| Securities and Business Investments Division | |
|
Securities Bulletin | |
| Vol. XV No. 1 | Spring 2001 |
Features:
- A Word from the Banking Commissioner
- Order Governing Insurance Company Demutualization Transactions
- Commissioner Rescinds 1994 Policy Statement on Retail Sales of Nondeposit
Investment Products by Depository Institutions - Broker-dealer Registration Forms Simplified
- First Quarter Statistical Summary
Enforcement Highlights:
- Ralph Lambiase, Division Director
- Cynthia Antanaitis, Assistant Director and Bulletin Editor
- Eric Wilder, Assistant Director
- Marge Kagan, Subscription Coordinator
- Cynthia Antanaitis, Assistant Director and Bulletin Editor
Contributors:
A WORD FROM THE BANKING COMMISSIONER
In the preceding Bulletin issue, I wrote that the Securities Division had undertaken a broad look at our investment adviser licensing process. As a result, among other changes, the Division simplified and re-wrote its investment adviser registration application in plain English.
I am pleased to now report that the Division has completed a similar evaluation of our broker-dealer licensing process. Consequently, a new, more streamlined broker-dealer registration packet has been prepared that reduces paperwork by about one-third. The broker-dealer registration revision further advances our goal of seeking greater uniformity with other state securities regulators. Key changes to the new broker-dealer registration forms may be found in this Bulletin issue. You may also access the new application in its entirety on our Web site.
In order to provide banks with regulatory guidance concerning retail sales of nondeposit investment products, the department issued a policy statement in 1994, which was later amended in 1999. The regulatory landscape has since dramatically changed, however, with enactment of the National Securities Markets Improvement Act of 1996 and the Gramm-Leach-Bliley Financial Modernization Act of 1999. Connecticut, too, amended its banking and securities laws in response to federal legislation and to offer state-chartered institutions new opportunities. Recognizing that portions of the document are or may become obsolete, I have rescinded the policy statement as of March 21, 2001.
In light of the high level of scrutiny given to conversions of mutual insurers and their affiliates by insurance regulators, and acknowledging positions taken by the SEC and other state securities regulators, I issued an Order Governing Insurance Company Demutualization Transactions in February, 2001. The order relieves insurers and their affiliates from having to comply with certain securities registration and licensing requirements in conjunction with their conversion from a mutual to a stock form of ownership.
These actions, and a continuing review of Division processes, reflect our desire to seek uniformity in regulation and to lessen the regulatory burden on industry. At the same time, the department remains committed to a strong enforcement program to protect Connecticut investors. I look forward to discussing these and other issues with you at our autumn Securities Forum 2001 conference. Visit our web site this spring for more conference information.
John P. Burke
Banking Commissioner
ORDER GOVERNING INSURANCE COMPANY DEMUTUALIZATION TRANSACTIONS
WHEREAS the Commissioner of Banking (the "Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act, as amended by P.A. 00-61, (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the "Regulations") promulgated under the Act;
WHEREAS Section 36b-31(a) of the Act provides that "[t]he commissioner may from time to time make ... such ... orders as are necessary to carry out the provisions of sections 36b-2 to 36b-33, inclusive, including ... orders governing registration statements, applications, and reports, and defining any terms, whether or not used in said sections, insofar as the definitions are not inconsistent with the provisions of said sections. For the purpose of ... orders, the commissioner may classify securities, persons and matters within his jurisdiction, and prescribe different requirements for different classes.";
WHEREAS Section 36b-31(b) of the Act adds that "[n]o ... order may be made ... unless the commissioner finds that the action is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of sections 36b-2 to 36b-33, inclusive. In prescribing ... orders the commissioner may cooperate with the securities administrators of the other states and the Securities and Exchange Commission with a view to effectuating the policy of said sections to achieve maximum uniformity in the form and content of registration statements, applications and reports wherever practicable";
WHEREAS Section 36b-3(15) of the Act provides, in part, that:
As used in sections 36b-2 to 36b-33, inclusive, unless the context otherwise requires ... (15)(A) 'Sale' or 'sell' includes every contract of sale of, contract to sell, or disposition of, a security or interest in a security for value. (B) 'Offer' or 'offer to sell' includes every attempt or offer to dispose of, or solicitation of an offer to buy, a security or interest in a security for value ... (G) The terms defined in this subdivision do not include ... (iii) any act incident to a class vote by security holders on a merger, exchange of securities for securities, consolidation, reclassification of securities, or sale of assets in consideration of the issuance of securities or securities and cash of another person other than an individual; or (iv) any security which is issued in exchange for one or more bona fide outstanding securities, claims or property interests, or partly in such exchange and partly for cash, where the terms and conditions of such issuance and exchange are approved by any state or federal court.
WHEREAS Section 36b-16 of the Act provides that: "No person shall offer or sell any security in this state unless (1) it is registered under sections 36b-2 to 36b-33, inclusive, (2) the security or transaction is exempted under section 36b-21, or (3) the security is a covered security provided such person complies with any applicable requirements in subsections (c), (d) and (e) of section 36b-21";
WHEREAS Section 36b-6 of the Act states, in part, that: "(a) No person shall transact business in this state as a broker-dealer unless he is registered under sections 36b-2 to 36b-33, inclusive. No individual shall transact business as an agent in this state unless he is (1) registered as an agent of the broker-dealer or issuer whom he represents in transacting such business or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of section 15(h) of the Securities Exchange Act of 1934 ... (b) No issuer shall employ an agent unless such agent is registered under sections 36b-2 to 36b-33, inclusive ...."
