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IN THE MATTER OF: FORMAN FINANCIAL ROGERS FORMAN III (Collectively "Respondents") * * * * * * * * * * * * * * * * * |
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ORDER TO CEASE AND DESIST NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-2010-7554-S |
I. 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 the regulations promulgated thereunder (Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies) (“Regulations”). |
| 2. |
Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of Respondents to determine if they 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. |
| 4. |
As a result of the Investigation, the Commissioner has the authority to issue an order to cease and desist to 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 on Respondents pursuant to Section 36b-27(d) of the Act, as amended by Public Act 09-160. |
II. RESPONDENTS
| 6. | FFS is a Connecticut limited liability company with its principal place of business last known to the Commissioner at 60 Gillett Street, Suite 204, Hartford, Connecticut 06105. |
| 7. |
Forman is an individual whose addresses last known to the Commissioner are 125 Seymour Avenue, West Hartford, Connecticut 06119; and 201 Bingham Street, New Britain, Connecticut 06051. |
III. STATEMENT OF FACTS
| 8. | From at least December 21, 2007, to the present, FFS has been an issuer of securities in the form of promissory notes (“FFS Notes”). |
| 9. | From at least December 21, 2007 through April 8, 2008, Forman, on behalf of FFS, effected the sale of FFS Notes to at least two Connecticut investors. |
| 10. | The FFS Notes that were offered and sold by Respondents were never registered in Connecticut, nor were they exempt from registration, nor were they covered securities. |
| 11. | Forman has never been registered in Connecticut as an agent of FFS. |
| 12. |
To date, at least two Connecticut investors have not received any of the payments provided for in the FFS Notes. |
IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND ORDER IMPOSING FINE AGAINST RESPONDENTS
a. Violation of Section 36b-16 of the Act –
Offer and Sale of Unregistered Securities
| 13. | Paragraphs 1 through 12, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 14. |
Respondents offered and sold unregistered securities to at least two Connecticut investors, as more fully described in paragraph 9, which securities were not registered in Connecticut under the Act, as more fully described in paragraph 10. The offer and sale of such securities absent registration constitutes violations of Section 36b-16 of the Act, which forms a basis for an order to cease and desist to be issued to Respondents under Section 36b-27(a) of the Act; and for the imposition of a fine against Respondents under Section 36b-27(d) of the Act, as amended. |
b. Violation of Section 36b-6 of the Act –
Unregistered Agent Activity
| 15. | Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 16. | Forman acted as an agent of issuer on at least two occasions, absent registration, as more fully described in paragraphs 9 and 11. Such conduct constitutes violations of Section 36b 6(a) of the Act, which forms a basis for an order to cease and desist to be issued to Forman under Section 36b-27(a) of the Act, and for the imposition of a fine against Forman under Section 36b-27(d) of the Act, as amended. |
| 17. |
FFS employed Forman as an agent of issuer on at least two occasions, absent registration, as more fully described in paragraphs 9 and 11. Such conduct constitutes violations of Section 36b-6(b) of the Act, which forms a basis for an order to cease and desist to be issued to FFS under Section 36b-27(a) of the Act, and for the imposition of a fine against FFS under Section 36b-27(d) of the Act, as amended. |
V. ORDER TO CEASE AND DESIST, 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, Respondents have each committed at least two violations of Section 36b-16 of the Act, and at least two violations of Section 36b-6 of the Act;
WHEREAS, the Commissioner further finds that the issuance of this Order to Cease and Desist and the imposition of a fine 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 fine not to exceed One Hundred Thousand Dollars ($100,000) per violation, or a maximum fine against FFS of Two Hundred Thousand Dollars ($200,000) and a maximum fine against Forman of Two Hundred Thousand Dollars ($200,000);
AND WHEREAS, pursuant to Section 36b-27 of the Act, as amended, Respondents will be afforded an opportunity for a hearing on the allegations set forth above.
THE COMMISSIONER THEREFORE ORDERS that FFS CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, (1) offering and selling unregistered securities, and (2) employing an agent of issuer absent registration; and that Forman CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, (1) offering and selling unregistered securities, and (2) acting as an agent of issuer absent registration.
THE COMMISSIONER FURTHER ORDERS that a hearing will be granted to Respondents if a written request for a hearing is received by the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following each Respondent’s receipt of this Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If either 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 of Connecticut State Agencies. If a hearing is requested, the hearing will be held on March 16, 2010, 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, Respondents 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. If any Respondent fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon such Respondent.
This Order to Cease and Desist shall remain in effect and become permanent against each Respondent if a hearing is not requested within the prescribed time period.
| Dated at Hartford, Connecticut, | ________/s/________ | |
| this 26th day of February 2010. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 1st day of March 2010, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Forman Financial Services, LLC at 60 Gillett Street, Suite 204, Hartford, Connecticut 06105, registered mail no. RB027869529US; and 201 Bingham Street, New Britain, Connecticut 06051, registered mail no. RB027869532US; and to Rogers Forman III at 125 Seymour Avenue, West Hartford, Connecticut 06119, registered mail no. RB027869546US; and 201 Bingham Street, New Britain, Connecticut 06051, registered mail no. RB027869550US.
_______/s/_________
Jesse B.Silverman
Prosecuting Attorney