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MULTIVEND, LLC d/b/a VENDSTAR ("Multivend") * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CF-2008-852-B |
I. PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the General Statutes of Connecticut, the Connecticut Business Opportunity Investment Act (“Act”);
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation pursuant to Section 36b-71(a) of the Act into the activities of Multivend, its officers, agents, representatives and employees to determine if they, or any of them have violated, are violating or are about to violate any provisions of the Act (“Investigation”);
WHEREAS, as a result of the Investigation, the Division alleged that Multivend, through its agents, sold unregistered business opportunities to at least eight Connecticut purchaser-investors, in violation of Section 36b-67(1) of the Act;
WHEREAS, on August 15, 2008, the Commissioner, acting pursuant to Section 36b-72 of the Act, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Multivend (collectively “Notice”), which Notice is incorporated by reference herein;
WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Multivend, that a hearing would be held on September 24, 2008, on the matters alleged in the Fine Notice (“Fine Hearing”), and that if Multivend failed to appear at the Fine Hearing, the Commissioner may order that a maximum fine of Two Hundred Sixty Thousand Dollars ($260,000) be imposed upon Multivend;
WHEREAS, on August 21, 2008, the Notice was received by Multivend;
WHEREAS, on September 3, 2008, Multivend requested a hearing on the matters alleged in the Notice (“Hearing”);
WHEREAS, the designated Hearing Officer granted various motions to continue the Fine Hearing and Hearing;
WHEREAS, the Fine Hearing and Hearing are currently continued indefinitely in order to afford the Commissioner and Multivend an opportunity to settle this matter;
WHEREAS, Multivend has represented that it has made eight sales of unregistered business opportunities to Connecticut residents (“Connecticut Purchaser-Investors”);
WHEREAS, Section 36b-72(d) 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 (b) 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, an administrative proceeding initiated under Section 36b-72 of the Act would constitute a “contested case” within the meaning of Section 4-166(2) of the General Statutes of Connecticut;
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, Multivend and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;
AND WHEREAS, Multivend agrees that the Notice may be used in construing the terms of this Consent Order, and agrees to the language in this Consent Order.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Multivend, through its execution of this Consent Order, voluntarily waives the following rights:
| 1. |
To be afforded notice and an opportunity for a hearing within the meaning of Sections 36b-72(a) and 36b-72(b) of the Act, and Section 4-177(a) of the General Statutes of Connecticut; |
| 2. |
To present evidence and argument and to otherwise avail itself of Sections 36b-72(a) and 36b-72(b) of the Act, and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. |
To present its position in a hearing in which it is represented by counsel; |
| 4. |
To have a written record of the hearing made and a written decision issued by a hearing officer; and |
| 5. |
To seek judicial review of, or otherwise challenge or contest the matters described herein, including the validity of this Consent Order. |
III. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Multivend, through its execution of this Consent Order, acknowledges that the Commissioner has made the following allegations, without admitting or denying them:
| 1. |
Multivend sold business opportunities to at least eight Connecticut Purchaser-Investors, absent registration and absent the Commissioner having declared the business opportunity effective, constituting a violation of Section 36b-67(1) of the Act, which forms a basis for an order to cease and desist to be issued against Multivend under Section 36b-72(a) of the Act, and for the imposition of a fine against Multivend under Section 36b-72(b) of the Act; |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Multivend an opportunity for a hearing;
AND WHEREAS, Multivend acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Multivend, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on it the following sanctions:
| 1. |
The Order to Cease and Desist set forth in the Notice shall remain in effect for ten (10) years from the date this Consent Order is issued by the Commissioner, provided that, after seven (7) years from the date this Consent Order is issued by the Commissioner, the Commissioner, at the Commissioner’s sole discretion, may vacate the Order to Cease and Desist upon written application to reconsider by Multivend; |
| 2. |
No later than the date this Consent Order is issued by the Commissioner, Multivend shall remit to the Department, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Five Thousand Dollars ($5,000) as an administrative fine; |
| 3. |
No later than ten (10) business days after the date this Consent Order is issued by the Commissioner, Multivend shall offer all eight (8) Connecticut Purchaser-Investors the opportunity to rescind their business opportunity contracts and receive from Multivend all sums paid to Multivend (“Rescission Offers”). Such Rescission Offers and the acknowledgment of receipt of such Rescission Offers (“Acknowledgment”) shall be in writing in the form attached hereto as Exhibit A and sent by certified mail, return receipt requested, to the Connecticut Purchaser-Investors; |
| 4. |
No later than ten (10) business days after the date of mailing of the Rescission Offers, Multivend shall submit to the Division Director at the mailing address of the Department evidence of compliance with paragraph 3 of this Consent to Entry of Sanctions, including copies of certified mailings, receipts or any other documentary evidence of mailing; |
| 5. |
No later than thirty (30) business days after the date of mailing of the Rescission Offers, Multivend shall submit to the Division Director at the mailing address of the Department copies of evidence, to the extent received, of non delivery of the Rescission Offers; |
| 6. |
No later than forty-five (45) business days after the date of delivery of each Rescission Offer, as evidenced by the return receipt, Multivend shall provide to the Division Director at the mailing address of the Department a copy of any Acknowledgment received by Multivend either accepting or rejecting the Rescission Offer, and for each Rescission Offer accepted, refund the amounts paid to Multivend for each unregistered business opportunity, in accordance with the terms of the Rescission Offer, by cashier’s check, certified check or money order made payable to the Connecticut Purchaser-Investor, and submit written evidence of such payments, including copies of checks or money orders, to the Division Director at the mailing address of the Department; and |
| 7. |
For each Rescission Offer for which evidence of non-delivery has been submitted to the Division Director, Multivend shall exercise all commercially reasonable efforts to ascertain the Connecticut Purchaser’s current address. If Multivend obtains knowledge of such address within one (1) year of the date this Consent Order is issued by the Commissioner, Multivend shall promptly send a second Rescission Offer to such Connecticut Purchaser-Investor in the manner and form set forth in paragraph 3 of this Consent to Entry of Sanctions, and comply with paragraphs 4 through 6, inclusive, of this Consent to Entry of Sanctions; |
AND WHEREAS, Multivend specifically assures the Commissioner that none of the violations alleged in the Notice shall occur in the future.
V. CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
| 1. |
The Sanctions set forth above be and are hereby entered; |
| 2. |
Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Multivend, its officers, agents, representatives and employees, based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representations made by Multivend and reflected herein are subsequently discovered to be untrue; and |
| 3. |
This Consent Order shall become final when issued. |
Issued at Hartford, Connecticut,
this 31st day of July 2009. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CONSENT TO ENTRY OF ORDER
I, Edward Weaver, state on behalf of Multivend, LLC d/b/a Vendstar, 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 Multivend, LLC d/b/a Vendstar; that Multivend, LLC d/b/a Vendstar agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Multivend, LLC d/b/a Vendstar voluntarily consents to the issuance of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
________/s/_________
Name: Edward Weaver
Title: President
Multivend, LLC d/b/a Vendstar
State of: New York
County of: Suffolk
On this the 29th day of July 2009, before me, Edward Weaver [sic], the undersigned officer, personally appeared Before Me [sic], who acknowledged himself/herself to be the president + CEO of Multivend, LLC d/b/a Vendstar, a limited liability company, and that he/she, as such president + CEO, being authorized to do so, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself/herself as Edward Weaver [sic].
In witness whereof I hereunto set my hand.
________/s/_______________________________
Notary Public/Commissioner of the Superior Court
Date Commission Expires: Jan. 18, 2010
EXHIBIT A
[Multivend Logo]
[Date]
CERTIFIED MAIL, RETURN RECEIPT REQUESTED
Name
Address
Address
City, State Zip
Re: Rescission Offer of Multivend Distributorship
Dear _______________________,
On _____________, we sold you products, equipment, supplies and services under the enclosed purchase agreement. At the time we entered into the agreement with you, Multivend, LLC d/b/a Vendstar (“Multivend”) had not registered its business opportunity under the Connecticut Business Opportunity Investment Act (“Act”). The State of Connecticut Department of Banking, which administers the Act, has asked us to extend this rescission offer to you and provide you with a copy of the Act (enclosed) in connection with a settlement to resolve this matter.
As part of our attempt to settle any claims raised by the State of Connecticut, we are offering you the right to immediately rescind your agreement with Multivend. The terms of the offer are described below.
OFFER OF RESCISSION
We hereby offer you the right to immediately rescind your agreement and receive back the consideration you paid for the products, equipment, supplies and services you received from Multivend.
Please advise us as to whether you wish to accept or decline the rescission offer by completing and executing the Acknowledgement of Rescission Offer, also enclosed, and delivering it to us within thirty (30) days of receipt; if we do not receive a duly completed Acknowledgement of Rescission Offer by such time, you are considered to have elected not to rescind your agreement.
If you choose to accept the rescission offer, you must cease operating your business operated under the agreement with Multivend.
If you choose to accept the rescission offer, you must return all machines purchased from Multivend. We will pay all costs of returning such machines to Multivend and will contact you upon acceptance of this rescission offer to arrange for shipment. We will return to you one hundred percent (100%) of the original cost of each individual machine returned to us within twenty (20) business days of our receipt of each machine.
The State of Connecticut has agreed to allow Multivend to continue to sell products, equipment, supplies and services in Connecticut. If you would like to remain a customer of Multivend, you may continue to do so.
We cannot provide you with legal advice regarding your decision whether or not to exercise the offer to rescind. Consequently, you may want to consult with an advisor such as an attorney to review your legal options. Of course, if you have any nonlegal questions about this letter or the procedures described herein, or any other questions concerning your relationship with us, please feel free to call our Chief Executive Officer Ned Weaver. You may also contact the Securities and Business Investments Division of the State of Connecticut Department of Banking at (860) 240-8230.
Very truly yours,
Ned Weaver, Chief Executive Officer
Multivend, LLC d/b/a Vendstar
Attachments
ACKNOWLEDGEMENT OF RESCISSION OFFER
(Please complete this form by checking the appropriate option, executing the signature block below, dating this form, and returning the completed form to Multivend, LLC d/b/a Vendstar, (address)
I have reviewed your letter to me dated _____________________, and have decided as follows:
______ I accept your offer to rescind my agreement with Multivend, LLC d/b/a Vendstar in accordance with the terms contained in the letter. Please contact me at the following telephone number: _________________________.
______ I do not want to rescind my agreement with Multivend, LLC d/b/a Vendstar.
Date: ________________
__________________________________________
Purchaser-investor