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IN THE MATTER OF: INDEPENDENT SECURITIES ("Respondent") * * * * * * * * * * * * * * * |
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NOTICE OF INTENT TO REVOKE NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. RF-2006-7155-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”). |
| 2. |
Pursuant to Section 36b-26(a) of the Act, as amended by Public Act 05-177, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation into the activities of Respondent to determine if it has violated, is violating or is about to violate provisions of the Act or Regulations. Section 36b-26(a) of the Act, as amended, provides, in pertinent part:
The commissioner may, subject to the provisions of the Freedom of Information Act . . . (1) [m]ake such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated, is violating or is about to violate any provision of sections 36b-2 to 36b-33, inclusive, . . . or any regulation or order thereunder . . . . |
| 3. | As a result of the investigation by the Division, the Commissioner has reason to believe that Respondent has violated certain provisions of the Act. |
| 4. |
As a result of the investigation by the Division, the Commissioner brings this administrative action pursuant to Section 36b-15 of the Act, as amended by Public Act 05-177, and Section 4-182(c) of the Connecticut General Statutes to revoke the broker-dealer registration of Respondent, as set forth herein. Section 36b-15(a) of the Act, as amended, provides, in pertinent part:
The commissioner may, by order, . . . revoke any registration . . . if the commissioner finds that (1) the order is in the public interest, and (2) the . . . registrant . . . (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-33, inclusive, . . . or any regulation . . . under said sections . . . ; (H) has engaged in fraudulent, dishonest or unethical practices in the securities . . . business, including abusive sales practices in the business dealings of such . . . registrant . . . with current or prospective customers or clients . . . ; (K) has failed reasonably to supervise . . . [t]he agents . . . of such . . . registrant, if the . . . registrant is a broker-dealer . . . ; [or] (L) in connection with any investigation conducted pursuant to section 36b-26 . . . or any examination under subsection (d) of section 36b-14 . . . has withheld or concealed material information from . . . the commissioner . . . . |
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Section 4-182(c) of the Connecticut General Statutes provides, in pertinent part:
No revocation . . . of any license is lawful unless, prior to the institution of agency proceedings, the agency gave notice by mail to the licensee of facts or conduct which warrant the intended action, and the licensee was given an opportunity to show compliance with all lawful requirements for the retention of the license. | |
| 5. |
As a result of the investigation by the Division, the Commissioner has the authority to impose a fine on Respondent pursuant to Section 36b-27(d) of the Act, as amended by Public Act 05-177, which provides, in pertinent part:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . or any regulation . . . adopted . . . under said sections, the commissioner may send a notice to (A) such person . . . by registered mail, return receipt requested . . . . Any such notice shall include: (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (ii) a short and plain statement of the matter asserted or charged; (iii) the maximum fine that may be imposed for such violation; and (iv) the time and place for the hearing. Any such hearing shall be fixed for a date not earlier than fourteen days after the notice is mailed.