WHEREAS demutualization is a reorganizational process by which a mutual insurance company or mutual insurance holding company converts to a stock form of ownership, and may include the merger of one or more affiliated entities;
WHEREAS a demutualization is typically characterized by 1) eligible policyholders (as defined in the Plan of Conversion) exchanging their membership interests in the mutual insurance company or mutual insurance holding company for stock of a newly formed entity; 2) approval of the reorganization by a state insurance regulator; and 3) a required vote by affected policyholders;
WHEREAS were it not for the fact that membership interests are not technically "securities", the offer and sale of stock to eligible policyholders would be excluded from the definitions of "offer" and "sale" as an act incident to a class vote by security holders on an exchange of securities for securities under Section 36b-3(15)(G)(iii) of the Act;
WHEREAS such exchange would also otherwise be excluded from the definitions of "offer" and "sale" under Section 36b-3(15)(G)(iv) of the Act had the exchange been accompanied by judicial, rather than state agency, approval;
WHEREAS the Commissioner acknowledges that other state securities regulators as well as the federal Securities and Exchange Commission have taken a no enforcement action position vis-a-vis registration of the securities offered in conjunction with a demutualization and the registration as broker-dealers and agents of individuals involved in implementing the demutualization plan;
WHEREAS the Commissioner finds that the entry of this Order, which recognizes the high level of scrutiny given to demutualizations by insurance regulators, is necessary or appropriate in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:
| 1. | The offer or sale of stock or other securities in conjunction with the demutualization of an insurance company or insurance holding company falls within Sections 36b-3(15)(G)(iii) and 36b-3(15)(G)(iv) of the Act and shall not require registration of the securities involved pursuant to Section 36b-16 of the Act, provided the terms and conditions of the demutualization are approved by the state insurance regulator of the state of domicile of the converting mutual and a vote of affected policyholders; | |
| 2. | Individuals who disseminate information to policyholders, including, without limitation, representatives of the insurance company or insurance holding company and call center personnel, shall not be required to register as broker-dealers or agents pursuant to Sections 36b-6(a) or 36b-6(b) of the Act solely by virtue of their participation in the demutualization transactions as long as they a) do not receive any compensation transactionally related to the demutualization other than a straight salary; and b) in communicating with policyholders, refrain from making any investment recommendations or value judgments concerning the merits of the demutualization; | |
| 3. | Any initial public offering of securities following the demutualization shall continue to be subject to 1) the broker-dealer and agent registration requirements contained in Sections 36b-6(a) and 36b-6(b) of the Act; and 2) the registration requirement in Section 36b-16 of the Act unless the securities involved are covered securities under Section 18(b) of the Securities Act of 1933 or the offering is otherwise exempt under Section 36b-21 of the Act; and | |
| 4. | This Order shall remain in effect until vacated, modified or superseded by the Commissioner or other legal authority. |
| So ordered at Hartford, Connecticut this 20th day of February, 2001 |
John P. Burke Banking Commissioner |
| TO: | Chief Executive Officers of Banks and Credit Unions |
| FROM: | John P. Burke, Commissioner of Banking |
| RE: | Rescission of Policy Statement Re Retail Sales by Depository Institutions of Mutual Funds and Other Nondeposit Investment Products |
| DATE: | March 21, 2001 |
On June 30, 1994, the Department of Banking ("Department") issued a revised policy statement entitled "Department of Banking policy statement re retail sales by depository institutions of mutual funds and other nondeposit investment products." The policy statement was amended in part on May 5, 1999. The June 30, 1994 policy statement and its May 5, 1999 amendment ("Policy Statement") aimed to give banks and credit unions ("Banking Institutions") guidance on state regulatory requirements concerning retail sales of nondeposit investment products. The regulatory landscape has changed dramatically in the interim, particularly with the enactment of federal legislation such as the National Securities Markets Improvement Act of 1996 and the Gramm-Leach-Bliley Financial Modernization Act of 1999. Connecticut, too, has amended its banking and securities laws to respond to federal legislative changes and to offer state-chartered institutions new opportunities. Currently, the Connecticut General Assembly is considering at least two legislative proposals that would further affect the powers of Banking Institutions. As a result, many portions of the Policy Statement are or may become obsolete.
Accordingly, I am hereby rescinding the Policy Statement effective immediately.
Notwithstanding this action, certain positions taken by the Department concerning the status of Banking Institution personnel as "agents" and "investment adviser agents" under Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act ("CUSA"), remain unaffected until further notice. Bear in mind that these positions apply only where a Banking Institution uses a separate entity-subsidiary, affiliate or independent third-party marketer such as a broker-dealer or investment adviser to offer securities-related products and services. Two examples follow.
The Department will continue to require Banking Institution personnel to register as agents of a third-party broker-dealer if they perform one or more of these functions: (1) opening customer accounts and/or making suitability determinations regarding securities purchases or sales (this function would not cover individuals who merely collect or verify information for transmittal to and action by another person who is registered as an agent or a broker-dealer under CUSA); (2) rendering investment advice or making investment recommendations in connection with securities purchases or sales; (3) soliciting orders to purchase or sell securities; (4) processing orders to purchase or sell securities; (5) handling inquiries or engaging in the resolution of complaints regarding securities purchases or sales; or (6) supervising sales personnel either directly or indirectly or assuming responsibility for the day-to-day operation and supervision of any broker-dealer place of business in Connecticut. Note that Banking Institution personnel who only perform clerical or ministerial functions would not be agents of the third-party broker-dealer, and that referring complaints and/or merely transmitting order forms or like information to another person who is registered as an agent or a broker-dealer under CUSA for action by that person would be considered clerical or ministerial.
Next, Banking Institution support personnel who are bona fide employees of the Banking Institution and who are not acting as broker-dealer agents under CUSA may make compensated referrals to an investment adviser with whom the Banking Institution has a marketing arrangement without registering as investment adviser agents of that investment adviser where certain conditions are met. Specifically: (1) The referral must only be accompanied by a nominal referral fee of a fixed dollar amount per referral; (2) The Banking Institution, rather than the investment adviser to whom the referral is directed, must pay the referral fee to the support person; (3) The referral fee arrangement must be clearly disclosed to each customer who is referred; (4) The investment adviser to whom the prospect is referred must be registered under CUSA or eligible for an exemption from registration (e.g., as a Securities and Exchange Commission registered investment adviser); and (5) Payment of the referral fee must not depend on whether the referral results in the customer actually engaging the investment adviser.
Of course, the Department will continue to respond to industry requests for interpretive opinions on specific issues that arise as the new laws take effect. We would also strongly encourage Banking Institutions involved in or contemplating retail sales of nondeposit investment products, either directly or indirectly, to consult with private counsel on applicable state and federal requirements, including those governing customer privacy.
