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NEWS RELEASE | |
Department Suspends
Broker-Dealer and Agent Registrations
April 24, 1998 -
Banking Commissioner John P. Burke announced today that he has summarily suspended in separate cases the Connecticut registrations of a securities firm and a broker-dealer agent for their failure to provide records to the Department of Banking's Securities Division during examinations in violation of The Connecticut Uniform Securities Act. The administrative actions taken prevent the firm and the agent from doing business in Connecticut.
In the case of E. C. Capital, Ltd., Securities Division examiners entered the broker-dealer's Mineola, New York office late in the afternoon of April 2, 1998 and began looking at firm records stored on personal computers. At the close of business, examiners made note of specific files they found and explicitly told the firm's president and compliance officer to preserve such files for inspection the next day. When state examiners returned to the firm the following morning, they discovered that approximately 300 files had been deleted from E. C. Capital's computers, including files the examiners had made note of the previous afternoon.
In the case of Frank Gregory Marino, a Securities Division examiner noticed documents on the broker-dealer agent's desk during an examination of his employer, Joseph Stevens & Co., Inc., in New York City. Mr. Marino refused to surrender the documents to the examiner for inspection, and subsequently left the building with the documents in his possession.
To date, neither E. C. Capital nor Mr. Marino has provided the department with missing records for examination by the Securities Division.
In May 1997, the Division participated with other state securities regulators in the biggest nationwide crackdown ever against telemarketers who allegedly use abusive sales practices. Both E. C. Capital Ltd. and Joseph Stevens & Co., Inc. were targeted for examinations as part of the Securities Division's continuing focus on broker-dealers who engage in aggressive telephone sales of small or micro cap securities. Although E. C. Capital Ltd. and Joseph Stevens & Co., Inc. have been registered in Connecticut since 1996 and 1994, respectively, and have been selling to Connecticut residents, neither has a physical location in the state.
"The Department of Banking will strongly respond to any attempt to deny or limit its access to broker-dealer books and records during audits or investigations," Commissioner Burke said. "Such illegal conduct jeopardizes our ability to protect Connecticut investors and it will not be tolerated."
