SEC NEWS DIGEST Issue 2002-43 March 5, 2002 ENFORCEMENT PROCEEDINGS ELLSWORTH MCCLAWS AND ALAN CLAGG BARRED On March 4, Ellsworth Wayne McClaws and Alan Clagg were barred from association with any broker or dealer. The sanction was ordered in an administrative proceeding before an administrative law judge. McClaws and Clagg were permanently enjoined from future violations of Section 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 and Rule l0b-5 thereunder in the United States District Court for the Northern District of Texas. McClaws and Clagg declined to defend the administrative proceeding. Based on the permanent injunction, the law judge barred McClaws and Clagg from association with any broker or dealer. (Rel. 34- 45498; File No. 3-10535) SEC ALLEGES FRAUD AGAINST PRINCIPALS OF DAYTONA BEACH BROKER RELATIONS FIRM THAT REAPED ILLEGAL PROFITS OF MORE THAN $3.4 MILLION IN CONNECTION WITH PUMP AND DUMP SCHEMES The Commission announced that on February 27, 2002 it filed a federal civil action against David S. Heredia (Heredia), 31, of Apopka, Florida and Raylen Parra (Parra), 24, of Orlando, Florida. Heredia and Parra were the principals of a now defunct broker relations firm Norrstar Advertising, Inc. (Norrstar) located in Daytona Beach, Florida. According to the SEC's complaint, from approximately September 1998 to September 1999, at the direction and under the supervision of Heredia and Parra, Norrstar's staff of "broker relations executives" disseminated false and misleading information to the investment community concerning the stock of at least five public companies quoted on the Over-the-Counter Bulletin Board. The complaint further alleges that the broker relations executives at Norstarr made hundreds of thousands of telephone calls to registered representatives of registered broker-dealers, and sent faxes of "bullet sheets" -- prepared by Heredia and Parra -- making false and misleading material misrepresentations and omissions about the public companies touted. The complaint also alleges that while touting the stock of the public companies, Norrstar's principals, Heredia and Parra, reaped illegal profits of more than $3.4 million by engaging in the practice of "scalping" -- selling the stock of the public companies they were simultaneously recommending to others to purchase. Finally, the complaint alleges that Heredia and Parra also failed to disclose the compensation they received for their touting services. As a result, the Commission charges Heredia and Parra with violations of Section 17(a) and 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is also seeking in its lawsuit a permanent injunction, disgorgement of ill-gotten profits and a civil money penalty against Heredia and Parra. [SEC v. David S. Heredia and Raylen Parra, Case No. 6:02-CV-218- ORL-19-JGG, M.D. Fla., filed February 27, 2002] (LR-17390) INVESTMENT COMPANY ACT RELEASES NUVEEN EXCHANGE-TRADED INDEX TRUST, ET AL. An order has been issued on an application filed by Nuveen Exchange- Traded Index Trust, et al. The order permits an open-end management investment company, whose portfolios will consist of the component securities of certain domestic or foreign equity securities indices, to issue