Guest Post by Nicolas Morgan of DLA Piper Rudnick Gray Cary:

If the SEC thought it would gain home court advantage by asking Congress to allow monetary penalties to be awarded in administrative proceedings under Sarbanes-Oxley, the DC Circuit has set the record straight. On November 15, 2005, in The Rockies Fund v. SEC, the DC Circuit scolded the SEC for arbitrarily and capriciously awarding "the harshest available penalties" against the Funds' directors without any showing that their conduct "created a significant risk of substantial loss to others." 

The SEC accused the Fund of mischaracterizing and overvaluing certain holdings on its SEC filings, but the SEC failed to demonstrate in the administrative proceeding that such conduct put any investors at risk of loss. Sarbanes-Oxley permitted the SEC to seek civil penalties in an administrative proceeding presided over by an SEC administrative law judge rather than in a federal court action. However, the DC Circuit confirmed that the SEC must make the same evidentiary showing to obtain civil penalties no matter which forum the SEC brings its enforcement action in.

My post from January 4, 2005 entitled "2004: The Year in Review" was selected to appear in a new book called "BlawgWorld 2006: Capital of Big Ideas," which collected and published posts from 51 of the "most influential" law-related blogs.  To see what my section of the book looks like, click here.

A free copy of the entire book can be obtained by registering here.

Why is that when the SEC wins a litigated case it issues a Litigation Release about the victory and posts it on its website (see this example), but when the SEC loses a case (like this one yesterday against Richard "Bulletproof" Scrushy)... nothing?

I think that question raises another interesting question: What is the purpose of the SEC's Litigation Releases and of the Litigation Release page of the SEC's website?  Are they supposed to be informational? If so, then you would think that all court decisions, both favorable and unfavorable, would be posted. 

Or are they intended to be promotional for the SEC's Enforcement program?  If so, then perhaps the SEC should make it clear on the website that its lengthy list of Litigation Releases is not a complete list and add something to the effect that "The Litigation Releases listed below are limited to cases with outcomes deemed favorable to the SEC."

As discussed here, Ahold's agreement to settle the securities class action against for $1.1 billion is the 5th largest settlement in history.  The company seems to be taking great comfort from the fact that these four other larger settlements exist.  As discussed in this article from the Daily Telegraph, Ahold Executive board member Peter Wakkie

said yesterday the settlement was fair to US investors and other shareholders and to the company itself: "It is a substantial compensation for shareholders of between $1 and $1.30 per share. This is not so high that it will bring Ahold into problems.

"Other lawsuits have been settled for well over $2 billion so we are happy we are having to pay an amount that's south of that."

So the new standard has been set for defendants--if any other company has settled any other, unrelated lawsuit for more than you are agreeing to settle for... you should be happy!  Plaintiffs' lawyers, I think this should work out just fine for you.

The ABA's Section of Litigation has organized what should be an interesting program on "Pleading and Proving Loss Causation in Securities Class Actions Post Dura Pharmaceuticals."  A panel consisting of plaintiffs' counsel, defense counsel and a damages expert will cover subjects including:

• How must loss causation be pled in order to meet the standard?
• Must a specific corrective disclosure that causes a stock drop be alleged?
• Does the Dura decision encourage issuers to delay or bury harmful disclosures in order to make proof of loss causation more difficult?
• How does the decision affect the calculation of damages?

Considering that I've been "answering" all the loss causation questions sent my way by reporters by saying "I have no idea, call Lyle Roberts," I think I probably need to sign myself up!

What in the world can be done about the recurring problem of people trying to trade on advance copies of Business Week?  See the bottom of this post if you need the history, but is it fair to say that the "Inside Wall Street" column in Business Week has wreaked more insider trading havoc than any other information source in the world?  To my knowledge, the lengthy list of "Business Week defendants" includes someone from just about every point in the distribution chain-- printing, distribution, U.S. postal delivery and so on.  It is the catnip of the securities enforcement world.

Clearly, humans are incapable of resisting the lure of trading on advance copies of Business Week.  So now what?   What level of security will protect us from this scourge?  Should Business Week be published and distributed out of Fort Knox?  Should it receive the same Code Red-level of security as the orange juice "Crop Report" in Trading Places?  Hannibal Lechter-level security?

