[Federal Register Volume 68, Number 128 (Thursday, July 3, 2003)]
[Notices]
[Pages 39991-39992]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-17001]


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SECURITIES AND EXCHANGE COMMISSION


Sunshine Act Meetings

    Notice is hereby given, pursuant to the provisions of the 
Government in the Sunshine Act, Pub. L. 94-409, that the Securities and 
Exchange Commission will hold the following meetings during the week of 
July 7, 2003:
    A Closed Meeting will be held on Tuesday, July 8, 2003 at 2 p.m., 
and an Open Meeting will be held on Thursday, July 10, 2003, at 2 p.m. 
in Room 1C30, the William O. Douglas Room.
    Commissioners, Counsel to the Commissioners, the Secretary to the 
Commission, and recording secretaries will attend the Closed Meeting. 
Certain staff members who have an interest in the matters may also be 
present.
    The General Counsel of the Commission, or his designee, has 
certified that, in his opinion, one or more of the exemptions set forth 
in 5 U.S.C. 552b(c)(3), (5), (7), (9)(B) and (10) and 17 CFR 
200.402(a)(3), (5), (7), (9)(ii) and (10), permit consideration of the 
scheduled matters at the Closed Meeting.
    The subject matter of the Closed Meeting scheduled for Tuesday, 
July 8, 2003 will be:
    Institution and settlement of administrative proceedings of an 
enforcement nature;
    Institution and settlement of injunctive actions;

[[Page 39992]]

    Formal orders of investigation;
    Post-argument discussion; and
    Opinions.
    The subject matter of the Open Meeting scheduled for Thursday, July 
10, 2003 will be:

    1. The Commission will hear oral argument on an appeal by the 
Division of Enforcement and the Office of the Chief Accountant from 
an initial decision of an administrative law judge. The law judge 
found that Michael J. Marrie and Brian L. Berry did not engage in 
improper professional conduct within the meaning of Rule of Practice 
102(e) during the course of an audit by the accounting firm of 
Coopers & Lybrand LLP (Coopers) of the 1994 fiscal year financial 
statements of California Micro Devices, Inc. (CMD), a public 
company. Marrie, a certified public accountant and former partner 
with Coopers, was the engagement partner for the audit of CMD. 
Berry, a certified public accountant and former manager with 
Coopers, was the audit manager for the CMD audit.
    The Division alleges that Marrie and Berry recklessly failed to 
comply with applicable standards of professional conduct in their 
audit of CMD's 1994 fiscal year financial statements in three areas: 
(a) CMD's write-off of $12 million of accounts receivable; (b) 
confirmation of CMD's accounts receivable, and (c) CMD's sales 
returns and allowances for sale returns. The Division maintains that 
Marrie and Berry recklessly failed to conduct the audit in 
accordance with Generally Accepted Auditing Standards as a result of 
their failure to exercise professional skepticism and to obtain 
sufficient competent evidential matter with respect to these audit 
areas.
    Among the issues likely to be considered are:
    a. Whether respondents committed the alleged violations; and
    b. if so, whether sanctions should be imposed in the public 
interest.
    2. The Commission will also hear oral argument on an appeal by 
Michael A. Flanagan, Ronald O. Kindschi, and Spectrum 
Administration, Inc. of an initial decision of an administrative law 
judge. During the period covered by this Commission proceeding, 
Flanagan and Kindschi were registered representatives with FSC 
Securities Corporation, a registered broker-dealer. Kindschi also 
was associated with Spectrum Administration, a registered investment 
adviser.
    The law judge found that Flanagan and Kindschi 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 thereunder. 
The law judge also found that Spectrum Administration violated 
Sections 206(1) and (2) of the Investment Advisers Act of 1940, and 
that Kindschi, in his role as an associated person of Spectrum 
Administration, aided and abetted Spectrum Administration's 
violations. The law judge concluded that the Respondents committed 
fraud by steering certain customers to purchase Class B shares in 
various mutual funds without disclosing all material facts regarding 
the costs associated with those purchases, thereby depriving these 
customers of the discounts on sales charges that would have been 
applicable to their investments had the customers purchased Class A 
shares in like amounts.
    Based on these violations, the law judge suspended Flanagan from 
association with any broker or dealer for four months, and ordered 
him to pay a civil money penalty of $10,000 and to disgorge $12,469. 
The law judge suspended Kindschi from association with any broker, 
dealer, or investment adviser for three months, and ordered him to 
pay a civil money penalty of $7,500, and to disgorge $3,762. The law 
judge also censured Spectrum Administration and imposed cease-and-
desist orders on Flanagan, Kindschi, and Spectrum Administration.
    Among the issues likely to be considered are:
    a. Whether respondents committed the alleged violations; and
    b. if so, whether sanctions should be imposed in the public 
interest.

    At times, changes in Commission priorities require alterations in 
the scheduling of meeting items. For further information and to 
ascertain what, if any, matters have been added, deleted, or postponed, 
please contact the Office of the Secretary at (202) 942-7070.

    Dated: June 30, 2003.
Jonathan G. Katz,
Secretary.
[FR Doc. 03-17001 Filed 6-30-03; 4:36 pm]
BILLING CODE 8010-01-P