| * * * * * * * * * * * * * * * * * *
IN THE MATTER OF: (Collectively "Respondents") * * * * * * * * * * * * * * * * * * |
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
|
NO. CO-13-7831-S |
I. PRELIMINARY STATEMENT
WHEREAS, 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;
WHEREAS, Michael P. Healey ("Healey") is an individual whose address last known to the Commissioner is 192 Shorefront Drive, Milford, Connecticut 06460. Healey is not and has not been registered in any capacity under the Act;
WHEREAS, Healey Ford of Ansonia, Inc. ("Healey Ford"), a Connecticut corporation formed on August 18, 1980, maintains its principal place of business at 500 Main Street, Ansonia, Connecticut 06401. Healey is the president, secretary and treasurer of Healey Ford. Healey Ford is not and has not been registered in any capacity under the Act;
WHEREAS, Eurospeed USA, Inc. ("Eurospeed"), a Connecticut corporation formed on April 20, 2006, maintains its principal place of business at 500 Main Street, Ansonia, Connecticut 06401. Healey is the president of Eurospeed. Eurospeed is not and has not been registered in any capacity under the Act;
WHEREAS, American Motor Sports, LLC ("AMS"), a Connecticut limited liability company formed on January 28, 2008, maintains its principal place of business at 500 Main Street, Ansonia, Connecticut 06401. Eurospeed is the managing member of AMS. AMS is not and has not been registered in any capacity under the Act;
WHEREAS, at all times relevant hereto, Healey has been a control person of Healey Ford, Eurospeed, and AMS;
WHEREAS, the Commissioner, through the Securities and Business Investments Division ("Division") of the Department of Banking, conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Respondents to determine whether they, or any of them, had violated, were violating or were about to violate provisions of the Act or Regulations ("Investigation");
WHEREAS, as a result of such Investigation, the Division obtained evidence that at various times from April 2006 to January 2009 Respondents: (1) offered and sold securities in and from Connecticut to at least one investor, 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; and (2) in connection with the offer, sale or purchase of such securities, directly or indirectly, omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;
WHEREAS, the Commissioner has reason to believe that the foregoing conduct violates certain provisions of the Act, and would support administrative proceedings against Respondents under Section 36b-27 of the Act;
WHEREAS, Section 36b-31(a) of the Act provides, in relevant part, that "[t]he commissioner may from time to time make . . . such . . . orders as are necessary to carry out the provisions of sections 36b-2 to 36b-34, inclusive";
WHEREAS, Section 36b-31(b) of the Act provides, in relevant part, that "[n]o . . . order may be made . . . unless the commissioner finds that the action 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 sections 36b-2 to 36b-34, inclusive";
WHEREAS, an administrative proceeding initiated under Section 36b-27 of the Act would constitute a "contested case" within the meaning of Section 4-166(2) of the General Statutes of Connecticut;
WHEREAS, Section 4-177(c) of the General Statutes of Connecticut and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and Respondents reached an agreement, the terns of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, the Commissioner has determined that no fine will be imposed on Healey based on Healey's demonstrated' inability to pay;
WHEREAS, Respondents expressly consent to the Commissioner's jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS, the Commissioner finds that 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 WHEREAS, Respondents, through their execution of this Consent Order, specifically assure the Commissioner that none of the violations alleged in this Consent Order shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive the following rights:
| 1. | To be afforded notice and an opportunity for a hearing within the meaning of Section 36b-27 of the Act and Section 4-177(a) of the General Statutes of Connecticut; |
| 2. | To present evidence and argument and to otherwise avail themselves of Section 36b-27 and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. |
To present their respective positions in a hearing in which each is represented by counsel; |
| 4. | To have a written record of the hearing made and a written decision issued by a hearing officer; and |
| 5. |
To seek judicial review of, or otherwise challenge or contest, the matters described herein, including the validity of this Consent Order. |
III. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Respondents, through their execution of this Consent Order, acknowledge the following allegations of the Commissioner, and admit sufficient evidence exists for the Commissioner to issue an order to cease and desist, an order imposing a maximum administrative fine of one hundred thousand dollars ($100,000) per violation of the Act, or any regulation, rule or order adopted or issued under the Act, and an order imposing restitution upon Respondents:
| 1. |
Respondents violated Section 36b-16 of the Act through the offer and sale of unregistered securities in or from Connecticut to at least one investor, which securities were not registered in Connecticut under the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they subject to an exemption claim or claim of covered security [sic]; |
| 2. | Respondents violated Section 36b-4(a)(2) by, in connection with the offer, sale or purchase of any securities, directly or indirectly, omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; and |
| 3. | The foregoing conduct, if proven, forms a basis for the initiation of administrative proceedings against Respondents pursuant to 36b-27(a) of the Act; |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondents an opportunity for a hearing;
AND WHEREAS, Respondents acknowledge the possible consequences of an administrative hearing and voluntarily agree to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner's entry of an order imposing on them the following sanctions:
| 1. | Respondents, their representatives, agents, employees, affiliates, assigns, subsidiaries, and successors in interest shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including without limitation: (a) offering and selling unregistered securities in and from Connecticut; and (b) in connection with the offer, sale or purchase of any security, directly or indirectly, 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; |
