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IN THE MATTER OF: STEVEN LLOYD CRONIN * * * * * * * * * * * * * * * * * * |
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STIPULATION AND No. ST-10-7828-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, on December 14, 2009, Steven Lloyd Cronin (“Cronin”) of Great Neck, New York filed with the Commissioner an application for registration as a broker-dealer agent of Merlin Securities, LLC (CRD number 133068) pursuant to Sections 36b-7 and 36b-32 of the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking conducted an investigation of Cronin pursuant to Section 36b-8 of the Act;
WHEREAS, as a result of such investigation, the Division ascertained that on April 28, 2003, a New York Stock Exchange (“NYSE”) Hearing Panel found that Cronin violated NYSE Rule 408(a) by exercising discretion without written authorization, that Cronin effected unsuitable, excessive and unauthorized trades and used margin without authorization; and that Cronin violated NYSE Rules 345.12 and 476(a)(10) by failing to keep current and to accurately update his Form U-4 (Decision number 03-73). As a result, Cronin consented to a censure, three month suspension and $25,000 fine;
WHEREAS, as a result of such investigation, the Division further ascertained that on December 19, 2008, the NYSE found that Cronin violated 1) NYSE Rule 346(b) by engaging in an outside business activity by entering into a profit sharing arrangement with a third party without making a written request and receiving written consent of his member organization employer; 2) NYSE Rule 476(a)(4) by making material misstatements to the NYSE; 3) NYSE Rule 476(a)(6) by engaging in conduct inconsistent with just and equitable principles of trade in that Cronin engaged in an outside business without the approval of his member organization employer; made material misstatements to the exchange and made material misstatements to his member organization employer about a business relationship (HBD number 08-47). As a result, Cronin was fined $50,000, censured and suspended for four months from membership, allied membership, approved person status and from employment or association in any capacity with any member or member organization commencing on the close of business on February 27, 2009;
WHEREAS, Section 36b-15(a) of the Act provides, in part, that “[t]he commissioner may, by order, deny . . . any registration or, by order, restrict or impose conditions on the securities or investment advisory 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 . . . (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 or the Commodity Futures Trading Commission if the effect of the sanction has not been stayed or overturned by appeal or otherwise”;
WHEREAS, Merlin Securities, LLC. subsequently filed to withdraw Cronin’s application for registration as a broker-dealer agent, which withdrawal request became effective by operation of law ninety days following the application to withdraw;
WHEREAS, Section 36b-15(e)(1) of the Act provides, in part, that “[i]f withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial . . . proceeding under subsection (a) of this section within one year after withdrawal became effective”;
WHEREAS, Cronin neither admits nor denies that the activities and sanctions described herein would support administrative proceedings under Section 36b-15 of the Act;
WHEREAS, Cronin, through his execution of this Stipulation and Agreement, represents that 1) during the limited term of his association with Merlin Securities, LLC he did not conduct any securities sales activities that would cause him to be deemed an “agent” within the meaning of Section 36b-3(1) of the Act; and 2) he will not engage in any future securities-related activities in or from this state without compliance with the Act and the Regulations thereunder;
WHEREAS, an administrative proceeding under Section 36b-15 of the Act would constitute a “contested case” within the meaning of Section 4-166(2) of the Connecticut General Statutes;
WHEREAS, Section 4-177(c) of Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;
WHEREAS, Cronin desires to settle the matters described herein and, without admitting or denying the allegations herein, voluntarily enters into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding adjudicating any issue of fact or law on the matters described herein;
WHEREAS, Cronin, through his execution of this Stipulation and Agreement, voluntarily waives any rights he may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| 1. |
(a) [sic] For a period of thirty-six (36) months from the date this Stipulation and Agreement is executed by the Commissioner, Cronin shall not (1) apply for registration under the Act, or transact business in or from Connecticut as, a broker-dealer, agent, investment adviser or investment adviser agent as such terms are defined in Section 36b-3 of the Act; (2) rely on any definitional exclusion or exemption under the Act that would otherwise excuse registration by a person transacting business in or from Connecticut as an agent of issuer, broker-dealer agent, investment adviser agent, broker-dealer or investment adviser; (3) supervise any broker-dealer agents with respect to securities business transacted in or from Connecticut or with respect to Connecticut-based securities brokerage accounts; and (4) act as a finder for compensation, receive or split commissions or similar remuneration and/or receive referral fees in conjunction with the offer, sale or purchase of securities effected in or from Connecticut; |
| 2. |
After thirty-six (36) months from the date this Stipulation and Agreement is executed by the Commissioner, Cronin may apply for registration under the Act as an agent, investment adviser agent, investment adviser or broker-dealer, provided he files with the Division Director, concurrent with such application, a written submission stating that he has not been the subject of any securities-related complaints, actions or proceedings since execution of this Stipulation and Agreement by the Commissioner, and that he has at all times been in compliance with this Stipulation and Agreement. The Commissioner, in the Commissioner’s sole discretion, may enter Cronin’s name on the appropriate register, deny Cronin’s registration, or restrict or impose conditions on the securities or investment advisory activities that Cronin may perform in this state without making the findings required by Section 36b-15(a) of the Act or complying with the requirements of subsection (f) of Section 36b-15 of the Act; |
| 3. | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Cronin based upon a violation of this Stipulation and 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 Cronin and reflected herein is subsequently discovered to be untrue; and |
| 4. | This Stipulation and Agreement shall become binding when executed by both parties hereto. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.
| Dated at Hartford, Connecticut | _______/s/_________ | |
| this 4th day of November 2010. | Howard F. Pitkin | |
| Banking Commissioner |
I, Steven Lloyd Cronin, being duly sworn, state that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; and that I agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein, expressly waiving any right to a hearing on the matters described herein.
________/s/_______
Steven Lloyd Cronin
Subscribed and sworn to before me
this 23 day of August 2010.
_____/s/________________________
Notary Public
My Commission Expires: Dec. 9, 2013