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ORDER TO CEASE AND DESIST ORDER TO MAKE RESTITUTION AND NOTICE OF RIGHT TO HEARING DOCKET NO. CRF-8065-S |
I. PRELIMINARY STATEMENT
| 1. | 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. |
| 2. | Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation into the activities of Nicholas John Moniodes (“Moniodes”) to determine if Moniodes has violated, is violating or is about to violate provisions of the Act or Regulations (“Investigation”). |
| 3. |
As a result of the Investigation, the Commissioner has reason to believe that Moniodes has violated certain provisions of the Act. |
| 4. | As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Moniodes pursuant to Section 36b-27(a) of the Act. |
| 5. |
As a result of the Investigation, the Commissioner has the authority to order that Moniodes make restitution pursuant to Section 36b-27(b) of the Act. |
| 6. | As a result of the Investigation, the Commissioner has the authority to impose a fine upon Moniodes pursuant to Section 36b-27(d) of the Act. |
II. RESPONDENT
| 7. |
Moniodes is an individual whose addresses last known to the Commissioner are 60 Bear Run, Woodbury, Connecticut 06798; and 663 Groton Long Point Road, Groton, Connecticut 06340. Although Moniodes worked in the information technology department at the broker-dealer Millenco LLC (CRD No. 33726) from January 13, 2003 to September 29, 2009, Moniodes is not and has not been registered in any capacity under the Act. From approximately 1999 to approximately 2011, Moniodes did business as Moniodes Investments. |
III. STATEMENT OF FACTS
8.
From approximately November 1, 2004 to approximately June 30, 2011, Moniodes entered into agreements, each entitled “Investment Agreement”, with at least three individuals (“Investors”). In exchange for entering into the Investment Agreements, the Investors gave Moniodes approximately $97,000 in total. Each “Investment Agreement”, on its face, indicated that the proceeds of the investment would be used for “Nicholas Moniodes [sic] business, ‘Moniodes Investments.’” In soliciting the Investors, Moniodes represented to the Investors that he would use the investment proceeds to trade and invest in the stock market, and represented to at least one of the Investors that the investor would receive quarterly interest payments based on any gains the investor’s investment made in the stock market.
9.
Despite his representations to the Investors, Moniodes did not use the Investors monies to invest and/or trade in the stock market, but rather used the investment proceeds to pay for personal expenses.
10.
The “Investment Agreements” are securities within the meaning of Section 36b-3(19) of the Act, 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.
11.
Although Moniodes has repaid some of the Investors, there is still an outstanding balance owed to one of the Investors of approximately $35,000.
ORDER TO MAKE RESTITUTION AND ORDER IMPOSING FINE
a. Violation of Section 36b-16 of the Act –
Offer and Sale of Unregistered Securities
| 12. | Paragraphs 1 through 11, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 13. |
Moniodes offered and sold unregistered securities in or from Connecticut to at least one investor, as more fully described in paragraph 8, which securities were not registered in Connecticut under the Act, as more fully described in paragraph 10. The offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act, which forms a basis for an order to cease and desist to be issued against Moniodes under Section 36b-27(a) of the Act, an order that Moniodes make restitution under Section 36b-27(b) of the Act, and for the imposition of a fine upon Moniodes under Section 36b-27(d) of the Act. |
b. Violation of Section 36b-4(a) of the Act by Moniodes –
Fraud in Connection with the Offer, Sale or Purchase of any Security
| 14. | Paragraphs 1 through 13, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 15. |
The conduct of Moniodes, as more fully described in paragraphs 8 through 11, inclusive, constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or 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, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person. Such conduct constitutes a violation of Section 36b-4(a) of the Act, which forms a basis for an order to cease and desist to be issued against Moniodes under Section 36b-27(a) of the Act, an order that Moniodes make restitution under Section 36b-27(b) of the Act, and for the imposition of a fine upon Moniodes under Section 36b-27(d) of the Act. |
NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Moniodes has committed at least one violation of Section 36b-16 of the Act and at least one violation of Section 36b-4(a) of the Act;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist, Order to Make Restitution and the imposition of a fine upon Moniodes is 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, notice is hereby given to Moniodes that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon Moniodes;
WHEREAS, the Commissioner ORDERS that NICHOLAS JOHN MONIODES CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, (1) offering and selling unregistered securities, and (2) in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or 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, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person;
WHEREAS, the Commissioner ORDERS that NICHOLAS JOHN MONIODES MAKE RESTITUTION of any sums obtained as a result of Moniodes’ violation of Section 36b-16 and Section 36b-4(a) of the Act, plus interest at the legal rate set forth in Section 37-1 of the General Statutes of Connecticut. Specifically, the Commissioner ORDERS that:
| 1. | Within thirty (30) days from the date this Order to Make Restitution becomes permanent, Moniodes shall provide the Division with a written disclosure which contains (a) the name and address of each investor who entered into an “Investment Agreement” (or similar instrument) with Moniodes between approximately November 1, 2004 and approximately June 30, 2011; (b) the amount collected from each investor, (c) the date of each investment, and (d) the amount of any refunds of principal or purported interest payments made to each investor; |
| 2. | Within forty-five (45) days from the date this Order to Make Restitution becomes permanent, Moniodes shall reimburse each investor the amount of funds collected from the investor in connection with the “Investment Agreements”, (or similar instruments) plus interest, less funds returned in the form of purported refunds of principal and purported interest payments. Such restitution shall be made by certified check, and shall be sent by certified mail, return receipt requested, to each affected investor; and |
| 3. | Within ninety days (90) days from the date this Order to Make Restitution becomes permanent, Moniodes shall provide the Division with proof in the form of copies of the certified checks and the return receipts required by paragraph 2 of Section V of this Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing that Moniodes has reimbursed each investor the amount of funds collected from the investor plus interest, less funds returned in the form of purported refunds of principal and purported interest payments, with respect to each investor who entered into an “Investment Agreement” (or similar instrument) with Moniodes. |
THE COMMISSIONER FURTHER ORDERS THAT, pursuant to Section 36b-27 of the Act, Moniodes will be afforded an opportunity for a hearing on the allegations set forth above if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Moniodes’ receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Moniodes 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 General Statutes of Connecticut and Section 36a-1-21 of the Regulations. If a hearing is requested, the hearing will be held on September 23, 2014, 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 General Statutes of Connecticut. At such hearing, Moniodes 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.
This Order to Cease and Desist shall remain in effect and become permanent against Moniodes if he fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
This Order to Make Restitution shall remain in effect and become permanent against Moniodes if he fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
The Commissioner may order that the maximum fine be imposed upon Moniodes if he fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
| Dated at Hartford, Connecticut, | _______/s/__________ | |
| this 9th day of July 2014. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 9th day of July 2014, the foregoing Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Nicholas John Moniodes d/b/a Moniodes Investments at: 60 Bear Run, Woodbury, Connecticut 06798, certified mail no. 7012 3050 0002 1692 6583; 663 Groton Long Point Road, Groton, Connecticut 06340, certified mail no. 7012 3050 0002 1692 6590; and c/o Law Offices of George C. Tzepos, 444 Middlebury Road, Middlebury, Connecticut 06762, certified mail no. 7012 3050 0002 1692 6606.
| ____/s/___________ |
| Elena Zweifler |
| Prosecuting Attorney |