Banking Commissioner Bars Florida Company
From Offering Business Opportunities in Connecticut for Five Years
December 27, 2006
As part of a state and federal crackdown on over 100 bogus business opportunities nationwide, the Department of Banking announced that Candy King of America, Inc., a Florida-based company has been barred for five years from selling business opportunities in Connecticut, fined $25,000 and ordered to offer rescission of $100,000 to affected Connecticut purchaser-investors.
“While most business opportunities are legitimate companies, shady promoters are out there, and their goal is to cheat unsuspecting investors,” stated State Banking Commissioner Howard Pitkin. “Be wary of advertisements that promise high profits, little or no risk, and unjustified start-up fees. Remember that when something sounds too good to be true it usually is.”
Commissioner Pitkin added, “Potential investors should take the time to investigate a potential venture. Thoroughly read the business opportunity disclosure document and contract before buying a business or franchise. Be sure to consult with an attorney or accountant prior to signing any document related to the business opportunity. Also be certain the business is registered with the state.”
Earlier this year the Banking Commissioner entered a consent order resolving allegations contained in a September 16, 2005 Order to Cease and Desist against Candy King of America, Inc., which allegedly was in the business of selling vending machines and offering location assistance.
The Order to Cease and Desist had alleged that Candy King of America, Inc. 1) sold unregistered business opportunities through its agents Harvey Wall, Alan Goodman and George Kunkel in violation of Section 36b-67(1) of the Connecticut Business Opportunity Investment Act; 2) failed to provide prospective purchaser-investors with the disclosure document required by Section 36b-63 of the Act; 3) violated Section 36b-67(3) of the Act by using the trademark of Kraft® foods without authorization; and 4) violated Section 36b-80 of the Act by making two false statements in its registration application concerning the extent of its prior offers and sales in Connecticut.
Without admitting or denying the Commissioner’s allegations, Candy King of America, Inc. agreed to the entry of a Consent Order 1) rendering the September 16, 2005 Order to Cease and Desist permanent; 2) barring Candy King of America, Inc. from offering or selling business opportunities in Connecticut for five years; 3) requiring Candy King of America, Inc. to pay a $25,000 fine; and 3) directing that Candy King of America, Inc. offer rescission in the amount of approximately $100,000 to affected Connecticut purchaser-investors and repay those purchaser-investors electing rescission.
Most investment opportunities must be registered in the state where they are sold. In Connecticut, the Department of Banking’s Securities Division is responsible for regulating these types of business opportunities. Commissioner Pitkin urges investors to contact the department’s Securities Division before investing to find out if a potential business opportunity is registered. You may visit the department’s Web site, call 860-240-8230 or toll-free 1-800-831-7225 or write to the Securities Division at 260 Constitution Plaza, Hartford, CT 06103-1800.
The Banking Department also has a free publication, entitled, “Understanding Business Opportunity Investments,” which provides a comprehensive checklist of items investors should consider before risking their money. Copies can be requested by calling the agency at 1-800-831-7225, or by going on-line at www.ct.gov/dob/understandingbizopps.
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On December 12, 2006 the Federal Trade Commission (FTC) announced Project FAL$E HOPE$, a federal and state law enforcement sweep targeting bogus business opportunities and work-at-home scams. The crackdown includes more than 100 law enforcement actions by the Federal Trade Commission, the Department of Justice, the United States Postal Inspection Service, and law enforcement agencies in 11 states, including Connecticut. Further information on Project FAL$E HOPE$ may be found on the FTC’s Web site, at http://www.ftc.gov/opa/2006/12/falsehopes.htm.
Additional information:
Candy King of America, Inc. Consent Order