CONNECTICUT APPLICATION FOR BROKER-DEALER REGISTRATION
(Revised 3/2001)
WHO MUST REGISTER:
Generally, any person who is engaged in the business of effecting securities transactions for the account of others or for its own account must register as a broker-dealer with the Connecticut Department of Banking. Typically, a broker-dealer firm must register if it is 1) located in Connecticut and transacts securities business with Connecticut residents or with residents of other jurisdictions; or 2) located in another jurisdiction and transacts securities business for Connecticut residents. Individuals who work for a broker-dealer (e.g. "registered representatives" or "stockbrokers") are "agents" of that broker-dealer under the Connecticut Uniform Securities Act. Although they do not register as "broker-dealers", they would register as agents of their employing firm to transact securities business in the state.
| FOR HELP: | Write to us at: | State of Connecticut Department of Banking Securities and Business Investments Division 260 Constitution Plaza Hartford, Connecticut 06103 |
| Telephone: | (860) 240-8230 | |
| Web site: | Visit us at www.ct.gov/dob for breaking news or to download state forms |
WHAT'S IN THIS PACKET:
- Instructions, including information on testing requirement
- Connecticut Broker-dealer Supplement
- Workers' Compensation Questionnaire
- Branch Office Application
- Form DBA-1, with instructions
- Connecticut Uniform Securities Act
- Regulations under the Connecticut Uniform Securities Act
STEP 1: What To File Electronically Through the Central Registration Depository or "CRD":
All NASD member broker-dealer firms file for state and federal broker-dealer registration through NASD Regulation, Inc.'s ("NASDR") Central Registration Depository ("CRD" or "Web CRD"). Web CRD is an Internet-based depository that accepts filings and fees for broker-dealer firms and their agents and will electronically relay the information to us for processing. Through Web CRD, you will also renew your Connecticut broker-dealer registration and the registrations of your firm's agents.
| HOW TO CONTACT NASDR: | NASD 9513 Key West Avenue Rockville, Maryland 20850-3389 Telephone: (301) 590-6500 Web site |
|---|
YOU MUST FILE THE FOLLOWING FORMS ELECTRONICALLY AND OBTAIN THEM FROM NASDR:
FORM BD (Uniform Application for Registration as a Broker-dealer or to Amend such an Application)
Use Form BD to file for initial registration as a broker-dealer in Connecticut. Be sure to check off the "Connecticut" block.
FORM U-4 (Uniform Application for Securities and Commodities Industry Representative and/or Agent)
Use Form U-4 to register at least one agent of your firm in Connecticut.
FORM U-5 (Uniform Termination Notice for Securities Industry Representative and/or Agent).
Use Form U-5 when an agent leaves your firm's employ.
FORM BDW (Uniform Notice of Withdrawal from Registration as a Broker-dealer)
Use Form BDW to withdraw your firm's registration federally or with a particular state.
STEP 2: Remit the Correct Connecticut Registration Fees to NASDR
NOTE: Registration fees are non-refundable.
INITIAL REGISTRATION FEES
| Broker-dealer Firms: | $250 |
| Agents: | $ 50 per agent. A new broker-dealer applicant must register at least one agent in Connecticut |
RENEWAL REGISTRATION FEES
Unless suspended or revoked, every broker-dealer and agent registration expires on December 31st unless renewed. If you do not have to amend your filing, you need only remit the correct renewal fees to NASDR. Renewal fees are non-refundable.
| Broker-dealer Firms: | $150 |
| Agents: | $ 50 per agent |
STEP 3: Submit Connecticut Supplemental Information Directly to the Connecticut Department of Banking, Securities and Business Investments Division
1. FINANCIAL STATEMENTS
What to File:
An original statement of financial condition as of a date within 60 days prior to the date your firm files its Connecticut broker-dealer application
- A Separate Registrant's Certificate is No Longer Required
Capital Required:
Broker-dealer applicants and registrants must have and maintain the minimum net capital required by Securities and Exchange Commission Rule 15c3-1 and comply with SEC Rule 15c3-3 governing customer protection, reserves and custody of securities.
Financial Statement Content:
1. Disclose the nature and amount of your firm's assets, liabilities and capital. If the firm is a sole proprietorship, include personal assets and liabilities.
2. Net capital computation
3. The financial statement dated within 60 days of the application date must be audited (i.e. examined in accordance with generally accepted auditing standards and reported upon with an opinion expressed by an independent certified public accountant) where the broker-dealer has been in business for one year or more unless the firm submits 1) its most recent audited statement of financial condition; and 2) an unaudited statement of financial condition as of a date within 60 days prior to the date the Connecticut broker-dealer application is filed. If the firm has been in business for less than one year, it may submit an unaudited financial statement as of a date within 60 days before the Connecticut broker-dealer application was filed.
2. CONNECTICUT BROKER-DEALER SUPPLEMENT (form enclosed with this packet)
Other Connecticut Requirements To Know About
1. EXPERIENCE REQUIREMENTS
Who Must Meet the Experience Requirement?
- Every person listed on Schedule A, B or C of Form BD who is involved in managerial or supervisory responsibilities
- If the broker-dealer is a partnership, at least 2 active partners (or if there is only one active partner, then that one)
- If the broker-dealer is a corporation, at least 2 active officers (or if there is only one active officer, then that one)
- Applicants with personnel having no managerial or supervisory responsibilities or not being active as officers or partners should provide a dated written statement, signed by an officer or other authorized person of similar rank, supporting their claim that these individuals should receive a waiver from the experience requirement and the reason for the waiver request.
What Type of Experience is Required?
- Employment in the securities business as a broker-dealer or agent, spending a major portion of working time in the securities business for at least 3 years within the 7 calendar years preceding the date of the Connecticut broker-dealer application
- The agency determines that the individual is otherwise qualified by knowledge and experience. Applicants relying on this provision should furnish sufficient information on the individual's work experience and education to enable the agency to fully evaluate the request. The Regulations permit the agency to substitute a qualifying examination for the experience requirements
- Attorney with at least 3 years of substantial experience in securities law
- Accountant with at least 3 years of substantial experience in the sale of securities
2. PRINCIPAL'S EXAMINATION
- All officers, partners or sole proprietors who act as managers and all managers must pass an examination as principal (e.g. Series 24) given by the SEC or by a securities self-regulatory organization registered under the Securities Exchange Act of 1934
- Applicants with personnel having no managerial or supervisory responsibilities should provide a dated, written statement, signed by an officer or other authorized person of similar rank, supporting their claim that these individuals should receive a waiver from the principal's examination requirement and the reason for the waiver request.
