Charles P. Grom, a former Deutshe Bank research analyst, will pay $100,000 to settle charges that he certified a rating on a stock that was inconsistent with his personal view. Grom was represented by Patrick Smith of DLA Piper in New York. A Securities and Exchange Commission (SEC) investigation found that Grom certified that his March 29, 2012 research report about discount retailer Big Lots accurately reflected his own beliefs about the company and its securities. But in private communications with Deutsche Bank research and sales personnel, Grom indicated that he didn’t downgrade Big Lots from a “buy” recommendation in his report because he wanted to maintain his relationship with Big Lots management. Grom agreed to settle the charges by paying a $100,000 penalty, and he will be suspended from the securities industry for a year. “When research analysts tell clients to buy or sell a particular security, the rules require them to actually mean what they say.  

Analysts simply cannot express one view publicly and the opposite view privately,” said Andrew J. Ceresney, Director of the SEC Enforcement Division. The SEC found that Grom violated the analyst certification requirement of Regulation AC, which requires research analysts to include a certification that the views expressed in a research report accurately reflect their own beliefs about the company and its securities. Grom and Deutsche Bank hosted Big Lots executives at a non-deal roadshow on March 28, 2012.  Grom became concerned by what he believed to be cautious comments by the Big Lots executives. After the roadshow concluded, Grom communicated with a number of hedge fund clients about Big Lots. Four of the hedge funds subsequently sold their entire positions in Big Lots stock. The next day, Grom issued a research report on Big Lots in which he reiterated his “buy” rating. As required by Regulation AC, Grom signed an analyst certification included at the end of the report stating, “The views expressed in this report accurately reflect the personal views of the undersigned lead analyst(s) about the subject issuer and the securities of the issuer.”

During an internal conference call with Deutsche Bank’s research and sales personnel within hours after the publication of his report, Grom said, among other things, that he had maintained a “buy” rating on Big Lots because “we just had them in town so it’s not kosher to downgrade on the heels of something like that.” On April 24, 2012, during another conference call with Deutsche Bank research and sales personnel, Grom discussed disappointing first quarter sales figures at Big Lots and stated, “I think the writing was on the wall [that] we were getting concerned about it, but I was trying to maintain, you know, my relationship with them. So, that’s why we didn’t downgrade it a couple of weeks back.” Grom consented to the entry of the SEC’s order finding that he willfully violated the analyst certification requirement of Regulation AC of the Securities Exchange Act of 1934. Grom neither admitted nor denied the SEC’s findings.All classic car original air conditioning systems were filled with dichlorodifluoromethane or R-12/CFC-12 Freon.

Even newer cars used the standard R-12 until the EPA, under section 609, in an attempt to reduce atmospheric ozone depletion, mandated that manufacturers phase out its use by the end of the 1994 model year. my ac unit won't startAn environmentally friendlier substitute, tetrafluoroethane or R134A, was selected as the new industry standard, and plans were to phase out R-12 manufacture entirely by 1996. ac unit for single roomAt the same time, new regulations regarding recharging of the older air conditioning systems on classic cars were also mandated. best central air conditioning brandsOriginal R-12 systems were to be retrofitted to accept the R134A refrigerant. The changeover kit depended on the original manufacturers’ components, but basically consisted of adapters for connecting the older R-12 charging ports to the new R134A charging hoses and manifolds.

A filter drier changeover was also done and once the old R-12 was purged from the system (hopefully through an MVAC refrigerant recycler), a new R134A-compatible PAG oil was added to the system for lubrication before the system was refilled. Prices for old R-12 skyrocketed as production was reduced and sales of R-12 were restricted to certified air-conditioning recycling specialists. This caused many classic car owners who wanted to keep their A/C system original turned to household R-22 Freon while it was still available. R-22 Chlorodifluoromethane was commonly found in household air conditioning systems, as well as refrigerators and freezers and in tractor-trailer reefer units. It was a passable substitute, but generated much higher engine compartment temperatures than the original R-12. The EPA soon realized that R-22 was being put into R-12 systems, and eliminated the production of R-22 in 2003. Like R-12 though, you occasionally see someone with an old container making a tidy profit by sitting on a stockpile for a few years.

R-22 in household refrigeration units is now substituted with R502, but it is not recommended for automotive use. R134A or HFC-134A became the accepted standard, because it has no potential of ozone depletion and has similar (but not equal to) cooling abilities to the R-12 and R-22 refrigerants. Many classic car enthusiasts have stated that their original air conditioning systems, once changed over and refilled with R134A, do not blow as cold as they used to. Unfortunately, there is not much anyone can do about this. With the new EPA mandates, some driver comfort has to be sacrificed in the name of a more environmentally friendly and safer replacement refrigerant. Anybody who grabs a can of air to blow off their computer keyboard is using HFC-134A to do it. Computer air has fewer lubricants in it than the conventional R134A. In the future, look for even R134A to be replaced with even more friendly substitutes. Recent European environmental standards have called for a new Freon formulation known as R152A.

The good news with this new formulation is that it can be retrofitted into an R134A system without modifications and it actually blows slightly colder air than its R134A predecessor. R152A is slightly less dense than R134A, so it can theoretically contribute to better fuel economy as well. The bad news is that it is a Class 2 flammable gas, similar to bottled acetylene, hydrogen and methane. It would not be a good thing to get it too close to a spark plug wire or a hot exhaust manifold. The other new alternative to R134A is HFO-1234YF, which has similar properties to R134A but meets the new European global warming standards. Each of the above-listed refrigerants has a global warming potential rating as well as an ozone depletion rating, and as of yet, the HCO-1234YF is the only refrigerant that meets both EPA and European standards. HFO-1234YF is also a Class 2 flammable gas although slightly less flammable than the R152A. Other Class 2 refrigerants found on the market, but not recommended for automotive use include R1143A, R142B and R143A.