SEC NEWS DIGEST Issue 2003-49 March 14, 2003 ENFORCEMENT PROCEEDINGS ADMINISTRATIVE PROCEEDING AGAINST EMANUELE SCARSO On March 13, the Commission entered an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 against Emanuele A. Scarso. Scarso consented to the entry of the Order without admitting or denying any of the Order's findings, except as to jurisdiction, which was admitted. The Order issued by the Commission found that between April 1996 and January 1998, Scarso was associated as a registered representative with J.W. Barclay & Co., Inc. (Barclay), a broker-dealer registered with the Commission. The Order found that during the time period from in or about June 1997 through in or about January 1998, Scarso made unauthorized purchases and sales of securities in the accounts of at least one customer, made unsuitable purchases and sales of securities in the accounts of at least two customers, and failed to execute sell orders or follow other instructions from at least one customer. Based on the foregoing, the Order finds that Scarso willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Order suspends Scarso from association with any broker or dealer for a period of twelve (12) months. Also, Scarso is ordered to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Finally, the Order requires Scarso to pay disgorgement and prejudgment interest in the amount of $11,291.97 as well as a civil penalty in the amount of $25,000. (Rels. 33-8200; 34-47496; File No. 3-10765) ADMINISTRATIVE PROCEEDING AGAINST EMMANUEL CUBE On March 13, the Commission entered an Order Making Findings and Imposing Remedial Sanctions and a Cease-and-Desist Order Pursuant to Section 8A of the Securities Act of 1933 and Sections 15(b) and 21C of the Securities Exchange Act of 1934 against Emmanuel P. Cube. Cube consented to the entry of the Order without admitting or denying any of the Order's findings, except as to jurisdiction, which was admitted. The Order issued by the Commission found that during the period September 1994 through December 2000, Cube was associated as a registered representative with J.W. Barclay & Co., Inc. (Barclay), a broker-dealer registered with the Commission. The Order found that during the time period from in or about June 1997 through in or about December 1998, Cube made unauthorized purchases and sales of securities in the accounts of at least two customers, churned the account of at least one customer, made unsuitable purchases and sales of securities in the accounts of at least two customers, and failed to execute sell orders or follow other instructions from at least one customer. Based on the foregoing, the Order finds that Cube willfully violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The Order bars Cube from association with any broker or dealer with the right to reapply for association after five (5) years. The Order also requires Cube to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. In addition, the Order requires Cube to pay disgorgement and prejudgment interest in the amount of $22,745.28 as well as a civil money penalty in the amount of $27,000.00. (Rels. 33-8201; 34-47497; File No. 3-10765) ADMINISTRATIVE PROCEEDING AGAINST MICHAEL WILLS On March 13, the Commission entered an Order Making Findings and Imposing Remedial Sanctions pursuant to Section 15(b) of the Securities Exchange Act of 1934 against Michael J. Wills. Wills consented to the entry of the Order without admitting or denying any of the Order's findings, except as to jurisdiction, which was admitted. The Order issued by the Commission found that during the time period from in or about June 1997 through in or about December 1998, Wills was the vice president and senior sales manager