Issue 93-170 September 2, 1993 u.s SEGUf-lInES ••••••••lIlxlf$.':tVB ••••••••~b¢.lbBijl•••••••••••••••••••••I~SI-~l:I•••iilmiifui.8·;.;· THOMAS RUSSO, EDWARD LAMARCA, DAN MAUSS AND JOHN TAGLIANETTI PERMANENTLY BARRED; TRANSFER AGENT'S REGISTRATION REVOKED The Commission instituted public administrative proceedings, made findings and imposed remedial sanctions pursuant to Sections l5(b) and 19(h) of the Securities Exchange Act (Exchange Act) against Thomas Russo (Russo), Edward LaMarca (LaMarca) and John Taglianetti (Taglianetti), formerly employed by Wall Street West, Inc., a registered broker-dealer, and Dan Mauss (Mauss), formerly a principal of Wasatch Stock Trading, Inc., also a registered broker-dealer. The Commission instituted similar action pursuant to Section l7A of the Exchange Act against Philadelphia Registrar & Transfer Company (PRT) , a registered transfer agent. The Commission accepted offers of settlement from Russo, LaMarca, Mauss, Taglianetti and PRT wherein they consent, without admitting or denying the findings contained therein, to the entry of orders providing that they violated the antifraud provisions of the Exchange Act by engaging in a fraudulent scheme to distribute the securities of Amglo Industries, Inc., (Amglo) and Amglobal Corporation (Amglobal). The orders further provide that Russo, LaMarca and Mauss violated registration provisions of the Securities Act. The Commission ordered that Russo, LaMarca, Mauss and Taglianetti be permanently barred from association with any broker, dealer, municipal securities dealer, investment adviser or investment company and that PRT's transfer agent registration be revoked. (ReI. 34-32808) NYSE ACTION AGAINST FRANK DEROSE AFFIRMED The Commission has affirmed NYSE disciplinary action against Frank DeRose of Lansing, Michigan, a former salesman for Merrill Lynch, Pierce, Fenner & Smith, Inc., and Dean Witter Reynolds, Inc. The Exchange censured DeRose and barred him for five years from membership, allied membership, approved person status, and employment or association in any capacity with a member or member organization. One year of that period was deemed served as of March 5, 1992, the date of the NYSE decision. The Commission found that during the period from about November 1980 to September 1984, DeRose recommended unsuitable options trading to customers, deceived customers into signing options agreements, filled in false information in those agreements, failed to give customers an adequate explanation of options trading, effected discretionary trades in customer accounts without proper authorization and engaged in excessive trading. In affirming the sanctions assessed by the NYSE, the Commission stated that DeRose had "engaged in an egregious pattern of misconduct over an extended period of time, exhibiting a disturbing lack of understanding of a registered representative's fiduciary duty to his customers." (ReI. 34-32812) ADMINISTRATIVE PROCEEDINGS ORDERED AGAINST DONALDSON, LUFKIN & JENRETTE SECURITIES CORPORATION On September 2, the Commission instituted public administrative proceedings against Donaldson, Lufkin & Jenrette Securities Corporation (Donaldson, Lufkin) pursuant to Sections lS(b) and 2lC of the Securities Exchange Act and simultaneously accepted an offer of settlement submitted by Donaldson, Lufkin. Pursuant to the offer of settlement, the Commission issued an order to which Donaldson, Lufkin consented without admitting or denying the matters set forth therein. The order finds that Donaldson, Lufkin violated certain recordkeeping requirements of the federal securities laws in connection with the submission of inaccurate noncompetitive bids in auctions of U.S. Treasury securities from March 1989 through August 1991. The Commission's order imposes a civil money penalty of $50,000, requires that Donaldson, Lufkin pay disgorgement and prejudgment interest of $100, 000 and orders that Donaldson, Lufkin cease and desist from future violations of the recordkeeping requirements of the federal securities laws. (ReI. 34-32827) ADMINISTRATIVE PROCEEDINGS ORDERED AGAINST CARROLL MCENTEE & MCGINLEY SECURITIES, INC. On September 2, the Commission instituted public administrative proceedings against Carroll McEntee & MCGinley Securities, Inc. (CMM Securities) pursuant to Sections lS(b) and 2lC of the Securities Exchange Act and simultaneously accepted an offer of settlement submitted by CMM Securities. Pursuant to the offer of settlement, the Commission issued an order to which CMM Securities consented without admitting or denying the matters set forth