3. TESTING REQUIREMENTS
(see enclosed Question and Answer Sheet)
4. WORKERS' COMPENSATION COVERAGE QUESTIONNAIRE
(separate instructions)
5. BRANCH OFFICE REGISTRATION - Each broker-dealer operating a Connecticut branch office, as defined in Section 36b-3(4) of the Connecticut Uniform Securities Act, must register that branch office with the Securities and Business Investments Division (see separate instructions, enclosed).
6. FORM DBA-1 (Trade or Assumed Name Notification) - Remember to file a Form DBA-1 if, for example, an agent working from a Connecticut branch office uses a trade or assumed name or if the firm uses a trade or assumed name not included on its Form BD (see separate instructions, enclosed).
7. AGENT REGISTRATION
No individual may represent a broker-dealer in effecting securities transactions within or from Connecticut unless that individual is registered as an agent of the broker-dealer whom he or she represents. Any corporate or partnership application for broker-dealer registration must, under the agency's Regulations, include the registration of at least one agent.
- FORM U-4: File a Form U-4 for at least one agent with CRD. Include a checked off "Connecticut" box as well as the original signature of an authorized individual. Also include a non-refundable registration fee of $50 per agent.
Examinations: Each broker-dealer agent must pass the Series 63 examination (Uniform State Agents Securities Law Exam) and an examination given by the NASD that qualifies the agent for the particular securities products he or she will sell (e.g. Series 7 for general securities products; Series 6 for mutual funds). See the enclosed Testing Question and Answer sheet for more information.
- FORM U-5: If an agent leaves the employ of a broker-dealer, the old employer must file written notice with the CRD on Form U-5 within 30 days following the agent's departure. The notice should state why the agent ceased employment. If a broker-dealer does not file Form U-5 in a timely manner, the broker-dealer may be billed a renewal fee for the agent.
Note: If an agent is transferring from another registered broker-dealer, the Connecticut Uniform Securities Act imposes a $50 transfer fee.
8. MULTIPLE REGISTRATION
Broker-dealer Agent and Investment Adviser Agent (or Agent of Issuer)
Multiple registration is permissible where 1) the broker-dealer agent obtains prior written consent from his or her employers to act in the multiple capacity; and 2) the employers' written consent is filed with the department. Employer consent letters must have original signatures, be dated and signed by an officer, partner or other authorized person of similar rank. Exception: No consent is needed where the employers are affiliated or under common management or control.
Broker-dealer Agent of More than Broker-dealer
Department written consent is required and may be given if each employer files a written, dated undertaking stating that the employer: 1) consents to the multiple employment and setting forth the effective date of the multiple employment; and 2) agrees to assume joint and several liability with all other employers for any act or omission of broker-dealer agent during the employment period.
STEP 4: Work With Us On Getting Your Registration Processed Quickly
Once we receive your application, we may be contacting you with questions or comments. Be sure to promptly respond to our information requests. By law, the Commissioner may deem an application denied for abandonment where the applicant has failed to respond to an information request within 60 days.
HOW WILL I KNOW WHEN MY FIRM IS REGISTERED IN CONNECTICUT?
Under the Connecticut Uniform Securities Act, your broker-dealer registration is not effective until the registrant's name has been entered on the Register of Broker-dealers. We will notify you in writing of that fact.
Reminder: Until your firm and its agents have become registered under the Connecticut Uniform Securities Act, it is unlawful to transact securities business in or from Connecticut.
What to File After Your Firm Is Registered . . .
FINANCIAL REPORTS
| Content: |
|
|---|---|
| When to File: | Within 60 days after the end of your firm's calendar or fiscal year. If the date of your firm's audited financial statement is outside this 60 day "window", include with your audited financial statement an unaudited statement dated within the 60 day period. You must file financial reports every year. |
| Where to File: | You can file your financial report either with our office or with the NASD. |
| To File With the NASD Instead |
1. Your firm must be, and remain, a member of a self-regulatory organization ("SRO") that is registered under laws the SEC administers
2. Your firm must file annual audited financial reports with that SRO 3. Your firm must be current in filing all required financial reports with that SRO 4. You must file a one-time Waiver Eligibility Certification for Filing of Financial Reports with our office. A copy is enclosed. |
AMENDMENTS
After your firm has become registered, you have a duty to amend your Form BD through the CRD system to reflect all material changes.
CONNECTICUT BROKER-DEALER SUPPLEMENT
GENERAL
| 1. | Exact Name of Broker-dealer Applicant as Stated in Item 1 of Form BD: __________________________________________________________ | |
| 2. | Applicant's IRS Employer Identification Number: _______________________________________ | |
| 3. | Applicant’s CRD Number: _____________________ | |
| 4. | Connecticut law provides that no broker-dealer may be registered without the registration of at least one broker-dealer agent. To expedite our processing of your firm's application, you may wish to list the name(s) and CRD number(s) of the agent(s) applying for Connecticut registration through the CRD System here: | |
| Name | CRD Number | |
CERTIFICATION CONCERNING PRE-EXISTING CLIENTS
| [ ] | The undersigned certifies, on behalf of the aforementioned applicant for broker-dealer registration, that, during the two year period immediate preceding the date of its Connecticut broker-dealer application, the applicant has not transacted business as a broker-dealer in Connecticut, and, if the applicant is based in Connecticut, that the applicant has not transacted business as a broker-dealer in Connecticut or from Connecticut with persons located in another jurisdiction. |
| [ ] | The undersigned certifies, on behalf of the aforementioned applicant for broker-dealer registration, that, during the two year period immediately preceding the filing of its Connecticut broker-dealer application, the applicant (you may check more than one box): |
| [ ] | Has transacted business as a broker-dealer in Connecticut. |
| [ ] | Is based in Connecticut and has transacted business as a broker-dealer from Connecticut with persons located in another jurisdiction. |
Attach a Separate Schedule Providing the Following Information and Documents:
- Each customer’s name and address
- The date(s) the transactions were effected
- Copies of written confirmations and monthly statements
- How each customer was introduced to the broker-dealer
- How each client was introduced to the applicant
- The names and CRD numbers of the agent(s) who handled each transaction
- The exclusion or exemption, if any, under the Connecticut Uniform Securities Act upon which the applicant relied in transacting business with each customer
CERTIFICATION CONCERNING STATEMENTS OF FINANCIAL CONDITION
The undersigned certifies, on behalf of the aforementioned applicant for broker-dealer registration, that the statement(s) of financial condition submitted in connection with such application pursuant to Section 36b-9 of the Connecticut Uniform Securities Act are, to the best of the applicant's own knowledge true, and that neither the principal, nor any member, partner, officer or director of the applicant, as the case may be, has any proprietary interest in any account classified solely as that of a customer except as follows:
UNDERTAKING NOT TO TRANSACT BUSINESS AS A BROKER-DEALER ABSENT REGISTRATION
The undersigned undertakes, on behalf of the aforementioned applicant for broker-dealer registration, that the applicant will not transact business as a broker-dealer in or from Connecticut until effectively registered as a broker-dealer in this state.
