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MARTIN SCOTT SANDS (CRD Number 1186904) * * * * * * * * * * * * * * * * |
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CONSENT ORDER File No. CO-04-7093-S |
WHEREAS the Banking Commissioner (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (the "Regulations");
WHEREAS Sands Brothers & Co., Ltd. ("SBC") (CRD number 26816) and Sands Brothers International Ltd. ("SBI") (CRD number 119037) are affiliated broker-dealers registered under the Act and located at 90 Park Avenue, New York, New York;
WHEREAS Sands Brothers Asset Management LLC ("SBAM") (CRD number 110076), an affiliate of SBC, is an investment adviser registered with the Securities and Exchange Commission and located at 90 Park Avenue, New York, New York;
WHEREAS Martin Scott Sands (hereinafter, "Sands") has been registered under the Act as a broker-dealer agent of Sands Brothers & Co., Ltd. since January 16, 1991 and as a broker-dealer agent of Sands Brothers International Ltd. since September 12, 2003;
WHEREAS Sands, a control person of SBAM, applied for registration as an investment adviser agent of SBAM on October 1, 2004;
WHEREAS on December 18, 2003, the New York Stock Exchange censured Sands, fined him $50,000 and imposed on him a four month bar from membership, allied membership, approved person status and employment or association in any capacity with any member or member organization (No. 03-222) , based on allegations that Sands had purchased options in a particular stock for the benefit of members of his family before the completion of an order by a customer to buy 1 million shares of that stock, and that Sands knew, or was reckless in not knowing, that a significant portion of the customer's order had not been completed;
WHEREAS the four month bar imposed by the New York Stock Exchange in December 2003 commenced on February 24, 2004 and has been completed;
WHEREAS in October 2000, the New York Stock Exchange censured Sands, fined him $50,000 and suspended him for three months from all supervisory positions and responsibilities (No. HPD 00-174) based upon allegations that Sands violated Exchange Rule 342 by failing to reasonably discharge his supervisory duties as president and co-chairman of the board of SBC;
WHEREAS Sands is no longer president and co-chairman of the board of SBC;
WHEREAS the Commissioner, through the Securities and Business Investments Division (the "Division") of the Department of Banking has conducted an investigation of Sands pursuant to Sections 36b-8 and 36b-26 of the Act;
WHEREAS Section 36b-15(a) of the Act provides, in part, that "[t]he commissioner may by order deny, suspend, or revoke any registration or by order restrict or impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) that the applicant or registrant . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years . . . (iii) a suspension, expulsion or other sanction issued by a national securities exchange or other self-regulatory organization registered under federal laws administered by the Securities and Exchange Commission . . . if the effect of the sanction has not been stayed or overturned by appeal or otherwise . . . . ";
WHEREAS Sands acknowledges that he was the subject of the New York Stock Exchange sanctions described above;
WHEREAS Sands agrees to the entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities solely for the purpose of obviating the need for formal administrative proceedings on the matters described above;
WHEREAS Section 36b-6(b) of the Act states, in part, that: "No broker-dealer shall employ an agent unless such agent is (1) registered under sections 36b 2 to 36b-33, inclusive, or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of section 15(h) of the Securities Exchange Act of 1934";
WHEREAS Section 36b-6(c) of the Act states, in part, that: "No investment adviser shall engage an investment adviser agent unless such investment adviser agent is registered under . . . [the Act]";
WHEREAS SBC, SBI and SBAM agree to the entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities solely as a condition to the continued registration of Sands as a broker-dealer agent in this state and as a condition to the registration of Sands as an investment adviser agent under the Act, and understand that the entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities does not constitute a finding by the Commissioner of a violation of any provision of the Act or any regulation or order under the Act by SBC, SBI or SBAM, nor shall it operate as a restriction or limitation on the securities or investment advisory activities of SBC, SBI or SBAM in the State of Connecticut;
WHEREAS Sands voluntarily agrees to waive any right to a hearing upon the entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities;
NOW, THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:
| 1. | During his association with SBC, SBI and/or SBAM, Sands shall refrain, for seventy two hours following any securities recommendation Sands makes to a customer or client or following any purchase or sale effected on behalf of a customer or client by Sands, from buying or selling any security being recommended, purchased or sold to such client by or through the efforts of Sands; |