therein, finding that CMM Securities violated certain recordkeeping requirements of the federal securities laws in connection with the submission of inaccurate noncompetitive bids in auctions of U.S. treasury securities from March 1989 through August 1991. The Commission's order imposes a civil money penalty of $30,000 and requires that CMM Securities cease and desist from future violations of the recordkeeping requirements of the federal securities laws. (ReI. 34-32828) ..,.,.,' , -, ' .. - . INVESTMENT COMPANY ACT RELEASES . THE FRANKLIN CORPORATION SBIC A notice has been issued g1v1ng interested persons until September 27 to request a hearing on an application filed by The Franklin Corporation SBIC for an order under Section 8(f) of the Investment Company Act declaring that it has ceased to be an investment company. (ReI. IC-19668 - September 1) TYLER CABOT MORTGAGE SECURITIES FUND, INC. A notice has been issued giving interested persons until September 27 to request a hearing on an application filed by Tyler Cabot Mortgage Securities Fund, Inc. for an order under Section 8(f) of the Investment Company Act declaring that it has ceased to be an investment company. (ReI. IC-19669 - September 1) 2 NEWS DIGEST, September 2, 1993 .... '_ ... , .... BOLDING COMPANY ACT RELEASES THE SOUTHERN COMPANY, ET AL. An order has been issued authorizing Southern Company Services, Inc. (Services), a wholly-owned service subsidiary company of The Southern Company (Southern) to engage in financing. Services proposes to incur indebtedness and issue notes, through December 31, 1996, up to an aggregate principal amount of $200 million through borrowings from lenders, short- term or long- term borrowings under one or more revolving credit commitment agreements, short-term borrowings from banks (collectively, Borrowings), and/or borrowings from Southern. Southern proposes to guarantee the Borrowings of Services. (ReI. 35-25874) LISTING, DELI STING AND UNLISTED TRADING ACTIONS UNLISTED TRADING PRIVILEGES A notice has been issued g~v~ng interested persons until September 22 to comment on the application of the Chicago Stock Exchange for unlisted trading privileges in two over-the-counter issues, Nextel Communications and VLSI Technology, Inc., and an application to withdraw unlisted trading privileges in two over-the-counter issues, MTC Electronic Technologies Co. LTD and McCaw Cellular Communications, Inc. (ReI. 34-32824) SELF ....REGULATORY •.ORGANIZATIONS APPROVAL OF PROPOSED RULE CHANGE The Commission approved a proposed rule change submitted by the New York Stock Exchange (SR-NYSE-92-3l) to amend its rules relating to organizations controlled or guaranteed by members or member organizations. (ReI. 34-32823) ACCELERATED APPROVAL OF PROPOSED RULE CHANGE On August 17, the Municipal Securities Rulemaking Board filed with the Commission a proposed rule change (SR-MSRB-93-9) to extend for 18 months, through April 6, 1995, the Continuing Disclosure Information Pilot System. The pilot system accepts and disseminates voluntary submissions of official disclosure notices relating to outstanding issues of municipal securities. (ReI. 34-32825) . 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; NEWS DIGEST, September 2, 1993 3 and a designation if the statement is a New Issue. S-3 BOISE CASCADE CORP, ONE JEFFERSON SQ, P.O.BOX 50, BOISE, ID 83728 (208) 384-6161 - 8,625,000 ($180,046,875) PREFERRED STOCK. (FILE 33-50089 - AUG. 26) (BR. 8) S-6 CENTRAL EQUITY TRUST UTILITY SERIES 26, 201 PROGRESS PKWY, CIO UNISON INVESTMENT TRUST LTD, MARYLAND HEIGHTS, MD 63043 - INDEFINITE SHARES. (FILE 33-50091 - AUG. 26) (NEW ISSUE) S-3 INTERNATIONAL BUSINESS MACHINES CORP, OLD ORCHARD RD, ARMONK, NY 10504 (914) 765-1900 - 6,500,000 ($279,500,000) COMMON STOCK. (FILE 33-50095 - AUG. 26) (BR. 13) S8-2 COUNTRY STAR RESTAURANTS INC, 54 MUSIC SQUARE E, STE 305, NASHVILLE, TN 37203 (615) 726-3444 - 1,610,000 ($8,050,00D) COMMON STOCK. 2,615,000 (S653,750) WARRANTS, OPTIONS OR RIGHTS. 3,D35,OOO ($20,167,000) COMMON STOCK. UNDERWRITER: GOLDMEN A S & CO INC. (FILE 33-67526-A - AUG. 17) (8R. 11 - NEW ISSUE) SB-2 LEADING EDGE EARTH PRODUCTS INC, 410 WEST ENTERPRISE RD, SHELTON, WA 98584 (206) 456-3456 - 10,328,530 ($32,657,060) COMMON STOCK. (FILE 33-67656-S - AUG. 19) (BR. 9 - NEW ISSUE) S-1 SPRECKELS INDUSTRIES INC, 4234 HACIENDA DR, PLEASANTON, CA 94588 (415) 460-0840 - 70,000,000 ($70,000,000) STRAIGHT BONDS. (FILE 33-67740 - AUG. 23) (8R. 3) S-3 BEST BUY CO INC, 4400 W 78TH ST, BLOOMINGTON, MN 55435 (612) 896-2300 - 125,000,000 ($125,000,000) STRAIGHT BONDS. UNDERWRITER: