| Securities and Business Investments Division | |
|
Securities Bulletin | |
| Vol. IX No. 2 | June 1995 |
Features:
- A Word from the Banking Commissioner
- Departments of Banking and Consumer Protection Issue Joint
Policy on Consumer Privacy Issues - Policy on Series 66 Examination
- Quarterly Statistical Summary
Enforcement Highlights:
- Ralph A. Lambiase, Division Director
- Cynthia Antanaitis, Assistant Director and Bulletin Editor
- Eric J. Wilder, Assistant Director
Jeffrey P. Halperin, Senior Administrative Attorney- Louise Hanson, Subscription Coordinator
- Cynthia Antanaitis, Assistant Director and Bulletin Editor
Contributors:
A WORD FROM THE BANKING COMMISSIONER
Customers or clients properly expect that confidential information they entrust to financial institutions will be protected from unwarranted disclosure. Recent reports indicate, however, that some financial institutions have not carefully discarded sensitive documents, needlessly raising the risk of revealing sensitive and confidential data. In response, the Department of Banking and the Department of Consumer Protection have issued a joint policy statement on consumer privacy which is included within this Securities Bulletin.
In July, 1995, the agency also issued a policy adopting the Series 66 examination for use in Connecticut. The Series 66 examination promises to ease the compliance burden on those seeking multiple registration.
In addition, the agency is enthusiastically testing streamlined securities registration procedures through electronic filing to facilitate capital formation. The Securities Registration Depository or "SRD" is a nationwide electronic filing system that would permit issuers to make a one-stop filing with the Securities and Exchange Commission and with the states. The system would enable filers to submit the electronic equivalent of Forms U-1, U-2 and U-2A to the SRD which, in turn, would relay the information to states designated by the filer. The filer would also be able to tag documents that have been filed with the SEC through the SEC's electronic EDGAR system, and have those documents forwarded to the states.
SRD would be phased in over four years. Phase One, in which the Securities and Business Investments Division is now involved, allows Division staff to communicate electronically with the securities divisions of other states and would eventually allow for e-mail communications with issuers and their counsel. Phase Two would permit currently registered open-end investment companies and unit investment trusts to maintain their registrations electronically. Phase Three would allow newly formed open-end investment companies and unit investment trusts to register their securities electronically. Finally, Phase Four would expand SRD to cover corporate issuers. Further information on SRD will be available in future Bulletin issues.
As part of the agency's policy to encourage an open dialogue with those it regulates, the department's 7th annual Securities Forum will be held on November 13, 1995 at the Sheraton Inn in Waterbury. Look for program and registration details in the next Bulletin.
-- John P. Burke, Banking Commissioner
Departments of Banking and Consumer Protection
Issue Joint Policy on Consumer Privacy Issues
| TO: | All Securities Registrants |
| FROM: | John P. Burke, Commissioner of Banking Mark A. Shiffrin, Commissioner of Consumer Protection |
| SUBJECT: | Consumer Privacy Issues |
| DATE: | July 20, 1995 |
In light of the recent disclosures that some banks are not protecting their customers' privacy when discarding financial documents, we are writing to ask you to formally address this problem by voluntarily drafting new procedures to ensure proper control of sensitive information entrusted to your care.
Most consumers assume that their privacy will be protected and that confidential information contained within documents such as tax returns and wage statements will not be jeopardized when it is provided to you in consideration of investment advice, brokerage accounts or other services that you traditionally provide. The Department of Consumer Protection and the Department of Banking devote a great deal of time and effort warning consumers to protect their fmancial data from falling into the wrong hands. The practice of improperly discarding consumer information flies in the face of these efforts and needlessly exposes consumers and fmancial institutions as well to the growing, multimillion dollar financial fraud industry.
It is clear to us that Connecticut consumers need and deserve a kind of security deposit box when they submit financial records to you. With this in mind, we ask that you voluntarily draft and formally adopt a policy that, as a minimum, would include:
- a custody of consumer information system, with appropriate checks and balances, that assures customers that you maintain control and confidentiality of information throughout any corporate restructuring and personnel changes.
