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EURO PACIFIC CAPITAL, INC. * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER No. CO-08-7611-S |
PRELIMINARY STATEMENT
WHEREAS, the Banking 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 (the “Regulations”) promulgated under the Act;
WHEREAS, Euro Pacific Capital, Inc. (“EPC”) of 10 Corbin Drive, Darien, Connecticut is a registered broker-dealer under the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, has conducted an examination of EPC’s records pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and an investigation of EPC’s activities pursuant to Section 36b-26 of the Act to determine whether EPC had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act;
WHEREAS, Euro Pacific Capital, Inc. (“EPC”) of 10 Corbin Drive, Darien, Connecticut is a registered broker-dealer under the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, has conducted an examination of EPC’s records pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and an investigation of EPC’s activities pursuant to Section 36b-26 of the Act to determine whether EPC had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act;
WHEREAS, the Commissioner, as a result of such examination and investigation, alleges that 1) EPC violated Section 36b-16 of the Act by effecting transactions in securities that were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act; and 2) in contravention of Section 36b-14(d) of the Act and Section 36b-31-14f(b) of the Regulations, EPC failed to promptly provide records to the Division when requested;
WHEREAS, EPC has represented to the Division that in an effort to enhance its supervisory procedures, it has increased its Operations and Compliance staff to five people, four of whom have passed the Series 24 examination;
WHEREAS, EPC has also represented to the Commissioner that its inability to promptly provide records to the Division was attributable to the relocation of the firm’s main office during the relevant time frame;
WHEREAS, the foregoing allegations of the Commissioner would support the initiation of administrative proceedings under Section 36b-15 of the Act to suspend or revoke EPC’s broker-dealer registration under the Act or to restrict or impose conditions on the securities activities that the firm may perform in this state; and/or proceedings under Section 36b-27 of the Act seeking the entry of an order to cease and desist and/or an order imposing an administrative fine against EPC;
WHEREAS, an administrative proceeding under Sections 36b-15 and 36b-27 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 provides that “[u]nless precluded by law, a contested case may be resolved by stipulation, agreed settlement, or consent order or by the default of a party”;
WHEREAS, Section 36b-31(a) of the Act provides, in part, that: “The Commissioner may from time to time make, amend and rescind such . . . orders as are necessary to carry out the provisions of Sections 36b-2 to 36b-33, inclusive [of the Connecticut Uniform Securities Act]”;
WHEREAS, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and EPC reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, EPC, without admitting or denying any of the Commissioner’s allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order; and
WHEREAS, EPC, through its execution of this Consent Order, represents and agrees that none of the violations alleged in this Consent Order shall occur in the future;
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS EPC, through its execution of this Consent Order, voluntarily waives the following rights:
| 1. | To receive prior written notice within the meaning of Sections 36b-15(f), 36b-27(a), 36b-27(d) and 4-177(b) of the Connecticut General Statutes; |
| 2. | To present evidence and argument and to otherwise avail itself of Section 4-177c(a) of the Connecticut General Statutes; |
| 3. | To present its position in a hearing in which it is represented by counsel; |
| 4. | To have a written record of the hearing made and a written decision issued by a hearing officer; and |
| 5. | To seek judicial review of, or otherwise challenge or contest, the matters described herein, including the validity of this Consent Order; |
CONSENT TO ENTRY OF FINDINGS
WHEREAS, EPC, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner:
| 1. | That the entry of this Consent Order is appropriate, in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act; |
| 2. | That EPC violated Section 36b-16 of the Act by effecting transactions in securities that were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act; and |
| 3. | That in contravention of Section 36b-14(d) of the Act and Section 36b-31-14f(b) of the Regulations, EPC failed to promptly provide records to the Division when requested; |
CONSENT TO ENTRY OF SANCTIONS AND REMEDIAL MEASURES
WHEREAS, EPC, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions and remedial measures:
| 1. | Within sixty (60) days from the date this Consent Order is executed by the Commissioner, EPC shall hire an independent consultant sufficiently experienced in securities regulatory and compliance issues and not unacceptable to the Division Director to (a) conduct a review of EPC’s internal supervisory and compliance procedures to ensure compliance with the Act and the Regulations, including agent registration requirements under Connecticut law and oversight of the firm’s agents’ activities; (b) prepare a written report on the adequacy of such supervisory and compliance procedures, which report shall include an outline of improvements needed and current deficiencies identified; and (c) ensure implementation of revised procedures in accordance with this Consent Order and applicable law. The report shall be completed and submitted to the Division Director within ninety (90) days from the date this Consent Order is executed by the Commissioner, and shall include a copy of the consultant’s written report, together with a summary of those recommendations which have been implemented, an implementation timetable for those recommendations not yet implemented and, if any recommendations were not or will not be implemented, the reasons therefor. Once assessed by the Division Director, the report and implementation summary shall be returned to EPC to be maintained at EPC’s principal office and available for future inspection by the Division upon request; |
| 2. | EPC, its officers, directors, representatives, agents, employees, affiliates, and successors in interest shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any organizational or other device; |
| 3. | No later than the date this Consent Order is entered by the Commissioner, EPC shall remit to the department by check made payable to “Treasurer, State of Connecticut” the sum of seven thousand, five hundred dollars ($7,500), one thousand dollars ($1,000) of which shall represent reimbursement for the Division’s cost of conducting its examination of EPC and six thousand five hundred dollars ($6,500) of which shall constitute an administrative fine; |
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Findings, Sanctions and Remedial Measures set forth above be and are hereby entered; |
| 2. | Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against EPC, its officers, directors, agents, employees and representatives based upon a violation of this Consent Order or the matters underlying its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by EPC and reflected herein is subsequently determined to be untrue; and |
| 3. | This Consent Order shall become final when entered. |
________/s/_________
Howard F. Pitkin
Banking Commissioner
So ordered at Hartford, Connecticut
this 20th day of February 2009.
this 20th day of February 2009.
CONSENT TO ENTRY OF ORDER
I, Michael Carroll, state on behalf of Euro Pacific Capital, Inc. that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Euro Pacific Capital, Inc.; that Euro Pacific Capital, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Euro Pacific Capital, Inc. voluntarily consents to the entry of this Consent Order expressly waiving any rights it may have to a hearing on the matters described herein.
Euro Pacific Capital, Inc.
By
________/s/______________________________
Michael Carroll
Chief Operating Officer and Chief Compliance Officer
On this 17 day of February 2009, personally appeared Michael Carroll, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Euro Pacific Capital, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.
_______________/s/_______________________
Notary Public/Commissioner of the Superior Court
My Commission Expires: 9/30/11