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IN THE MATTER OF: MILLENCO, L.L.C. * * * * * * * * * * * * * * |
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STIPULATION AND AGREEMENT No. ST-07-7346-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 (the "Regulations") promulgated under the Act;
WHEREAS, Millenco, L.L.C. (“Millenco”) is a broker-dealer that is a member of the American Stock Exchange and that has its principal office at 666 Fifth Avenue, 8th Floor, New York, New York;
WHEREAS, in mid-2005, legal counsel to Millenco initiated a dialogue with the staff of the Securities and Business Investments Division (the “Division”) concerning a regulatory inquiry by the Securities and Exchange Commission (the “SEC”) and a location in Greenwich, Connecticut being utilized as a place of business by Millenco;
WHEREAS, during the course of such discussion, the Division communicated the need for the firm to register as a broker-dealer under the Act;
WHEREAS, on December 14, 2005, Millenco filed an application for registration as a broker-dealer under the Act;
WHEREAS, 1) on December 1, 2005, the SEC sanctioned certain control persons of Millenco for violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder in connection with certain market timing practices; and 2) such sanctions included an order to cease and desist against all parties (Administrative Proceeding File No. 3-12116);
WHEREAS, the Commissioner, acting pursuant to Sections 36b-8 and 36b-26 of the Act and through the Division, conducted a follow-up investigation into the activities of Millenco and specifically its activities occurring at the Greenwich, Connecticut location;
WHEREAS, the Commissioner further ascertained, as a result of such investigation, that 1) Millenco had been transacting business from the Greenwich, Connecticut location since at least March, 2005 at a time when the firm was not registered as a broker-dealer under the Act; and 2) during January, 2006 certain persons affiliated with Millenco continued to conduct securities activity from the Greenwich location at a time when such persons were not registered as agents of Millenco under the Act;
WHEREAS, Section 36b-6 of the Act states in part that: “(a) No person shall transact business in this state as a broker-dealer unless such person is registered under sections 36b-2 to 36b-33, inclusive . . . (b)…No broker-dealer shall employ an agent unless such agent is (1) registered under sections 36b-2 to 36b-33, inclusive . . . . ”;
WHEREAS, Section 36b-15 of the Act states in part: “(a) The 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 . . . 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 . . . (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-33, inclusive . . . or any regulation or order under said sections . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years . . . (v) a cease and desist order entered by the Securities and Exchange Commission . . . ”;
WHEREAS, Section 36b-27 of the Act authorizes the Commissioner to enter an order to cease and desist and to impose a fine of up to $100,000 per violation after granting Millenco an opportunity for a hearing;
WHEREAS, the allegations described above would, if proven, provide a basis for the initiation of administrative proceedings pursuant to Section 36b-15 and/or 36b-27 of the Act;
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, Millenco 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, Millenco, through its execution of this Stipulation and Agreement, voluntarily waives any rights it 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. | No later than the date this Stipulation and Agreement is executed by the Commissioner, Millenco shall remit to the department, by check payable to “Treasurer, State of Connecticut” the sum of twenty five thousand dollars ($25,000) representing the following: (a) twenty thousand dollars ($20,000) as an administrative fine; and (b) five thousand dollars ($5,000) as reimbursement for the Division’s costs of investigation; |
| 2. |
No later than the date this Stipulation and Agreement is entered by the Commissioner, Millenco shall designate, and identify in writing to the Division, an employee to be responsible for supervising the compliance aspects of the firm's Connecticut operations (the "Connecticut Compliance Supervisor") for a period of two years from the date this Stipulation and Agreement is entered by the Commissioner and in accordance with the following provisions:
(a) The Connecticut Compliance Supervisor shall be: (1) not unacceptable to the Division Director, (2) an agent registered under the Act who has passed an examination as principal administered by the National Association of Securities Dealers; and (3) not subject to disqualification under Section 36b-15 of the Act; and (b) Millenco shall ensure that any successor Connecticut Compliance Supervisor complies with the requirements of paragraph 2.(a) of this Stipulation and Agreement and shall notify the Division Director in writing concerning the identity of any such successor no later than thirty days following the succession; |
| 3. | No later than the date this Stipulation and Agreement is executed by the Commissioner, Millenco shall designate and retain an independent consultant sufficiently experienced in securities regulatory and compliance issues and not unacceptable to the Division Director to conduct a review of the firm's internal procedures for compliance with the Act and its regulations; ensure implementation of revised procedures in accordance with this Stipulation and Agreement and with applicable law; and issue a written report thereon to the firm. The independent consultant shall initiate his or her review of the firm's internal procedures six months following the Commissioner's execution of this Stipulation and Agreement or on June 29, 2007, whichever occurs first, and shall complete such review and issue a report thereon no later than sixty (60) days after the review has been initiated. No later than September 4, 2007, Millenco shall provide the Division Director with a written summary of those report recommendations that have been or that will be implemented, the proposed timetable for implementation and, if any of the recommendations have not been or will not be implemented, the reasons therefor. Millenco shall provide the Division with a complete copy of the consultant's report upon the Division's request. |
| 4. | Millenco shall maintain such electronic and other surveillance systems as are necessary to maintain proper supervisory controls over the firm’s trading activities; |
| 5. | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Millenco 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 written representation made to the Commissioner by Millenco in connection with the matters reflected herein is subsequently discovered to be untrue; and |
| 6. |
IN WITNESS WHEREOF
________/s/_________
Howard F. Pitkin
Banking Commissioner
this 29th day of January 2007.
I, Mark Israel Meskin, state on behalf of Millenco, L.L.C., that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Millenco, L.L.C. and that Millenco, L.L.C. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
Millenco, L.L.C.
By
________/s/_______________
Mark Israel Meskin
Chief Executive Officer
On this 23rd day of January, 2007, personally appeared Mark Israel Meskin, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Millenco, L.L.C., a limited liability company, and acknowledged the same to be his free act and deed, before me.
_______________/s/_______________________
Notary Public/Commissioner of the Superior Court
My Commission Expires: April 10, 2010