- a Protocol for Destruction of consumer documents so that there is no lapse in oversight from the time you have accepted the documents for review to the time the materials are actually shredded, or in some other manner destroyed, to prevent unwarranted disclosure of confidential information when the documents are no longer needed.
It is the intent of both of our agencies to work closely together within the parameters of our respective jurisdictions to insure that the proper measures be used to safeguard the privacy of consumers. The adoption of standards such as those outlined above should eliminate any potential for fraud or wrongdoing.
We appreciate your cooperation in this important undertaking. We would be pleased to review any drafts or proposed policies you plan to initiate should you wish to share them with us prior to their adoption.
Sincerely,
| Mark A. Shiffrin Commissioner Department of Consumer Protection |
John P. Burke Commissioner Department of Banking |
CONNECTICUT POLICY ON
THE SERIES 66 EXAMINATION
The North American Securities Administrators Association, Inc. ("NASAA"), in cooperation with the National Association of Securities Dealers (the "NASD") has recently developed the Series 66 examination. The Series 66 examination represents a combination of the present Series 63 Uniform State Agents Securities Law Examination and the Series 65 Uniform Investment Adviser Law Examination now administered by the NASD.
Section 36b-15(b)(6) of the Connecticut Uniform Securities Act (the "Act") provides that "the commissioner may by regulation provide for an examination, which may be written or oral or both, to be taken by any class of or all applicants, as well as persons who represent or will represent an investment adviser in doing any of the acts which make him an investment adviser." The Commissioner has exercised his discretion in promulgating Sections 36b-31-15e(d), 36b-31-15e(e) and 36b-31-15e(f) of the Regulations under the Act. Section 36b-31-15e(d) states that: "Each applicant for registration as an agent shall supply evidence to the commissioner that such applicant has taken and successfully passed (1) an examination given by the United States Securities and Exchange Commission or by a securities self-regulatory organization registered under the Securities Exchange Act of 1934 and (2) effective October 1, 1994, the Uniform State Agents Securities Law Examination." Section 36b-31-15e(e) of the Regulations provides, in part, that: "Effective October 1, 1994, each applicant for registration as an investment adviser agent shall supply evidence to the commissioner that such applicant has taken and successfully passed the Uniform Investment Adviser Law Examination or such other examination determined by the commissioner to be acceptable in lieu thereof." (emphasis supplied) In addition, Section 36b-31-15e(e) specifically acknowledges the Commissioner's authority to grant exemptions in certain instances. Section 36b-31-15e(f) of the Regulations requires that applicants for agent of issuer registration pass the Series 63 examination.
Many times, individuals apply under Section 36b-31-6g of the Regulations for multiple registration as either 1) a broker-dealer agent and an investment adviser agent; or 2) an investment adviser agent and an agent of issuer. Unless "grandfathered" under Sections 36b-31-15e(h) and 36b-31-15e(i) of the Regulations, individuals seeking multiple registration as broker-dealer agents and investment adviser agents would have to pass both the Series 63 and Series 65 examinations. Since the Regulations do not contain a grandfather provision for agents of issuer, if such individuals were to seek investment adviser agent registration, they would have to pass both examinations.
Section 36b-31-31c of the Regulations gives the Commissioner authority to "exempt a person ... from a specified provision of ... the regulations upon a finding that such exemption is in the public interest." To ease the burden on registrants seeking multiple registration, the Commissioner has determined that it is in the public interest for the Series 66 examination to be deemed a suitable substitute for the Series 65 examination, and that applicants who otherwise would have had to pass both the Series 63 and Series 65 examinations may fulfill this requirement by achieving a passing score on the Series 66 examination. Similarly, individuals who would otherwise have to pass either the Series 63 examination or the Series 65 examination may satisfy the respective testing requirement by passing the Series 66 examination.
July, 1995.
ENFORCEMENT HIGHLIGHTS
ADMINISTRATIVE SANCTIONS
Gemco Oil Development, Inc. (CRD # 30984), Jeffrey Willis and Sid Katchum
On May 1, 1995, the Commissioner issued an Order to Cease and Desist and Notice of Right to Hearing (Docket number CD-95-2643-S) under the Connecticut Uniform Securities Act against Gemco Oil Development, Inc. of 11645 Biscayne Boulevard, Suite 305D, North Miami, Florida and 12000 Biscayne Boulevard, Suite 503, North Miami, Florida; and two of its employees, Jeffrey Willis and Sid Katchum.
