SECURITIES LAWS

The following is an excerpt from the SEC website: "Washington, D.C., Sept. 27, 2011 — The Securities and Exchange Commission’s Division of Enforcement announced today that Kara Novaco Brockmeyer has been named Chief of its national specialized Foreign Corrupt Practices Act Unit that focuses on violations of the anti-bribery provisions of the federal securities laws. Ms. Brockmeyer has been serving as an Assistant Director in the Enforcement Division and supervising a number of complex investigations involving violations of the Foreign Corrupt Practices Act (FCPA), which prohibits U.S. companies from bribing foreign officials to obtain government contracts and other business. Ms. Brockmeyer spearheaded the SEC’s investigation of Halliburton Co., KBR Inc., Technip S.A., and ENI S.p.A. for FCPA violations resulting from a decades-long bribery scheme in Nigeria. The SEC’s actions in this matter together with the Department of Justice resulted in the recovery of $1.2 billion of ill-gotten gains and criminal penalties. In addition to her significant FCPA experience, Ms. Brockmeyer has served as the co-head of the Division’s Cross Border Working Group, a proactive risk-based initiative focusing on U.S. companies with substantial foreign operations. Ms. Brockmeyer’s efforts on the Cross Border Working Group have resulted in several recent significant enforcement actions, including the Commission’s first stop orders for post-effective registration statements due to the resignation of the companies’ independent auditor. “Kara’s creativity and perseverance is reflected in her outstanding efforts and results over the years in fulfilling the Commission’s mission of investor protection,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “Enforcement of the FCPA remains a high priority for the Division, and adding Kara’s talent to the exceptional ability and dedication of the members of the Foreign Corrupt Practices Act Unit will further enhance our anti-corruption program.” Ms. Brockmeyer said, “I am looking forward to the privilege of leading the Foreign Corrupt Practices Act Unit and its dedicated and talented staff.” Ms. Brockmeyer is filling the position previously held by Cheryl Scarboro, who left the agency in June after serving as the first chief of the unit. Ms. Brockmeyer joined the SEC in 2000 following several years in private practice. She started supervising investigations in 2002 and was promoted to Assistant Director in 2005. In addition to FCPA investigations, Ms. Brockmeyer has substantial experience supervising matters involving financial fraud, insider trading, market manipulation, and violations by regulated entities. Ms. Brockmeyer received her law degree magna cum laude from the University of Michigan Law School and her undergraduate degree cum laude from Williams College."

KNOWN PURCHASERS WHO MADE CERTAIN TRADES HAVE HAD THEIR ASSETS FROZEN

UThe following excerpt is from the SEC website: “On September 16, 2011, the U.S. District Court for the Southern District of New York entered a Temporary Restraining Order freezing assets and trading proceeds of certain unknown purchasers of the securities of Global Industries, Ltd. (the “Unknown Purchasers”). The Commission filed a complaint alleging that the Unknown Purchasers engaged in illegal insider trading in the days preceding the September 12, 2011 public announcement that Technip SA (“Technip”), a French company, and Global Industries, Ltd. (“Global”) had entered into an agreement pursuant to which Technip would offer to acquire all of the outstanding common stock of Global for $8.00 per share, a 55% premium over the closing price of Global common stock on the trading day preceding the public announcement. The Commission’s complaint alleges that the Unknown Purchasers engaged in insider trading, thereby violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctive relief, the disgorgement of all illegal profits, and the imposition of civil money penalties. The Commission’s complaint alleges that on September 8 and 9, 2011, the Unknown Purchasers bought a total of 685,840 shares of Global common stock through an omnibus account in the name of Raiffeisen Bank International AG Vienna, Austria, at Brown Brothers Harriman & Co., at share prices ranging from $5.14 to $5.39. These purchases accounted for 8.6% and 11.9%, respectively, of the total volume of Global trading on each of those days. The closing price for Global common stock on September 9 was $5.15 per share. On the next trading day, September 12, before the U.S. markets opened, the public announcement of the Global buy-out was made. Following the public announcement, Global shares opened at $7.77. The Unknown Purchasers sold all 685,840 shares of Global on September 12 at prices ranging from $7.77 to $7.80 per share, realizing a profit of approximately $1,726,809. The U.S. District Court for the Southern District of New York issued a Temporary Restraining Order freezing the assets relating to the trading; requiring the Unknown Purchasers to identify themselves, imposing an expedited discovery schedule, and prohibiting the defendants from destroying documents. The Commission acknowledges the Office of Fraud Detection and Market Intelligence of the Financial Industry Regulatory Authority (“FINRA”) for its assistance in this investigation.”

