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SAGEWORKS CAPITAL INC.
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STIPULATED AGREEMENT No. ST-13-8090-S |
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (“Act”), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act;
WHEREAS, on February 20, 2013, Sageworks Capital Inc. (“Sageworks”), a North Carolina corporation formed on May 4, 2011 and located at 25 West 36th Street, 11th Floor, New York, New York 10018, filed with the Commissioner an application for registration as a broker-dealer pursuant to Sections 36b-7 and 36b-32 of the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking has conducted an investigation of Sageworks pursuant to Section 36b-8 of the Act;
WHEREAS, Sageworks’ application for broker-dealer registration indicated that its Director and Chief Executive Officer Robert M. Granado (Central Registration Depository (“CRD”) No. 6058307) (“Granado”), its Director and General Securities Principal Peter B. Leahy (CRD No. 4844213) (“Leahy”), and its Chief Compliance Officer Vlad Uchenik (CRD No. 4071805) (“Uchenik”) would be the only active officers of Sageworks who exercised supervisory authority over Sageworks’ securities activities;
WHEREAS, Sageworks indicated in the business plan accompanying its application that its business activities would be confined to selling private placements;
WHEREAS, Uchenik has been engaged in the securities business as an agent, spending a major portion of his working time in the securities business for at least three of the seven calendar years preceding the date of Sageworks’ broker-dealer application;
WHEREAS, neither Granado nor Leahy have been engaged in the securities business as a broker-dealer or agent, spending a major portion of their working time in the securities business for at least three of the seven calendar years preceding the date of Sageworks’ broker-dealer application;
WHEREAS, Granado, Leahy and Uchenik have no reported disciplinary history and have passed the Series 7, 24, and 63 examinations;
WHEREAS, Section 36b-31-7a of the Regulations provides, in part, that:
| (a) | Each applicant for broker-dealer registration shall (1) have been engaged in the securities business as a broker-dealer or agent spending a major portion of his working time in the securities business for at least three years within the seven calendar years preceding the date of the application or (2) be otherwise qualified by knowledge and experience as determined by the commissioner. An attorney who has had at least three years of substantial experience in the practice of securities law, an accountant who has had at least three years of substantial experience in the sale of securities and any other person who can demonstrate equivalent knowledge and experience in the sale of securities may be deemed to have sufficient experience for purposes of this subsection. | ||
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| (c) | If the applicant for broker-dealer registration is a corporation, at least two of its active officers, or if there is only one active officer then that one, shall meet the experience requirements of subsection (a) of this section. |
WHEREAS, the Division believes that due to Granado’s and Leahy’s lack of securities-related experience, Sageworks has not fulfilled the requirements set forth in subsections (a) and (c) of Section 36b-31-7a of the Regulations;
WHEREAS, as a result of such investigation, the Division also believes that a basis exists under Section 36b-15(a)(2)(J) of the Act for restricting or imposing conditions on the securities activities that Sageworks may perform in this state;
WHEREAS, Section 36b-15(a) of the Act provides, in part, that:
| The commissioner may, by order, deny . . . any registration or, by order, restrict or impose conditions on the securities . . . activities that an applicant . . . may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) the applicant . . . or, in the case of a broker dealer . . . any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker dealer . . . (J) is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (b) of this section; |
WHEREAS, Sageworks represents through its execution of this Stipulated Agreement Conditioning Registration as a Broker-dealer (“Stipulated Agreement”) that it has read and has familiarized itself with the Act and the Regulations thereunder, particularly those provisions governing the compliance responsibilities of broker-dealers;
WHEREAS, Sageworks through its execution of this Stipulated Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulated Agreement;
AND WHEREAS, the issuance of this Stipulated Agreement is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act.
NOW THEREFORE, THE PARTIES HERETO DO AGREE AS FOLLOWS:
| (1) |
For two years, commencing on the date this Stipulated Agreement is signed by the Commissioner, Sageworks shall not sell securities in or from Connecticut to individuals or entities who do not qualify as “accredited investors” within the meaning of Rule 501(a) of federal Regulation D, 17 C.F.R. § 230.501(a), promulgated under the Securities Act of 1933. During such two year period, Sageworks shall further restrict its business in or from Connecticut to the offer and sale of securities private placements that have been registered under the Act or for which an exemptive claim or claim of covered security status has been filed pursuant to Section 36b-21 of the Act and shall make full disclosure to all accredited investors regarding the limited experience of Granado and Leahy; |
| (2) | For two years, commencing on the date this Stipulated Agreement is signed by the Commissioner, Sageworks and/or its successors in interest shall notify the Division promptly regarding any material disciplinary actions involving the firm or any of its officers, directors, control persons, agents, employees or representatives, by filing the appropriate amendments to the firm’s Form BD and/or to the affected individual’s Form U4 or Form U5, as required by rules of the Securities and Exchange Commission, FINRA, and/or provisions of the Act and the Regulations; and Sageworks will concurrently file a copy of any sales-related securities complaints and any dispositional documents directly with the Division Director; |
| (3) |
Sageworks shall establish, maintain, and implement such supervisory procedures and monitoring practices as are necessary to ensure that it adheres to the restrictions and condition imposed by paragraphs 1 and 2 above; |
| (4) | Nothing in this Stipulated Agreement shall preclude Sageworks from applying in writing to the Division Director for relief from one or more of the restrictions in paragraphs 1 and 2 above prior to the expiration of the two year period applicable to such restrictions, if Sageworks provides documentation that it has retained additional qualified individuals to serve as active officers or managers of Sageworks. As used in this paragraph, “qualified” shall mean meeting the experience requirements in Section 36b-31-7a of the Regulations; |
| (5) |
Execution of this Stipulated Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Sageworks based upon a violation of this Stipulated Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by or on behalf of Sageworks in connection with its application for registration is subsequently discovered to be untrue; |
| (6) | Effective on the date this Stipulated Agreement is signed by the Commissioner, the name “Sageworks Capital, Inc.” shall be entered on the Register of Broker-dealers pursuant to Section 36b-8 of the Act; and |
| (7) | This Stipulated Agreement shall become binding when executed by the parties hereto. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulated Agreement on the dates indicated.
| Dated at Hartford, Connecticut, | _______/s/____________ | |
| this 28th day of June 2013. | Howard F. Pitkin | |
| Banking Commissioner |
I, Robert M. Granado, state on behalf of Sageworks Capital, Inc., that I have read the foregoing Stipulated Agreement Conditioning Registration as a Broker-dealer; that I know and fully understand its contents; that I am authorized to execute this Stipulated Agreement Conditioning Registration as a Broker-dealer on behalf of Sageworks Capital, Inc., and that Sageworks Capital, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
| Sageworks Capital, Inc. | |
| By: | ______/s/___________ |
| Robert M. Granado | |
| Chief Executive Officer |
State of: New York
On this the 25 day of June 2013, before me, Marilena Nanau, the undersigned officer, personally appeared Robert M. Granado, who acknowledged himself to be the Chief Executive Officer of Sageworks Capital, Inc., and that he, as such Chief Executive Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as Chief Executive Officer.
_____/s/__________________________
Notary Public
Date Commission Expires: 01/22/15