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K.C. WARD FINANCIAL, LLC * * * * * * * * * * * * * * * * * * |
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STIPULATION AND No. ST-15-8201-S |
WHEREAS, the Banking Commissioner (the “Commissioner”) is responsible for administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the “Act”) and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the “Regulations”) promulgated under the Act;
WHEREAS, K.C. Ward Financial, LLC (“KCW”) of 4175 Veterans Memorial Highway, Suite 300, Ronkonkoma, New York 11779 has been registered as a broker-dealer under the Act since April 3, 2008;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, has conducted an examination of KCW’s records pursuant to Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations, and a related investigation under Section 36b-26 of the Act to determine whether KCW had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act;
WHEREAS, as a result of such examination and investigation, the Commissioner alleges that 1) commencing in September, 2012, KCW employed an unregistered broker-dealer agent in contravention of Section 36b-6(b) of the Act; and 2) in contravention of Section 36b-16 of the Act, KCW offered and sold securities of Pegasi Energy Resources Corp. on a solicited basis in a nonissuer transaction to at least one Connecticut investor at a time when such securities were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act;
WHEREAS, the broker-dealer agent referenced above became registered as an agent of KCW under the Act on December 8, 2014;
WHEREAS, the foregoing allegations, if proven, would support the initiation of 1) administrative proceedings under Section 36b-15(a)(2)(B) of the Act to revoke or suspend KCW’s broker-dealer registration under the Act or to restrict or condition KCW’s securities activities in this state; and/or 2) administrative proceedings seeking the entry of an order to cease and desist and/or the imposition of an administrative fine under Section 36b-27 of the Act;
WHEREAS, an administrative proceeding initiated under Sections 36b-15(a) and 36b-27 of the Act and Section 4-182(c) of the Connecticut General Statutes would constitute a “contested case” within the meaning of Section 4-166(2) of the Connecticut General Statutes;
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by stipulation, unless precluded by law;
WHEREAS, KCW desires to settle the matters described herein and voluntarily enters into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding against KCW, its members, employees, agents or representatives adjudicating any issue of fact or law on the specific matters described herein;
AND WHEREAS, KCW, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| 1. |
No later than the date this Stipulation and Agreement is executed by the Commissioner, KCW shall remit to the department via check payable to “Treasurer, State of Connecticut” the sum of three thousand five hundred dollars ($3,500), two thousand dollars ($2,000) of which shall constitute an administrative fine, one thousand dollars ($1,000) of which shall be applied to reimburse the Division for its examination and investigative costs and five hundred dollars ($500) of which shall represent past due registration fees; |
| 2. |
KCW, its members, representatives, agents, employees, affiliates, and successors in interest shall refrain from engaging, directly or indirectly, in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act; |
| 3. | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against KCW based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof; |
| 4. | Nothing in this Stipulation and Agreement shall be construed as limiting the Commissioner’s ability to take enforcement action against KCW, its affiliates and/or successors in interest 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 Stipulation and Agreement shall become binding when executed by KCW and the Commissioner. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.
| Dated at Hartford, Connecticut | ____/s/___________________ | |
| this 26th day of February, 2015. | Bruce Adams | |
| Acting Banking Commissioner |
I, Louis Ward, state on behalf of K.C. Ward Financial, LLC, that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of K.C. Ward Financial, LLC and that K.C. Ward Financial, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
| K.C. Ward Financial, LLC | ||
| By | ____/s/_______________ | |
| Louis Ward | ||
| Chief Executive Officer |
On this 24th day of February 2015, personally appeared Louis Ward, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of K.C. Ward Financial, LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.
_____/s/________________________
Notary Public
My Commission Expires: 03/31/2019