SEC News Digest, 05-05-1982
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_________________ ==U.:.!.S>!.!.C-.lo!S:"'E.\oIC"-lll~R>.LITLJII.I:.E.:;S__AA.AlN.g.D • ._. __ ... _ •. _ EXCHANGE COMMISSION CMl PROCEEDINGS -------~------------------_. __ ._._-- -------- STEVEN R. GRAYSON PRELIMINARILY ENJOINED The Los Angeles Regional Office announced that on April 26 the Honorable Cynthia H. Hall, U.S. District Judge for the Central District of California, issued a prelimi- nary injunction against Steven R. Grayson which, among other things, prohibits him from committiRg further violations of the antifraud provisions of the securities laws, and transferring or dissipating assets while the Court's Order is in effect. The Court found that Grayson, a municipal securities salesman, had violated Section 17(a) (1) and (2) of the Securities Act of 1933, Section lOeb) of the Securities Exchange Act of 1934 and Rule 10b-S thereunder, in connection with the offer and sale of municipal bonds. Specifically, the Court found that Grayson had obtained from his employer $150,000 worth of municipal bearer bonds through a fraudulent representation that he planned to deliver them to a customer. In fact, Grayson neither delivered the bonds to the customer nor returned them to the firm. In addition, the court found that Grayson had induced his retail customers to turn over to him at least $1.6 million worth of municipal bearer bonds on the represen- tation that he would upgrade the bonds and return them to the customers. Instead, the bonds were sold through a nominee account and neither the proceeds of the sales nor any new bonds were returned to the customers. Judge Hall has not yet set a date for trial on the permanent injunction. {SEC v. Steven R. Grayson, U.S.D.C, C.D. Cal., Civil Action No. 82-0453-CHH, Tx). (LR-966S) CRI_NAl PROCEEDINGS ARNOLD POLISKIN, OTHERS SENTENCED FOR WESTAMERICA FRAUD The Los Angeles Regional Office announced that on April 19 the Honorable Manuel Real, Judge, U.S. District Court, Los Angeles, sentenced Arnold Po1iskin, Jerold Zukor, and James Morse following their conviction on an indictment based on fraudulent sales of stock of Westamerica Automotive Corporation. Po1iskin was sentenced to imprisonment for five years which was suspended except for six months in prison to be followed by service of 60 days in jail on 30 successive weekends. The defendant was ordered placed on probation for the remainder of the five year term following the six months of incarceration and was also required to perform 2,000 hours of community service. Poliskin was found guilty by Judge Real on April 2, 1982 on 19 counts charging him with conspiracy and securities fraud following a four day trial to the Court. Zukor was sentenced to the same terms of imprisonment, probation, and community service except that he was required to serve 90 days in jail on 45 successive week- ends following the term of imprisonment. Zukor entered a plea of guilty to three counts of securities fraud on March 19, 1982 before Judge Real. Morse was sentenced to serve 90 days in prison in addition to a term of imprisonment he is currently serving on an unrelated mail fraud conviction. He was also required to perform 1,000 hours of community service during probation. Morse entered a plea of guilty to one count of conspiracy to commit securities fraud and mail fraud on March 15, 1982 before Judge Real. On January 27, 1982, the above three defendants were charged in various counts of a 30-count indictment with conspiracy, mail fraud and securities fraud in connection with the fraudulent distribution and manipulation of stock of Westamerica Automotive Corporation in the over-the-counter market. (U.S. v. Arnold Poliskin, Jerold Zukor and James Morse, C.D. Cal., CR-82-83). (LR-9664) INVESTMENT COMPANY ACT RELEASES T~I-CONTINENTAL CORPORATION. A notice has been issued giving interested persons until May 25 to request a hearing on an application of Tri-Continental Corporation (Applicant), a closed-end, diversi- fied, management investment company registered under the Investment Company Act of 1940, for an order, pursuant to Section 6(c) of the Act, declaring that William M. Rees shall not be deemed an -interested person- of Applicant or of its investment adviser, J. & W. Seligman & Co. Incorporated, as that term is defined in Section 2 (a ) (19) of the Act solely by reason of his being a director of The Chubb Corpora- tion. (ReI. IC-12414 - Apr. 30) SOUTHWEST FUNDING CORPORATION A notice has been issued g1v1ng interested persons until May 28 to request a hearing on an application filed by Southwest Funding Corporation (Applicant), a Delaware corporation, requesting an order, pursuant to Section 6ec) of the Act, exempting Applicant from all provisions of the Act and the rules and