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EURO GROUP OF ("Respondents") * * * * * * * * * * * * * * * |
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AMENDED AND RESTATED AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-13-8022-S |
I. AMENDED AND RESTATED PRELIMINARY STATEMENT
| 1. | The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (“Act”), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act. |
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Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), has conducted an investigation into the activities of Respondents to determine if Respondents have violated, are violating or are about to violate provisions of the Act or Regulations (“Investigation”). |
| 3. | As a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act. |
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As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-27(a) of the Act.
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| 5. |
As a result of the Investigation, the Commissioner has the authority to impose a fine upon Respondents pursuant to Section 36b-27(d) of the Act. |
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II. AMENDED AND RESTATED RESPONDENTS | |
| 6. | Euro Group of Companies, Inc. (“Euro”) formerly known as ICT Technologies, Inc., is a Delaware holding company whose principal place of business was 10 Midland Avenue, Port Chester, New York 10573 until it relocated to 475 Whitney Avenue, New Haven, Connecticut 06511 in February 2012. Euro, through its subsidiaries, markets and distributes motor vehicles and telecommunications products and services in the United States and abroad. |
| 7. | Vasilios Koutsobinas (“Koutsobinas”) is an individual whose address last known to the Commissioner is 255 Fieldston Terrace #5-B, Riverdale, New York 10471. At all relevant times hereto, Koutsobinas was the control person and Chairman of Euro. Koutsobinas is not and has not been registered in any capacity under the Act. |
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III. AMENDED AND RESTATED STATEMENT OF FACTS | |
| 8. | At various times during 2008, Euro issued restricted shares (“Euro Restricted Shares”) in private placements at prices ranging from $0.07 to $0.50 per share, and at various times in 2009 Euro issued Euro Restricted Shares in private placements at prices ranging from $0.15 to $1.00 per share, which securities were not registered in Connecticut under Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they the subject of a filed exemption claim or claim of covered security status. During the relevant period of time, Koutsobinas materially aided Euro in the issuance of Euro Restricted Shares by meeting with and speaking to investors regarding investing in Euro Restricted Shares. |
| 9. | By contrast, during 2008 and 2009, unrestricted publicly traded shares of Euro (“Euro Public Shares”), were trading on the Over the Counter Bulletin Board (“OTCBB”) for between $0.10 and $0.35 per share, significantly less than the price paid by investors in the private placements. Except for a one day closing price of $0.40 per share and a single intraday trading price of $0.44, Euro Public Shares traded at or below $0.20 per share during the same time period that Euro sold Euro Restricted Shares to several investors in private placements at a price ranging from of $0.15 to $1.00 per share. Euro Public Shares traded on the OTCBB under the symbol “EGCO” until May 22, 2013. EGCO was essentially a low priced thinly traded penny stock. |
| 10. | Respondents failed to disclose to investors of Euro Restricted Shares that Euro was a public company trading on the OTCBB and that investors could have purchased Euro Public Shares for significantly less than they paid for Euro Restricted Shares through private placements. None of the investors who purchased Euro Restricted Shares through private placements held a controlling interest in Euro, nor was there any demonstrated basis for their paying a premium over market value for the Euro Restricted Shares. |
| 11. | Respondents did not provide investors with a private placement memorandum or any other offering document that disclosed the risks associated with a purchase of Euro Restricted Shares. For example, Respondents did not disclose to investors that Euro Restricted Shares were not liquid or that Euro Restricted Shares were not registered under the Act. |
| 12. | Christos Christoforou (“Christoforou”) is the President, director and control person of Maxcomusa Group Inc., a Delaware corporation with a principal place of business and address last known to the Commissioner of 61 Fair Street, Norwalk, Connecticut 06851. Christoforou is not and has not been registered in any capacity under the Act. |
| 13. | In approximately October 2007, Euro and Christoforou purportedly entered into a business relationship whereby Christoforou would assist Euro and/or its subsidiaries in various business ventures. In April and May 2008, Christoforou purchased Euro Restricted Shares from Euro in private placements. |
| 14. | From approximately May 2008 through approximately September 2008, Christoforou engaged in the business of effecting sales of Euro Restricted Shares on behalf of Euro at a price of $0.50 per share to at least six investors in Connecticut and other states. Respondents were well-aware that Christoforou engaged in effecting sales of Euro Restricted Shares on behalf of Euro, as investors sent their money to Christoforou, who forwarded the investor’s money to Euro. Euro then sent certificates for the Euro Restricted Shares either directly to each individual investor or to Christoforou, who delivered the certificate(s) to the investors. |
