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WOODSTOCK FINANCIAL GROUP, INC. * * * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER CO-2009-7751-S |
PRELIMINARY STATEMENT
WHEREAS, Woodstock, through its execution of this Consent Order, represents and agrees that none of the alleged violations in this Consent Order shall occur in the future;
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Woodstock, 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 with respect to the matters described herein; |
2. | To present evidence and argument and to otherwise avail itself of Section 4-177c(a) of the Connecticut General Statutes with respect to the matters described herein; |
3. | To present its position in a hearing in which it is represented by counsel with respect to the matters described herein; |
4. | To have a written record of the hearing made and a written decision issued by a hearing officer with respect to the matters described herein; 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, Woodstock, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner without admitting or denying them:
1. | 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. | In employing unregistered “cold callers” who pre-qualified customers, Woodstock engaged in conduct proscribed by FINRA Rule 1031. Such conduct constitutes a violation under Section 36b-31-15a(b) of the Regulations, and forms a basis for initiating administrative proceedings under Section 36b-15(a)(2)(H) of the Act; |
3. | Woodstock, by failing to itemize and adequately disclose to its Connecticut clients the fee classified as “Misc.” or “Ticket Charge” on the trade confirmations, which fee ranged from $50 to $99 per transaction, engaged in conduct which would support the initiation of proceedings under Section 36b-15(a)(2)(H) of the Act; |
4. | In contravention of Section 36b-31-6f(b) of the Regulations, Woodstock failed to establish, enforce, and maintain a system for supervising the activities of its agents that was reasonably designed to achieve compliance with applicable securities laws and regulations; |
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Woodstock, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions:
1. | Woodstock, its representatives, agents, employees, affiliates, assigns, or 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 person, organization or other device; |
2. | Within forty-five (45) days from the date this Consent Order is entered by the Commissioner, Woodstock shall provide the Division with proof that 1) it has reimbursed its Connecticut customers for all transactions since January 1, 2008, the difference between the amount of the “Misc.” or “Ticket Charge” fee paid by its Connecticut customers for each transaction and the actual amount of Woodstock’s ticket and clearing charge and the postage fee assessed by its clearing firm; 2) it has amended its customer trade confirmations and/or pre-confirmations to provide Woodstock’s customers with additional disclosure acceptable to the Division which adequately described the “Misc.” fee appearing on the trade confirmations and/or pre-confirmations; and 3) it has sent correspondence to its Connecticut customers who received the reimbursement explaining that the “Misc.” or “Ticket Charge” fee reimbursement was a result of an examination conducted by the Division; |
3. | No later than the date this Consent Order is entered by the Commissioner, Woodstock shall provide to the Division Director for review and approval the letter that is to be sent to its Connecticut customers who receive the “Misc.” or “Ticket Charge” fee reimbursement outlined in item #2 above; |
4. | No later than the date this Consent Order is entered by the Commissioner, Woodstock shall remit to the Department of Banking, via certified bank check, payable to "Treasurer, State of Connecticut", the sum of twenty thousand dollars ($20,000), fifteen thousand dollars ($15,000) of which shall constitute an administrative fine, and five thousand dollars ($5,000) of which shall be applied to defray the costs associated with the Division’s investigation of this matter; and |
CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
1. | The Sanctions 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 Woodstock based upon a violation of this Consent Order or the matters underlying its entry if the Commissioner determines that compliance with the terms herein is not being observed or if any representations made by Woodstock and reflected herein are subsequently discovered to be untrue; and |
3. | This Consent Order shall become final when entered. |
Dated at Hartford, Connecticut | _______/s/_________ | |
this 26th day of March 2010. | Howard F. Pitkin | |
Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, William J. Raike III, state on behalf of Woodstock Financial Group, 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 Woodstock Financial Group, Inc.; that Woodstock Financial Group, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Woodstock Financial Group, Inc. voluntarily consents to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
Woodstock Financial Group, Inc. | |
By | ______/s/__________________ |
William J. Raike III | |
President |
State of: Georgia
County of: Cherokee
_________/s/________________________
Notary Public
Date Commission Expires: 12-5-11