EXECUTION SECTION
The undersigned, being duly sworn, does hereby certify, on behalf of the aforementioned applicant for broker-dealer registration under the Connecticut Uniform Securities Act that he or she is authorized to execute this Connecticut Broker-dealer Supplement on behalf of the applicant and that the information contained herein, including any schedules and supplements included herewith, is complete, true and accurate.
_____________________________________________________
Print Name of Signatory: ________________________________
Title: ________________________________________________
Subscribed and sworn to before me this
________ day of ____________ 20______.
_________________________________________
Notary Public/Commissioner of the Superior Court
My Commission Expires:
Rev. 3/2001
Enforcement Highlights
Montgomery Sterling Corporation Ordered to Cease and Desist from Regulatory Violations; Notice of Intent to Fine Issued
On March 27, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-6144-S) against Montgomery Sterling Corporation of 651 Willowbrook Road, Staten Island, New York. The action was predicated on allegations that on or about June 12, 2000, the respondent sold unregistered non-exempt units of its common stock to at least one Connecticut resident in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The Order to Cease and Desist and Notice of Intent to Fine also claimed that the respondent could not rely on the exemption for Rule 504 offerings under Connecticut law since Ernest Cappone, an executive officer, director and beneficial owner of the respondent, had been the subject of an April 9, 1999 Consent Order issued by the State of Delaware prohibiting Cappone from pursuing registration as a broker-dealer agent in that state for three years. Montgomery Sterling Corporation was afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for May 15, 2001.
Redbank Petroleum, Inc. Fined $20,000
On March 22, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-6143-S) against Redbank Petroleum, Inc. of 16901 Dallas Parkway, Suite 111, Dallas, Texas. The action was based on findings that from at least April 1998, the corporation sold unregistered non-exempt notes to Connecticut investors through several unregistered agents of issuer in violation of the Connecticut Uniform Securities Act. Redbank Petroleum, Inc. had been the subject of a November 7, 2000 Order to Cease and Desist that was uncontested by Redbank Petroleum, Inc. and that became permanent on January 16, 2001.
Ameritech Petroleum, Inc. Fined $20,000
On March 22, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-6137-S) against Ameritech Petroleum, Inc. of 16775 Addison Road, #335, Addison Texas and 16901 Dallas Parkway, Suite 111, Dallas, Texas. The action was based on findings that from at least November 1996, the corporation sold unregistered non-exempt notes to Connecticut investors through several unregistered agents of issuer in violation of the Connecticut Uniform Securities Act. Ameritech Petroleum, Inc. had been the subject of a November 7, 2000 Order to Cease and Desist that, being uncontested by the respondent, became permanent on January 16, 2001.
Vincent J. Esposito, Jr. (CRD # 1320279) - Notice of Intent to Revoke Agent Registration, Order to Cease and Desist and Notice of Intent to Fine Issued
On March 15, 2001, the Banking Commissioner issued a Notice of Intent to Revoke the registration of Vincent J. Esposito, Jr. as a broker-dealer agent of Jefferson Pilot Securities Corporation (Docket No. NRCDF-2001-6021-S). On the same day, the Commissioner issued an Order to Cease and Desist and Notice of Intent to Fine with respect to respondent Esposito. The actions were based on claims that the respondent violated the antifraud provisions of the Connecticut Uniform Securities Act and engaged in dishonest or unethical practices by misleading a brokerage customer on multiple occasions as to the value of the customer's account. The alleged misconduct occurred in 1999 when the respondent was associated with Legg Mason Wood Walker, Incorporated, a broker-dealer. In addition, the agency's action alleged that the respondent engaged in dishonest or unethical practices by intercepting and destroying faxed customer complaints and failing to bring them to the attention of the branch manager at Legg Mason Wood Walker, Incorporated in violation of that firm's procedures.
The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke and the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for May 8, 2001.
Dana J. Andrusik (CRD # 859311) - Notice of Intent to Revoke Registration as Investment Adviser, Order to Cease and Desist and Notice of Intent to Fine Issued
On February 27, 2001, the Banking Commissioner issued a Notice of Intent to Revoke the investment adviser registration of Dana J. Andrusik of Glastonbury, Connecticut (Docket No. CF-2000-5460-S). The Notice of Intent to Revoke was coupled with an Order to Cease and Desist and Notice of Intent to Fine against the respondent. The department's action was based on claims that from at least February 1999 forward, the respondent violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered non-exempt notes issued by World Vision Entertainment, Inc. and Sebastian International Entertainment, Inc. The department also alleged that the respondent acted as an unregistered agent of issuer in effecting the note transactions.
The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Investment Adviser and the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for April 24, 2001.
Communications Marketing Associates, Inc. - Stop Order Denying Effectiveness of Business Opportunity Registration Issued
On February 27, 2001, the Banking Commissioner entered a Stop Order denying effectiveness to the pending business opportunity registration of Communications Marketing Associates, Inc. (Docket No. SO-2000-765-B). The corporation maintains its principal office at One Park Place, 621 N.W. 53rd Street, Suite 355, Boca Raton, Florida and sells payphone equipment packages to the public. The Stop Order, which was uncontested by the corporation, found that Communications Marketing Associates, Inc. filed a materially incomplete application for business opportunity registration with the department.