The cease and desist order alleged that the respondents violated Section 36b-16 of the Act by offering and selling unregistered non-exempt securities to Connecticut residents between June 1992 and March 1993. Those securities took the form of participation agreements and promissory notes and were issued in connection with the corporation's Loan and Income Participation Program. The corporation allegedly represented to investors that not only would they receive a return on the notes but a percentage interest in an oil well once the notes became due. In addition, the cease and desist order alleged that respondents violated the antifraud provisions in Section 36b-4 of the Act by failing to disclose to investors that the states of South Dakota and Wisconsin had taken regulatory action against the corporation for alleged securities law violations; that the securities were not registered under Connecticut's securities laws; that there were financial risks involved in the investment; and what those risks were. The respondents also allegedly misrepresented the purported return on the investment and the likelihood that the investor would actually receive an interest in an oil well.
The Commissioner also claimed that respondents Willis and Katchum transacted business as unregistered agents of the issuer in contravention of Section 36b-6(a) of the Act, and that the corporation violated Section 36b-6(b) of the Act by employing Willis and Katchum in that capacity. Finally, the order alleged that the corporation violated Section 36b-23 of the Act by falsely representing to the agency that no general solicitation was involved in the offering. On May 23, 1995, the Order became permanent as to respondent Gemco Oil Development, Inc. since that entity did not request a hearing on the matter. Similarly, the Order became permanent as to respondents Willis and Katchum on May 22, 1995.
Dennis Duane Dean (CRD # 2488109)
On April 4, 1995, the Banking Commissioner entered a Consent Order (No. CO-95-2627-S) with respect to Dennis Duane Dean, now or formerly the president of C.H. Dean and Associates, Inc., an investment adviser located at 2480 Kettering Tower, Dayton, Ohio. The Consent Order followed a Securities and Business Investments Division investigation pursuant to the Connecticut Uniform Securities Act. That investigation revealed indications that, contrary to information contained in the firm's Form ADV filings, Dennis Duane Dean did not graduate from Wright State University and that filings made with the agency were not amended to disclose either Dean's failure to matriculate or the initiation of administrative proceedings by the State of Illinois on or about April 25, 1994.
The Consent Order required that Dennis Duane Dean cease and desist from regulatory violations. The Consent Order also censured Dean, suspended his investment adviser agent registration for ten business days and required that he pay a $1,000 civil penalty to the state.
Stanley P. Kerry d/b/a Kerry Retirement Planning, Inc. (CRD # 268522)
On April 4, 1995, the Banking Commissioner entered a Consent Order (No. CO-94-2309-S) with respect to Stanley P. Kerry d/b/a Kerry Retirement Planning, Inc. of 170 Little Brooke Drive, Newington, Connecticut. The Consent Order was preceded by a December 15, 1994 Notice of Intent to Revoke Investment Adviser Registration and Order to Cease and Desist (Docket No. NR/CD-94-2309-S) which alleged that Kerry had 1) engaged in dishonest or unethical business practices in the securities business; 2) employed unregistered investment adviser agents; 3) failed to maintain required books and records; 4) engaged in securities fraud; 5) failed to notify the agency of custody and possession of client funds; 6) failed to properly maintain custody and possession of client funds; and 7) engaged in other activities prohibited by the Connecticut Uniform Securities Act.
The Consent Order required that, within 18 months following its entry, Kerry make restitution in the amount of $10,000 to the Estate of Natalie Ide. The Consent Order also barred Kerry for six years from associating in any capacity with any broker-dealer or investment adviser and from offering or selling securities, rendering investment advice, acting as an investment adviser agent or soliciting accounts for any investment adviser. Once the six year period expired, Kerry would be permitted to apply for registration as an agent or investment adviser agent. If such registration were made effective, Kerry would be subject to a conditional license for two years.
EDI Financial, Inc. (CRD # 15699)
On April 10, 1995, the Banking Commissioner entered a Consent Order (No. CO-94-2309-S) with respect to EDI Financial, Inc., a broker-dealer located in Irving, Texas. The firm had been the subject of a December 16, 1994 Order to Cease and Desist and Notice of Right to Hearing issued under the Connecticut Uniform Securities Act.
