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JOHN MORGAN * * * * * * * * * * * * * * * |
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ORDER IMPOSING FINE DOCKET NO. CF-13-7839-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, the Commissioner, through the Securities and Business Investments Division of the Department of Banking (“Department”), conducted an investigation into the activities of John Morgan (“Respondent”), pursuant to Section 36b-26(a) of the Act, to determine if Respondent had violated, was violating or was about to violate provisions of the Act or Regulations (“Investigation”);
WHEREAS, on September 16, 2013, based on the Investigation, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the Act, issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated by reference herein;
WHEREAS, the Commissioner alleged in the Notice that Respondent offered and/or sold securities in or from Connecticut, which securities were not registered in Connecticut under the Act. 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 Respondent under Section 36b-27(a) of the Act, and for the imposition of a fine upon Respondent under Section 36b-27(d) of the Act;
WHEREAS, the Commissioner alleged in the Notice that Respondent transacted business as an agent of issuer in this state absent registration. Such conduct constitutes a violation of Section 36b-6(a) of the Act, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the Act, and for the imposition of a fine upon Respondent under Section 36b-27(d) of the Act;
WHEREAS, the Notice stated, inter alia, that the Commissioner intended to impose a fine upon Respondent, that Respondent would be afforded an opportunity for a hearing on the allegations set forth in the Notice if a written request for a hearing was received by the Department within fourteen (14) days following Respondent’s receipt of the Notice, and that the Commissioner may order that the maximum fine be imposed upon Respondent if Respondent failed to request a hearing within the prescribed time period or failed to appear at any such hearing;
WHEREAS, on September 16, 2013, the Notice was sent by certified mail, return receipt requested, to Respondent;
WHEREAS, on October 2, 2013, the Notice was returned to the Department as undeliverable;
WHEREAS, on October 2, 2013, the Notice was served on the Commissioner, and on October 3, 2013, in accordance with Section 36b-33(h) of the General Statutes of Connecticut, Notice of Service on the Banking Commissioner In the Matter of: John Morgan dated October 3, 2013 (“Notice of Service”), was sent by registered mail, return receipt requested, to Respondent;
WHEREAS, Respondent has failed to request a hearing on the allegations set forth in the Notice within 14 days of the date of the Notice of Service;
WHEREAS, on October 28, 2013, a Certification was issued rendering the Order to Cease and Desist permanent as of October 18, 2013, which Certification is incorporated by reference herein;
WHEREAS, Section 36a-1-31(a) of the Regulations provides, in pertinent part, that:
When a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted. Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies, provided the commissioner may, if deemed necessary, receive evidence from the department, as part of the record, concerning the appropriateness of the amount of any . . . fine . . . sought in the notice.
WHEREAS, Section 36b-31(a) of the Act provides, in pertinent 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”;
AND WHEREAS, Section 36b-31(b) of the Act provides, in pertinent 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.”
II. FINDINGS OF FACT AND CONCLUSIONS OF LAW
| 1. | The Commissioner finds that the facts as set forth in paragraphs 6 through 28, inclusive, of the Notice, shall constitute findings of fact within the meaning of Section 4-180(c) of the General Statutes of Connecticut and Section 36a-1-52 of the Regulations, and that the Statutory Basis for Order to Cease and Desist and Order Imposing Fine set forth in paragraphs 29 through 39, inclusive, of the Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the General Statutes of Connecticut and Section 36a-1-52 of the Regulations. |
| 2. | The Commissioner finds that Respondent committed one violation of Section 36b-16 of the Act and one violation of Section 36b-6(a) of the Act. |
| 3. | The Commissioner finds that the facts require the imposition of a fine upon Respondent. |
| 4. |
The Commissioner finds that the Notice complied with the requirements of Section 36b-27 of the Act and Section 4-177 of the General Statutes of Connecticut. |
| 5. | The Commissioner finds that the imposition of a fine upon Respondent is necessary and appropriate in the public interest and 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, of the Act. |
III. ORDER
Having read the record, I hereby ORDER, pursuant to Section 36b-27(d) of the Act, that:
| 1. | A fine of Twenty-five Thousand Dollars ($25,000) be imposed upon John Morgan, such fine to be remitted to the Department by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than forty-five (45) days from the date the Order Imposing Fine is mailed; and |
| 2. |
This Order Imposing Fine shall become final when mailed. |
| Dated at Hartford, Connecticut, | ______/s/__________ | |
| this 13th day of November 2013. | Howard F. Pitkin | |
| Banking Commissioner |
This Order was sent by certified mail,
return receipt requested, to
Respondent on November 14, 2013.
John Morgan
183 Madison Avenue, Suite 1719
New York, NY 10016
Certified mail no. 7012 3050 0002 1692 7481