regulations thereunder. (ReI. IC-12415 - May 3) IDS GOVERNMENT SECURITIES MONEY FUND, INC. A notice has been issued giving interested persons until May 29 to request a hearing on the application of IDS Government Securities Money Fund, Inc., for an order of exemption from Section 2(a) (41) of the Investment Company Act of 1940 and Rules 2a-4 and 22c-l thereunder to the extent necessary to permit it to value its port- folio securities on an amortized cost basis. (ReI. IC-124l6 - May 4) ------_._----- .._-- .._-- -._. HOLDING COMPANY ACT RELEASES ------------------------_._ .._._--------------- THE HARTFORD ELECTRIC LIGHT COMPANY An order has been issued authorizing The Hartford Electric Light Company, subsidiary of Northeast Utilities, to issue and sell at competitive bidding up to $40 million of first mortgage bonds not later than June 30, 1982. (Re!. 35-22482 - Apr. 30) THE COLUMBIA GAS SYSTEM, INC. An order has been issued authorizing The Columbia Gas System, Inc., a registered holding company, to issue and sell 3,000,000 shares of its common stock from time to time through April 30, 1985 pursuant to its Dividend Reinvestment Plan. (ReI. 35-22486 - May 3) GEORGIA POWER COMPANY An order has been issued approving a proposal by Georgia Power Company to acquire, by purchase or lease, 225 railroad cars pr10r to December 31, 1985. Jurisdiction has been reserved over the acquisition of 275 additional cars in the same time period. (ReL, 35-22487 - May 3) LISTING, DELISTING AND UNLISTED TRADING ACTIONS UNLISTED TRADING GRANTED A notice has been issued g1v1ng interested persons until May 24 to comment on the applications of the Philadelphia Stock Exchange, Inc. for unlisted trading privi- leges in two issues which are listed and registered on one or more other national securities exchanges and are reported in the consolidated transaction reporting system. (ReI. 34-18709) 2 NEWS DIGEST, May 5, 1982 SELF -REGULATORY ORGANIZATIONS ACCELERATED APPROVAL OF PROPOSED RULE CHANGE The Commission has approved, on an accelerated basis, a proposed rule change filed by the New York Stock Exchange, Inc. (SR-NYSE-82-3) to conform its capital rules for NYSE member organizations to the recent changes to the Commission's Uniform Net Capital Rule (Rule 15c3-1 of the Securities Exchange Act of 1934). (ReI. 34-18695) NOTICE OF IMMEDIATE EFFECTIVENESS OF PROPOSED RULE CHANGE The Midwest Stock Exchange, Inc. has filed a proposed rule change which became effective under Section 19(b) (3) (A) of the Securities Exchange Act of 1934 (SR-MSE-82-3) to increase to $50 from $40 the fee for registration of new officers and partners of non-NYSE member organizations. Publication of the proposal is expected to be made in the Federal Register during the week of May 3. (Rel. 34-18696) APPROVAL OF PROPOSED RULE CHANGE The Commission has approved a proposed rule change filed under Rule 19b-4 by the Chicago Board Options Exchange, Inc. (SR-CBOE-82-3) to require CBOE member firms to file termination reports only for registered representatives who have been terminated for cause~ and to clarify the CBOE's disciplinary juriSdiction. (ReI. 34-18697) NOTICE OF AMENDMENT TO PROPOSED RULE CHANGE The New York Stock Exchange, Inc. has filed an amendment to a proposed rule change pursuant to Rule 19b-4 (SR-NYSE-82-2) to amend the NYSE's 700 series rules with regard to stock index options in order to detect manipulation through concurrent trading in an option and a futures contract, where both are based on a similar index or group of stocks. In addition, the proposed amendment increases the minimum number of stocks underlying the proposed stock index option from 25 to 50. Publication of the proposal is expected to be made in the Federal Register during the week of May 3. (ReI. 34-18702) NOTICE OF PROPOSED RULE CHANGE The Municipal Securities Rulemaking Board has filed a proposed rule change pursuant to Rule 19b-4 (SR-MSRB-82-4) to amend MSRB Rule A-3 to permit a member of its Board representing the public sector to succeed himself in office if his first term of office was less than 18 months. Publication of the proposal is expected to be made in the Federal Register during the week of May 3. (Re!. 34-18708) TRUST INDENTURE ACT RELEASES PETRO-LEWIS CORPORATION A notice has been issued g1v1ng interested persons until May 24 to request a hearing on the application by Petro-Lewis Corporation (Applicant), pursuant to Section 3l0(b) (1) (ii) of the Trust Indenture Act of 1939, declaring that the trusteeShip of United States Trust Company under five indentures of Applicant, four of which are qualified under the Act, is not so likely to involve a material conflict of interest as to make it necessary to disqualify United States Trust Company of New York from acting as trustee under any such indentures.