The Consent Order required that the firm cease and desist from regulatory violations; that it review, revise and implement supervisory and compliance procedures designed to prevent and detect violations of the Connecticut Uniform Securities Act and the regulations thereunder; and that the firm pay $3,000 to the department, $1,500 of which constituted a civil penalty and the remainder of which represented the disgorgement of commissions earned during the period when the firm transacted business as a broker-dealer absent registration under the state's securities laws.
John Scott Tournour (CRD # 1714892)
On May 1, 1995, the Banking Commissioner entered a Consent Order (No. CO-95-2739-S) with respect to John Scott Tournour. Tournour had been the subject of a July 31, 1991 Order Imposing Civil Penalty which assessed a $1,500 fine against him for state securities law violations. The Consent Order alleged that Tournour wilfully violated the July 31, 1991 order by failing to pay the civil penalty.
Pursuant to the Consent Order, Tournour remitted $2,094.60 to the agency; that sum represented the past due amount plus accrued interest. In addition to precluding Tournour from engaging in unlawful activity, the Consent Order barred him for one year from applying for registration as a broker-dealer, an investment adviser, a broker-dealer agent, an agent of issuer or an investment adviser agent. After that year elapsed, Tournour was granted leave to apply for registration in a restricted capacity (i.e. as an agent of an issuer or, in a non-supervisory and non-proprietary capacity, as an agent of a broker-dealer or investment adviser). If Tournour were to become registered in the restricted capacity, the restriction would last for twelve months.
W.E. Donoghue & Co., Inc. (CRD # 37329)
On May 5, 1995, the Banking Commissioner entered a Consent Order (No. CO-95-2718-S) with respect to W.E. Donoghue & Co., Inc. ("WEDCO"), an investment adviser located at 100 Medway Road, Suite 401, Milford, Massachusetts. The Consent Order followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act. That investigation suggested that from approximately 1992 through 1994, the firm transacted business as an investment adviser absent registration under Section 36b-6(c) of the Act and engaged unregistered investment adviser agents in contravention of that section.
The Consent Order directed WEDCO to refrain from regulatory violations and to review, revise and implement necessary supervisory and compliance procedures designed to ensure regulatory compliance. The Consent Order also directed the firm to pay $9,000 to the agency, $7,500 of which represented an administrative fine, $1,000 of which represented unpaid registration fees during the period of unregistered activity and the balance of which represented reimbursement for the Division's investigative costs.
Redwood Securities Group, Inc. (CRD # 27536)
On June 16, 1995, the Banking Commissioner entered a Consent Order (No. CO-95-2772-S) with respect to Redwood Securities Group, Inc. ("Redwood"), a broker-dealer located at 600 California Street, Suite 1650, San Francisco, California. The Consent Order followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act. The investigation uncovered evidence that in 1994, when the firm previously applied for broker-dealer registration, it submitted a written statement with the agency indicating that it had not effected securities transactions in Connecticut; the department subsequently learned that that statement was untrue.
The Consent Order directed Redwood to cease and desist from regulatory violations and to review, revise and implement supervisory and compliance procedures designed to ensure compliance with Connecticut's securities laws and the Regulations thereunder. In addition, the Consent Order required that the firm remit to the department 1) $2,233 representing the disgorgement of commissions earned during the period of unregistered activity, and 2) $500 as a civil penalty.
FFP Securities, Inc. (CRD # 16337)
On April 12, 1995, the Banking Commissioner entered into a Stipulation and Agreement with FFP Securities, Inc. ("FFP") (No. ST-95-2563-S) of 15455 Conway Road, Second Floor, Chesterfield, Missouri. The Stipulation and Agreement followed a Securities and Business Investments Division investigation conducted pursuant to the Connecticut Uniform Securities Act. That investigation revealed that 1) from approximately November 1993 to April 1994, while acting as an agent of FFP, one David Lee Cowan (CRD number 1445632) offered and sold unregistered non-exempt investments in Cross Financial Services, Inc. Government Accounts Receivable Financing Investment Program to Connecticut residents; and 2) that the firm failed to exercise proper supervisory controls over Mr. Cowan's activities in connection with those transactions.