shares of limited redeemability that will trade in the secondary market at negotiated prices. The order also permits certain affiliated persons of the portfolios to deposit securities into, and receive securities from, the portfolios, and certain portfolios to pay redemption proceeds more than seven days after the tender of shares for redemption under certain circumstances. (Rel. IC-25451 - March 4) HOLDING COMPANY ACT RELEASES EXELON CORPORATION, ET AL. A notice has been issued giving interested persons until March 26 to request a hearing on a proposal by Exelon Corporation (Exelon), a registered holding company, and four subsidiary companies, Exelon Ventures Company, LLC, Exelon Enterprises Company, LLC, Exelon Generation Company, LLC, and Exelon Energy Delivery Company, LLC, (collectively, Applicants). Applicants request the following authority for the period ending June 30, 2005: 1) to expend up to $500 million in the aggregate outstanding at any time on development and administrative/management activities related to exempt wholesale generators, foreign utility companies, exempt telecommunications companies, subsidiaries permitted under rule 58 of the Act, and energy- related subsidiaries operating outside the United States (collectively, Permitted Nonutility Investments); 2) to expend up to $500 million to construct or acquire energy assets incidental and related to its business as an electricity and energy commodities marketer/broker or to acquire the securities of existing or new companies substantially all of whose physical properties consist of energy assets; 3) to acquire the securities of entities that would be created and organized exclusively for the purpose of acquiring, holding or financing or facilitating the acquisition of Permitted Nonutility Investments or engaging in development or administrative and management activities; 4) to undertake internal reorganizations of existing and Permitted Nonutility Subsidiaries and businesses; and 5) to engage in energy management and consulting services anywhere outside the United States and energy marketing activities in Canada and Mexico. (Rel. 35-27493) SELF-REGULATORY ORGANIZATIONS IMMEDIATE EFFECTIVENESS OF PROPOSED RULE CHANGES A proposed rule change (SR-NASD-2002-20) and Amendment No. 1 thereto filed by the National Association of Securities Dealers through its subsidiary, The Nasdaq stock Market, Inc., relating to the use of share caps to comply with the shareholder approval rules of Nasdaq, have become immediately effective pursuant to Rule 19b-4 under the Securities Exchange Act of 1934. (Rel. 34-45492) A proposed rule change filed by the National Association of Securities Dealers (SR-NASD-2002-31) under Section 19(b)(1) of the Securities Exchange Act of 1934 amending NASD Rule 4710, Participant Obligations in NNMS, has become effective under Section 19(b)(3)(A) of the Act. Publication of the proposal is expected in the Federal Register during the week of March 4. (Rel. 34-45496) ACCELERATED APPROVAL OF PROPOSED RULE CHANGE The Commission issued notice of filing and granted accelerated approval to a proposed rule change and Amendment No. 1 thereto (SR-CBOE-2002-07) submitted under Rule 19b-4 of the Securities