| * * * * * * * * * * * * * * * * * * *
IN THE MATTER OF: * * * * * * * * * * * * * * * * * * * |
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
|
CONSENT ORDER |
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, Q 350 Ely LLC (“Q 350”) is a Connecticut limited liability company formed on June 10, 2008 and located at 365 Dr. Martin Luther King, Jr. Drive, Norwalk, Connecticut 06854. Q 350 was created to develop a commercial recreation sports facility in South Norwalk, Connecticut known as the “Sono Field House.”
WHEREAS, James P. Quinn (“Quinn”) is an individual who resides at 286 Mansfield Avenue, Darien, Connecticut 06820. Quinn is a Manager of Q 350 and played a significant role in the creation and development of the Sono Field House;
WHEREAS, Gary Youm (“Youm”) is an individual who resides at 16 Francine Drive, Greenwich Connecticut 06830 and who played a role in the creation and development of the Sono Field House;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Respondents to determine whether they violated, have violated or are about to violate provisions of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act, and that such violations would support administrative proceedings against Respondents under Section 36b-27 of the Act;
WHEREAS, as a result of such Investigation, the Division obtained evidence that at various times from approximately September 2008 to approximately September 2010: 1) Respondents offered and/or sold securities of Q 350 in and from Connecticut to at least one investor, 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; 2) Respondents Quinn and Youm each transacted business as an unregistered agent of issuer; and 3) Respondent Q 3 50 engaged at least one unregistered agent of issuer;
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 Section 36b-27 of the Act would constitute a “contested case” within the meaning of Section 4-166(4) of the General Statutes of Connecticut, as amended by Public Act 15-61;
WHEREAS, Section 4-177(c) of the General Statutes of Connecticut and Section 36a-1-55(a) of the Regulations provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and Respondents reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
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 expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
AND WHEREAS, Respondents, through their execution of this Consent Order, specifically assure the Commissioner that none of the violations alleged in this Consent Order shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive the following rights:
| 1. | To be afforded notice and an opportunity for a hearing within the meaning of Section 36b-27 of the Act and Section 4-177(a) of the General Statutes of Connecticut; |
| 2. | To present evidence and argument and to otherwise avail themselves of Section 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. |
To present their position in a hearing in which they are 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, Respondents, through their execution of this Consent Order, and without admitting or denying the Commissioner’s allegations, acknowledge the following allegations of the Commissioner:
| 1. | Respondents violated Section 36b-16 of the Act through the offer and sale of unregistered securities in or from Connecticut to at least one investor, which securities were not registered in Connecticut under 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; | |
| 2. | Respondent Q 350 violated Section 36b-6(b) of the Act by employing one or more unregistered agents of issuer; and | |
| 3. | Respondents Quinn and Youm each violated Section 36b-6(a) of the Act by transacting business as an unregistered agent of issuer. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondents an opportunity for a hearing;
AND WHEREAS, Respondents acknowledge the possible consequences of an administrative hearing and voluntarily agree to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing on them the following sanctions:
| 1. | Respondent Q 350 and its successors and assigns shall cease and desist from directly or indirectly violating the provisions of the Act, including, without limitation, engaging in any activity in or from Connecticut that violates Sections 36b-16 or 36b-6(b) of the Act; |
| 2. | Respondent Quinn shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including, without limitation, engaging in any activity in or from Connecticut that violates Sections 36b-16 or 36b-6(a) of the Act; |
| 3. | Respondent Youm shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including, without limitation, engaging in any activity in or from Connecticut that violates Sections 36b-16 or 36b-6(a) of the Act; |
| 4. | No later than the date this Consent Order is entered by the Commissioner, Respondent Q 350 shall pay to the Department by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut,” the sum of one thousand dollars ($1,000), which shall constitute an administrative fine; and |
| 5. | No later than the date this Consent Order is entered by the Commissioner, Respondents Quinn and Youm shall jointly and severally remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of thirteen thousand dollars ($13,000), which shall constitute an administrative fine against both Quinn and Youm; and [sic] |
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 Respondents 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; |
| 3. | This Consent Order shall not preclude additional proceedings by the Commissioner against Respondents for acts or omissions not specifically addressed in this Consent Order or for acts and/or omissions that do not arise from the facts or transactions addressed herein; |
| 4. | Respondents shall not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis. However, nothing is this Consent Order affects Respondents’ testimonial obligations or right to take any legal or factual position in litigation, arbitration, or other legal proceedings in which the Commissioner is not a party; and |
| 5. | Respondents shall not take any position in any proceeding brought by or on behalf of the Commissioner, or to which the Commissioner is a party, that is inconsistent with any part of this Consent Order. |
| So ordered at Hartford, Connecticut, | ____/s/___________ | |
| this 26th day of January 2016. | Jorge L. Perez | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, James P. Quinn, state on behalf of Q 350 Ely LLC, 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 Q 350 Ely LLC; that Q 350 Ely LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Q 350 Ely LLC consents to the entry of this Consent Order.
| Q 350 Ely LLC | |
| By: | _____/s/__________ |
| James P. Quinn | |
| Manager |
_______/s/______________________
Commissioner of the Superior Court
CONSENT TO ENTRY OF ORDER
I, James P. Quinn, 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 entry of this Consent Order.
| _____/s/______ |
| James P. Quinn |
State of: Connecticut
On this the 22nd day of January 2016, before me, the undersigned officer, personally appeared James P. Quinn, 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.
_______/s/______________________
CONSENT TO ENTRY OF ORDER
I, Gary Youm, 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 entry of this Consent Order.
| ____/s/______ |
| Gary Youm |
State of: Connecticut
On this the 22nd day of January 2016, before me, the undersigned officer, personally appeared Gary Youm, 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.
_______/s/______________________