SEC ALLEGES A QUANTITATIVE FUND MANAGER CONCEALED A COMPUTER ERROR THAT COST INVESTORS $217 MILLION

The following excerpt is from the SEC website: Washington, D.C., Sept. 22, 2011 — The Securities and Exchange Commission today charged the co-founder of institutional money manager AXA Rosenberg with securities fraud for concealing a significant error in the computer code of the quantitative investment model that he developed and provided to the firm's entities for use in managing client assets. According to the SEC's order instituting administrative proceedings against Barr M. Rosenberg, he learned of the error in June 2009 but directed others to keep quiet about it and not fix it immediately. Rosenberg denied the existence of any significant errors in the model during an October 2009 board meeting discussion about its performance. AXA Rosenberg disclosed the error to SEC examination staff in late March 2010 after being informed of an impending SEC examination. The error was not disclosed to clients until April 2010, causing them $217 million in losses. Rosenberg has agreed to settle the SEC's charges by paying a $2.5 million penalty and consenting to a lifetime securities industry bar. The SEC previously charged AXA Rosenberg and its affiliated investment advisers, and they agreed to pay $217 million to harmed clients plus a $25 million penalty. "Rosenberg chose concealment over candor, and in doing so selfishly served his interests over those of his clients," said Robert Khuzami, Director of the SEC's Division of Enforcement. Bruce Karpati, Co-Chief of the Asset Management Unit in the SEC's Division of Enforcement, added, "Investors in quant funds trust their advisers to develop, maintain and operate the quant models that drive a fund's performance. Rosenberg betrayed investors when he failed to disclose the material coding error." According to the SEC's order, Rosenberg created the model, oversaw research projects to improve and enhance it, and exercised significant authority throughout the AXA Rosenberg organization. The material error in the model's computer code disabled one of its key components for managing risk and affected the model's ability to perform as expected. Clients raised concerns about this underperformance, and Rosenberg knew about and discussed these concerns with others at AXA Rosenberg. But instead of disclosing and correcting the error immediately, Rosenberg directed others to conceal the error and declined to fix the error. The SEC's order found that due to Rosenberg's misconduct, AXA Rosenberg and its affiliated investment advisers misrepresented to clients that the model's underperformance was attributable to factors other than the error, and inaccurately stated that the model was controlling risk correctly. Rosenberg's instructions to delay fixing the error caused additional client losses. In its order, the SEC found that Rosenberg willfully violated anti-fraud provisions of the Investment Advisers Act of 1940, Sections 206(1) and 206(2). Without admitting or denying the SEC's findings, Rosenberg consented to the entry of an SEC order that requires him to cease and desist from committing or causing any violations and any future violations of these provisions; orders him to pay the $2.5 million penalty; and bars him from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization and prohibits him from serving as an officer, director or employee of a mutual fund.”