Canko Environmental Technologies, Inc. Fined $20,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-5538-S) against Canko Environmental Technologies, Inc. of 10458 Mayfield Road, #206, Edmonton, Alberta, Canada. In fining the corporation $20,000 the Commissioner found that, from at least November 1997, Canko Environmental Technologies, Inc. sold unregistered non-exempt notes to Connecticut investors through at least two unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. Respondent had been the subject of an uncontested Order to Cease and Desist issued on November 7, 2000. The Order to Cease and Desist became permanent on December 2, 2000.
South Mountain Resort and Spa, Inc. Fined $20,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-6134-S) against South Mountain Resort and Spa, Inc. of 930 Queens Road, Charlotte, North Carolina. The Order Imposing Fine found that from at least November 1997, the respondent sold unregistered non-exempt notes to Connecticut investors through at least two unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. The respondent had been the subject of an uncontested Order to Cease and Desist issued on November 7, 2000. The Order to Cease and Desist became permanent on December 7, 2000.
Sweetwater Development Corporation Fined $20,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-6132-S) against Sweetwater Development Corporation of 5001 Silverside Road, Suite 113, Wilmington, Delaware. The Order Imposing Fine found that from at least November 1998, the respondent sold unregistered non-exempt notes to Connecticut investors through at least two unregistered agents of issuer in violation Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. The respondent had been the subject of an uncontested Order to Cease and Desist issued on November 7, 2000. The Order to Cease and Desist became permanent on November 29, 2000.
Yucatan Investment Corp. Fined $20,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-6133-S) against Yucatan Investment Corp. of 711 South Michigan Street, LaPaz, Indiana. The Order Imposing Fine, which assessed the corporation $20,000, found that from at least August 1998, the respondent sold unregistered non-exempt notes to Connecticut investors through at least one unregistered agent of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. The respondent had also been the subject of a November 7, 2000 Order to Cease and Desist which became permanent on December 21, 2000 since the respondent withdrew its request for a hearing on that order.
Lifeblood Biomedical, Inc. Fined $20,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-5538-S) against Lifeblood Biomedical, Inc. of 101 Southhall Lane, Suite 400, Maitland, Florida. In fining the firm $20,000, the Commissioner found that from at least March 1997, the corporation sold unregistered, non-exempt promissory notes to the Connecticut public through unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. The respondent had been the subject of an October 13, 2000 Order to Cease and Desist which became permanent on November 21, 2000 since the respondent failed to request a hearing.
Palm Beach Investment Group, Inc. Fined $30,000
On January 24, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2000-5325-S) against Palm Beach Investment Group, Inc., now or formerly of 12765 West Forest Hills Boulevard, Suite 1313, Wellington, Florida, 12765 West Forest Hills Boulevard, Suite 1313, West Palm Beach, Florida and 1395 Woodrow Way, Wellington, Florida. The Commissioner's action was based on findings that, from at least November, 1998, the respondent sold unregistered stock to Connecticut residents through at least five unregistered agents in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act. The Commissioner also found that the respondent violated the antifraud prohibition in Section 36b-4(a)(2) of the Act through representations made by its co-chairman and president, Michael Shuda, and in brochures circulated to investors. Those representations were false in that they claimed the stock of Palm Beach Investment Group, Inc. was FDIC-insured and that the corporation was capitalized in the amount of $19 million.
The respondent had also been the subject of an uncontested October 10, 2000 Order to Cease and Desist that became permanent on November 28, 2000.
Michael Shuda Fined $10,000
On January 24, 2001, the Banking Commissioner issued an Order Imposing Fine (Docket No. CF-2000-5325-S) against Michael Shuda, co-chairman and president of Palm Beach Investment Group, Inc. In assessing a $10,000 penalty against Shuda, the Commissioner found that, from at least November, 1998, Shuda violated the antifraud prohibition in Section 36b-4(a)(2) of the Connecticut Uniform Securities Act by making, or causing to be made, false statements to the effect that the stock of Palm Beach Investment Group, Inc. was FDIC-insured and that the corporation was capitalized in the amount of $19 million.
The respondent had been the subject of an uncontested October 10, 2000 Order to Cease and Desist which became permanent on November 28, 2000.
First Providence Financial Group, LLC (CRD # 39469) - Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine Issued; Appeal Filed
On January 3, 2001, the Banking Commissioner issued a Notice of Intent to Revoke the broker-dealer registration of First Providence Financial Group, LLC (Docket No. NRF-2001-5482-S) and a Notice of Intent to Fine. The firm maintains its principal office at 90 Broad Street, 10th Floor, New York, New York. First Providence Financial Group, LLC had been the subject of a November 27, 2000 administrative decision and order (Docket No. SS-2000-5528-S) fining the firm $30,000 and upholding the suspension of the firm for violating Sections 36b-14(d) and 36b-6(b) of the Connecticut Uniform Securities Act; engaging in dishonest or unethical conduct; and violating Section 36b-31-6f(b) of the Regulations under the Act. The suspension would have been lifted upon payment of the $30,000 fine. The Notice of Intent to Revoke Registration and Notice of Intent to Fine issued on January 3, 2001 were predicated on the respondent's failure to pay the $30,000 fine in wilful violation of an administrative order. The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Broker-dealer. A hearing on the January 3, 2001 Notice of Intent to Fine was scheduled for January 25, 2001.
On January 8, 2001, respondent First Providence Financial Group, LLC appealed the department's November 27, 2000 decision, requesting a stay of both that decision and the agency's January 3, 2001 Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine. On January 8, 2001, the Superior Court for the Judicial District of New Britain (Administrative Appeals Court) ordered that a hearing on the application for a stay be held on January 22, 2001. On January 23, 2001, the parties stipulated that, in return for the posting of a $30,000 bond by First Providence Financial Group, LLC, pending departmental actions would be stayed until all appeals had been exhausted. A briefing schedule has been set, with oral argument to follow.
Greater Metropolitan Investment Services, Inc. (CRD # 17452) Assessed $7,500 for Unregistered Broker-dealer and Agent Activity
On March 27, 2001, the Banking Commissioner entered a Consent Order (No. CO-01-6124-S) with respect to Greater Metropolitan Investment Services, Inc. of 5 Cold Hill Road South, Suite 13, Mendham, New Jersey. The Consent Order alleged that on intermittent occasions between 1995 and 1999, the firm transacted business as a broker-dealer absent registration in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act and employed unregistered agents in violation of Section 36b-6(b) of the Act.