(2) The commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. After the hearing if the commissioner finds that the person has violated . . . any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . or any regulation . . . adopted . . . under said sections, the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. The commissioner shall send a copy of any order issued pursuant to this subsection by registered mail, return receipt requested, . . . to any person named in such order. |
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Prior to October 1, 2003, Section 36b-27(d)(2) of the Act provided, in pertinent part:
After the hearing if the commissioner finds that the person or persons have violated any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation . . . adopted . . . under said sections, the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding ten thousand dollars per violation be imposed upon such person or persons. If such person or persons fail to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding ten thousand dollars per violation be imposed upon such person or persons. The commissioner shall send a copy of any order issued pursuant to this subsection by registered mail, return receipt requested, . . . to any person or persons named in such order. | |
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II. RESPONDENT | |
| 6. | Respondent is a corporation with its principal place of business at 795 Main Street, Chipley, Florida 32428. |
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III. STATEMENT OF FACTS | |
| 7. | From at least July 2001 to the present, Respondent has been registered in Connecticut under the Act as a broker-dealer. |
| 8. | Dennis Jordan (“Jordan”) is Respondent’s Chief Executive Officer, President, Chief Compliance Officer, Director and majority-shareholder. |
| 9. | On March 10 and 11 and April 7, 2005, the Commissioner, through employees of the Division, conducted an investigation of Respondent pursuant to Section 36b-26(a) of the Act, as amended (“Investigation”), and an examination of Respondent’s books and records pursuant to Section 36b-14(d) of the Act (“Examination”). The Investigation and Examination were conducted at Respondent’s branch office located at 11 Broadway, Suite 1015, New York, New York (“NY Branch”). |
| 10. | Charter One Capital Holding, Inc. (“Charter One”) is a holding company that owns the NY Branch and shares the office with the NY Branch. Charter One also owns a branch of Respondent located in Boca Raton, Florida. |
| 11. | From at least March to June 2005, Respondent employed at least two individuals as “cold callers”, who, inter alia, pre-qualified customers as to financial status and investment history. |
| 12. | The “cold callers” referred to in paragraph 11 were not, at all times relevant hereto, registered with the National Association of Securities Dealers, Inc. (“NASD”) as representatives of Respondent. |
| 13. | 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. |
| 14. | Respondent paid commissions for trades executed by the NY Branch to Charter One. Charter One was not registered with the NASD. NASD Conduct Rule 2420(b) prohibits the payment of any selling concession, discount or other allowance to an unregistered broker-dealer. |
| 15. | Respondent’s Membership Agreement with the NASD restricts it to a maximum of ten associated people, including principals, registered representatives, trainees and cold callers who interface with the public as part of its sales efforts. |
| 16. | The NY Branch alone employed at least 24 individuals who interfaced with the public as part of Respondent’s sales effort. |
| 17. | In at least November 2003, Respondent, through its agent, made a sale of Advanced Optics Electronics securities to at least one Connecticut customer. |
| 18. | The Advanced Optics Electronics securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 19. | From at least December 2004 through April 2005, Respondent, through its agent, made three sales of Bio-Solutions Manufacturing securities to at least two Connecticut customers. |
| 20. | The Bio-Solutions Manufacturing securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 21. | In at least May 2003, Respondent, through its agent, made five sales of Deltagen Inc. securities to at least one Connecticut customer. |
| 22. | The Deltagen Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 23. | In at least July 2003, Respondent, through its agent, made six sales of GoAmerica Inc. securities to at least one Connecticut customer. |
| 24. | GoAmerica Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 25. | In at least October 2003, Respondent, through its agent, made four sales of Hop-On.com securities to at least one Connecticut customer. |
| 26. | Hop-On.com securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 27. | In at least May 2003, Respondent, through its agent, made two sales of Loudeye Technologies securities to at least one Connecticut customer. |
| 28. | Loudeye Technologies securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 29. | In at least June 2003, Respondent, through its agent, made two sales of Paradigm Med Inds securities to at least one Connecticut customer. |