Pursuant to the Stipulation and Agreement, the firm agreed to extend to Program investors the opportunity to rescind their investment, which aggregated $128,118, and receive back those sums paid to Cross Financial Services, Inc. The firm also agreed to review, revise and implement supervisory and compliance procedures designed to prevent and detect regulatory violations; conduct an annual compliance audit of each Connecticut branch office for two years; file a copy of the written audit report with the agency; and, for a two year period, notify the Division on a quarterly basis of any securities-related complaints involving Connecticut residents.
Lara, Millard & Associates, Ltd. (CRD # 10556)
On May 17, 1995, the Banking Commissioner entered into a Stipulation and Agreement with Lara, Millard & Associates, Ltd. (No. ST-95-2764-S) of 8000 Towers Crescent Drive, Suite 260, Vienna, Virginia. The Stipulation and Agreement followed a Securities and Business Investments Division investigation conducted pursuant to the Connecticut Uniform Securities Act. That investigation revealed that from at least June 1993 through August 1994, the firm transacted business as a broker-dealer absent registration in alleged contravention of Section 36b-6(a) of the Act and allegedly employed an unregistered agent in contravention of subsection (b) of that section.
Pursuant to the Stipulation and Agreement, the firm agreed to cease and desist from regulatory violations; review its supervisory and compliance procedures and implement modified procedures designed to prevent and detect violations of the Act and its Regulations; and pay $1,000 to the department. Five hundred dollars of that amount represented a civil penalty and the balance represented uncollected registration fees during the period of unregistered activity.
Futurcorp, Inc.
On May 19, 1995, the Banking Commissioner entered into a Stipulation and Agreement with Futurcorp, Inc. (No. ST-94-2690-S) of 7818 Orange Avenue, Lubbock, Texas. The Stipulation and Agreement followed a Securities and Business Investments Division investigation conducted pursuant to the Connecticut Uniform Securities Act. That investigation uncovered evidence that from December 31, 1993 to December 31, 1994, 1) Futurcorp employed one William J. Greene as an agent to offer and sell limited partnership interests in the Liberty Fund, the Liberty Performance Fund, the Liberty Global Fund, Liberty Fund VI and Liberty International Fund and 2) at that time, Greene was not registered as an agent of issuer under Section 36b-6(b) of the Act.
Pursuant to the Stipulation and Agreement, the corporation agreed to offer rescission to those Connecticut investors who purchased limited partnership interests in the funds from Mr. Greene. The rescission amount offered totaled approximately $322,500 plus interest. In addition, the corporation agreed to review its compliance procedures to ensure that regulatory requirements were observed.
Townsley Associates & Company, Inc. (CRD # 14211)- Broker-dealer Registration Revoked
On April 26, 1995, the Banking Commissioner issued Findings of Fact, Conclusions of Law and an Order revoking the broker-dealer registration of Townsley Associates & Company, Inc. of The Professional Building, Suite 300, Hilton Head, South Carolina. The Commissioner's action, which followed an administrative hearing, was based on a preliminary injunction entered against the firm and against its president, Jesse M. Townsley, Jr. (CRD number 448614) by the United States District Court for the Western District of New York (SEC v. The Twenty Plus Investment Club, Townsley Associates & Co., Inc. and Jesse M. Townsley, Jr., 94-CV-6090T (6/10/94)). Although the agency had initiated proceedings to also revoke the investment adviser registration of the firm and the agent and investment adviser agent registrations of Jesse M. Townsley, the Commissioner ruled that these could not be the proper subject of a revocation action since they had expired by operation of law on December 31, 1994 when respondents failed to remit the proper renewal fees.
Mark I. Lew (CRD # 1354400) - Agent Registration Summarily Suspended; Notice of Intent to Suspend or Impose Conditions on Registration Issued
On May 19, 1995, the Banking Commissioner entered an order summarily suspending the broker-dealer agent registration of Mark I. Lew, chairman and chief executive officer of Lew Lieberbaum & Co., Inc., a registered broker-dealer (Docket No. SS-95-2765-S). On the same day, the Commissioner issued a Notice of Intent to Suspend or Impose Conditions on Lew's agent registration. Both the summary suspension order and the Notice of Intent were predicated on February 1, 1995 sanctions imposed by the National Association of Securities Dealers censuring Lew, fining him $200,000 and suspending him from association with any NASD member firm for three months, commencing on April 3, 1995 and concluding at the close of business on July 3, 1995. Respondent Lew was afforded an opportunity for a hearing on the Notice of Intent to Suspend or Impose Conditions on his registration.