of J.W. Barclay & Co., Inc. (Barclay), a broker-dealer registered with the Commission. The Order further found that during this period, six registered representatives associated with Barclay engaged in willful violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, by, among other things, making unauthorized and unsuitable purchases and sales of securities and churning the accounts of several Barclay customers. The Order found that Wills acted as a supervisor at Barclay and that certain of the registered representatives were subject to his supervision. The Order also finds that Wills caused Barclay to institute an inadequate supervisory system and that he also ignored or failed to recognize red flags regarding the registered representatives' misconduct. Based on this conduct, the Order finds that Wills failed reasonably to supervise pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 and within the meaning of Section 15(b)(4)(E) of the Act. The Order bars Wills from association in a supervisory capacity with any broker or dealer and suspends him from association with any broker or dealer for a period of twelve (12) months. The Order also requires Wills to pay a civil penalty in the amount of $17,000. (Rels. 33-8202; 34-47498; File No. 3-10765) SEC OBTAINS JUDGMENTS AGAINST PERPETRATORS OF INTERNET OFFERING FRAUD INVOLVING WORKERS' COMPENSATION INSURANCE SCHEME On March 4, the Honorable Marcia S. Kreiger, U.S. District Judge for the District of Colorado, entered an order granting the Commission's motion for summary judgment against defendant William L. Brotherton, an unlicensed chiropractor and the only executive officer of the company he founded, defendant International Business Consortium, Inc. (IBC). In separate orders, the Court also resolved other motions in favor of the Commission, as explained below. The Commission's complaint, filed July 13, 2001, alleged that Brotherton and IBC raised over $300,000 by selling unregistered IBC stock to over 180 investors between January and July of 2001. Holding IBC out as a promising start-up preparing to offer discount workers' compensation insurance, IBC and Brotherton deceived investors about, among other things, IBC's true state of development and operations, a future initial public offering for IBC securities, the use of investment proceeds and the risks and returns associated with ownership of IBC stock. Brotherton misappropriated at least 25% of the offering proceeds for the personal benefit of himself and certain of his relatives. Although denying the Commission's request for injunctive relief, Judge Kreiger found no contested issue of material fact that Brotherton violated the federal securities laws and ordered him to disgorge his ill- gotten gains and pay prejudgment interest in an amount to be determined by Magistrate Judge Patricia A. Coan, who also will determine whether civil money penalties should be assessed against Brotherton. On March 3, Judge Kreiger also granted the Commission's Motion for Default Judgment against IBC and permanently enjoined IBC from future violations of the antifraud and registration provisions of the federal securities laws. The Court also ordered IBC to pay disgorgement and prejudgment interest, in an amount to be determined by Magistrate Judge Coan, who also will determine whether civil money penalties should be assessed against IBC. On March 3, Judge Kreiger entered an order denying Brotherton's motion to name the Commission in a counterclaim, finding the proposed counterclaim barred by sovereign immunity and by the Securities Exchange Act of 1934. Judge Kreiger's order also adopted the Magistrate Judge's recommendation to strike the Defendants' response to the Commission's