| 30. | Paradigm Med Inds securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 31. | In at least May 2003, Respondent, through its agent, made two sales of Peregrine Pharmaceuticals Inc. securities to at least one Connecticut customer. |
| 32. | Peregrine Pharmaceuticals Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 33. | In at least June 2003, Respondent, through its agent, made two sales of Predictive Systems Inc. securities to at least one Connecticut customer. |
| 34. | Predictive Systems Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 35. | In at least June 2003, Respondent, through its agent, made two sales of Robotic Vision Systems Inc. securities to at least one Connecticut customer. |
| 36. | Robotic Vision Systems Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 37. | In at least June 2003, Respondent, through its agent, made one sale of Sagent Tech Inc. securities to at least one Connecticut customer. |
| 38. | Sagent Tech Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 39. | In at least 2003, Respondent, through its agent, made 9 sales of Skyway Communications securities to at least one Connecticut customer, three in May, four in October and two in November. |
| 40. | Skyway Communications securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 41. | In at least November 2004, Respondent, through its agent, made three sales of Stake Technology securities to at least three Connecticut customers. |
| 42. | Stake Technology securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 43. | In at least September 2003, Respondent, through its agent, made three sales of Tellium Inc. securities to at least one Connecticut customer. |
| 44. | Tellium Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 45. | In at least June 2003, Respondent, through its agent, made five sales of Valicert Inc. securities to at least one Connecticut customer. |
| 46. | Valicert Inc. securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 47. | In at least January 2004, Respondent, through its agent, made one sale of Vodavi Technology securities to at least one Connecticut customer. |
| 48. | Vodavi Technology securities were never registered in Connecticut as required by Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they covered securities. |
| 49. | Respondent failed to maintain records, at its main office, of payments made by the NY Branch to agents, cold-callers and unregistered individuals, and the NY Branch failed to maintain complete and accurate records of transactions with Connecticut customers. |
| 50. | From at least March 2003 to January 2004, Respondent employed at least one agent who, on behalf of Respondent, effected an aggregate of 92 purchases and 66 sales in the following securities for the account of at least one person located in Connecticut: 1st Investors Blue Chip FD-A, 1st Investors Growth & Inc., 1st Investors Tot Return FD A, 1st Investors USA Midcap Opp A, Advanced Optics Electronics, Charter Communications CL A, Deltagen Inc., Federated Growth Strategy FD-B, Federated Hi Inc. BD FD CL-B, Federated Kaufmann B, GoAmerica Inc., Hop-On.com, Lantronix Inc., Loudeye Technologies, Lucent Technologies Inc., Paradigm Med Inds, Peregrine Pharmaceuticals Inc., Predictive Systems Inc., Prosoft I-net Solutions Inc., Radview Software Ltd., RAE Systems Inc., Redback Networks Inc., Robotic Vision Systems Inc., Sagent Tech Inc., Silicon Graphics Inc. (DE), Sirius Satellite Radio Inc., Skyway Communications, Tellium Inc., Transwitch Corp., Valicert Inc., Viragen Inc. and Vodavi Technology. At no time was such agent registered in Connecticut under the Act as an agent of Respondent. |
| 51. | On at least February 9, 2005, Respondent employed at least one agent who, on behalf of Respondent, effected a sale of Nuvelo Inc. securities for the account of at least one person located in Connecticut absent registration in Connecticut. |
| 52. | From at least November 2004 through April 2005, Respondent, through its agent, effected an aggregate of at least three unauthorized transactions on behalf of two Connecticut customers. |
| 53. | During and subsequent to the Investigation and Examination, the Division requested Respondent, both verbally and in writing, to provide numerous documents. Despite repeated requests, Respondent has not provided the Division with all of the requested documents. |
| 54. | Respondent provided the Division with a copy of its “OSJ Manual” (“Supervisory Manual”) during the Investigation and Examination. |
| 55. | “Section 510: Registration” of the Supervisory Manual provides, in pertinent part, that “[t]he OSJ Manager should review the activities in the office in order to prevent any of the following: . . . no . . . [registered representative] may solicit transactions . . . with residents of a state in which the . . . [registered representative] is not registered”. |
| 56. | As described in greater detail in paragraphs 50 and 51, due to an inadequate supervisory system, agents of Respondent effected an aggregate of 159 purchases and sales of securities for 2 Connecticut customers absent registration in Connecticut. At no time was such agent registered in Connecticut under the Act as an agent of Respondent. |
