The SEC barred an Arizona-based mutual fund manager from the securities industry for failing to follow the investment objectives of a stock mutual fund managed by his firm, leading to the fund’s collapse. The SEC found that the prospectus of Z Seven Fund (ZSF) stated that it sought long-term capital appreciation and restricted the use of options. Nonetheless, beginning in September 2009, the fund invested in put options for speculative purposes contrary to the fund’s stated investment policy. The losses from options trading and the ensuing investor redemptions ultimately resulted in ZSF’s

The SEC announced it filed a civil action against Lee S. Rosen, the former Chairman of the Board of publicly traded New Generation Biofuels Holdings, Inc., alleging that he fraudulently evaded the reporting requirements concerning his ownership interest in New Generation shares held in five separate trusts in violation of the antifraud provisions and beneficial reporting provisions of the federal securities laws. According to the complaint, at various times from June 2007 through May 2010, Rosen, directly or indirectly profited from the sale of New Generation shares held in two of the five

The CFTC Division of Swap Dealer and Intermediary Oversight ("DSIO") issued a letter providing that DSIO will not recommend that the CFTC take action against certain CPOs, CTAs or any principal or associated person thereof who will be required to register with the CFTC pursuant to the recent amendment to CFTC Rule 4.5 or the rescission of Rule 4.13(a)(4). The no-action letter provides that the relevant entity or individual will not be required to be actually registered by the December 31 deadline, so long as an application to register has been filed by the deadline. See: CFTC Letter 12-68

On December 21, 2012, the Commodity Futures Trading Commission ("CFTC") approved a final exemptive order (the "Order") providing time-limited relief from the cross-border application of certain swaps provisions of Title VII of the Dodd-Frank Act and CFTC regulations. The Order provides an interim definition of "U.S. person," and also clarifies several outstanding calculation issues for non-U.S. persons assessing their status as a swap dealer ("SD") or major swap participant ("MSP") under the CFTC's de minimis and MSP threshold tests. Additionally, the Order permits registered non-U.S. persons

NOTE: THIS NEWS ITEM WAS ORIGINALLY POSTED ON THE CABINET ON DECEMBER 17, ALBEIT WITHOUT THE FINAL RULE ATTACHED AS IT WAS NOT YET AVAILABLE. THE DESCRIPTION AND COMMENTS BELOW ARE FROM THE ORIGINAL NEWS ITEM, BUT WE HAVE ALSO ATTACHED THE FINAL RELEASE. IN ADDITION TO THE DISCUSSION BELOW, WE HAD ALSO PUBLISHED A BRIEF CAUTION WARNING FIRMS OF THE SOME OF THE STATE LAW REQUIREMENTS ON TAPING OF PHONE CONVERSATIONS, TO WHICH WE LINK HERE. The CFTC announced that it has approved a final rule to expand the CFTC's recordkeeping requirements. The announced rule change will amend CFTC Rules 1.35(a)