Exchange Act of 1934 by the Chicago Board Options Exchange relating to the automatic execution of incoming RAES orders against manual quotes. Publication of the proposal is expected in the Federal Register during the week of March 4. (Rel. 34-45490) PROPOSED RULE CHANGE The National Association of Securities Dealers has filed a proposed rule change (SR-NASD-2002-27) under Section 19(b)(1) of the Securities Exchange Act of 1934 amending NASD Rule 3070 concerning the reporting of criminal offenses by Members and persons associated with a Member to the NASD. Publication of the proposal is expected in the Federal Register during the week of March 4. (Rel. 34-45493) WITHDRAWALS A notice has been issued giving interested persons until March 20 to comment on the application for withdrawal from listing and registration on the Pacific Stock Exchange of BellSouth Corporation Common Stock, $1.00 par value. (Rel. 34-45494) A notice has been issued giving interested persons until March 20 to comment on the application for withdrawal from listing and registration on the Boston Stock Exchange of BellSouth Corporation Common Stock, $1.00 par value. (Rel. 34-45495) An order has been issued granting the application of IPI, Inc. to withdraw its Common Stock, $.01 par value, from listing and registration on the American Stock Exchange, effective at the opening of business on March 5. (Rel. 34-45497) 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; and a designation if the statement is a New Issue. Registration statements may be obtained in person or by writing to the Commission's Public Reference Branch at 450 Fifth Street, N.W., Washington, D.C. 20549 or at the following e-mail box address: . In most cases, this information is also available on the Commission's website: . S-3 3DO CO, 100 CARDINAL WAY, REDWOOD CITY, CA, 94063, 6502613000 - 21,552,227 ($14,224,469.82) Equity, (File 333-83576 - Mar. 1) (BR. 03) S-8 BEAR STEARNS COMPANIES INC, 245 PARK AVE, NEW YORK, NY, 10167, 2122722000 - 288,914 ($15,731,367.00) Equity, (File 333-83580 - Mar. 1) (BR. 07) S-4 CYTYC CORP, 237 CEDAR HILL ST, MARLBOROUGH, MA, 01752, 5082638000 - 23,485,354 ($532,732,359.00) Equity, (File 333-83582 - Mar. 1) (BR. 36) SB-1 AURORA WIRELESS INC, 996 OLD EAGLE SCHOOL RD STE 1102, WAYNE, PA, 19087, 6102931405 - 1,300,000 ($91,000.00) Equity, (File 333-83584 - Mar. 1) (BR. ) S-8 VOIP TELECOM INC//, 1116-1030 W GEORGIA STREET, VANCOUVER BC V6E 2YE, CA, 92660, 6044696957 - 2,000,000 ($20,000.00) Debt Convertible into Equity, (File 333-83594 - Mar. 1) (BR. 05) S-8 ATR SEARCH CORP, 29 E 31ST STREET, 2ND FLOOR, NEW YORK, NY, 10016, 2127256150 - 1,825,000 ($209,875.00) Equity, (File 333-83596 - Mar. 1) (BR. 09) S-8 SCAN OPTICS INC, 169 PROGRESS DR, MANCHESTER, CT, 06040, 8606457878 - 1,115,000 ($267,600.00) Equity, (File 333-83598 - Mar. 1) (BR. 03) S-3 IMH ASSETS CORP, 1401 DOVE STREET, SUITE 200, NEWPORT BEACH, CA, 92660, 9494753600 - 0 ($3,000,000,000.00) Asset-Backed Securities, (File 333-83600 - Mar. 1) (BR. 05) S-1 LIPOSCIENCE INC, 700 SPRING FOREST RD, SUITE 100, RALEIGH, NC, 27609, 9192121999 - 0 ($100,000,000.00) Equity, (File 333-83602 - Mar. 1) (BR. ) S-4 WELLS FARGO & CO/MN, 420 MONTGOMERY ST, SIXTH AND MARQUETTE, SAN