| * * * * * * * * * * * * * * * *
PERENNIAL INVESTMENT (CRD Number 144375) * * * * * * * * * * * * * * * * |
* * * * * * * * * * * |
STIPULATION No. ST-09-7731-S |
WHEREAS, the Banking Commissioner (the “Commissioner”) is responsible for administering 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, Perennial Investment Partners (U.S.) Inc. (“PIPUS”) is an investment adviser incorporated in Delaware on November 8, 2006 and having its principal office at 1010 Washington Boulevard, Stamford, Connecticut;
WHEREAS, on June 19, 2007, PIPUS filed with the Securities and Exchange Commission (the “SEC”) a Form ADV (Uniform Application for Investment Adviser Registration) indicating that it was a newly formed investment adviser seeking federal registration in reliance on SEC Rule 203A-2(d) which permits registration with the SEC where an adviser expects to be eligible for SEC registration within 120 days after its federal registration becomes effective. The June 19, 2007 Form ADV filing indicated that PIPUS had less than $25 million in assets under management and included the following undertaking by PIPUS: “I undertake to withdraw from SEC registration if, on the 120th day after my registration with the SEC becomes effective, I would be prohibited by Section 203A(a) of the Advisers Act from registering with the SEC”;
WHEREAS, Rule 203A-2(d) under the Investment Adviser Act of 1940 provides that:
The prohibition [on SEC registration] of section 203A(a) of the [Investment Advisers] Act does not apply to . . . (d) Investment advisers expecting to be eligible for SEC registration within 120 days. An investment adviser that: (1) Immediately before it registers with the Commission, is not registered or required to be registered with the Commission or a securities commissioner (or any agency or officer performing like functions) of any State and has a reasonable expectation that it would be eligible to register with the Commission within 120 days after the date the investment adviser's registration with the Commission becomes effective; (2) Indicates on Schedule D of its Form ADV (17 CFR 279.1) that it will withdraw from registration with the Commission if, on the 120th day after the date the investment adviser's registration with the Commission becomes effective, the investment adviser would be prohibited by section 203A(a) of the Act from registering with the Commission; and (3) Notwithstanding Rule 203A-1(b)(2), files a completed Form ADV-W (17 CFR 279.2) withdrawing from registration with the Commission within 120 days after the date the investment adviser's registration with the Commission becomes effective.
WHEREAS, on June 21, 2007, PIPUS became registered as an investment adviser with the SEC under the Investment Advisers Act of 1940, and filed an exemptive notice with the Commissioner pursuant to Section 36b-6(e) of the Act;
WHEREAS, on July 6, 2007 PIPUS filed a Form ADV amendment reflecting an address change. The firm’s July 6, 2007 Form ADV indicated that it had assets under management of less than $25 million;
WHEREAS, on September 26, 2008, PIPUS filed a Form ADV amendment indicating that it was no longer eligible to register with the SEC and reporting that the firm had under $25 million in assets under management;
WHEREAS, PIPUS did not file a Form ADV-W withdrawing its federal registration as contemplated by SEC Rule 203A-2(d)(3) nor did PIPUS demonstrate to the Securities and Business Investments Division (the “Division”) of the State of Connecticut Department of Banking that its assets under management met the threshold for SEC registration in Section 203A(a)(1) of the Investment Advisers Act of 1940;
WHEREAS, on June 2, 2009, approximately nine months after reporting that it was no longer eligible for SEC registration, PIPUS filed an application for investment adviser registration under the Act;
WHEREAS, in connection with its Connecticut registration application, PIPUS apprised the Division that, commencing in 2007, it had rendered investment advisory services from Connecticut to an institutional client;
WHEREAS, the Division conducted an follow-up evaluation of PIPUS pursuant to Sections 36b-8 and 36b-26(a) of the Act;
WHEREAS, the Commissioner alleges that from at least September 26, 2008 forward, PIPUS transacted business as an investment adviser while unregistered in contravention of Section 36b-6(c)(1) of the Act;
WHEREAS, PIPUS has submitted documentation indicating that PIPUS had relied upon a third party filing service to make PIPUS’ SEC and state registration filings;
WHEREAS, the Commissioner believes that the foregoing allegations would support the initiation of an administrative proceeding to deny or condition PIPUS’ investment adviser registration under Section 36b-15(a)(2)(B) of the Act;
WHEREAS, an administrative proceeding initiated 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, Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;
WHEREAS, PIPUS desires to settle the matter described herein and, without either admitting or denying the truth of the Commissioner's allegations set forth hereinabove, 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, PIPUS, 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;
WHEREAS, in furtherance of its desire to informally resolve this matter with the Commissioner, PIPUS represents and undertakes, through its execution of this Stipulation and Agreement, that 1) no later than ninety days following the Commissioner’s execution of this Stipulation and Agreement, PIPUS shall retain, and identify in writing to the Division Director, a Connecticut licensed attorney experienced in state and federal investment advisory legal and compliance issues (“Connecticut Legal Counsel”) and not unacceptable to the Division Director, to ensure that PIPUS is in compliance with this Stipulation and Agreement, the Act and the Regulations thereunder; and 2) PIPUS shall consult with such Connecticut Legal Counsel annually for a period of three years;
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| 1. | PIPUS shall refrain from engaging, directly or indirectly, in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, including, without limitation, transacting business in or from this state as an investment adviser absent registration; |
| 2. | No later than the date this Stipulation and Agreement is executed by the Commissioner, PIPUS shall remit to the department by certified bank check payable to “Treasurer, State of Connecticut” the sum of two thousand five hundred dollars ($2,500), one thousand seven hundred dollars ($1,700) of which shall constitute an administrative fine; three hundred dollars ($300) of which shall represent reimbursement for past due registration fees; and five hundred dollars ($500) of which shall be applied to defray the Division’s investigative costs; |
| 3. | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against PIPUS 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 undertaking or representation made by or on behalf of PIPUS and reflected herein is subsequently discovered to be untrue; and |
| 4. | This Stipulation and Agreement shall become binding when executed by PIPUS and the Commissioner. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.
________/s/_________
Howard F. Pitkin
Banking Commissioner
Dated at Hartford, Connecticut
this 16th day of December 2009.
I, Andrew H. Calderwood, state on behalf of Perennial Investment Partners (U.S.) Inc., 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 Perennial Investment Partners (U.S.) Inc. and that Perennial Investment Partners (U.S.) Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
Perennial Investment Partners (U.S.) Inc.
By
________/s/_______________
Andrew H. Calderwood
Vice President and Compliance Officer
On this 10th day of December 2009, personally appeared Andrew H. Calderwood, 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 Perennial Investment Partners (U.S.) 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: Jan. 31, 2014