THREE TAKEN TO COURT OVER ALLEGEDLY SELLING FAKE SECURITIES AND RUNNING FAKE TRADING PROGRAMS

The following is an excerpt from the SEC website: “On September 19, 2011, the Securities and Exchange Commission filed an enforcement action in federal court in Massachusetts against Diane Glatfelter of Billerica, Massachusetts, Robert Rice of Tallahassee, Florida, and Robert Anderson of Madison, Indiana, charging each of them with participating in fraudulent schemes involving the promotion and sale of fictitious financial instruments and trading programs. The Commission also charged two entities controlled by Glatfelter and Rice, K2 Unlimited, Inc. and 211 Ventures, LLC, in connection with the scheme. The Commission's Complaint alleges that beginning in 2007, Glatfelter and Rice, through K2 Unlimited and 211 Ventures, offered fraudulent venture capital financing, which was purportedly to be raised through the use of "bank guarantees." According to the Commission's Complaint, Glatfelter, Rice and 211 Ventures also offered direct investments involving fictitious securities and trading programs, promising sky-high returns with guarantees against loss. In fact, the Commission alleges that the bank guarantees were non-existent fictional instruments and that the defendants defrauded investors of at least $1.8 million. The Commission's Complaint also alleges that in early 2009, Glatfelter became associated with Anderson and the two began to offer fraudulent investments to investors, also based in part on the use of various fictitious financial instruments. The Commission's Complaint alleges that Glatfelter and Anderson offered these fraudulent investments through an entity called E-Trust Clearing House, KB. The Commission alleges that Glatfelter and Anderson caused at least $425,000 in investor losses through the E-Trust scheme. The Commission's Complaint alleges that Glatfelter, Rice, Anderson, K2 Unlimited and 211 Ventures violated various anti-fraud, broker-dealer and securities registration provisions of the federal securities laws. Specifically, the complaint alleges that Glatfelter, Rice, Anderson and 211 Ventures violated Sections 5(a) and 5(c) of the Securities Act of 1933; that all defendants violated Section 17(a) of the Securities Act; that all defendants violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; that Glatfelter and Rice aided and abetted K2 Unlimited and 211 Ventures' violations of Section 10(b) and Rule 10b-5 thereunder; and that Glatfelter, Rice and K2 Unlimited violated Section 15(a) of the Exchange Act. The Commission seeks permanent injunctions, disgorgement and prejudgment interest, and civil penalties against each defendant, and a bar prohibiting Glatfelter from serving as an officer or director of a public company. The Commission's Complaint alleges that the defendants in this matter purported to offer investment using the so-called "bank guarantees," stand-by letters of credit, or mid-term notes, among others. The Complaint alleges these instruments are fictitious and are not legitimate investments.”