FRANCISCO, CA, 94163, 6126671234 - 0 ($82,501,292.00) Equity, (File 333-83604 - Mar. 1) (BR. 07) S-3 PRICE LEGACY CORP, 17140 BERNARDO CENTER DRIVE, SUITE 300, SAN DIEGO, CA, 92128, 8586759400 - 0 ($500,000,000.00) Other, (File 333-83606 - Mar. 1) (BR. 08) S-8 EARFUL OF BOOKS INC, 907 W FIFTH STREET, SUITE 203, AUSTIN, TX, 78703, 5123432620 - 4,000,000 ($1,000,000.00) Equity, (File 333-83608 - Mar. 1) (BR. 04) S-8 TALARIAN CORP, 333 DISTEL CIRCLE, LOS ALTOS, CA, 94022-1404, 6509658050 - 0 ($880,225.92) Equity, (File 333-83610 - Mar. 1) (BR. 04) S-3 ANNUITY & LIFE RE HOLDINGS LTD, VICTORIA HALL, VICTORIA STREET, PO BOX HM 1262, HAMILTON, HM BERMUDA, D0, 00000, 4412951422 - 0 ($200,000,000.00) Debt Convertible into Equity, (File 333-83612 - Mar. 1) (BR. 01) S-3 MORGAN STANLEY DEAN WITTER & CO, 1585 BROADWAY, NEW YORK, NY, 10036, 2127614000 - 900,000,000 ($900,000,000.00) Other, (File 333-83616 - Mar. 1) (BR. 07) S-3D HIGHLANDS BANKSHARES INC /VA/, 340 W MAIN ST, C/O HIGHLANDS UNION BANK, ABINGDON, VA, 24210, 50,000 ($1,268,750.00) Equity, (File 333-83618 - Mar. 1) (BR. 07) S-3 AMERICA FIRST MORTGAGE INVESTMENTS INC, 399 PARK AVENUE, 36TH FLOOR, NEW YORK, NY, 10022, 2129358760 - 0 ($27,030,000.00) Equity, (File 333-83620 - Mar. 1) (BR. 08) S-8 HEALTHBRIDGE INC, 1177 WEST HASTINGS ST #1818, VANCOUVER BRITISH COLUMBIA, V6E 2K3, 6046021717 - 5,000 ($1,250.00) Equity, (File 333-83622 - Mar. 1) (BR. 06) S-8 MEMC ELECTRONIC MATERIALS INC, 501 PEARL DR, ST PETERS, MO, 63376, 6364745000 - 7,000,000 ($27,510,000.00) Equity, (File 333-83624 - Mar. 1) (BR. 36) S-3 ONYX ACCEPTANCE FINANCIAL CORP, 27051 TOWNE CENTER DR, STE 200, FOOTHILL, CA, 92610, 9494653500 - 0 ($1,000,000.00) Other, (File 333-83626 - Mar. 1) (BR. 05) S-8 MEMC ELECTRONIC MATERIALS INC, 501 PEARL DR, ST PETERS, MO, 63376, 6364745000 - 430,000 ($1,689,900.00) Equity, (File 333-83628 - Mar. 1) (BR. 36) S-8 COLE NATIONAL CORP /DE/, 5915 LANDERBROOK DR, MAYFIELD HEIGHTS, OH, 44124, 4404494100 - 0 ($3,875,000.00) Equity, (File 333-83630 - Mar. 1) (BR. 02) S-8 GRIC COMMUNICATIONS INC, 1421 MCCARTHY BLVD, MILPITAS, CA, 95035, 4089551920 - 0 ($2,375,723.69) Equity, (File 333-83632 - Mar. 1) (BR. 08) S-4 KENTUCKY RIVER PROPERTIES LLC, 200 WEST VINE STREET, SUITE 8K, LEXINGTON, KY, 40507, 8592548498 - 0 ($94,187,838.00) Equity, (File 333-83634 - Mar. 1) (BR. ) S-8 OPHTHALMIC IMAGING SYSTEMS INC, 221 LATHROP WAY STE 1, SACRAMENTO, CA, 95815, 9166462020 - 1,400,000 ($568,400.00) Equity, (File 333-83636 - Mar. 1) (BR. 36) S-1 EON LABS INC, 787 SEVENTH AVE, NEW YORK, NY, 10019, 2127288116 - 0 ($200,000,000.00) Equity, (File 333-83638 - Mar. 1) (BR. ) SB-2 FIRST SHARES BANCORP INC, 996 SOUTH STATE ROAD 135, GREENWOOD, IN, 46143, 3178824780 - 0 ($4,000,000.00) Equity, 0 ($3,960,000.00) Non-Convertible Debt, 0 ($40,000.00) Other, (File 333-83640 - Mar. 1) (BR. 07) S-3 BEA SYSTEMS INC, 2315 NORTH FIRST STREET, -, SAN JOSE, CA, 95131, 4085708000 - 0 ($9,537,109.00) Equity, (File 333-83642 - Mar. 1) (BR. 03) S-8 CORPORATE VISION INC /OK, 6130 SOUTH MEMORIAL DR, STE A, TULSA, OK, 74133, 9183072293 - 2,083,333 ($312,499.95) Equity, (File 333-83644 - Mar. 1) (BR. 05) S-3 ISTAR FINANCIAL INC, 1114 AVENUE OF THE AMERICAS 27TH FLOOR, NEW