U.S. HOLDS ANTITRUST MERGER ENFORCEMENT TALKS HELD WITH CHINA

DEPARTMENT OF JUSTICE AND FEDERAL TRADE COMMISSION MEET WITH CHINESE MINISTRY OF COMMERCE ON MERGER ENFORCEMENT MATTERS The following excerpt is from the Department of Justice, Antitrust Division website: November 29, 2011 “WASHINGTON — Acting Assistant Attorney General Sharis Pozen of the Department of Justice’s Antitrust Division and Federal Trade Commission (FTC) Chairman Jon Leibowitz today met with a delegation from China’s Ministry of Commerce (MOFCOM) to discuss antitrust merger enforcement. The delegation was led by China International Trade Representative and MOFCOM Vice Minister Gao Hucheng. MOFCOM is responsible for handling reviews of mergers and acquisitions under China’s Antimonopoly Law. This is the first high-level MOFCOM visit to the U.S. antitrust agencies since the department and the FTC signed an antitrust memorandum of understanding (MOU) with China’s three antimonopoly agencies in July 2011, to promote communication and cooperation among the antitrust enforcement agencies in both countries. The discussion topics in today’s meeting included recent antitrust enforcement and policy developments, the role of antitrust enforcement in times of economic downturn and cooperation among the three agencies on merger enforcement issues. The three agencies developed further guidance for cooperation on investigations when one of the U.S. antitrust agencies and MOFCOM are reviewing the same merger. Department and FTC officials said that the discussions with the delegation from MOFCOM were productive, and that they look forward to continuing their cooperative relationship.”

SEC, FBI GO AFTER ALLEGED KICKBACKS IN THINLY TRADED STOCKS

The following excerpt is from the SEC website: December 2, 2011 The Securities and Exchange Commission announced that, on December 1, 2011, the Commission, U.S. Attorney for the District of Massachusetts, and Federal Bureau of Investigation filed parallel cases in federal court against several corporate officers, lawyers and a stock promoter alleging they used kickbacks and other schemes to trigger investments in various thinly-traded stocks. The Commission filed civil charges of securities fraud against ZipGlobal Holdings, Inc.; Microholdings US, Inc.; Michael Lee of Hingham, MA; James Wheeler of Camas, WA; Paul Desjourdy of Medfield, MA; and Edward Henderson of Lincoln, Rhode Island and alleging they used kickbacks to engage in fraudulent activity involving microcap stocks. The criminal case charged 13 defendants who engaged in criminal activity in the midst of an undercover FBI operation. According to the charges filed in U.S. District Court, the schemes involved secret kickbacks to an investment fund representative in exchange for having the investment fund buy stock in certain companies; the kickbacks were to be concealed through the use of sham consulting agreements. What the insiders and promoters did not know was that the purported investment fund representative was actually an undercover agent. The charges follow a year-long investigation focusing on preventing fraud in the micro-cap stock markets. Microcap companies are small publicly traded companies whose stock often trades at pennies per share. Fraud in the microcap stock markets is of increasing concern to regulators as such markets have proven to be fertile grounds for fraud and abuse. This is, in part, because accurate information about microcap stocks may be difficult for the average investor to find, since many microcap companies do not file financial reports with the Commission. The Commission's complaint charges the defendants with violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5. The complaints seeks a permanent injunctions, disgorgement of ill-gotten gains plus prejudgment interest, civil monetary penalties, penny stock and officer and director bars.”

OVER $1 MILLION DOLLARS PAID TO SETTLE UNREGISTERED SECURITIES CASE

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.”

FORMER TRADER FORFEITS OVER $10,300,000 FOR SECURITIES FRAUDS

The following excerpt is from the SEC website: December 9, 2011 "Former Schottenfeld Trader Zvi Goffer Settles SEC Insider Trading Charges The Securities and Exchange Commission announced today that on December 5, 2011, the Honorable Jed S. Rakoff of the United States District Court for the Southern District of New York entered a consent judgment against Zvi Goffer in SEC v. Galleon Management, LP, et al., 09-CV-8811, an insider trading case the SEC filed on October 16, 2009. The SEC charged Goffer, who was a registered representative and a proprietary trader at the broker-dealer Schottenfeld Group, LLC during the relevant time period, with using inside information to trade ahead of impending acquisitions. In its action, the SEC alleged that, on July 2, 2007, Goffer was tipped with material non-public information that Hilton Hotels Corp. would be acquired the next day at a significant premium. Additionally, in March 2007, Goffer was tipped material non-public information that Kronos Inc. would be acquired in about a week for a substantial premium. On the basis of the material non-public information he received, Goffer traded in the Schottenfeld accounts he managed. To settle the SEC’s charges, Goffer consented to the entry of a judgment that: (i) permanently enjoins him from violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and (ii) orders him to pay disgorgement of $265,709.33, plus prejudgment interest of $59,564.56, for a total of $325,273.89. In a related SEC administrative proceeding, Goffer consented to the entry of an SEC order permanently barring him from association with any broker or dealer, investment adviser, municipal securities dealer or transfer agent, and barring him from participating in any offering of a penny stock. Goffer previously was found guilty of securities fraud and conspiracy to commit securities fraud in a related criminal case, United States v. Zvi Goffer, 10-CR-0056 (S.D.N.Y.), and was sentenced to a ten-year prison term and ordered to pay criminal forfeiture of $10,022,931. The SEC also announced today the entry of a consent judgment against Goffer in a separate case alleging insider trading in other securities."

