Source: https://www.sec.gov/news/digest/2012/dig062812.htm
Timestamp: 2019-04-18 12:25:39+00:00

Document:
The United States Securities and Exchange Commission (Commission) announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against Drew K. Brownstein. The Order finds that Brownstein, age 36, resides in Denver, Colorado. He founded Big 5 Asset Management, LLC (Big 5), a registered investment adviser and hedge fund management firm in October 2008 and was Big 5’s chief executive officer.
On October 21, 2011, the Commission filed a civil action against Brownstein in SEC v. H. Clayton Peterson et al., Civil Action No. 11-CV-5448 (S.D.N.Y.). On June 1, 2012, the Court entered an order permanently enjoining Brownstein, by consent, from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s complaint alleged that in April 2010 Brownstein obtained material non-public information concerning Apache Corporation’s impending acquisition of Mariner Energy, Inc. (Mariner) from Drew Peterson, a personal friend. Brownstein used the material nonpublic information he received from Drew Peterson to trade Mariner securities for himself, his relatives, and for Big 5 hedge funds. On October 21, 2011, Brownstein pleaded guilty to one count of securities fraud in a parallel criminal proceeding before the United States District Court for the Southern District of New York, in United States v. Drew K. Brownstein (Criminal Information No. 1:11-CR-00904) (RPP).
The United States Securities and Exchange Commission (Commission) announced the issuance of an Order of Suspension Pursuant to Rule 102(e)(2) of the Commission’s Rules of Practice (Order) against H. Clayton Peterson. The Order finds that Peterson, age 66, resides in Denver, Colorado, Phoenix, Arizona, and Cabo San Lucas, Mexico. Now retired, Peterson was a certified public accountant at Arthur Andersen for thirty years. He was licensed as a CPA by the State of Colorado until 2003. From 2006 through 2010, he was a member of the board of directors of Mariner Energy, Inc. (Mariner) and served as chairman of the board’s audit committee.
On August 5, 2011, the Commission filed a civil action against Peterson in SEC v. H. Clayton Peterson et al., Civil Action No. 11-CV-5448 (S.D.N.Y.). On June 1, 2012, the Court entered an order permanently enjoining Peterson, by consent, from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s complaint alleged that in April 2010 Peterson engaged in insider trading by tipping his son, Drew Peterson, regarding the impending acquisition of Mariner by Apache Corporation and instructing his son to purchase Mariner Energy securities for Clayton Peterson’s daughter. On August 5, 2011, Clayton Peterson pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud in a parallel criminal proceeding before the United States District Court for the Southern District of New York, in United States v. H. Clayton Peterson (Criminal Information No. 1:11-CR-00665) (RPP).
The United States Securities and Exchange Commission (Commission) announced the issuance of an Order Instituting Administrative Proceedings Pursuant to Section 203(f) of the Investment Advisers Act of 1940, Making Findings and Imposing Remedial Sanctions (Order) against Drew Clayton Peterson. The Order finds that Peterson, age 35, resides in Denver, Colorado. He previously worked as a financial adviser at Private Capital Management, Inc., a registered investment adviser based in Denver, Colorado. While working at Private Capital Management, Peterson held a Series 65 license.
On August 5, 2011, the Commission filed a civil action against Peterson in SEC v. H. Clayton Peterson et al., Civil Action No. 11-CV-5448 (S.D.N.Y.). On June 1, 2012, the Court entered an order permanently enjoining Peterson, by consent, from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission’s complaint alleged that in April 2010 Peterson obtained material non-public information concerning Apache Corporation’s impending acquisition of Mariner Energy, Inc. (Mariner) from his father, H. Clayton Peterson, a Mariner board member. Drew Peterson used the material nonpublic information he received from his father to trade Mariner shares for his own accounts, for his family members, his investment club and investment clients, and to tip certain friends. On August 5, 2011, Drew Peterson pleaded guilty to one count of securities fraud and one count of conspiracy to commit securities fraud in a parallel criminal proceeding before the United States District Court for the Southern District of New York, in United States v. Drew Clayton Peterson (Criminal Information No. 1:11-CR-00664) (RPP).
In The Manner of Alderox, Inc.