| 2. | While associated with SBC, SBI and/or SBAM, Sands shall not, directly or through intermediary accounts, buy or sell any security for seventy two hours after Sands receives oral or written notice that SBC, SBI or SBAM will be modifying any recommendation concerning the advisability of investing in, purchasing or selling such security; |
| 3. | During the term of his association with SBC, SBI and/or SBAM, Sands shall be subject to the direct supervision of a principal or other employee of higher grade; |
| 4. | During the term of his association with SBC, SBI and/or SBAM, the chief compliance officer of each respective firm shall approve any trading in Sands' personal accounts and those of his immediate family, including, without limitation, spousal accounts and accounts for the benefit of Sands' minor children. Should such individual(s) be unable to perform such supervisory functions, SBC, SBI and/or SBAM shall notify the Division Director in writing concerning the identity of the successor compliance officer within five business days following the respective individual's cessation of such supervisory activities with respect to Sands; |
| 5. | For two years, SBC, SBI and SBAM shall notify the Division Director in writing each calendar quarter of any securities-related complaints, actions or proceedings (including arbitrations and updates thereto) involving Sands which occur during the quarter, including the disposition thereof. Such report shall be provided no later than ten business days following the close of the quarter and shall include any written reprimands, censures or warnings issued by SBC, SBI and/or SBAM to Sands. If no complaints, actions, proceedings, firm actions or updates exist for the quarter, the report shall so indicate. The first report shall cover the quarter ending December 31, 2004, and the final report shall cover the quarter ending December 31, 2006; |
| 6. | Entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities is without prejudice to the right of the Commissioner to take enforcement action against Sands for violations of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities, or based on the predicate for its entry, if the Commissioner determines that compliance is not being observed with the terms hereof; |
| 7. | Sands shall be on ADMINISTRATIVE PROBATION as an investment adviser agent and as a broker-dealer agent for a period of two (2) years from the date of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities; and |
| 8. | This Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities shall become final when issued. |
________/s/_________
John P. Burke
Banking Commissioner
So ordered at Hartford, Connecticut
this 29th day of November 2004.
CONSENT TO ENTRY OF ORDER
I, Martin Scott Sands, being duly sworn, do state that I agree voluntarily and without threat or coercion of any kind to the entry of this Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities, voluntarily waiving any right to a hearing on the matters described herein.
___________/s/________________
Martin Scott Sands
Subscribed and sworn to before me this 17th
day of November 2004.
________________/s/______________________________
Notary Public/Commissioner of the Superior Court
My Commission Expires: 11/04/2006
I, Christopher Moses Silver, Chief Compliance Officer of Sands Brothers & Co., Ltd., Sands Brothers International Ltd. and Sands Brothers Asset Management LLC, state on behalf of such entities that I have read the foregoing Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities with respect to Martin Scott Sands; that I know and fully understand its contents; that I am authorized to execute the same on behalf of Sands Brothers & Co., Ltd., Sands Brothers International Ltd. and Sands Brothers Asset Management LLC; and that Sands Brothers & Co., Ltd., Sands Brothers International Ltd. and Sands Brothers Asset Management LLC each agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein with respect to Martin Scott Sands, expressly waiving any right to a hearing on the matters described herein.
Sands Brothers & Co., Ltd.
Sands Brothers International Ltd.
Sands Brothers Asset Management LLC
By ______________/s/________________________
Christopher Moses Silver
Chief Compliance Officer
On this 17th day of November, 2004, personally appeared Christopher Moses Silver, signer of the foregoing Consent Order Conditioning Registration as an Investment Adviser Agent and Restricting Securities-Related Activities with respect to Martin Scott Sands, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Sands Brothers & Co, Ltd., Sands Brothers International Ltd. and Sands Brothers Asset Management LLC, and acknowledged the same to be his free act and deed, before me.
__________________/s/____________________________
Notary Public/Commissioner of the Superior Court
My Commission Expires: 11/04/2006