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IV. AMENDED AND RESTATED STATUTORY BASIS FOR a. Violation of Section 36b-16 of the Act – Offer and Sale of Unregistered Securities | |
| 15. | Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 16. | Euro offered and sold securities in or from Connecticut to at least one Connecticut investor, as more fully described in paragraphs 8 and 9, which securities were not registered in Connecticut under the Act. The offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act, which forms a basis for an order to cease and desist to be issued against Euro under Section 36b-27(a) of the Act, and for the imposition of a fine upon Euro under Section 36b-27(d) of the Act. |
| 17. | The conduct of Koutsobinas, as more fully described in paragraphs 8 and 9, materially aided Euro’s violation of Section 36b-16 of the Act, which forms a basis for an order to cease and desist to be issued against Koutsobinas under Section 36b-27(a) of the of the Act, and for the imposition of a fine upon Koutsobinas under Section 36b-27(d) of the Act. |
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b. Violation of Section 36b-6(b) of the Act by Euro – Employing an Unregistered Agent | |
| 18. | Paragraphs 1 through 17, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 19. | Euro employed an unregistered agent of issuer, as described more fully in paragraphs 12 through 14, inclusive. Such conduct constitutes a violation of Section 36b-6(b) of the Act, which forms a basis for an order to cease and desist to be issued against Euro under Section 36b-27(a) of the Act, and for the imposition of a fine upon Euro pursuant to Section 36b-27(d) of the Act. |
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c. Violation of Section 36b-4(a) of the Act – Fraud in Connection with the Offer, Sale or Purchase of any Security | |
| 20. | Paragraphs 1 through 19, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 21. | The conduct of Euro, as more fully described in paragraphs 8 through 11, inclusive, constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person. Such conduct constitutes a violation of Section 36b-4(a) of the Act, which forms a basis for an order to cease and desist to be issued against Euro under Section 36b-27(a) of the Act, and for the imposition of a fine upon Euro under Section 36b-27(d) of the Act. |
| 22. | The conduct of Koutsobinas, as more fully described in paragraphs 8 through 11, inclusive, violated Section 36b-4(a) of the Act or in the alternative materially aided Euro’s violation of Section 36b-4(a) of the Act, which forms a basis for an order to cease and desist to be issued against Koutsobinas under Section 36b-27(a) of the of the Act, and for the imposition of a fine upon Koutsobinas under Section 36b-27(d) of the Act. |
V. AMENDED AND RESTATED ORDER TO CEASE AND DESIST,
AMENDED AND RESTATED NOTICE OF INTENT TO FINE
AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Koutsobinas has materially aided Euro in at least one violation of Section 36b-16 of the Act, has committed at least one violation of Section 36b-4(a) of the Act or in the alternative materially aided Euro’s violation of Section 36b-4(a) of the Act;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist and the imposition of a fine upon Respondents is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act;
WHEREAS, notice is hereby given to Respondents that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation;
WHEREAS, the Commissioner ORDERS that EURO GROUP OF COMPANIES, INC. CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, (1) offering and selling unregistered securities, (2) employing an unregistered agent of issuer, and (3) in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that VASILIOS KOUTSOBINAS CEASE AND DESIST from directly or indirectly violating or materially aiding in the violation of the provisions of the Act, including without limitation, offering and selling unregistered securities, and in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person;
THE COMMISSIONER FURTHER ORDERS THAT, pursuant to subsections (a) and (d) of Section 36b 27 of the Act, each Respondent will be afforded an opportunity for a hearing on the allegations set forth above if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following each Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If any Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations. If a hearing is requested, the hearing will be held on March 12, 2014, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At such hearing, each Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
This Order to Cease and Desist shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
The Commissioner may order that the maximum fine be imposed upon any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
Dated at Hartford, Connecticut,
_______/s/__________
this 10th day of February 2014.
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 10th day of February 2014, the foregoing Amended and Restated Order to Cease and Desist, Amended and Restated Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Vasilios Koutsobinas, 255 Fieldston Terrace #5-B, Riverdale, New York 10471, certified mail no. 7012 3050 0002 1692 6392; Vasilios Koutsobinas, 29-20 23rd Avenue, Suite 201, Astoria, New York 11105, certified mail no. 7012 3050 0002 1692 6408; and by first-class mail and e-mail to Euro Group of Companies, Inc., c/o Stephen Bellis, Esq., The Pellegrino Law Firm, 475 Whitney Avenue, New Haven, Connecticut 06511.
| ____/s/___________ |
| Elena Zweifler |
| Prosecuting Attorney |