Leonard A. Neuhaus (CRD # 1871294) - Agent Registration Summarily Suspended; Notice of Intent to Suspend or Impose Conditions on Registration Issued
On May 19, 1995, the Banking Commissioner entered an order summarily suspending the broker-dealer agent registration of Leonard A. Neuhaus, chief financial officer, chief operating officer and chief compliance officer of Lew Lieberbaum & Co., Inc., a registered broker-dealer (Docket No. SS-95-2770-S). On the same day, the Commissioner issued a Notice of Intent to Suspend or Impose Conditions on Neuhaus' agent registration. Both the summary suspension order and the Notice of Intent were predicated on February 1, 1995 sanctions imposed by the National Association of Securities Dealers censuring Neuhaus, fining him $225,000 and suspending him from association with any NASD member firm for three months, commencing on April 3, 1995 and concluding at the close of business on July 3, 1995. Respondent Neuhaus was afforded an opportunity for a hearing on the Notice of Intent to Suspend or Impose Conditions on his registration.
F.X.C. Investors Corp. (CRD # 38753) - Notice of Intent to Deny Registration as an Investment Adviser Issued
On June 22, 1995, the Banking Commissioner issued a Notice of Intent to Deny the pending investment adviser registration of F.X.C. Investors Corp. (Docket No. ND-95-4174-S). The corporation is located at 62-19 Cooper Avenue, Glendale, New York. The Commissioner's action was predicated on the corporation's alleged filing of documents which contained false or misleading statements concerning a 1985 permanent injunction entered by the United States District Court for the Southern District of New York, a prior administrative proceeding by the Securities and Exchange Commission and a 1984 cease and desist order entered by the State of Minnesota. The Notice also alleged that entry of the federal court injunction would constituted an independent basis for administrative action. Respondent corporation was afforded an opportunity to request a hearing on the allegations in the Notice.
Francis X. Curzio (CRD # 59349) - Notice of Intent to Deny Registration as an Investment Adviser Agent Issued
On June 22, 1995, the Banking Commissioner issued a Notice of Intent to Deny the pending investment adviser agent registration of Francis X. Curzio, president of F.X.C. Investors Corp., a New York based entity (Docket No. ND-95-4174-S). The Commissioner's action was based on Curzio's alleged filing of documents which contained false or misleading statements concerning a 1985 permanent injunction entered by the United States District Court for the Southern District of New York, a prior administrative proceeding by the Securities and Exchange Commission and a 1984 cease and desist order entered by the State of Minnesota. The Notice also alleged that entry of the federal court injunction would constituted an independent basis for administrative action. Respondent Curzio was afforded an opportunity to request a hearing on the allegations in the Notice.
Robert Todd Financial Corp. (CRD # 7423) - Notice of Intent to Revoke Registration as a Broker-dealer Issued
On June 28, 1995, the Banking Commissioner issued a Notice of Intent to Revoke the broker-dealer registration of Robert Todd Financial Corp. (Docket No. NR-95-2624-S). The corporation has its principal office at 805 Third Avenue, 15th Floor, New York, New York. The Commissioner alleged that the firm 1) wilfully violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered non-exempt American Aircraft Corporation stock to Connecticut residents; 2) wilfully violated Section 36b-6(b) of the Act by employing unregistered agents; 3) violated Section 36b-6(d) of the Act by transacting business from unregistered Connecticut branch offices in Wilton and Norwalk; 4) engaged in unauthorized trading; and 5) failed to establish sufficient supervisory controls over agent activity. The Notice also alleged that the firm had been the subject of a March 15, 1995 suspension by the National Association of Securities Dealers based on an alleged failure to comply with written requests to submit financial information to the NASD. The firm was provided with an opportunity to request a hearing on the allegations in the Notice.