| 57. | Although Respondent had a system for supervising the activities of its agents in place during all periods of time relevant hereto, Respondent failed to establish, enforce and maintain a supervisory system designed to prevent the violative conduct described in paragraphs 11, 12, 14, 16, 17, 53 and 56. |
| 58. | NASD Conduct Rule 2110 states that a “member in the conduct of his business, shall observe high standards of commercial honor and just and equitable principles of trade”. |
| 59. | On August 16 and 24, 2005, the Commissioner gave Respondent written notice pursuant to Section 4-182(c) of the Connecticut General Statutes that it may have engaged in conduct which would provide a basis for the suspension or revocation of its broker-dealer registration in Connecticut and gave Respondent the opportunity to show compliance with all lawful requirements for the retention of its broker-dealer registration in Connecticut. |
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IV. STATUTORY BASIS FOR REVOCATION OF BROKER-DEALER REGISTRATION AND FINE | |
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a. Dishonest or Unethical Practices in the Securities Business – Unregistered Cold Callers | |
| 60. | Paragraphs 1 through 59, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 61. | Respondent’s employment of at least two individuals as “cold callers” who were not registered with the NASD, as more fully described in paragraphs 11 and 12, constitutes a dishonest or unethical practice in the securities business within the meaning of Section 36b-31-15a(b) of the Regulations, in that it is conduct proscribed by NASD Membership and Registration Rule 1031(a). Such a dishonest or unethical practice in the securities business by Respondent forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(H) of the Act, as amended. |
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b. Dishonest or Unethical Practice in the Securities Business – Concession, Discount or Other Allowance | |
| 62. | Paragraphs 1 through 61, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 63. | Respondent’s payment of commissions to Charter One, as more fully describe in paragraph 14, constitutes a dishonest or unethical practice in the securities business, in it is conduct proscribed by NASD Conduct Rule 2420(b). Such a dishonest or unethical practice in the securities business by Respondent forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(H) of the Act, as amended. |
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c. Dishonest or Unethical Practices in the Securities Business – Violating a Membership Agreement Restriction | |
| 64. | Paragraphs 1 through 63, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 65. | Respondent’s employment of 24 associated people in violation of its Membership Agreement with the NASD, as more fully described in paragraphs 15 and 16, constitutes a dishonest or unethical practice in the securities business within the meaning of Section 36b-31-15a(b) of the Regulations, in that it is conduct proscribed by NASD Membership and Registration Rule 1017(a). Such a dishonest or unethical practice in the securities business by Respondent forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(H) of the Act, as amended. |
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d. Dishonest and Unethical Practices in the Securities Business – Executing Transactions and Exercising Discretionary Power Without Authority | |
| 66. | Paragraphs 1 through 65, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 67. | Respondent’s unauthorized sale of securities to two Connecticut customers, as more fully described in paragraph 52, constitutes a dishonest or unethical practice in the securities business within the meaning of subdivisions (5) and (6) of subsection (a) of Section 36b-31-15a of the Regulations. Such a dishonest or unethical practice in the securities business by Respondent forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(H) of the Act, as amended. |
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e. Wilful Violation of Section 36b-16 of the Act – Sale of Unregistered Securities | |
| 68. | Paragraphs 1 through 67, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 69. | Respondent effected 51 offers and sales of 16 securities, which were not registered in Connecticut under the Act, to at least three Connecticut customers, as more fully described in paragraphs 17 through 48, inclusive. The offer and sale of such securities absent registration constitutes a wilful violation of Section 36b-16 of the Act, and such violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the Act, as amended, and for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended. |
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f. Wilful Violation of Section 36b-14(a) of the Act – Failure to Maintain Books and Records | |
| 70. | Paragraphs 1 through 69, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 71. | Respondent’s failure to maintain complete and accurate books and records, as more fully described in paragraph 49, constitutes a wilful violation of Section 36b-14(a) of the Act, and such violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the Act, as amended, and for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended. |