COURT ORDERS PAYMENT OF NEARLY $16 MILLION IN MISINFORMATION CASE

The following excerpt is from the SEC website: “The Securities and Exchange Commission announced today that on December 1, 2011, the United States District Court for the District of Colorado entered judgments against Richard Dalton and Universal Consulting Resources LLC (UCR) and ordered them to pay $15,842,948, which includes a civil penalty of $7,549,458. The Court found that Dalton routinely provided investors with false and materially misleading information about investments contracts known as the Trading Program and the Diamond Program. The Court stated that Dalton told investors they would receive annual profits ranging from 48% to 120% when, in fact, he was operating a Ponzi scheme, with new investors providing the funds for UCR’s profit payments to existing investors. The Court held that Dalton misappropriated investors’ funds and used at least $2.5 million for his personal benefit or for the benefit of family members. According to the Commission’s complaint, Dalton raised approximately $17 million from 130 investors in 13 states. Dalton told investors in the Trading Program that their money would be held in an escrow account in a U.S. bank, and that a European trader would use the value of that account to obtain leveraged funds to purchase and sell bank notes. The Diamond Program supposedly generated profits from the trading of cut and uncut diamonds. The Court permanently enjoined Dalton and UCR from violating Sections 5 and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder, and Dalton from violating Exchange Act Section 15(a). The Court also entered a judgment on December 1, 2011 against Marie Dalton, who was named as a relief defendant in the Commission’s complaint. According to the Commission’s complaint, Marie Dalton purchased a residence in Golden, Colorado with over $900,000 in investors’ funds. The Court stated that a receiver would be appointed to sell the residence. The Court also ordered Marie Dalton to disgorge $115,000 in investors’ funds that were deposited in her bank account. On October 19, 2011, a federal grand jury in the District of Colorado handed up an indictment charging Dalton and Marie Dalton with violations of federal criminal laws in connection with a scheme involving investments in UCR’s Trading Program and the Diamond Program.”

SEC COMMISSIONER AGUILAR SPEAKS ON SMALL BUSINESS CAPITAL FORMATION

The following excerpt is from the SEC website: Facilitating Small Business Capital Formation Does Not Need to Be at the Expense of Protecting Investors by Commissioner Luis A. Aguilar U.S. Securities and Exchange Commission SEC Government-Business Forum on Small Business Capital Formation Washington, D.C. November 17, 2011 Good morning. First, I would like to welcome all of the distinguished panelists, participants, and attendees to the SEC for today’s Government-Business Forum on Small Business Capital Formation. Thank you for inviting me to speak and add my voice to today’s dialogue. Second, I also add my thanks to the staff from the Division of Corporation Finance and the Office of Small Business Policy for their work to facilitate today’s program. Third, before I start, I must remind you that my remarks represent my own views, and not necessarily those of the Commission, my fellow Commissioners, or members of the staff. Small business is vital to any nation’s economic well-being. I know everyone in this room has been closely following the economic crisis in Europe. I was struck by a recent news article discussing the tragic impact of the crisis on the people of Greece. Specifically, it was reported that “[s]mall shops, in many ways the lifeblood of the Greek economy, which relies on domestic demand, are closing by the day.”1 The European debt crisis reminds us that investors, consumers, entrepreneurs, lenders, underwriters, etc., make up the same economic system, the same market. In this interdependent system, it is essential for all market participants that the fundamentals of this system are strong, fair and transparent. The principles of a strong, fair and transparent regulatory framework are the defining characteristics of the Federal securities laws. There is no doubt that the system of laws and regulations administered by the SEC has contributed to the United States having the most robust capital market in the world. A key component of the SEC’s mission is to facilitate capital formation while at the same time protecting investors. Many studies have demonstrated how regulations fostering investor protections can promote capital formation.2 For example, a 2003study showed that the MD&A disclosure required in public company filings under the Exchange Act resulted in more accurate and informed share prices, which contributes to a better functioning real economy.3 A 2006 study found that the Exchange Act amendments of 1964, which extended disclosure requirements to over-the-counter companies, created substantial value for the shareholders of such companies.4 Such value creation is central to strong capital formation. We must not forget that investors are the capital providers that drive our capital markets – after all they are writing the checks that make capital formation possible. And, we need to remember that capital formation is much more than just capital raising. True capital formation requires that funds raised be invested in productive assets. The more productive those assets are, the greater the capital formation facilitated by such investment.5 Fair disclosure rules level the playing field and help provide investors with the information they need to make reasoned investment decisions. Accordingly, market safeguards that promote reliable disclosure engender the confidence investors need to invest their savings in debt, equity and other securities. The need for full and fair disclosure, so that investors can make investment decisions with the benefit of material information, is a founding principle of the Federal securities laws.6 I look forward to today’s dialogue, and to your thoughts as to how we can improve the economic environment for entrepreneurs and investors alike, because smart and workable regulation is a necessary component of a robust capital market and strong capital formation. Thank you for your participation in today’s forum. You have my best wishes for a productive day.”