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DONALD CHAPMAN PRATT (CRD No. 367121) * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER NO. CO-2006-6998-S |
PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (“Act”), and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (“Regulations”);
WHEREAS, on February 1, 2006, Donald Chapman Pratt (“Pratt”) filed an application for registration as an investment adviser agent of Harvest Capital Advisers, LLC (CRD number 125920) under the Act, and as a broker-dealer agent of Harvest Capital, LLC (CRD number 35723) under the Act (together, the “Applications”);
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Sections 36b-8 and 36b-26 of the Act into the activities of Pratt, to determine whether Pratt had violated, was violating or was about to violate any provision of the Act or the Regulations thereunder (“Investigation”);
WHEREAS, during the pendency of the Investigation, the Applications were held in abeyance;
WHEREAS, Pratt has represented to the Division that, during the time when the Applications were pending, he did not transact business in or from Connecticut as a broker-dealer agent or as an investment adviser agent under Section 36b-6 of the Act;
WHEREAS, Section 36b-31 of the Act, provides, in relevant part, that “[t]he commissioner may from time to time make … such … orders as are necessary to carry out the provisions of sections 36b-2 to 36b-33, inclusive”;
WHEREAS, Section 4-177(c) of the Connecticut General Statutes provides, in relevant part, that “[u]nless precluded by law, a contested case may be resolved by . . . consent order”;
WHEREAS, the Commissioner finds that the entry of this Consent Order is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the 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 Pratt reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS Pratt, without admitting or denying any of the Commissioner allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS Pratt, through his execution of this Consent Order, represents and agrees that none of the violations or dishonest or unethical practices alleged in this Consent Order shall occur in the future.
ALLEGATIONS
WHEREAS, as a result of the Investigation, the Division alleges that Pratt was registered under the Act as a broker-dealer agent of ING Financial Partners, Inc. (“ING”) (CRD number 2882) from approximately September 1998 to January 2006, and as an investment adviser agent of ING from approximately January 2002 to January 2006;
WHEREAS, as a result of the Investigation, the Division has obtained evidence that from February 2004 to March 2004, Pratt wilfully violated Section 36b-31-6e of the Regulations under the Act by engaging in a private securities transaction through sales of shares of NewAlliance Bancshares, Inc. to one of his clients; that such sale was done without Pratt providing prior written notice to his employing broker-dealer, ING; that such transaction was not recorded on the books and records of ING,; and that Pratt did not notify ING that he would take part in such sale, nor did he provide ING with a description of the compensation he would receive for the transaction.
FINDINGS OF THE COMMISSIONER AS TO EVIDENTIARY SUFFICIENCY TO INITIATE ADMINISTRATIVE PROCEEDINGS
WHEREAS, the Commissioner finds that sufficient grounds would exist to initiate administrative proceedings under Sections 36b-15(a)(2)(B), 36b-27(a) and 36b-27(d) of the Act against Pratt based upon Pratt’s wilful violation of Section 36b-31-6e of the Regulations and his engaging in private securities transactions without written notice to his employing broker-dealer as more fully described above;
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Pratt through his execution of this Consent Order, voluntarily waives the following rights:
| 1. | To be afforded written notice and an opportunity for a hearing within the meaning of Sections 36b-15(f) and 36b-27 of the Act and Sections 4 177(a) and 4-177(b) of the Connecticut General Statutes; |
| 2. | To present evidence and argument and to otherwise avail himself of Sections 36b-15 and 36b-27 of the Act and Section 4 177c(a) of the Connecticut General Statutes; |
| 3. | To present his position in a hearing in which he may be 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 SANCTIONS
WHEREAS, Pratt through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:
| 1. | Upon the Commissioner’s entry of this Consent Order, the name “Donald Chapman Pratt” shall be entered on the register of broker-dealer agents and on the register of investment adviser agents in accordance with Section 36b-8 of the Act; provided, however, that effective on such date, the broker-dealer and investment adviser agent registrations of Pratt shall be immediately SUSPENDED for a period of ten (10) days; |
| 2. | No later than the date this Consent Order is entered by the Commissioner, Pratt shall remit to the department via check payable to "Treasurer, State of Connecticut" the sum of three thousand seven hundred dollars ($3,700) as an administrative fine. |
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanctions set forth above be and are hereby entered; |
| 2. | If Pratt fails to comply with any terms of this Consent Order or if any representation made by Pratt and set forth herein is subsequently determined to be untrue, the Commissioner may initiate administrative or judicial proceedings against Pratt to enforce this Consent Order or to sanction Pratt for violating an order of the Commissioner, or may take any other action authorized under the Act or any other applicable law, including the issuance of fines or penalties as provided therein; |
| 3. | This Consent Order shall not preclude additional proceedings by the Commissioner against Pratt for acts or omissions not specifically addressed in this Consent Order or for acts and/or omissions that do not arise from the facts or transactions addressed herein; and |
| 3. | This Consent Order shall become final when issued. |
________/s/_________
John P. Burke
Banking Commissioner
Dated at Hartford, Connecticut
this 7th day of April 2006.
this 7th day of April 2006.
CONSENT TO ENTRY OF ORDER
I, Donald C. Pratt, state that I have read the foregoing Consent Order; that I know and fully understand its contents; that I agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that I voluntarily consent to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
________/s/_______________
Donald C. Pratt
Subscribed and sworn to before me
this 7th day of April 2006.
_______________/s/_______________________
Notary Public
My Commission Expires: 12/31/2007