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 promulgated under the Act (“Regulations”);

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 if they had violated, were violating or were about to violate provisions of the Act or Regulations (“Investigation”);

WHEREAS, Kondracki is an individual whose address last known to the Commissioner is 535 Hunting Ridge Road, Stamford, Connecticut.  Since December 17, 2003 to the present, Kondracki has been registered in Connecticut as an investment adviser agent of Fairport Advisors, Inc. (CRD No. 117177);

WHEREAS, Liu is an individual whose address last known to the Commissioner is 535 Hunting Ridge Road, Stamford, Connecticut;

WHEREAS, ACAE is a New York limited liability company whose principal place of business and address last known to the Commissioner is 535 Hunting Ridge Road, Stamford, Connecticut.  From at least September 2000 to October 2007, Kondracki and Liu owned, managed and were the only members of ACAE;

WHEREAS, on November 10, 2010, the Commissioner, acting pursuant to Sections 36b-15 and 36b-27 of the 2010 Supplement to the General Statutes (“2010 Supplement”), as amended by Public Act 10-141, issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Investment Adviser Agent, Notice of Intent to Fine and Notice of Right to Hearing (collectively “Notice”) against Respondents, which Notice is incorporated by reference herein;

WHEREAS, the Notice alleged that, in violation of Section 36b-5(a) of the Act, Respondents, in connection with directly or indirectly receiving compensation or other remuneration for soliciting advisory business on behalf of a person subject to the prohibition contained Section 36b-5(a) of the Act, employed a device, scheme or artifice to defraud, made an untrue statement of a material fact or omitted 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, or engaged in an act, practice or course of business which operates as a fraud or deceit upon such other person;

WHEREAS, the Notice alleged that, in violation of Section 36b-5(e) of the Act, Kondracki and Liu, in connection with directly or indirectly receiving compensation or other remuneration for soliciting advisory business on behalf of a person subject to the prohibition contained Section 36b-5(a) of the Act, employed a device, scheme or artifice to defraud, made an untrue statement of a material fact or omitted 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, or engaged in an act, practice or course of business which operates as a fraud or deceit upon such other person;

WHEREAS, the Notice alleged that, in violation of Section 36b-5(f) of the Act, Respondents, in connection with directly or indirectly receiving compensation or other remuneration for advising another person as to the value of securities or their purchase or sale or soliciting advisory business on behalf of a person subject to the prohibition contained in Section 36b-5(a) of the Act constituted engaging in a dishonest or unethical practice in connection with the rendering of such advice or in connection with such solicitation;

WHEREAS, the Notice alleged that, in violation of Section 36b-6(c)(1) of the Act, ACAE transacted business as an investment adviser in Connecticut absent registration as such;

WHEREAS, the Notice alleged that, in violation of Section 36b-6(c)(3) of the Act, ACAE engaged Kondracki and Liu as investment adviser agents in Connecticut, absent registration;

WHEREAS, the Notice alleged that, in violation of Section 36b-6(c)(2) of the Act, Kondracki and Liu transacted business as investments adviser agents of ACAE in Connecticut absent registration as an investment adviser agent;

WHEREAS, the Notice stated that the Commissioner found that the issuance of an Order to Cease and Desist and the imposition of a fine as well as a an order revoking Kondracki’s registration as an investment adviser agent of Fairport Advisors, Inc., in Connecticut was necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act;

WHEREAS, the Notice stated that the Commissioner intended to impose a maximum fine not to exceed One Hundred Thousand Dollars ($100,000) per violation;

WHEREAS, Respondents requested a hearing on the matters alleged in the Notice (“Hearing”);

WHEREAS, Respondent and the Division requested continuances of the Hearing;

WHEREAS, the Hearing has been continued so that the parties may engage in settlement discussions;

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 Sections 36b-15 and 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 36b-27(f) of the Act provides, in relevant part, that “[a]ny time after the issuance of an order or notice provided for in subsection (a) . . . or subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing”;

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, Respondents and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;

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;

WHEREAS, Respondents agree that the Notice may be used in construing the terms of this Consent Order and agree to the language in this Consent Order;

AND WHEREAS, Respondents have provided documentation to the Division evidencing their financial inability to pay the fine that otherwise would have been assessed against them pursuant to the Notice and this Consent Order.

WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive the following rights:

WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing the following sanctions:

V. CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

I, Judy Bao-Shan Liu, state on behalf of ACAE, L.L.C, 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 ACAE, L.L.C; that ACAE, L.L.C agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that ACAE, L.L.C consents to the issuance of this Consent Order.

___________/s/________________
Commissioner of the Superior Court
Bar #: 418108

I, Michael George Sean Kondracki, 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 issuance of this Consent Order, expressly waiving any right to challenge or contest the validity of this Consent Order.

State of:  Connecticut

County of:  Hartford

On this the 14th day of June 2011, before me, Richard N. Freeth, Esq., the undersigned officer, personally appeared Michael George Sean Kondracki, 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/_________________
Commissioner of the Superior Court
Bar #: 418108

I, Judy Bao-Shan Liu, 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 issuance of this Consent Order, expressly waiving any right to challenge or contest the validity of this Consent Order.

State of:  Connecticut

___________/s/________________
Commissioner of the Superior Court
Bar #: 418108

Administrative Orders and Settlements