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JOEL TORRES
("Respondent")
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ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-10-7746-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, as amended by Public Act 10-141, 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 Respondent has 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 an order to cease and desist against Respondent pursuant to Section 36b-27(a) of the 2010 Supplement to the General Statutes (“2010 Supplement”), as amended by Public Act 10-141. |
| 5. |
As a result of the Investigation, the Commissioner has the authority to impose a fine against Respondent pursuant to Section 36b-27(d) of the 2010 Supplement, as amended by Public Act 10-141. |
II. RESPONDENT
| 6. | Respondent is an individual whose last known address to the Commissioner is 149-27 84th Street, Howard Beach, New York 11414. At all pertinent times hereto, Respondent resided at 256 Washington Boulevard, Unit 10, Stamford, Connecticut 06902-6870. |
| 7. |
Respondent does or has done business under various names, including Virtual Solutions. Respondent has held Virtual Solutions out as having a business address located at 256 Washington Boulevard, Unit 10, Stamford, Connecticut 06902-6870. |
III. STATEMENT OF FACTS
| 8. | From at least June 8, 2009, Respondent has been an issuer of securities in the form of at least one promissory note (“Promissory Note”). |
| 9. | From at least June 8, 2009 to the present, Respondent effected the sale of the Promissory Note in or from Connecticut to at least one investor. |
| 10. | The Promissory Note that was offered and sold by Respondent was never registered in Connecticut, nor was it exempt from registration, nor was it a covered security. |
| 11. | To date, no investor has received any payment provided for in the Promissory Note. |
| 12. | In connection with the offer and sale of the Promissory Note, Respondent failed to disclose, inter alia, the risk of loss of the entire investment; any risk factors related to the investment; any financial information on Respondent or Respondent’s business; or Respondent’s ability to meet his obligations under the Promissory Note. Each of these omitted items was material to investors and prospective investors of the Promissory Note. |
IV. STATUTORY BASIS FOR ORDER TO CEASE AND DESIST
AND ORDER IMPOSING FINE AGAINST RESPONDENT
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 unregistered securities in or from Connecticut to at least one investor, as more fully described in paragraphs 8 and 9, which securities were not registered in Connecticut under the Act, as more fully described in paragraph 10. The offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act, as amended by Public Act 10-141, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the 2010 Supplement, as amended, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2010 Supplement, as amended. |
b. Violation of Section 36b-4(a) of the Act –
Fraud in Connection with the Offer and Sale of any Security
| 15. | Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 16. |
The conduct of Respondent, as more fully described in paragraphs 8 through 12, inclusive, constitutes, in connection with the offer, sale or purchase of any security, employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person. Such conduct constitutes a violation of Section 36b-4(a) of the 2010 Supplement, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the 2010 Supplement, as amended, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2010 Supplement, as amended. |
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, as amended, and at least one violation of Section 36b-4(a) of the 2010 Supplement;
WHEREAS, the Commissioner further finds that the issuance of this Order to Cease and Desist and the imposition of a fine 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;
AND WHEREAS, pursuant to Section 36b-27 of the 2010 Supplement, as amended, Respondent will be afforded an opportunity for a hearing on the allegations set forth above.
THE COMMISSIONER THEREFORE ORDERS that Respondent CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, (1) offering and selling unregistered securities, and (2) in connection with the offer, sale or purchase of any security, employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person.
THE COMMISSIONER FURTHER ORDERS that a hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following Respondent’s receipt of this Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing. 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 September 14, 2010, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut. Any such hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At any 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 Respondent 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 Respondent fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
| Dated at Hartford, Connecticut, | ________/s/________ | |
| this 15th day of July 2010. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 15th day of July 2010, 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 Joel Torres, 149-27 84th Street, Howard Beach, New York 11414, certified mail no. 7008 1140 0002 4974 3565.
_______/s/_________
Paul A. Bobruff
Prosecuting Attorney