According to news reports, Ahold has agreed to settle the securities class action filed against it for $1.1 billion.  The SCAS database shows that when it becomes final, this will be the 5th largest settlement in history behind only Enron ($7,144,500,000), WorldCom ($6,156,100,670 ), Cendant ($3,186,500,000) and AOL Time Warner ($2,650,000,000).  Indeed, the total settlement amount in this case may still rise further, as the plaintiffs reportedly intend to pursue their claims against Ahold's former accountants, Deloitte & Touche, in the case.

Investment News has this article offering analysis of the ILR study previously discussed at length here and elsewhere on SLW.  The article includes the following quotes from me:

Some involved in tracking securities litigation question the study's results. "It's a strange way to look at it," commented Bruce Carton, vice president of Securities Class Action Services, a service offered by Institutional Shareholder Services Inc. in Rockville, Md., that tracks securities litigation and files claims for about 100 institutions.

He cites as an example losses of billions of dollars by the New York State Common Retirement Fund in Albany as a result of fraud perpetrated by WorldCom Inc., now MCI Inc. of Ashburn, Va. "They lost that money," Mr. Carton said. "They bought WorldCom securities and took a huge hit. The premise of the study appears to be that somewhere else they were the beneficiaries of holding inflated stock that that they sold at a good time. Who's to say that that's true or not? In any individual case, you're never going to know."

Further, Mr. Carton argued, large institutional investors invest money for individuals. "A pension fund or a mutual fund ultimately is making money to distribute to you and I."

I'm still waiting for some explanation why the second point above--that institutions  such as pension funds and mutual funds are aggregations of individual investor interests--does not undercut the study's conclusion that individual investors get the "short end of the stick" because, unlike institutions, they are unlikely to be sufficiently diversified  to get enough of the "'winning' transactions (i.e., from selling a security at what is alleged to be an artificially inflated price)" to offset their losses from "losing" transactions caused by securities fraud. 

The article also notes that the ILR's goal is to advance legislation dealing with securities litigation, and is looking at areas such as "how damages are calculated in securities class actions; stopping discovery proceedings while defendants' motions to dismiss cases are pending; requiring lead plaintiff's attorneys to bid competitively to be named lead counsel in class actions; as well as ways to better distribute funds to individual investors." 

I think all of these areas are worthy of some real scrutiny (although discovery already is supposed to be stayed under the PSLRA while a motion to dismiss is pending).  I just don't find the ILR study (as I understand it) to be a real red flag indicating that securities litigation reform is necessary.  To me, it seems like another reminder to investors of the importance of diversification.

Trust me when I tell you that almost nothing would prompt me to blog from home, on Thanksgiving Day, but how can I possibly resist posting about this development in the Sonja Anticevic case that ties together about 10 past posts?  Answer--I can't.

Remember the trader who followed my handy 5-point plan to getting oneself sued by the SEC by, among other things, buying massive quantities of out-of-the money call options in advance of the Reebok merger? 

And remember how the trading wound up being in the account of a 63-year-old Croatian woman named Sonja Anticevic, a retired tailor/cleaning lady living on a monthly pension of 1,600 kuna ($263) who claimed she had  "never bought a stock and I have no idea how that works" (which prompted speculation that just maybe Anticevic's 25-year-old nephew, a broker in New York, may have played some role....)?

Well, according to this article, the FBI has now arrested David Pajcin, Anticevic's nephew, and accused him of insider trading.  Yes, you say, we all saw that coming.  So what?  Why post this on Thanksgiving, Carton? 

Well, let me ask you--did you see this coming?  According to the article, Pajcin is accused of committing insider trading by  "obtaining advance access to Business Week's Inside Wall Street column and buying 10 separate stocks ahead of the column's publication."

That's right.  Trading on advance copies of Business Week--the doomed insider trading scheme that I have blogged about since August 2003.  The "legendarily unsuccessful" tactic that I listed as #1 on my original "Do Not Use" list for securities fraudsters, and which I most recently labeled the "gold standard of what not to do."  It's back again, when and where I least expected it. 

Now if we just can find some way to link all of this up with the Estonian "spider" hackers....

Happy Thanksgiving to all.

As the website says, these "make the perfect holiday gift"... perhaps for that lawyer you've been trying to push over the edge into insanity.

Thanks to Jim Calloway's Law Practice Tips Blog for the link.

Update:  The SEC logo link works again.  I take full credit.  And no, I was not hallucinating about the link not working in the first place.  I have witnesses.

Now, I don't want to get off on a rant here, and it is entirely possible that I'm hallucinating all of this, but I'm pretty darned sure that for the last 10 years or so the SEC logo in the upper left-hand corner of its website has been a hyperlink that takes you back to the front page of www.sec.gov.  So if you were buried deep in the Litigation Releases or something and wanted to extricate yourself and return to the main page, you just clicked on the logo and back you went.

Now?  The logo is no longer a hyperlink.  You need to locate and click on the tiny, 6-point font "Home" text to get back.  This is a waste of a second or two of my life each day and is clearly going to push up the over/under date on my developing Carpal Tunnel syndrome in my mouse hand by a day or more.

And yes, I know I've already wasted many more seconds by typing this out then I'll lose to the SEC because of this change, but hey, I'm doing it for you all. 

Of course, that's just my opinion.  I could be wrong.

p.s. Can someone please confirm that I'm not hallucinating here?

The PSLRA Nugget has been tracking many of the post-Dura outcomes such as this one and that one and concludes in this post about a recent decision in the Cisco Systems litigation that

There's seems to be two trends emerging in loss causation. The first is that over the past seven months, Defendants who already lost motions to dismiss in securities class actions have been filing Rule 12(c) motions to dismiss based on Dura. This has resulted in the second trend -- Defendants losing those motions.

What say you, 10b-5 Daily?

Following this GAO report that showed that although the SEC had collected $4.8 billion through its enforcement efforts under the Fair Funds provision of Sarbanes-Oxley, it had returned just $60 million of that amount to investors, at least two members of Congress reportedly called for congressional hearings to be held on the issue of this lag (see this post).  I assume that Rep. John Dingell was one of those congressmen because this article in today's NY Daily News states that

Securities and Exchange Commission chairman Christopher Cox said he's determined to simplify and speed the distribution of money to investors hurt by corporate misconduct.

"I am attacking this problem head-on," Cox wrote in a letter to Rep. John Dingell (D-Mich.) early last week.

"The process of returning money to injured investors has, in my view, been rendered needlessly complex," Cox added.

If anyone has a copy of Chairman Cox's letter, or has any information on the SEC's efforts to simplify this process, please send it to me and I will post it here.

News organizations around the world have fallen in line in support of this blog's moratorium on the term "Mouse House" or "House of Mouse" as a supposed nickname for the Walt Disney Co.  But there's always gotta be a holdout, right?  Yes, Variety, I'm looking dead straight at you--is your flagrant noncompliance really necessary?  Do you want to be found to be in contempt of blog?

Variety...You're on notice!

"Pant cuffs go on the ON NOTICE board, replacing New York Intellectuals, who are officially now on the DEAD TO ME board." --Steven Colbert, The Colbert Report, November 17, 2005

Posted here is a must read article by Andrew Longstreth of the American Lawyer about the personalities, strategies, and turning points that led up to the $6+ billion settlement in the WorldCom securities class action.  If you thought that no one could write 10 interesting pages about securities litigation, this article proves you (and me) wrong.

Add Merchant Capital to the list of recipients of the Carl Spackler Total Consciousness Award ("And he says, 'Oh, uh, there won't be any money, but when you die, on your deathbed, you will receive total consciousness.' So I got that goin' for me, which is nice").  It joins past winners such as Arthur Andersen and Kirk Kerkorian. 

According to this article, the SEC sued Merchant for fraud in 2002, alleging that partnership interests in a company Merchant formed to buy and collect on credit-card debts were "securities" and that Merchant, therefore, was selling "unregistered securities."  In  mid-2003, however, the federal court in Atlanta denied the SEC's request for an injunction and concluded that the interests weren't securities under federal law.  Last week, the article states, the court further concluded that Merchant had properly disclosed risks to investors and its principals acted "in good faith" at all times.

Unfortunately, Merchant's victory appears to have come too late to do it any good--Merchant says it is closing its doors at the end of year, primarily because

"large national issuers of credit weren't willing to do business with the firm after three years of bad publicity linked to the SEC case. 

Company principals Steven C. Wyer and Kurt Beasley said banks were less willing to sell their firm credit-card debt be-cause of the long court battle, and that hurt returns for investors."

