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ANDREW SAVVAS CONSTANTINOU ("Constantinou") * * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CF-2006-6176-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, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation pursuant to Section 36b-26(a) of the 2006 Supplement to the General Statutes into the alleged activities of Constantinou, to determine whether Constantinou had violated, was violating or was about to violate any provision of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, the Division alleges that Constantinou was registered with the Division as an agent with Metlife Securities Inc. (“Metlife”), from February 1, 1999 to April 28, 2000, and with A. CH. Securities, Inc. (“ACH”), from March 27, 2000 to November 20, 2001;
WHEREAS, as a result of the Investigation, the Division further alleges that, in violation of Section 36b-16 of the Act, Constantinou offered and sold to one or more Connecticut residents securities consisting of the simultaneous sales of payphones by American Telecommunications Company, Inc., f/k/a ATC, Inc. (“ATCI”), and payphone service contracts by Alpha Telcom, Inc., a/k/a Alpha Tel-Com, Inc. (“Alpha”) (collectively “Payphone Securities”), and that the Payphone Securities were never registered in Connecticut nor were they exempt from registration under Section 36b-21 of the 2006 Supplement to the General Statutes, nor were they covered securities. Constantinou was retained by Alpha as an Alpha sales agent, pursuant to the terms of a written sales representative agreement entered into between Alpha and Constantinou, which provided for Constantinou to sell products on a commissioned basis for Alpha;
WHEREAS, as a result of the Investigation, the Division also alleges that, in violation of Section 36b-6(a) of the 2006 Supplement to the General Statutes, Constantinou acted as an agent of issuer in making offers and sales of the Payphone Securities at which time he was not registered as such;
WHEREAS, as a result of the Investigation, the Division also alleges that, while registered as an agent, initially of Metlife and later of ACH, Constantinou participated in private securities transactions within the meaning of Section 36b-31-6e of the Regulations through the offer and sale of the Payphone Securities, outside of the regular course or scope of his employment with both Metlife and ACH, and without providing written notice wherein he described in detail the proposed transactions, his proposed role in the transactions and whether he had received or may receive compensation in connection with the transactions, in violation of Section 36b-31-6e of the Regulations;
WHEREAS, Constantinou cooperated with the Department’s investigation including providing testimony and producing documentary evidence requested by the Department, which included documents reflecting that Alpha may have misrepresented the nature of the Alpha payphones to Constantinou and Alpha’s customers by representing, among other things, that the Alpha payphones were not “securities” and were fully insured by reputable insurance companies;
WHEREAS, on May 19, 2006, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the 2006 Supplement to the General Statutes, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine and Notice of Right to Hearing against Constantinou (“Notice”), which Notice is incorporated by reference herein;
WHEREAS, the Notice stated that the Commissioner intended to impose a fine against Constantinou; that a hearing would be held on July 6, 2006, on the matters alleged in the Notice (“Fine Hearing”); and that if Constantinou failed to appear at such hearing, the Commissioner may order that a maximum fine of Sixty Thousand Dollars ($60,000) be imposed upon Constantinou;
WHEREAS, Constantinou received the Notice and requested a hearing on the matters alleged in the Order (“Hearing”);
WHEREAS, the Hearing and Fine Hearing are currently scheduled for July 31, 2006;
WHEREAS, Section 36b-27(f) of the 2006 Supplement to the General Statutes provides, in relevant part, that “[a]ny time after the issuance of an order or notice provided for in subsection (a) . . . or subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing”;
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, Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provides, in relevant part, that “unless precluded by law, any contested case may be resolved by . . . consent order”;
WHEREAS, Constantinou and the Commissioner now desire to resolve the matters alleged in the Notice;
WHEREAS, Constantinou agrees that the Notice may be used in construing the terms of this Consent Order and agrees to the language in this Consent Order.
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Constantinou, through his execution of this Consent Order, voluntarily waives the following rights:
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To be afforded an opportunity for a hearing within the meaning of Sections 36b-27(a) and 36b-27(d) of the 2006 Supplement to the General Statutes and Section 4-177(a) of the Connecticut General Statutes;
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To present evidence and argument and to otherwise avail himself of Sections 36b-27(a) and 36b-27(d) of the 2006 Supplement to the General Statutes and Section 4-177c(a) of the Connecticut General Statutes;
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| 3. | To present his position in a hearing in which he may be represented by counsel; |
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To have a written record of the hearing made and a written decision issued by a hearing officer; and
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To seek judicial review of, or otherwise challenge or contest the matters described herein, including the validity of this Consent Order.
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ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Constantinou, through his execution of this Consent Order, acknowledges that the Commissioner has made the following allegations, without admitting or denying them:
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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;
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Constantinou violated Section 36b-16 of the Act by offering and selling unregistered securities to one or more Connecticut investors;
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Constantinou violated Section 36b-6(a) of the 2006 Supplement to the General Statutes by acting as an agent of issuer without being registered as such; and
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Constantinou violated Section 36b-31-6e of the Regulations by engaging in private securities transactions without written notice to his employing broker-dealer.
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WHEREAS, the Commissioner would have the authority to enter findings after granting Constantinou an opportunity for a hearing;
WHEREAS, Constantinou acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Constantinou, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:
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No later than the date this Consent Order is issued by the Commissioner, Constantinou shall remit to the Department of Banking by cashier’s or certified check made payable to “Treasurer, State of Connecticut” the sum of Ten Thousand Dollars ($10,000), as an administrative fine;
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Commencing on the date this Consent Order is issued by the Commissioner, Constantinou is permanently barred from acting in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer as such terms are defined in Section 36b-3 of the Act; and
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The Order to Cease and Desist set forth in the Notice shall become permanent.
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CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
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The Sanctions set forth above be and are hereby entered;
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Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Constantinou 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 Constantinou and reflected herein are subsequently discovered to be untrue;
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This Consent Order shall not preclude additional proceedings by the Commissioner against Constantinou 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
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This Consent Order shall become final when issued.
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Issued at Hartford, Connecticut
this 10th day of August 2006. ________/s/_________
John P. Burke
Banking Commissioner
CONSENT TO ENTRY OF ORDER
I, Andrew Savvas Constantinou, 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 consent to the issuance of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
________/s/_________
Andrew Savvas Constantinou
State of: CT
County of: New Haven
On this the 27 day of July 2006, before me, Priscella Woodin, the undersigned officer, personally appeared Andrew Savvas Constantinou, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand.
________/s/_________
Notary Public
Date Commission Expires: 7/31/09