Robert Fallah (CRD # 1069032) - Notice of Intent to Revoke Registration as an Agent Issued
On June 28, 1995, the Banking Commissioner issued a Notice of Intent to Revoke the registration of Robert Fallah as an agent of Robert Todd Financial Corp. (Docket No. NR-95-2624-S). Fallah was also the president of the firm. The Commissioner's action was based on allegations that Fallah failed to exercise his supervisory obligations in preventing alleged sales of unregistered securities, employment of unregistered agents and unauthorized trading by the firm. Fallah was afforded an opportunity to request a hearing on the allegations in the Notice.
QUARTERLY STATISTICAL SUMMARY
April 1, 1995 through June 30, 1995
| Registration |
Securities |
Business |
YTD |
|---|---|---|---|
| Total Coordination (Initial & Renewal) | 1,678 | n/a | 3,521 |
| -- (Investment Co. Renewals 1,140) | |||
| -- (All Other Coordinations 538) | |||
| Qualification (Initial) | 6 | n/a | 9 |
| Qualification (Renewal) | 0 | n/a | 0 |
| Regulation D Filings | 396 | n/a | 766 |
| Other Exemption or Exclusion Notices | 70 | 11 | 105 (SE) 23 (BO) |
| Business Opportunity (Initial) | n/a | 16 | 29 |
| Business Opportunity (Renewal) | n/a | 23 | 28 |
| Licensing & Branch Office Registration |
Broker-Dealers |
Investment Advisers |
Issuers |
YTD |
|---|---|---|---|---|
| Firm Initial Registrations Processed | 91 | 46 | n/a | 161 (BD) 93 (IA) |
| Firms Registered as of 6/30/95 | 1,842 | 1,046 | n/a | n/a |
| Agent Initial Registrations Processed | 6,723 | 535 | 12 | 14,340 (BD) 1,233 (IA) 31 (IS) |
| Agents Registered as of 6/30/95 | 70,405 | 9,343 | 208 | n/a |
| Branch Offices Registered as of 6/30/95 |
1,062 | 288 | n/a | n/a |
| Examinations Conducted | 37 | 16 | 0 | 64 BD) 25 (IA) 0 (IS) |
| Investigations |
Securities |
Business |
YTD |
|---|---|---|---|
| Investigations Opened | 62 | 3 | 96 (SE) 3 (BO) |
| Referrals from Attorney General | 1 | 0 | 2 (SE) 0 BO) |
| Referrals from Other Agencies | 2 | 0 | 5 (SE) 0 BO) |
| Investigations Closed | 55 | 2 | 85 (SE) 5 (BO) |
| Investigations in Progress as of 6/30/95 |
86 | 4 | n/a |
| Subpoenas Issued | 18 | 2 | 26 (SE) 4 (BO) |
| Administrative Enforcement Actions |
Number |
Parties |
YTD |
|---|---|---|---|
| Securities | |||
| Consent Orders | 6 | 6 | 10/11 |
| Stipulation and Agreements | 3 | 3 | 5/5 |
| Cease and Desist Orders | 1 | 1 | 1/3 |
| Denial, Suspension & Revocation Orders | 3 | 3 | 4/6 |
| Conditional Licensing Orders | 0 | 0 | 1/1 |
| Other Notices and Orders | 6 | 6 | 6/6 |
| Referrals (Civil) | 1 | 1 | 1/1 |
| Referrals (Criminal) | 0 | 0 | 0/0 |
| Business Opportunities | |||
| Cease and Desist Orders | 0 | 0 | 1/2 |
| Referrals (Civil) | 1 | 1 | 1/1 |
| Referrals (Criminal) | 0 | 0 | 0/0 |
| Monetary Sanctions |
$ Assessed |
YTD |
|---|---|---|
| Consent Orders and Stipulation and Agreements (Securities) |
$ 18,827 | $ 157,077 |
| Public Reimbursement Following Division Intervention |
Voluntary Restitution Offers; |
YTD |
|---|---|---|
| Securities | $ 587,755 | $ 936,944 |
| Business Opportunities | 0 | 0 |
| _____ | _____ | |
| Totals | $ 587,755 | $ 936,944 |