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STANLEY L. GLADSTONE ("Gladstone") * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CF-2005-823-B |
PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the Connecticut General Statutes, the Connecticut Business Opportunity Investment Act (“Act”);
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36b-71(a) of the Act into the activities of Gladstone to determine whether he had violated, was violating or was about to violate any provisions of the Act (“Investigation”);
WHEREAS, as a result of the Investigation, the Division alleges that Gladstone caused two materially false statements to be made in an application for registration of a business opportunity filed with the Commissioner on behalf of Candy King of America, Inc. (“Candy King”) in violation of Section 36b-80 of the Act;
WHEREAS, on September 16, 2005, the Commissioner, acting pursuant to Section 36b-72 of the Act, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Gladstone (collectively “Notice”), which Notice is incorporated by reference herein;
WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Gladstone; that a hearing would be held on November 1, 2005, on the matters alleged in the Fine Notice (“Fine Hearing”); and that if Gladstone failed to appear at the hearing, the Commissioner may order that a maximum fine of Twenty Thousand Dollars ($20,000) be imposed upon Gladstone;
WHEREAS, on September 22, 2005, the Notice was received by Gladstone;
WHEREAS, on September 27, 2005, counsel for Gladstone requested a hearing on the matters alleged in the Order (“Hearing”);
WHEREAS, the designated Hearing Officer granted various motions to continue the Hearing and the Fine Hearing;
WHEREAS, the Hearing and Fine Hearing are currently scheduled for April 25, 2006;
WHEREAS, Stanley Gladstone represents that he relied on the expertise of counsel in the drafting and implementing of disclosure documents and filings for Candy King in Connecticut;
WHEREAS, Section 36b-72(d) of the Act provides, in relevant part, that “[a]ny time after the issuance of an order provided for in subsection (a) or (b) of this section, the commissioner may accept an agreement by any person charged with violating any provision of . . . [the Act] 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, Gladstone and the Commissioner now desire to resolve the foregoing matter without the need for administrative proceedings, agree that the Notice may be used in construing the terms of this Consent Order and agree to the language in this Consent Order.
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Gladstone, 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-72(a) and 36b-72(b) of the Act, 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-72(a) and 36b-72(b) of the Act, and Section 4-177c(a) of the Connecticut General Statutes;
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To present his position in a hearing in which he is 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, Gladstone, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, 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; and
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Gladstone caused two materially false statements to be made in a document filed with the Commissioner in violation of Section 36b-80 of the Act, which constitutes a basis for an order to cease and desist pursuant to Section 36b-72(a) of the Act, and an order imposing fine pursuant to Section 36b-72(b) of the Act;
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WHEREAS, if the above allegations were proven, the Commissioner would have the authority to enter findings after granting Gladstone an opportunity for a hearing;
WHEREAS, Gladstone acknowledges the possible consequences of an administrative hearing and voluntarily agrees to the consent to entry of sanctions described below.
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Gladstone, 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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The Order to Cease and Desist set forth in the Notice shall become permanent;
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No later than the date this Consent Order is issued by the Commissioner, Gladstone shall remit to the Department of Banking, by certified or cashier’s check made payable to “Treasurer, State of Connecticut”, the sum of Seven Thousand Five Hundred Dollars ($7,500) as an administrative fine; and
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For a period of five (5) years commencing on the date this Consent Order is issued by the Commissioner, Gladstone shall be barred from acting as a director or officer of any entity that advertises, contracts, promotes, offers or sells any “business opportunity” as defined in Section 36b-61(6) of the Act, in this state within the meaning of Section 36b-75 of the Act, provided that, after three (3) years from the date this Consent Order is issued by the Commissioner, Gladstone may apply in writing to the Commissioner with evidence of rehabilitation for waiver of the remaining term of such bar. The granting or denial of such waiver shall be determined by the Commissioner, in the Commissioner’s sole discretion;
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AND WHEREAS, Gladstone specifically assures the Commissioner that none of the violations alleged in the Notice shall occur in the future.
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 Gladstone 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 Gladstone and reflected herein are subsequently discovered to be untrue; and
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This Consent Order shall become final when issued.
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Issued at Hartford, Connecticut
this 26th day of April 2006. ________/s/_________
John P. Burke
Banking Commissioner
CONSENT TO ENTRY OF ORDER
I, Stanley L. Gladstone, 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 issuance of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
________/s/_________
Stanley L. Gladstone
State of: Florida
County of: Broward
On this the 12 day of April 2006, before me, _______________, the undersigned officer, personally appeared Stanley L. Gladstone, 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: April 7, 2008