On the bright side, however, on its deathbed (which appears to be now, actually), Merchant will receive ... well, you know.

Back in April 2005, Bob Merritt, who had at that time been the CFO of Outback Steakhouse for over 15 years, dramatically resigned from the company during the quarterly conference call because of his resentment of the

increasingly negative regulatory environment in which we now operate. The recent lunacy over lease accounting, as an example, took me past the breaking point and has convinced me that the environment is not going to get any better any time soon.

I view the recent accounting fiasco as a complete failure of regulatory and other bodies which oversee financial accounting and reporting.

Merritt's resignation was discussed in detail at that time at Ideoblog and elsewhere.  Now Merritt is back with more in this article entitled "The Sarbanes-Oxley Act: A Personal View," in which he concludes by stating that he knows "of no seasoned public company CFO who has not thought of making a career change at this point."

A publication from the Manhattan Institute called "Trial Lawyers Inc." seems to be antagonizing Melvyn Weiss of Milberg Weiss fame to no end.  Yes, it was originally published over two years old but I just heard about it (don't get out much, sorry) and, according to this post from PointofLaw.com, as recently as this weekend Weiss

waved a copy of the Manhattan Institute's "Trial Lawyers Inc." report and denounced it and the Institute in colorful terms. At the same panel, National Association of Manufacturers president and former Michigan governor John Engler is said to have cited statistics from TLI in his prepared remarks.

This does not appear to be the first time that Weiss has engaged in waving/denouncing Trial Lawyers Inc., as discussed in this PointofLaw.com post from 2004.

For the uninitiated, the Trial Lawyers Inc. report creatively takes on the trial lawyers bar, likening it to a corporation that has mature business lines (class actions, asbestos, med mal), high growth products (mold, regulated industries) and new product development (fast food, etc.).  It even creates a mock org chart for the plaintiffs' bar, that lists Weiss as "Co-President, Class Action (Securities)", former VP candidate John Edwards as "President, Government Relations," and so on.  There are also some updated sections that appear to be from 2005, one of which is specifically devoted to securities litigation in California and concludes that

Although the plaintiffs' bar disingenuously claims its mission is to reform management and protect the rights of the "little guy," empirical evidence shows that securities class actions' settlement values are unrelated to the merits of the underlying cases,[105] and the money to pay settlements comes directly from the corporate coffers of the company in which small shareholders have invested.[106] Securities claims are thus often nothing more than a mechanism for transferring assets from one group of shareholders to another, with a 30 percent cut for Trial Lawyers, Inc.

Can't imagine why Weiss dislikes it so much!

The Washington Post reports that Freddie Mac will need to restate its profit for the first half of 2005 by $220 million "because of an error caused by faulty accounting software."  The company restated $5 billion in previously reported earnings in 2003.

According to the article,

The error stems from a flaw in the accounting program Freddie Mac has used since 2001. In a recent review of the company's accounting system, Freddie Mac employees realized the software was routinely overstating the amount of interest that the housing finance company earned from certain types of mortgage-backed securities that it bought for investment purposes, spokesman Michael Cosgrove said.

I just want to know--Why is it that accounting software glitches only seem to cause profit to be overstated and never understated?  Will someone please let me know the first time that they see a company announce that it is adding profit to its financials due to a software glitch?

The following article appeared in the November 2005 SCAS Alert:

A Call for Clarity

When it comes to filing claims in securities class action settlements, the question that comes up over and over again is also the most basic one:

Whose responsibility is it?

There will be over $7 billion in final securities class action settlements in 2005--who is responsible for recovering that money for the underlying accountholders of institutional investors and asset managers? Is it the clients themselves? The investment adviser? The custodian? None of them? All of them? The unsettling answer is that no one knows definitively, and this uncertainty combined with the threat of lawsuits, ambiguous messages from the SEC, and an increasing barrage of questions from clients is causing institutions a fair amount of heartburn.

This question was, not surprisingly, a topic of discussion at the securities class action panel that was part of the ISS annual conference on Oct. 19-21. After debating who, if anyone, has the fiduciary duty to file claims in securities class action settlements, the panel consisting of Baron & Budd's Randall Pulliam, Mintz Levin's Peter Saparoff, and the Investment Adviser Association's Karen Barr tried to answer an equally important off-shoot of this issue: Given the current state of confusion, what will need to occur for there ever to be clarity?

