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STEVEN HADLEY HAYNES ("Respondent") * * * * * * * * * * * * * * * |
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NOTICE OF INTENT TO DENY AND NOTICE OF RIGHT TO HEARING DOCKET NO. ND-2006-7172-S |
I. PRELIMINARY STATEMENT
| 1. | The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the Connecticut General Statutes, 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”). |
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Pursuant to Section 36b-8 of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation of Respondent. Section 36b-8 of the Act provides, in pertinent part, that:
On receipt of the application for registration as a[n] . . . agent . . . or investment adviser agent, the commissioner may make such investigation of the applicant and the applicant’s affairs as the commissioner deems necessary or advisable. |
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As a result of the investigation conducted by the Division, the Commissioner brings this administrative action pursuant to Section 36b-15(a) of the 2006 Supplement to the General Statutes to deny the agent and investment adviser agent registrations of Respondent in Connecticut. Section 36b-15 of the 2006 Supplement to the General Statutes provides, in pertinent part, that:
(a) The commissioner may, by order, deny . . . any registration . . . if the commissioner finds that (1) the order is in the public interest, and (2) the applicant . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years: . . . (iii) a suspension, expulsion or other sanction issued by a national securities exchange or other self-regulatory organization registered under federal laws administered by the Securities and Exchange Commission . . . if the effect of the sanction has not been stayed or overturned by appeal or otherwise . . .; [or] (H) has engaged in fraudulent, dishonest or unethical practices in the securities . . . business, including abusive sales practices in the business dealings of such applicant, registrant or person with current or prospective customers or clients . . . .
(e) (1) . . . [W]ithdrawal of an application for registration as a[n] . . . agent . . . or investment adviser agent, becomes effective ninety days after receipt of . . . a notice of intent to withdraw such application for registration or within such shorter period of time as the commissioner may determine, unless a denial . . . proceeding is pending when the . . . notice is filed or a proceeding to deny . . . is instituted within ninety days after the application or notice is filed. If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines. If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial . . . proceeding under subsection (a) of this section within one year after withdrawal became effective. |
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II. RESPONDENT
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| 4. | Respondent is an individual whose address last known to the Commissioner is 100 Ridge Road, East Longmeadow, Massachusetts 01028. |
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III. STATEMENT OF FACTS | |
| 5. | From February 1996 to March 2005, Respondent was employed by Tower Square Securities, Inc. (“TSSI”), a broker-dealer and investment adviser registered under the Act. |
| 6. | Respondent was registered as an agent in Connecticut from March 8, 1996 to April 6, 2005. |
| 7. | Between September 3, 2003 and March 25, 2005, Respondent made payments totaling $98,466 to David Faubert (“Faubert”), who was also employed by TSSI, or to Faubert Financial Group, Inc. The payments were for Series 7 trades and advisory accounts that Faubert had referred to Respondent because Faubert had not passed the Series 7 and was not registered as an investment adviser agent in Connecticut. |
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| 9. | On April 29, 2005, Respondent filed with the Commissioner applications for registration as an agent and an investment adviser agent in Connecticut (collectively “Applications”). |
| 10. | On August 3, 2005, Respondent filed a notice of intent to withdraw the Applications. |
| 11. | On November 2, 2005, the National Association of Securities Dealers, Inc. (“NASD”) issued a Letter of Acceptance, Waiver and Consent barring Respondent from association with any NASD member for failure to appear for an on-the-record interview in connection with an investigation into alleged payments of commissions to another individual. The effect of the sanction has not been stayed or overturned. |
| 12. | The NASD is a self-regulatory organization registered with the Securities and Exchange Commission pursuant to Section 15A of the Securities Exchange Act of 1934. |
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IV. STATUTORY BASIS FOR DENIAL OF REGISTRATION
AS AGENT AND INVESTMENT ADVISER AGENT a. Dishonest and Unethical Practices in the
Securities Business – Splitting Commissions | |
| 13. | Paragraphs 1 through 12, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 14. | Respondent’s splitting of commissions, as more fully described in paragraph 7, are dishonest and unethical practices within the meaning of Section 36b-31-15b(a)(5) of the Regulations, and constitute grounds for denial of the Applications pursuant to Section 36b-15(a)(2)(H) of the 2006 Supplement to the General Statutes. |
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b. Sanction Issued by the NASD | |
| 15. | Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 16. | The bar on Respondent, as more fully described in paragraph 11, is a sanction issued by a self regulatory organization registered under federal laws administered by the Securities and Exchange Commission and constitutes a ground for denial of the Applications pursuant to Section 36b-15(a)(2)(F)(iii) of the 2006 Supplement to the General Statutes. |
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V. NOTICE OF INTENT TO DENY REGISTRATIONS AS AGENT AND
INVESTMENT ADVISER AGENT AND NOTICE OF RIGHT TO HEARING |
WHEREAS, the Commissioner has reason to believe that there are grounds to deny Respondent’s applications for registration as agent and investment adviser agent, pursuant to Sections 36b-15(a)(2)(H) and 36b-15(a)(2)(F)(iii) of the 2006 Supplement to the General Statutes;
WHEREAS, the Commissioner believes that the issuance of an order denying registration as agent and investment adviser agent in Connecticut would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
AND WHEREAS, Section 36b-15(f) of the 2006 Supplement to the General Statutes provides, in pertinent part, that “[n]o order may be entered under this section . . . without (1) appropriate prior notice to the applicant . . . and to the employer or prospective employer if such applicant . . . is an agent or investment adviser agent, (2) opportunity for hearing, and (3) written findings of fact and conclusions of law”.
NOW THEREFORE, notice is hereby given to Respondent that his applications for registration as agent and investment adviser agent in Connecticut shall be denied, subject to his right to request a hearing on the allegations set forth above.
A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following his receipt of this Notice. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If 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 Connecticut General Statutes and Section 36a 1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on June 7, 2006, 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 Connecticut General Statutes. At such hearing, 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.
If Respondent fails to request a hearing within the prescribed time period, the Commissioner shall issue an order denying registration as agent and investment adviser agent in Connecticut.
Dated at Hartford, Connecticut ________/s/_________
this 6th day of April 2006. John P. Burke
Banking Commissioner
CERTIFICATION
I hereby certify that on this 6th day of April 2006, the foregoing Notice of Intent to Deny Registration as Agent and Investment Adviser Agent and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Steven Hadley Haynes, 100 Ridge Road, East Longmeadow, Massachusetts 01028, registered mail no. RB028032652US; and Bannon, Ohanesian & Lecours, Inc., 433 South Main Street, Suite 104, West Hartford, Connecticut 06110, registered mail no. RB028032666US.
________/s/_________
Nirja Savill
Prosecuting Attorney