MAN PLEADS GUILTY TO POORLY MADE, NON-DISCLOSED HIGH RISK INVESTMENTS IN HIS INVESTMENT CLUB

The following excerpt is from the Department of Justice website: Thursday, September 22, 2011 Investment Club Manager Pleads Guilty to $40 Million Fraud WASHINGTON – Alan James Watson, 46, of Clinton Township, Mich., pleaded guilty today to fraudulently soliciting and accepting $40 million from more than 750 members of his investment club and losing nearly all of it through non-disclosed, high-risk investments. Victims were located in Virginia and nationwide. The guilty plea was announced by Assistant Attorney General Lanny A. Breuer of the Criminal Division, U.S. Attorney Neil H. MacBride for the Eastern District of Virginia and James W. McJunkin, Assistant Director in Charge (ADIC) of the FBI’s Washington Field Office. Watson pleaded guilty before U.S. District Judge Gerald Bruce Lee in the Eastern District of Virginia to one count of wire fraud. He faces a maximum penalty of 20 years in prison when he is sentenced on Dec. 9, 2011. “Without the consent of his clients, Mr. Watson gambled away investors’ funds on risky ventures that led to millions of dollars in losses,” said Assistant Attorney General Breuer. “He used his investment club to cheat people who trusted him out of their savings. The Justice Department will continue to be aggressive in our pursuit of financial fraudsters – whether they are on Wall Street or Main Street.” “A.J. Watson took huge risks with others’ money and lost big,” said U.S. Attorney MacBride. “He covered up his massive losses through lies and deceit to members of his investment club, many of whom would never have joined his club and have now lost everything.” “More than 750 unwitting victims thought they had done their homework and calculated their investment wisely; instead, they were met with false documentation that yielded no return on their investment,” said FBI ADIC McJunkin. “Schemes like this are why the FBI investigates white collar crimes, determined to protect potential victims.” According to a statement of facts filed with his plea agreement, Watson created an investment club in 2004 and served as the club’s chief executive officer. From 2006 to 2009, Watson received almost $40 million from investors. Watson purported that the money would be invested through an equities-trading system developed by an expert consultant, Company A, with a promised return on investment of 10 percent per month. In reality, Watson admitted that only $6 million of the $40 million was ever invested in Company A, while the remaining $34 million was secretly invested in miscellaneous, high-risk ventures without the consent of investment club members. These high-risk investments resulted in a near complete loss of the $34 million. According to court documents, despite the losses for the investors, Watson continued to create false monthly account statements showing net gains from their investments. In addition, Watson included “bonus” items on the account statements that appeared as trading profits, the result of a Ponzi scheme he orchestrated to use new investor funds to pay off earlier investors. In March of 2009, Watson ceased investing in Company A and re-deposited those funds in separate unauthorized ventures. In 2010, nearly a year after he had fully withdrawn finances from Company A, Watson informed investment club members that he had not invested their money as promised, and that none of the reported returns had ever materialized. This resulted in a combined $40 million loss for investment club members. The Commodity Futures Trading Commission (CFTC) has filed a related civil case in the Eastern District of Michigan. This case was investigated by the FBI’s Washington Field Office, the CFTC and the Securities and Exchange Commission. The department thanks these agencies for their substantial assistance in this matter. Trial Attorney Kevin B. Muhlendorf of the Criminal Division’s Fraud Section and Assistant U.S. Attorney Mark D. Lytle are prosecuting the case on behalf of the United States. The investigation has been coordinated by the Virginia Financial and Securities Fraud Task Force, an unprecedented partnership between criminal investigators and civil regulators to investigate and prosecute complex financial fraud cases in the nation and in Virginia. The task force is an investigative arm of the President’s Financial Fraud Enforcement Task Force, an interagency national task force. President Obama established the interagency Financial Fraud Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate and prosecute financial crimes. The task force includes representatives from a broad range of federal agencies, regulatory authorities, inspectors general and state and local law enforcement who, working together, bring to bear a powerful array of criminal and civil enforcement resources. The task force is working to improve efforts across the federal executive branch, and with state and local partners, to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, combat discrimination in the lending and financial markets, and recover proceeds for victims of financial crimes.”

ALLEGED FAKE TAX CREDITS IN LANDFILL METHANE

The following is from the Department of Justice website: Thursday, September 15, 2011 Texas Federal Court Bars Two Men from Promoting Alleged Tax Scam Involving Fictitious Methane at Landfills Customers of Pair Allegedly Claimed at Least $2.6 Million of False Tax Credits “WASHINGTON - A federal court in Beaumont, Texas, has permanently barred two men from promoting an alleged tax fraud scheme involving bogus tax credits for the production of methane gas from landfills, the Justice Department announced today. Ronald Fontenot and Anthony Burrell consented to the civil injunction order against them without admitting wrongdoing. The order was signed by Judge Marcia A. Crone of the U.S. District Court for the Eastern District of Texas. According to the government complaint , which was originally filed in Florida, the scheme involved bogus federal income tax credits available to producers of fuel from non-conventional sources. The government suit alleges that George Calvert and Gregory Guido of Florida, both previously enjoined and criminally convicted as a result of their involvement, concocted the scheme and promoted it through tax preparers like Fontenot and Burrell, who acted as sub-promoters to individual customers. The 32 defendants named in the civil injunction lawsuit allegedly helped customers claim more than $30 million in tax credits for the production and sale of fuel from landfill gas facilities that either did not exist or belonged to others. According to the complaint, Fontenot, of Lake Charles, La., and Burrell, of Livingston, Tex., are allegedly responsible for preparing federal income tax returns for customers that claimed at least $2.6 million in false tax credits.”