The Consent Order directed the firm to cease and desist from regulatory violations. In addition, the Consent Order required the firm to provide a report prepared by outside counsel demonstrating that the firm had implemented revised supervisory and compliance procedures addressing state broker-dealer and agent licensing requirements. The Consent Order also directed the firm to pay the department $7,500; of that amount, $5,000 constituted an administrative fine, $1,000 represented reimbursement of past due registration fees and $1,500 constituted reimbursement for agency investigative costs. Finally, the Consent Order mandated that the firm file quarterly reports for two years describing any securities-related complaints, actions or proceedings involving Connecticut residents.
SEB Asset Management America Inc. (CRD # 106330) Assessed $8,100
On March 26, 2001, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-01-6237-S) with SEB Asset Management America Inc., an investment adviser regulated by the Securities and Exchange Commission and having its principal office at One Stamford Plaza, 263 Tresser Boulevard, Stamford, Connecticut. The Stipulation and Agreement was based on allegations that, from approximately 1997 until January 30, 2001, when a notice filing was made, SEB failed to make the investment advisory notice filing and pay the fees required by Section 36b-6(e) of the Connecticut Uniform Securities Act. In entering into the Stipulation and Agreement, the Commissioner acknowledged the firm's representation that the firm's Connecticut client base was largely institutional in nature.
Pursuant to the Stipulation and Agreement, the firm agreed to pay $8,100 to the department, $7,500 of which constituted a monetary penalty and $600 of which represented reimbursement for past due notice filing fees. The firm also agreed to review, revise and implement such supervisory and compliance procedures as were necessary to ensure compliance with state notice filing requirements.
F1 Trading.com, Inc. f/k/a Gold Country Securities (CRD # 20375) Assessed $7,500; Agrees Not to Reapply for Broker-dealer Registration for 5 Years
On February 13, 2001, the Banking Commissioner entered a Consent Order (Docket No. NDCF-2000-6107-S) with respect to F1 Trading.com, Inc., formerly known as Gold Country Securities. The firm maintains its principal office at 600 Old Country Road, Suite 535, Garden City, New York. The firm had been the subject of a November 8, 2000 Order to Cease and Desist, Notice of Intent to Deny Registration as Broker-Dealer and Notice of Intent to Fine based on claims that 1) from at least September 1999 to June 2000, the firm transacted business as a broker-dealer absent registration under the Connecticut Uniform Securities Act; and 2) in conjunction with its broker-dealer application, the firm filed false or misleading information concerning the extent of its prior broker-dealer activity.
Without admitting or denying the allegations in the November 8, 2000 Order to Cease and Desist, Notice of Intent to Deny Registration as Broker-dealer and Notice of Intent to Fine, the firm agreed to pay a $7,500 assessment and to withdraw its broker-dealer application without prejudice. The Consent Order granted the firm leave to reapply for broker-dealer registration after five years had elapsed.
BankBoston Investor Services, Inc. (CRD # 36369) and FIS Securities, Inc. (CRD # 30533) Assessed $28,000 Jointly and Severally for Unregistered Branch Activity
On February 5, 2001, the Banking Commissioner entered a Consent Order (File No. CO-2000-6174-S) with respect to BankBoston Investor Services, Inc. of 100 Federal Street, Boston, Massachusetts and FIS Securities, Inc. of 75 State Street, Boston, Massachusetts. Both firms are registered as broker-dealers under the Connecticut Uniform Securities Act and are under the common ownership and control of Fleet Boston Corporation, a holding company. The Consent Order alleged that 1) at various times between December 1998 and September 1999, FIS Securities, Inc. violated Section 36b-6(d) of the Act by transacting securities business from multiple Connecticut locations at a time when no branch office registrations were in effect for such locations; 2) during the months of August, 2000 and September, 2000, BankBoston Investor Services, Inc. violated Section 36b-6(d) of the Act by transacting securities business from multiple Connecticut locations at a time when no branch office registrations were in effect for such offices; and 3) both FIS Securities, Inc. and BankBoston Investor Services, Inc. violated Section 36b-31-6f of the Regulations in that each failed to establish, maintain and implement a supervisory structure designed to achieve compliance with Connecticut branch office registration, branch office reporting and agent qualification requirements.
The Consent Order assessed both firms $28,000 jointly and severally. Of that amount, $25,000 constituted an administrative fine, and the balance reflected reimbursement for agency investigative costs. The Consent Order also directed both firms to cease and desist from violating regulatory provisions governing branch office registration, operations and supervision. In addition, the Consent Order mandated that the firms revise and implement supervisory procedures designed to achieve regulatory compliance.
Chemical Trust Order to Cease and Desist Becomes Permanent
On January 30, 2001, the Banking Commissioner entered a Consent Order (Docket No. CF-2000-5541-S) with respect to Chemical Trust of 130 Wildwood Parkway, Suite 108, Birmingham, Alabama. Chemical Trust had been the subject of a November 8, 2000 Order to Cease and Desist and Notice of Intent to Fine based on allegations that from at least August 1999, the respondent sold unregistered non-exempt notes to Connecticut investors through at least one unregistered agent of issuer in violation of the Connecticut Uniform Securities Act. On January 12, 2000, the United States District Court for the District of South Carolina, Greenville Division had appointed a receiver to manage the respondent's property and assets. To date, less than fifty percent of investors assets have been recovered in the receivership proceeding.
The Consent Order rendered the November 8, 2000 Order to Cease and Desist permanent as of January 30, 2001 and withdrew the Notice of Intent to Fine.
Harvey T. Gilkerson Permanently Barred from Securities Business
On January 18, 2001, the Banking Commissioner entered a Consent Order (Docket No. CO-01-5511-S) with respect to Harvey T. Gilkerson of East Haven, Connecticut. The Consent Order claimed that from June 1998 to March 1999, the respondent sold unregistered, non-exempt securities of BFW Enterprises in violation of the Connecticut Uniform Securities Act and that BFW Enterprises was a commodity pool that Gilkerson promoted in an on-line chat room.
The Consent Order permanently barred Gilkerson from effecting securities transactions in Connecticut and from transacting business in Connecticut as a broker-dealer, investment adviser, broker-dealer agent, agent of issuer and investment adviser agent as well as from effecting purchases or sales of business opportunities. In addition, the Consent Order ordered Gilkerson to cease and desist from regulatory violations.