YORK, NY, 10036, 2129309494 - 0 ($500,000,000.00) Equity, (File 333-83646 - Mar. 1) (BR. 08) S-1 FIVE STAR QUALITY CARE INC, 400 CENTRE STREET, NEWTON, MA, 02458, 617 796 8387 - 0 ($28,911,000.00) Equity, (File 333-83648 - Mar. 1) (BR. 08) S-8 IMPAC MORTGAGE HOLDINGS INC, 1401 DOVE STREET, NEWPORT BEACH, CA, 92660, 9494753600 - 1,120,069 ($9,274,171.32) Equity, (File 333-83650 - Mar. 1) (BR. 08) S-8 TTI HOLDINGS OF AMERICA CORP, 76 N. BROADWAY, C, HIKSVILLE, NY, 11801, 5169315700 - 203,000 ($22,330.00) Debt Convertible into Equity, (File 333-83654 - Mar. 4) (BR. 09) S-8 DYCOM INDUSTRIES INC, 4440 PGA BLVD. STE 500, FIRST UNION CENTER, PALM BEACH GARDENS, FL, 33410, 5616277171 - 1,128,476 ($45,770,986.56) Equity, (File 333-83656 - Mar. 4) (BR. 06) S-8 DYCOM INDUSTRIES INC, 4440 PGA BLVD. STE 500, FIRST UNION CENTER, PALM BEACH GARDENS, FL, 33410, 5616277171 - 240,000 ($3,662,720.00) Equity, (File 333-83658 - Mar. 4) (BR. 06) S-4 LONGVIEW FIBRE CO, P O BOX 639, 300 FIBRE WAY, LONGVIEW, WA, 98632, 2064251550 - 1 ($213,664,850.00) Non-Convertible Debt, (File 333-83660 - Mar. 4) (BR. 04) S-8 CKE RESTAURANTS INC, 401 WEST CARL KARCHER WAY, ANAHEIM, CA, 92801, 7147745796 - 0 ($8,380,398.08) Equity, (File 333-83666 - Mar. 4) (BR. 05) SB-2 CADAPULT GRAPHIC SYSTEMS INC, 110 COMMERCE DRIVE, ALLENDALE, NJ, 07401, 2012361100 - 2,288,330 ($242.11) Equity, (File 333-83668 - Mar. 4) (BR. 08) S-8 NET2PHONE INC, 520 BROAD STREET, NEWARK, NJ, 07102, 9734122800 - 0 ($790,500.00) Equity, (File 333-83670 - Mar. 4) (BR. 07) S-4 NORTHROP GRUMMAN CORP /DE/, 1840 CENTURY PK E, C/O NORTHROP GRUMMAN CORP, LOS ANGELES, CA, 90067, 3105536262 - 0 ($6,487,486,707.68) Other, (File 333-83672 - Mar. 4) (BR. 05) S-8 ABCI HOLDINGS INC, 5897 OBERLIN DRIVE, SUITE 210, SAN DIEGO, CA, 92121, 7604348486 - 0 ($50,000.00) Equity, (File 333-83674 - Mar. 4) (BR. 08) S-8 MANTECH INTERNATIONAL CORP, 12015 LEE JACKSON MEMORIAL HIGHWAY, FAIRFAX, VA, 22033, 7032186000 - 0 ($4,512,500.00) Equity, (File 333-83676 - Mar. 4) (BR. 01) S-1 KYPHON INC, 1350 BORDEAUX DR, SUNNYVALE, CA, 94089, 4085486500 - 0 ($86,250,000.00) Equity, (File 333-83678 - Mar. 4) (BR. 36) S-8 3 D SYSTEMS CORP, 26081 AVENUE HALL, VALENCIA, CA, 91355, 6612955600 - 1,600,000 ($18,480,000.00) Equity, (File 333-83680 - Mar. 4) (BR. 03) S-8 MANTECH INTERNATIONAL CORP, 12015 LEE JACKSON MEMORIAL HIGHWAY, FAIRFAX, VA, 22033, 7032186000 - 0 ($54,150,000.00) Equity, (File 333-83682 - Mar. 4) (BR. 01) S-8 AMERICAN BIO MEDICA CORP, 122 SMITH ROAD, KINDERHOOK, NY, 12106, 8002271243 - 4,000,000 ($3,579,150.00) Equity, (File 333-83684 - Mar. 4) (BR. 01) S-3 ION NETWORKS INC, 2014944440 - 5,120,000 ($4,460,000.00) Equity, (File 333-83686 - Mar. 4) (BR. 03) S-4 HARMAN INTERNATIONAL INDUSTRIES INC /DE/, 1101 PENNSYLVANIA AVENUE NW, STE 1010, WASHINGTON, DC, 20004, 2023931101 - 0 ($300,000,000.00) Non-Convertible Debt, (File 333-83688 - Mar. 4) (BR. 02) S-3 WIND RIVER SYSTEMS INC, 500 WIND RIVER WAY, ALAMEDA, CA, 94501, 5107484100 - 0 ($150,000,000.00) Debt Convertible into Equity, (File 333-83690 - Mar. 4) (BR. 03) S-3 PRECIS SMART CARD SYSTEMS INC, 2500 SOUTH MCGEE DR, SUITE 147, OKLAHOMA CITY, OK, 73072, 4057525550 - 0 ($20,178,000.00) Equity, (File 333-83692 - Mar. 4) (BR. 08)