Our panelists offered different opinions on this. Mr. Saparoff offered the most startling solution, stating that he expects that eventually "some state securities regulator or attorney general will find an egregious case with millions of dollars not claimed and then pursue a criminal case," which will in turn create enormous pressure for the SEC to engage in rule-making.

Ms. Barr, general counsel of the IAA, optimistically stated that she believed that "eventually, everyone will take care of this by contract." In the meantime, Ms. Barr urged investment advisers to go back to each of their clients to clarify these duties and responsibilities. Ms. Barr added that to the extent the SEC is imposing expectations upon investment advisers in this area (as it has done implicitly through its "fact-finding" and deficiency letters), "we think the SEC should have done a notice-and-comment rulemaking rather than a back-door rulemaking through the inspection process."

Finally, Mr. Pulliam, whose law firm filed the forty-plus lawsuits against mutual fund advisers in January 2005 over their alleged failure to file claims, stated that he expects the ultimate solution will be a "combination of litigation and regulation." He added that he is "cautiously optimistic that the SEC will continue down the road to expressly say that all investment advisers have an obligation to [file claims.]"

I agree with the common thread coming from these panelists--the ultimate solution to the current confusion is for the SEC to engage in rule-making to clearly determine who is, and who is not, responsible for filing claims in securities class action settlements. My sense is that the uncertainty that surrounds responsibilities in this area is one of the primary reasons that billions of settlement dollars are now being left on the table each year by institutional investors.

Clear rules will help blow the smoke away from what should be a "no-brainer" way for institutional investors to help themselves and their accountholders. As Mr. Saparoff stated, "It's not a just a duty; it's good business. For every penny spent [on filing claims], you get a dollar back."

Compliance Week has this interesting article entitled "Class Action And 'Opt Out' Lawyers Duke It Out" about the continuing spat (what it dubs the "He-Said, He Said") between Bernstein Litowitz and Lerach Coughlin over whose clients fared the best in the WorldCom class action and opt-out litigation (previously discussed here).  The article includes my "neutral observations":

Neutral observers say they are not surprised the two powerful law firms are sparring over the issue and trying to spin the analysis in their favor. Afterall, Lerach has been credited in general with getting dozens of institutions to opt out of the class-action.

"This is kind of the report card," asserts Bruce Carton, vice president of ISS of its Securities Class Action Services, adding, "calculating losses is an art, not a science."

                                                                 ***

Carton adds that it is important for future potential plaintiffs and would-be defendants to know whether the opt-out group fared better. "There will be another WorldCom one day," Carton adds, and the lead counsel and some outside counsel will be trying to make the case that they will fare better in a lawsuit or settlement.

And don't miss the "Bruce Carton Discount" offered in the upper-right corner of the article (not to be confused with the "Schrempp Discount").

All together now, to the tune of John Mellencamp's "R.O.C.K. in the U.S.A."....

They come from Baltimore City but they come from no other towns
Beat up computers with lawyers on the keyboards goin' crack, boom, bam

{Refrain}
R.S.S. in the U.S.A.O.
R.S.S. in the U.S.A.O.
R.S.S. in the U.S.A.O., yeah, yeah
R.S.S. in the U.S.A.O.

Alright--kindly forget that.  Horrible idea. 

But still--Let's give some credit to the U.S. Attorney's Office for the District of Maryland for being a first-mover in the blog world.  It appears that the Office's new blog--entitled the U.S. Attorney's Office District of Maryland Press Blog--is its new way of issuing press releases and communicating with the public about its cases. 

And of course, like all decent blogs, it has an RSS feed so that people who want immediate notification of what the Office is announcing day-to-day can subscribe to the feed and get instant updates.  RSS in the USAO.

SEC, care to follow suit?  It seems like a no-brainer to have an RSS feed of the SEC Litigation Releases, etc.  I'll be your first subscriber.

Thanks to White Collar Crime Prof Blog for discovering the USAO blog.

Let's say you are a mid-level sales executive with an important client that is a public company.  In its effort to make its numbers, your client asks/demands/pressures you to sign a letter going to its auditors that misstates the amount of rebates or other money owed by your company to the public company.  Perhaps the public company even suggests that if you do not, your sales relationship with it will suffer. 