complaint, and the court sua sponte struck a pending motion by the defendants to dismiss the Commission's action. [SEC v. William L. Brotherton and International Business Consortium, Inc., Civil Action No. 01-MK-1340, USDC, D. Colo.] (LR-18034) FINAL JUDGMENT ORDERING PERMANENT INJUNCTION AND OFFICER/DIRECTOR BAR AGAINST KENNETH WEEKS The Commission announced that on March 13 the Honorable Ted Stewart, U.S. Judge for the District of Utah, Central Division, entered a Final Judgment of Permanent Injunction as to Defendant Kenneth L. Weeks. The Commission's complaint, filed on June 2, 1997, alleged that from 1989 through 1995, Ken Weeks, in concert with others, violated the anti-fraud and registration provisions of the federal securities laws. The defendants filed false quarterly and annual reports with the Commission. They also prepared promotional materials designed to fraudulently inflate the value of PanWorld's mineral properties and misrepresent the viability of its business operations. While making these false statements, Weeks and the others solicited a network of "consultants" to fraudulently tout PanWorld stock. Ken Weeks then sold shares of inflated PanWorld stock to unsuspecting public investors. Weeks consented to the order which permanently enjoins and restrains him from violating Sections 17(a), 5(a), and 5(c) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Weeks was also unconditionally and permanently prohibited from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act. [SEC v. PanWorld, et al., CASE NO. 2:97 CV-0425ST (D. Utah.)] (LR-18036) INVESTMENT COMPANY ACT RELEASES JNL SERIES TRUST, ET AL. A notice has been issued giving interested persons until April 7, 2003, to request a hearing on an application filed by JNL Series Trust, et al. for an order granting an exemption from Section 15(a) of the Investment Company Act and Rule 18f-2 under the Act. The order would permit applicants to enter into and materially amend subadvisory agreements without shareholder approval and grant relief from certain disclosure requirements. (Rel. IC-25956 - March 12) LINCOLN BENEFIT LIFE COMPANY, ET AL. A notice has been issued giving interested persons until April 7, 2003, to request a hearing on an application filed by Lincoln Benefit Life Company, Lincoln Benefit Life Variable Annuity Account, and Lincoln Benefit Life Variable Life Account (collectively, Applicants). Applicants seek an order of the Commission amending a prior order granted April 30, 2002, (Rel. IC-25562) which authorized Applicants to effect a substitution of shares of one underlying portfolio for shares of another portfolio. The purpose of the amendment is to modify a term of the April 30 Order pertaining to limits on the receipt of direct or indirect future benefits from the Replacement Fund, its adviser, or their affiliates. (Rel. IC-25957 - March 12) SELF-REGULATORY ORGANIZATIONS PROPOSED RULE CHANGES The American Stock Exchange filed a proposed rule change (SR-Amex-2002- 86) to eliminate the obligation of specialists to accord priority to non- public customer options orders. Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47479) The International Securities Exchange filed a proposed rule change (SR- ISE-2003-11) relating to a one-year pilot for options intermarket linkage fees. Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47484) A proposed rule change and Amendment Nos. 1, 2, 3, and 4 thereto have been filed with the Commission by the National Association of Securities Dealers to retroactively establish maximum execution fees and liquidity provider rebates for SuperSoes transactions in low-priced securities (SR- NASD-2002-107). Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47488) IMMEDIATE EFFECTIVENESS OF PROPOSED RULE CHANGE A proposed rule change filed by the International Securities Exchange to amend the price criteria for securities that underlie options traded on the Exchange (SR-ISE-2003-04) has become immediately effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47483) A proposed rule change (SR-Amex-2003-13) filed by the American Stock Exchange to add iShares S&P 100 Index Fund to the list of Exchange Traded Funds for which the Exchange pays non-reimbursed fees to third parties has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47489) A proposed rule change (SR-CBOE-2003-09) filed by the Chicago Board Options Exchange to expand the order types that can trade on the Exchange's Large Order Utility has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication of the proposal is expected in the Federal Register during the week of March 17. (Rel. 34-47492) SECURITIES ACT REGISTRATIONS The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue. Registration statements may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . S-8 SUPERIORCLEAN INC, 500 N RAINBOW, STE 300, LAS VEGAS, NV, 89107, 3039333000 - 1,300,000 ($65,000.00) Equity, (File 333-103778 - Mar. 13) (BR. 08) S-8 FIRST COMMERCE CORP, 301 S MCDOWELL ST, STE 100, CHARLOTTE, NC, 28204, 7049546565 - 47,914 ($534,050.79) Equity, (File 333-103779 - Mar. 13) (BR. 07) SB-2 PARADIGM ENTERPRISES INC, 12880 RAILWAY AVE, UNIT 35, RICHMOND, A1, V7B 1Y3, 6042756519 - 500,000 ($100,000.00) Equity, (File 333-103780 - Mar. 13) (BR. ) S-4 GLOBAL INTERNET COMMUNICATIONS INC, 0 ($150,000.00) Equity, (File 333-103781 - Mar. 13) (BR. ) S-8 GROUP MANAGEMENT CORP, 2812424744 - 10,000,000 ($210,000.00) Equity, (File 333-103786 - Mar. 13) (BR. 08) S-8 NEW MEDIA INC, 8914 LEGACY PARK DR, SUITE J, CHARLOTTE, NC, 28269, 7045477090 - 6,500,000 ($1,625,000.00) Equity, (File 333-103787 - Mar. 13) (BR. 09) S-8 BUSINESS BANCORP /CA/, 1248 FIFTH AVENUE, SAN RAFAEL, CA, 94901, 4157842300 - 840,000 ($12,687,675.00) Equity, (File 333-103788 - Mar. 13) (BR. 07) S-8 RAMBUS INC, 4440 EL CAMINO REAL, LOS ALTOS, CA, 94022, 650-947-5000 - 0 ($32,680,293.28) Equity, (File 333-103789 - Mar. 13) (BR. 36) S-3 3DO CO, 200 CARDINAL WAY, REDWOOD CITY, CA, 94063, 6502613000 - 388,262 ($693,047.67) Equity, (File 333-103790 - Mar. 13) (BR. 03) S-8 STAR E MEDIA CORP, 949-581-9477 - 1,200,000 ($360,000.00) Equity, (File 333-103791 - Mar. 13) (BR. 02) S-8 STARTCALL COM INC, 719 5TH STREET, SUITE 1402, MIAMI, FL, 33139, 3055799008 - 8,000,000 ($880,000.00) Equity, (File 333-103792 - Mar. 13) (BR. 08) SB-2 1ST CENTENNIAL BANCORP, 218 EAST STATE STREET, REDLANDS, CA, 92373, 9097983611 - 225,000 ($5,118,750.00) Equity, (File 333-103794 - Mar. 13) (BR. 07) S-3 BMW FS SECURITIES LLC, 300 CHESTNUT RIDGE RD, WOODCLIFF LAKE, NJ, 07677, 2013074000 - 0 ($1.00) Other, (File 333-103795 - Mar. 13) (BR. 05) S-4 CANTON BANCORP INC, 5 WEST MAIN ST, P O BOX 217, CANTON, PA, 177240217, 5706735127 - 28,231 ($6,972,210.07) Equity, (File 333-103796 - Mar. 13) (BR. ) S-8 BOWATER INC, 55 EAST CAMPERDOWN WAY, P O BOX 1028, GREENVILLE, SC, 29601, 8642717733 - 2,600,000 ($8,499.97) Equity, (File 333-103797 - Mar. 13) (BR. 04) RECENT 8K FILINGS Form 8-K is used by companies to file current reports on the following events: Item 1. Changes in Control of Registrant. Item 2. Acquisition or Disposition of Assets. Item 3. Bankruptcy or Receivership. Item 4. Changes in Registrant's Certifying Accountant. Item 5. Other Materially Important Events. Item 6. Resignations of Registrant's Directors. Item 7. Financial Statements and Exhibits. Item 8. Change in Fiscal Year. Item 9. Regulation FD Disclosure. The following companies have filed 8-K reports for the date indicated and/or amendments to 8-K reports previously filed, responding to the item(s) of the form specified. 