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ROBERT TARINI ("Respondent") * * * * * * * * * * * |
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ORDER TO CEASE AND DESIST NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-2008-7565-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 the regulations promulgated thereunder (Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies) (“Regulations”). |
| 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 (“Department”), has conducted an investigation into the activities of Respondent to determine if he has violated, is violating or is about to violate provisions of the Act, Regulations or any order thereunder (“Investigation”). Section 36b-26(a) of the Act provides, in pertinent part:
The commissioner may, subject to the provisions of the Freedom of Information Act . . . (1) [m]ake such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated, is violating or is about to violate any provision of sections 36b-2 to 36b-33, inclusive, or any regulation or order thereunder . . . . |
| 3. | As a result of the Investigation by the Division, the Commissioner has reason to believe that Respondent has violated certain provisions of the Act. |
| 4. |
As a result of the Investigation by the Division, the Commissioner has the authority to issue a cease and desist order against Respondent pursuant to Section 36b-27(a) of the Act, which provides, in pertinent part:
Whenever it appears to the commissioner after an investigation that any person has violated, is violating or is about to violate any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may, in the commissioner’s discretion, order (1) the person . . . to cease and desist from the violations . . . of the provisions of said sections . . . . After such an order is issued, the person named in the order may, within fourteen days after receipt of the order, file a written request for a hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. |
| 5. |
As a result of the Investigation by the Division, the Commissioner has the authority to impose a fine on Respondent pursuant to Section 36b-27(d) of the Act, which provides, in pertinent part:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may send a notice to (A) such person . . . by registered mail, return receipt requested . . . . Any such notice shall include: (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (ii) a short and plain statement of the matter asserted or charged; (iii) the maximum fine that may be imposed for such violation; and (iv) the time and place for the hearing. Any such hearing shall be fixed for a date not earlier than fourteen days after the notice is mailed.
(2) The commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. After the hearing if the commissioner finds that the person has violated . . . any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. The commissioner shall send a copy of any order issued pursuant to this subsection by registered mail, return receipt requested, . . . to any person named in such order. |
| 6. | Respondent is an individual whose address last known to the Commissioner is 46 Bell Schoolhouse Road, Richmond, Rhode Island 02892. |
| 7. | On May 26, 2006, as part of the Investigation, a Subpoena Duces Tecum was issued to Respondent (“Subpoena”). |
| 8. |
On August 4, 2006, pursuant to the Subpoena, Respondent testified under oath in an investigatory deposition (“Deposition”). |
| 9. | During the Deposition, Respondent testified to an extensive professional relationship with Chad A. Verdi (“Verdi”). Respondent stated that he and Verdi had previously had joint ownership interests in: Bay View Capital, LLC, a Rhode Island limited liability company established to provide financing; Dyer Avenue Associates, a Rhode Island real estate holding company; VFM Realty, a Rhode Island real estate holding company; and Syquest, a Rhode Island corporation engaged in acoustic remote sensing technology. |
| 10. |
During the Deposition, Respondent also testified that he was President of Markland Technologies, Inc. (“Markland”), a Rhode Island based holding company which held various intellectual property assets related to electro-optic and biometric sensing technologies.
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| 11. |
During the Deposition, Respondent also testified that Verdi was a consultant to Markland, who was retained by Markland to “provide visibility for the corporation” and to “provide some guidance with respect to the structure of public companies.” |
| 12. | During the Deposition, when asked about Verdi’s role as a consultant for Markland, Respondent testified that, inter alia, Verdi “may have introduced investors to the company . . . . To the best of my recollection I don’t know that he did more than that.” Later in the Deposition, Respondent offered to clarify that earlier statement. Respondent then testified that, inter alia, “[Verdi’s] basic role was not to specifically solicit anyone’s interest. It was to verify whom they claimed to be and that their organizations were whom they claimed to be, et cetera.” In fact, Respondent knew that Verdi actively solicited investments from new investors, regularly sent out and received documents regarding this solicitation, including term sheets, and actively participated in negotiations with investors. |
| 13. | During the Deposition, Respondent also testified that Verdi did not represent Markland “with respect to the detailed negotiations on any transactions”. Respondent was also asked who, on behalf of Markland, negotiated the terms of a specific financing transaction between Markland and a particular Connecticut based investment pool of capital (“Hedge Fund”). Respondent testified that he, another officer of Markland and counsel for Markland were the only representatives of Markland in the negotiations with the Hedge Fund. In fact, Respondent knew that Verdi had represented Markland in negotiating the terms of transactions on multiple occasions and omitted to state that Verdi had, in fact, represented Markland in its negotiations with the Hedge Fund. |
AND ORDER IMPOSING FINE AGAINST RESPONDENT
| 14. | Paragraphs 1 through 13, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 15. | Respondent’s testimony in the deposition, as more fully described in paragraphs 8 through 13, inclusive, was, at the time and in light of the circumstances under which it was made, false or misleading in a material respect, which constitutes a violation of Section 36b-23 of the Act. Such violation forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the Act, and the imposition of a fine against Respondent under Section 36b-27(d) of the Act. |
V. ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING
AS A RESULT OF THE INVESTIGATION BY THE DIVISION, THE COMMISSIONER FINDS that, with respect to the activity described herein, Robert Tarini has violated Section 36b-23 of the Act;
THE COMMISSIONER FURTHER FINDS that the issuance of this Order 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;
THE COMMISSIONER THEREFORE ORDERS that Robert Tarini CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, making an oral statement in an investigation that is false or misleading in a material respect;
THE COMMISSIONER FURTHER ORDERS that, pursuant to Section 36b-27(a) of the Act, Robert Tarini will be afforded an opportunity for a hearing on the allegations set forth above.
A hearing will be granted to Robert Tarini if a written request for a hearing is received by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following his receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Robert Tarini 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 September 17, 2009, 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, Robert Tarini 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 shall remain in effect and become permanent against Robert Tarini if he does not request a hearing within the prescribed time period.
VI. NOTICE OF INTENT TO FINE RESPONDENT AND NOTICE OF HEARING
WHEREAS, the Commissioner finds as a result of the Investigation by the Division that Respondent committed at least one violation of Section 36b-23 of the Act;
WHEREAS, the Commissioner believes that the imposition of a fine upon Respondent would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
AND WHEREAS, notice is hereby given to Respondent that Section 36b-27(d) of the Act authorizes the Commissioner to impose a fine not to exceed One Hundred Thousand Dollars ($100,000) per violation. The Commissioner intends to impose a maximum fine against Respondent of One Hundred Thousand Dollars ($100,000).
NOW THEREFORE, a hearing will be held in accordance with Section 36b-27(d)(2) of the Act and Chapter 54 of the General Statutes of Connecticut. The hearing will be held on September 17, 2009, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut. At the hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law relating to the allegations stated herein. If Respondent fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon him.
Dated at Hartford, Connecticut,
this 16th day of July 2009. _______/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 16th day of July 2009, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by registered mail, return receipt requested, Robert Tarini, 46 Bell Schoolhouse Road, Richmond, Rhode Island 02892, registered mail no. RB028020711US.
________/s/_________
Jesse B. Silverman
Prosecuting Attorney