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g. Wilful Violation of Section 36b-6(b) of the Act – Employment of an Unregistered Agent by a Broker-Dealer | |
| 72. | Paragraphs 1 through 71, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 73. | Respondent’s employment of at least two unregistered agents, as more fully described in paragraph 50 and 51, constitutes a wilful violation of Section 36b-6(b) of the Act, and such violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the Act, as amended, and forms a basis for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended. |
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h. Withholding of Material Information from the Commissioner | |
| 74. | Paragraphs 1 through 73, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 75. | Respondent’s withholding of material information from the Commissioner, as more fully described in paragraph 53, forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(L) of the Act, as amended. |
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i. Dishonest and Unethical Practices in the Securities Business – Failure to Observe High Standards and Just and Equitable | |
| 76. | Paragraphs 1 through 75, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 77. | Respondent’s conduct as described in paragraphs 11, 12, 14, 16 through 53, inclusive, and 56 constitutes a dishonest or unethical practice in the securities business within the meaning of Section 36b-31-15a(b) of the Regulations, in that it is conduct proscribed by NASD Conduct Rule 2110. Such a dishonest and unethical practice in the securities business by Respondent forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(H) of the Act, as amended. |
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j. Wilful Violation of Section 36b-31-6f(b) of the Regulations – Failure to Enforce and Maintain Adequate Supervisory Procedures | |
| 78. | Paragraphs 1 through 77, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 79. | Respondent’s failure to establish, enforce and maintain a system for supervising the activities of its agents that is reasonably designed to achieve compliance with applicable securities laws and regulations, as more fully described in paragraphs 55 through 57, inclusive, constitutes a wilful violation of Section 36b-31-6f(b) of the Regulations. Such wilful violation of Section 36b-31-6f(b) of the Regulations constitutes a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(K) of the Act, as amended, and forms a basis for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended. |
V. NOTICE OF INTENT TO REVOKE BROKER-DEALER REGISTRATION
AND NOTICE OF RIGHT TO HEARING
WHEREAS, the Commissioner has reason to believe that Respondent has engaged in acts or conduct that, pursuant to Section 36b-15(a) of the Act, as amended, constitute grounds for revoking its registration as a broker-dealer in Connecticut;
WHEREAS, the Commissioner believes that the issuance of an order revoking registration 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 Act provides, in pertinent part, that “[n]o order may be entered under this section . . . without (1) appropriate prior notice to the . . . registrant . . . , (2) opportunity for hearing, and (3) written findings of fact and conclusions of law”.
NOW THEREFORE, notice is hereby given to Respondent that its registration as a broker-dealer shall be revoked, subject to its 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 its 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 February 23, 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 does not request a hearing within the prescribed time period, the Commissioner shall issue an order revoking registration as a broker-dealer in Connecticut.
VI. NOTICE OF INTENT TO FINE RESPONDENT AND NOTICE OF HEARING
WHEREAS, the Commissioner finds as a result of an investigation by the Division that Respondent has violated Sections 36b-6(b), 36b-14(a) and 36b-16 of the Act and Section 36b-31-6f(b) of the Regulations;
WHEREAS, the Commissioner believes that the imposition of a fine upon Respondent would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
AND WHEREAS, notice is hereby given to Respondent that the Commissioner intends to impose a fine not to exceed Ten Thousand Dollars ($10,000) per violation that occurred prior to October 1, 2003, and One Hundred Thousand Dollars ($100,000) per violation that occurred subsequent to October 1, 2003, for a maximum fine of Two Million Six Hundred Thirty Thousand Dollars ($2,630,000).
NOW THEREFORE, a hearing will be held in accordance with Section 36b-27(d)(2) of the Act, as amended, and Chapter 54 of the Connecticut General Statutes.
The hearing will be held on February 23, 2006, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
At the hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law relating to the allegations stated herein. If Respondent fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon Respondent.
________/s/_________
Dated at Hartford, Connecticut John P. Burke
this 5th day of January 2006. Banking Commissioner
CERTIFICATION
________/s/_________
Nirja Savill
Prosecuting Attorney