8-K reports may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . STATE 8K ITEM NO. NAME OF ISSUER CODE 1 2 3 4 5 6 7 8 9 DATE COMMENT ---------------------------------------------------------------------------------- AAMES FINANCIAL CORP/DE DE X 01/31/03 ACTERNA CORP DE X X 03/13/03 AIRPLANES LTD DE X 03/13/03 ALLIED PRODUCTS CORP /DE/ DE X X 02/01/03 AMERICAN BUILDING CONTROL INC DE X 03/13/03 ARTS WAY MANUFACTURING CO INC DE X 03/13/03 AMEND AUTOMATIC DATA PROCESSING INC DE X 03/13/03 AVANT IMMUNOTHERAPEUTICS INC DE X X 03/10/03 BAXTER INTERNATIONAL INC DE X X 03/13/03 BOSTON LIFE SCIENCES INC /DE DE X X 03/12/03 BRIAZZ INC WA X X 03/04/03 BURLINGTON RESOURCES INC DE X 02/21/02 AMEND BURLINGTON RESOURCES INC DE X 08/22/02 AMEND CHASE MORTGAGE FINANCE CORP DE X X 02/12/03 CIGNA CORP DE X 03/13/03 CITICORP MORTGAGE SECURITIES INC DE X 03/13/03 CNA FINANCIAL CORP DE X X 03/12/03 COMPASS BANCSHARES INC DE X 03/13/03 CONAGRA FOODS INC /DE/ DE X X 03/13/03 CONSECO INC IN X X 03/12/03 CONVERGENCE COMMUNICATIONS INC NV X 02/27/03 CONVERGENCE COMMUNICATIONS INC NV X X 03/11/03 CREDIT SUISSE FIRST BOSTON MORTGAGE A DE X 03/13/03 CRESCENT OPERATING INC DE X X X 03/06/03 CYBERGUARD CORP FL X X 03/04/03 DELTA MUTUAL INC X 02/28/03 AMEND DISCOVER CARD MASTER TRUST I DE X X 03/13/03 EDGEWATER TECHNOLOGY INC/DE/ DE X 03/13/03 EL PASO CORP/DE DE X X 03/12/03 ENTERGY CORP /DE/ DE X X 03/13/03 ESCAGENETICS CORP DE X 03/12/03 EXELON CORP PA X 03/13/03 FIRSTMERIT CORP /OH/ OH X X 03/13/03 FLORIDA EAST COAST INDUSTRIES INC FL X 03/13/03 FX ENERGY INC NV X 03/13/03 GENVEC INC DE X X 03/11/03 HANCOCK JOHN FINANCIAL SERVICES INC X 03/13/03 HCA INC/TN DE X X 03/11/03 HEMISPHERX BIOPHARMA INC DE X X X 03/12/03 HERITAGE WORLDWIDE INC X X X 02/28/03 INDEPENDENT BANK CORP MI X 03/13/03 INDYMAC MBS INC X X 03/13/03 INTERNATIONAL ABSORBENTS INC X X 03/13/03 K2 INC DE X 03/12/03 KANKAKEE BANCORP INC DE X 03/10/03 KEYSTONE MINES LTD NV X 03/13/03 AMEND KIMMINS CORP/DE FL X X 03/13/03 LEHMAN ABS CORP FORD MOTOR CO NOTE BA DE X X 03/13/03 LEVEL 3 COMMUNICATIONS INC DE X X 03/13/03 LIFE SCIENCES RESEARCH INC MD X X 02/28/03 AMEND MDU RESOURCES GROUP INC DE X X 03/11/03 MERCANTILE BANKSHARES CORP MD X X 03/12/03 MICRON ENVIRO SYSTEMS INC NV X 03/12/03 MID ATLANTIC REALTY TRUST MD X X 12/31/02 MORGAN STANLEY ABS CAP I INC MRT PSS DE X X 03/12/03 NATIONAL CITY CORP DE X X 03/12/03 NEW CENTURY HOME EQUITY LOAN TRUST SE DE X X 03/25/02 AMEND NEW CENTURY HOME EQUITY LOAN TRUST SE DE X X 04/25/02 AMEND NEW CENTURY HOME EQUITY LOAN TRUST SE DE X X 05/25/02 AMEND NUCENTRIX BROADBAND NETWORKS INC DE X 03/12/03 OUT TAKES INC DE X 02/19/03 AMEND PANERA BREAD CO DE X 03/13/03 PARK PHARMACY CORP CO X X X 02/20/03 PEOPLES BANCORP INC OH X 03/13/03 PEOPLES BANK CREDIT CARD MASTER TRUST CT X X 02/28/03 PERRY ELLIS INTERNATIONAL INC FL X X 03/11/03 PRIMARY PDC INC DE X X 03/07/03 PRIME GROUP REALTY TRUST MD X 03/11/03 RCN CORP /DE/ DE X X 03/13/03 RESIDENTIAL ACCREDIT LOANS INC DE X X 03/13/03 SALANT CORP DE X 12/28/02 SEQUIAM CORP CA X X 03/07/03 SHAW GROUP INC LA X X 03/13/03 SIMULATIONS PLUS INC X X 03/13/03 SRM NETWORKS INC NV X 03/05/03 AMEND STANDARD REGISTER CO OH X X 03/12/03 STAR RECEIVABLES FUNDING INC DE X 03/17/03 STRUCTURED PRODUCTS CORP MONTHLY PAY DE X 03/12/03 SUITE 101 COM INC DE X 03/04/03 TALBOTS INC DE X X 01/28/03 TENNECO AUTOMOTIVE INC DE X X 03/12/03 TOYOTA AUTO FINANCE RECEIVABLES LLC DE X X 03/11/03 UCAP INC CO X 03/31/03 UNIT CORP DE X 03/13/03 WAMU MORTAGE PASS THRU CERT SERIES 20 DE X 03/12/03 WASHINGTON MUTUAL MORTGAGE SEC CORP P DE X 02/28/03 WASHINGTON MUTUAL MORTGAGE SECURITIES DE X 03/10/03