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IN THE MATTER OF: STEPHEN P. PAZDAR ("Respondent")
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ORDER TO CEASE AND DESIST NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-12-7943-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 promulgated under the Act (“Regulations”). |
| 2. |
Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of Respondent to determine if he had 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 Respondent 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 Respondent pursuant to Section 36b-27(a) of the Act.
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| 5. |
As a result of the Investigation, the Commissioner has the authority to impose a fine upon Respondent pursuant to Section 36b-27(d) of the Act. |
II. RESPONDENT
| 6. | Respondent is an individual whose addresses last known to the Commissioner are 64 Addison Road, Apartment 103, Glastonbury, Connecticut 06033; and 2077 Main Street, Glastonbury, Connecticut 06033. |
III. STATEMENT OF FACTS
| 7. | In or about April and/or May 2008, Respondent approached two Connecticut residents to invest with Michael S. Goldberg (“Goldberg”), member of Michael S. Goldberg, LLC d/b/a Acquisitions Unlimited Group (“AUG”). |
| 8. | Goldberg represented to investors that AUG liquidated distressed assets obtained from Chase Manhattan Bank n/k/a JP Morgan Chase Bank (“Chase Asset Deals”). Such activity purportedly enabled Goldberg to pay investors a return on capital of up to 20 percent in a short period of time, typically 90 days. |
| 9. | Goldberg was arrested and charged with allegedly devising and executing a scheme to defraud investors of more than one hundred million dollars ($100,000,000) over an approximately 12 year period. Goldberg pleaded guilty to three counts of wire fraud, and on May 16, 2011, was sentenced to a term of imprisonment of 120 months on each count, to be served concurrently (United States v. Michael S. Goldberg, D. Conn., Criminal No. 3:10 CR192 (JCH)). |
| 10. | During April through June 2008, the two Connecticut residents invested a total of four hundred thousand dollars ($400,000) in Goldberg’s Chase Asset Deals as a result of the efforts of Respondent. The investments (“AUG Securities”) were evidenced by “Agreements” between AUG and the two Connecticut individuals. Under the “Agreements”, AUG agreed to utilize the invested funds in the Chase Asset Deals. The “Agreements” also provided that Respondent would receive a finder’s fee based on the amount of invested funds. In August 2008, Respondent received a twenty-five thousand dollar ($25,000) referral fee for such referrals. |
| 11. |
The AUG Securities offered and/or sold by Respondent were never 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, including, without limitation, the private placement exemption in Section 36b-21(b)(10) of the Act, and the notice filing provisions governing Regulation D Rule 506 offerings in Section 36b-21(e) of the Act. |
| 12. | Respondent has never been registered in Connecticut as an agent of AUG under Section 36b-6 of the Act. |
IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND ORDER IMPOSING FINE
a. Violation of Section 36b-16 of the Act –
Offer and Sale of Unregistered Securities
| 13. | Paragraphs 1 through 12, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 14. |
Respondent offered and sold securities in or from Connecticut, as more fully described in paragraphs 7 through 10, inclusive, which securities were not registered in Connecticut under the Act, as more fully described in paragraph 11. 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. |
b. Violation of Section 36b-6 of the Act –
Unregistered Agent Activity
| 15. | Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 16. | Respondent transacted business as an agent of issuer in this state absent registration, as more fully described in paragraphs 7 through 12, inclusive. 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. |
V. ORDER TO CEASE AND DESIST, 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, Respondent has committed at least one violation of Section 36b-16 of the Act and at least one violation of Section 36b-6(a) of the Act;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist and the imposition of a fine against Respondent 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 Respondent that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation against Respondent;
WHEREAS, the Commissioner ORDERS that Respondent CEASE AND DESIST from directly or indirectly violating the provisions of the Act and Regulations, including without limitation, (1) offering and selling unregistered securities, and (2) acting as an agent of issuer in this state absent registration;
THE COMMISSIONER FURTHER ORDERS THAT, pursuant Section 36b-27 of the Act, Respondent 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 Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Respondent 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 of Connecticut State Agencies. If a hearing is requested, the hearing will be held on May 15, 2012 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, Respondent 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 Respondent 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 Respondent 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 27th day of March 2012. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 27th day of March 2012, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Stephen Pazdar at 64 Addison Road, Apartment 103, Glastonbury, Connecticut 06033, certified mail no. 7011 0470 0002 2573 4254; and 2077 Main Street, Glastonbury, Connecticut 06033, certified mail no. 7011 0470 0002 2573 4261.
_______/s/_________
Paul A. Bobruff
Prosecuting Attorney