| 2. | For ten (10) years commencing on the date this Consent Order is entered by the Commissioner, Healey and any entity under his control shall be barred from (a) transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent, as such terms are defined in the Act, and notwithstanding any definitional exclusion that might otherwise be available; (b) in connection with the recommendation, sale or purchase of securities, acting as a finder for compensation, or receiving referral fees or other remuneration, directly or indirectly for soliciting or otherwise procuring securities investors, customers or clients for any issuer, broker-dealer or investment adviser; and (c) directly or indirectly soliciting or accepting funds for investment purposes from public or private investors in or from Connecticut; and |
| 3. | For ten (10) years, commencing on the date this Consent Order is entered by the Commissioner, Healey Ford, Eurospeed and AMS shall each be barred from directly or indirectly soliciting or accepting funds for investment purposes from public or private investors in or from Connecticut absent compliance with this paragraph. Specifically, Healey Ford, Eurospeed or AMS, as the case may be, shall (a) provide the Division Director with at least thirty (30) days advance written notice of the proposed issuance, offer or sale of securities to public or private investors; (b) retain legal counsel experienced in the area of state securities regulation under the Act and not unacceptable to the Division Director to provide advice on compliance with the securities laws of Connecticut and other jurisdictions ("Retained Counsel"), including compliance with agent of issuer registration requirements; (c) direct Retained Counsel to prepare and submit all required filings and fees to the Commissioner and to provide the Division Director with a signed opinion of counsel setting forth the basis for any claim of exemption or covered security status under Section 36b-21 of the Act, at least thirty (30) days prior to the commencement of the offering; and (d) refrain from offering or selling securities in or from Connecticut to public or private investors prior to receiving a written acknowledgement by Retained Counsel that the Commissioner has declared the registration of such securities effective or that the Division Director has acknowledged the issuer's claim of exemption under Section 36b-21 of the Act or the issuer's claim of covered security status. |
V. CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. | The Sanctions set forth above be and are hereby entered; |
| 2. | After seven years have elapsed from the date this Consent Order is entered by the Commissioner, an affected Respondent may request that the Commissioner relieve that Respondent of the restrictions contained in paragraph (2) or (3), as applicable, of Section IV of this Consent Order. A Respondent seeking such relief shall file a written application with the Division Director setting forth the basis for the request. The Division Director shall review the request and make a decision based on the Director's review. The Division Director may, in his/her sole discretion, grant, deny or condition the relief sought pursuant to this paragraph; |
| 3. | Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against any Respondent 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; |
| 4. | Nothing in this Consent Order shall be construed as limiting the Commissioner's ability to take enforcement action against any Respondent based upon evidence of which the Division was unaware on the date hereof relating to a violation of the Act or any regulation or order under the Act; and |
| 5. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | ______/s/__________ | |
| this 30th day of May 2013. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Michael P. Healey, 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 entry of this Consent Order.
| ______/s/________ |
| Michael P. Healey |
State of: Connecticut
County of: New Haven
On this the 23rd day of May 2013, before me, Dolores J. Mastroni, the undersigned officer, personally appeared Michael P. Healey, 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.
_____/s/__________________________________
Date Commission Expires: 10/31/13
CONSENT TO ENTRY OF ORDER
I, Michael P. Healey, state on behalf of Healey Ford of Ansonia, Inc., that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Healey Ford of Ansonia, Inc.; that Healey Ford of Ansonia, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Healey Ford of Ansonia, Inc. consents to the entry of this Consent Order.
| Healey Ford of Ansonia, Inc. | |
| By: | ______/s/________________ |
| Michael P. Healey | |
| President |
State of: Connecticut
County of: New Haven
On this the 23rd day of May 2013, before me Dolores J. Mastroni, the undersigned officer, personally appeared Michael P. Healey, who acknowledged himself to be the President of Healey Ford of Ansonia, Inc. and that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President.
_____/s/__________________________________
Notary Public/Commissioner of the Superior Court
Date Commission Expires: 10/31/13
CONSENT TO ENTRY OF ORDER
I, Michael P. Healey, state on behalf of Eurospeed USA, Inc., that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Eurospeed USA, Inc.; that Eurospeed USA, Inc., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Eurospeed USA, Inc. consents to the entry of this Consent Order.
| Eurospeed USA, Inc. | |
| By: | ______/s/________________ |
| Michael P. Healey | |
| President |
State of: Connecticut
County of: New Haven
On this the 23rd day of May 2013, before me Dolores J. Mastroni, the undersigned officer, personally appeared Michael P. Healey, who acknowledged himself to be the President of Eurospeed USA, Inc., and that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President.
_____/s/__________________________________
Notary Public/Commissioner of the Superior Court
Date Commission Expires: 10/31/13
CONSENT TO ENTRY OF ORDER
I, Michael P. Healey, state on behalf of American Motorsports, LLC, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of American Motorsports, LLC; that American Motorsports, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that American Motorsports, LLC consents to the entry of this Consent Order.
| American Motorsports, LLC | |
| By: | ______/s/____________________ |
| Michael P. Healey | |
| President of Eurospeed USA, Inc. | |
| Its Managing Member |
State of: Connecticut
County of: New Haven
On this the 23rd day of May 2013, before me, Dolores J. Mastroni, the undersigned officer, personally appeared Michael P. Healey, who acknowledged himself to be the President of the Managing Member of American Motorsports, LLC, and that he, in such capacity, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as President of its Managing Member.
_____/s/__________________________________
Notary Public/Commissioner of the Superior Court
Date Commission Expires: 10/31/13