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Four Respondents (Default Order) in Alderox, Inc., Admin. Proc. No. 3-14886. The Order Instituting Proceedings alleged that Alderox, Inc., Applied Solar, Inc., AskMeNow, Inc., and Blink Logic Inc. (collectively, Respondents) repeatedly failed to file timely periodic reports with the Securities and Exchange Commission. The Default Order finds these allegations to be true and revokes the registration of each class of registered securities of Respondents, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act).
An Administrative Law Judge has issued an Order Making Findings and Revoking Registrations by Default as to Six Respondents (Default Order) in One Voice Technologies, Inc., Admin. Proc. File No. 3-14871. The Order Instituting Proceedings alleged that Respondents repeatedly failed to file timely periodic reports while their securities were registered with the Securities and Exchange Commission (Commission). The Default Order finds these allegations to be true as to Respondents One Voice Technologies, Inc., Orchestra Therapeutics, Inc., Path 1 Network Technologies, Inc., Platina Energy Group, Inc., Pop N Go, Inc., and Powercold Corp. and revokes the registration of each class of their registered securities, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act).
The SEC announced that on June 1, 2012, the Honorable Robert P. Patterson, United States District Judge, United States District Court for the Southern District of New York, entered Final Judgments on Consent as to former Mariner Energy, Inc. (“Mariner”) Director, H. Clayton Peterson (“Clayton Peterson”) and his direct and indirect tippees, Drew Clayton Peterson (“Drew Peterson”), Drew K. Brownstein (“Brownstein”) and Big 5 Asset Management, LLC (“Big 5”) in the SEC’s insider trading case, SEC v. H. Clayton Peterson et al., 11 Civ. 5448 (SDNY) (RPP).
In addition, on June 27, 2012, the SEC issued orders on consent in related administrative proceedings that suspend Clayton Peterson from appearing or practicing before the SEC as an accountant, and bar Drew Peterson and Brownstein from association with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization. The entry of these Final Judgments and the issuance of the administrative orders resolve all claims asserted by the SEC in this insider trading case.
In this enforcement action, the SEC alleged that in April 2010, Clayton Peterson, having learned through confidential board meetings that Mariner was about to be acquired by Apache Corporation, tipped his son, Drew Peterson about the acquisition and instructed him to purchase Mariner securities for Clayton Peterson’s daughter. Drew Peterson used the material nonpublic information he received from his father to trade Mariner securities for his own accounts, for his family members, his investment club and investment clients, and to tip certain friends, including Brownstein. Drew Peterson’s trading and the trading of his tippees, excluding Brownstein, resulted in profits of $205,416. Brownstein used the material nonpublic information he received from Drew Peterson to trade shares for his own account, for his family members and for hedge funds managed by Big 5, Brownstein’s registered investment advisory firm. Brownstein reaped approximately $4.6 million for Big 5 hedge funds, $305,050 for his family members and $130,671 for himself.
The Final Judgments entered against Clayton Peterson and Drew Peterson: (1) permanently enjoin them from violations of Section 10(b) of the Securities Exchange Act of 1934 (“Exchange Act”) and Exchange Act Rule 10b-5; and (2) order them to pay, on a joint and several basis with each other, disgorgement of $205,416 plus prejudgment interest of $13,603, for a total of $219,019. The Final Judgment against Clayton Peterson also bars him from serving as an officer or director of a public company. In addition, on June 27, 2012, the SEC issued an order in a related administrative proceeding pursuant to Rule 102(e)(2) of the SEC’s Rules of Practice suspending Clayton Peterson from appearing or practicing before the SEC as an accountant. Also on June 27, 2012, the SEC issued an order on consent in a related administrative proceeding pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) barring Drew Peterson from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.
The Final Judgment entered against Brownstein: (1) permanently enjoins him from violations of Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder; (2) orders him to pay disgorgement of $435,722, representing illicit profits that he gained in his personal accounts and his relatives’ accounts, plus prejudgment interest in the amount of $23,427, for a total of $459,150; and (3) orders him to pay, on a joint and several basis with Big 5, disgorgement of $4,148,262, representing illicit profits gained by Big 5 hedge funds, plus prejudgment interest in the amount of $274,709, for a total of $4,422,971. In addition, on June 27, 2012, the SEC issued an order on consent in a related administrative proceeding pursuant to Section 203(f) the Advisers Act barring Brownstein from association with any investment adviser, broker, dealer, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.