What are the risks to you if you agree to do this?  Beginning in 2003, the SEC began to aggressively sue "facilitators"--third parties alleged to have knowingly assisted in an issuer's fraudulent revenue recognition practices (see this post, for a summary and numerous links).  More recently, however, the stakes have risen even higher as the DOJ has begun prosecuting facilitators, as well. 

We saw indictments in January 2005 of two AOL executives in connection with an alleged scheme to boost PurchasePro's reported sales by forging and back-dating contracts and providing false documents to company auditor Arthur Andersen.  Yesterday, as discussed in this article, the DOJ announced guilty pleas from seven former suppliers of U.S. Foodservice Inc., who

agreed to plead guilty yesterday to conspiracy charges for helping executives at the company meet earnings targets by inflating promotional allowances by $800 million from 2000 to 2003.

The men, who were mostly mid-level sales executives or food brokers at small firms in the Midwest and Northeast, surrendered to federal authorities yesterday morning. They face a maximum of five years in prison and a $250,000 fine when they are sentenced.

                                                                                     ***

Each of the men allegedly submitted false letters to U.S. Foodservice's independent auditors, either misstating how much in rebate payments the food distribution company earned or how much it was owed by the suppliers. Yesterday's guilty pleas mark the first public action in the case since January, when federal prosecutors in New York charged nine other suppliers with wrongdoing.

The seven men have also settled cases brought against them by the SEC, as announced here.

The SCAS database indicates that the $400 million Qwest Communications International settlement, if approved, will be the 11th largest securities class action settlement on record (of cases filed January 1, 1996 to present).   Our Top 25, including tentative settlements (in red) such as Qwest, is listed below.  Notably, the price of admission to crack the Top 25 has now reached $150 million.

One group that is not so happy about the SEC's press release yesterday concerning an Estonian firm's alleged success in hacking into Business Wire to steal press releases before they became public is ... you guessed it... Business Wire. 

Business Wire issued its own press release yesterday stating that its news releases had not been accessed prior to distribution and that "some of the SEC statements in its complaint have been misinterpreted."  Business Wire was even more direct in comments made to Reuters in this article, stating that the SEC's statement contained "blatant inaccuracies" and that "at no time did anyone access confidential Business Wire press releases."  Rather, Business Wire stated, certain individuals gained access to a "screen shot of limited background information" that did not include the content of news releases.

The Reuters article includes a response from the SEC's Associate District Administrator David Horowitz, who disagreed with Business Wire.  Horowitz stated that "the defendants saw enough to know the purpose, substance and time of the release."

While the SEC complaint does not allege that the defendants saw the complete press releases, "there is no question that their computers were infiltrated," Horowitz said.

"They made investment decisions based on what they were able to glean from Business Wire's secure site," Horowitz said. "Whatever was on that screen shot led them to make a trading decision that was almost always correct. They did it 360 times at least with 200 different companies at least."

After blasting the SEC for the "blatant inaccuracies" in its press release, Business Wire made sure to add that  "we were of enormous help in assisting the SEC crack this case."

As with SEC Instant Classic #1, today's Instant Classic is so original that even the SEC had to compliment the bad guys' effort (assuming "clever and pernicious" is a compliment).

According to this SEC press release issued today, the SEC filed an emergency action today against an Estonian financial services firm and two of its employees for conducting an alleged fraudulent scheme "involving the electronic theft and trading in advance of more than 360 confidential press releases issued by more than 200 U.S. public companies," resulting in at least $7.8 million in illegal trading profits.

How did they supposedly steal 360 confidential press releases?  How did they earn the "clever and pernicious" description from the SEC?

According to the SEC,

in June 2004, [the Estonian firm] became a client of Business Wire for the sole purpose of gaining access to Business Wire's secure client website. Once defendants had access, they surreptitiously utilized a software program, a so-called "spider" program, which provided unauthorized access to confidential information contained in impending nonpublic press releases of other Business Wire clients, including the expected time of issuance.

The complaint further alleges that the information fraudulently stolen by the defendants has allowed them to strategically time their trades around the public release of news involving, among other things, mergers, earnings, and regulatory actions. Using several U.S. brokerage accounts, the defendants have bought long or sold short the stocks of the companies whose confidential press release information they have stolen, and purchased options to increase their profits.

I'd love to know the story behind how the SEC finally caught these guys.  However they did it, kudos to the SEC for figuring this one out.