James H. Boughamer (CRD # 26869). Barred from Securities Business for Three Years
On January 9, 2001, the Banking Commissioner entered a Consent Order (Docket No. CO-00-6073-S) with respect to James H. Boughamer of Valrico, Florida. The Consent Order alleged that from approximately October 1998 to January 1999, Boughamer sold unregistered, non-exempt securities of Palm Beach Investment Group, Inc. to Connecticut residents and that, in so doing, Boughamer acted as an unregistered agent of issuer in violation of the Connecticut Uniform Securities Act. The Consent Order also claimed that Boughamer violated Section 36b-31-6e of the Regulations under the Connecticut Uniform Securities Act by engaging in private securities transactions involving Palm Beach Investment Group, Inc. absent written notice to his employing firm, Mutual of Omaha Investor Services, Inc.
The Consent Order barred Boughamer for three years from transacting business in Connecticut as a broker-dealer, investment adviser, broker-dealer agent, agent of issuer and investment adviser agent as well as from effecting purchases or sales of business opportunities. The Consent Order also barred Boughamer for three years from acting as a finder for compensation, and from splitting commissions or receiving referral fees in connection with any recommendation, sale or purchase of securities. Boughamer could, however, effect transacts in insurance or endowment policies or annuity contracts issued by insurers subject to regulation by the Connecticut Insurance Commissioner. In addition, the Consent Order directed Boughamer to cease and desist from regulatory violations and required that he remit $3,500 to the agency, $3,000 of which constituted an administrative fine and $500 of which represented reimbursement for investigative costs.
Robert Steven Ritson (CRD # 1726737) - Order Vacating Registration Conditions and Restrictions Entered
On January 30, 2001, the Banking Commissioner entered an Order Vacating Registration Conditions and Restrictions with respect to Robert Steven Ritson. Ritson is registered in Connecticut as a broker-dealer agent of FFP Securities, Inc. and an investment adviser agent of FFP Advisory Services, Inc. Both corporations maintain their principal office at 15455 Conway Road, Chesterfield, Missouri. On July 24, 1998, the department had entered a Consent Order (File No. CO-98-5147-S) conditioning Ritson's registrations with those firms based upon a February 5, 1991 Order to Cease and Desist issued in conjunction with an administrative proceeding.
In vacating those licensing restrictions that had not yet expired by their terms, the January 30, 2001 Order stated that Ritson had not been the subject of any customer complaints since 1990 and that he had achieved several professional industry designations since the 1998 Consent Order was issued.
| Licensing At A Glance March 31, 2001 | |
| Broker-dealers Registered | 2,566 |
| Broker-dealer Agents Registered | 118,077 |
| Broker-dealer Branch Offices Registered | 1,590 |
| Investment Advisers Registered | 382 |
| SEC Registered Advisers Filing Notice | 956 |
| Investment Adviser Agents Registered | 4,630 |
| Investment Advisory Branch Offices Registered | 524 |
| Agents of Issuer Registered | 154 |
| 1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Year to Date | |
|---|---|---|---|---|---|
| Securities Investigations | |||||
| Opened | 88 | 88 | |||
| Closed | 63 | 63 | |||
| Ongoing as of March 31, 2001 | 135 | ||||
| Subpoenas issued | 9 | 9 | |||
| Cases referred from Attorney General | 3 | 3 | |||
| Cases referred from Other Agencies | 5 | 5 | |||
| Securities Enforcement | |||||
| Administrative Actions | |||||
| Notices of Intent to Deny (Licensing) | 0 | 0 | |||
| Notices of Intent to Suspend (Licensing) | 0 | 0 | |||
| Notices of Intent to Revoke (Licensing) | 3 | 3 | |||
| Denial Orders (Licensing) | 0 | 0 | |||
| Suspension Orders (Licensing) | 0 | 0 | |||
| Revocation Orders (Licensing) | 0 | 0 | |||
| Notices of Intent to Fine | 4 | 4 | |||
| Orders Imposing Fine | 9 | 9 | |||
| Cease and Desist Orders | 9 | 9 | |||
| Notice of Intent to Condition Registration | 0 | 0 | |||
| Notices of Intent to Issue Stop Order | 0 | 0 | |||
| Activity Restrictions/Bars | 3 | 3 | |||
| Stop Orders | 0 | 0 | |||
| Vacating/Withdrawal Orders | 2 | 2 | |||
| Examinations | |||||
| Broker-dealers | 11 | 11 | |||
| Investment Advisers | 19 | 19 | |||
| Proceedings and Settlements | |||||
| Administrative Actions | 13 | 13 | |||
| Consent Orders | 7 | 7 | |||
| Stipulation and Agreements | 1 | 1 | |||
| Monetary Relief | |||||
| Monetary Sanctions Imposed | $231,100 | $231,100 | |||
| Restitution or Other Monetary Relief | $4,117,847 | $4,117,847 | |||
| Securities Referrals | |||||
| Criminal (Chief State's Attorney) | 0 | 0 | |||
| Criminal (Other) | 0 | 0 | |||
| Civil (Attorney General) | 0 | 0 | |||
| Other Agency Referrals | 0 | 0 | |||
The Securities and Business Investments Division is also charged with
administering the Connecticut Business Opportunity Investment Act.
| 1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Year to Date | |
|---|---|---|---|---|---|
| Business Opportunities | |||||
| Investigations Opened | 2 | 2 | |||
| Investigations Closed | 5 | 5 | |||
| Investigations ongoing as of March 31, 2001 | 4 | ||||
| Cases referred by Attorney General | 0 | 0 | |||
| Cases referred by Other Agencies | 0 | 0 | |||
| Subpoenas issued | 0 | 0 | |||
| Cease and Desist Orders | 0 | 0 | |||
| Notices of Intent to Issue Stop Order | 0 | 0 | |||
| Stop Orders | 1 | 1 | |||
| Notices of Intent to Fine | 0 | 0 | |||
| Orders Imposing Fine | 0 | 0 | |||
| Monetary Sanctions Imposed | 0 | 0 | |||
| Restitution or Other Monetary Relief | $6,000 | $6,000 | |||
| Criminal Referrals (Chief State's Attorney) | 0 | 0 | |||
| Civil Referrals (Attorney General) | 0 | 0 | |||
| Other Agency Referrals | 0 | 0 | |||
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