DOB: December 1997 Securities Bulletin

Securities and Business Investments Division

Securities Bulletin

Vol. XI No. 4 December 1997

Features:

Enforcement Highlights:

Contributors:

Ralph Lambiase, Division Director
Cynthia Antanaitis, Assistant Director and Bulletin Editor
Eric Wilder, Assistant Director
Marge Kagan, Subscription Coordinator

A WORD FROM THE BANKING COMMISSIONER

The Department of Banking remains committed to making Connecticut business friendly while at the same time protecting Connecticut's residents from investment scams and abusive sales practices.

As part of this effort, I recently issued an order to lessen the regulatory burden on business by reinstating an exemption removed following enactment of the National Securities Markets Improvement Act of 1996. Exemptive relief will be granted to domestic or foreign issues not deemed "covered securities" but qualified for margin by the Federal Reserve Board. You may find the order in this Bulletin.

We also continue to seek uniformity with our fellow securities regulators. I am proposing legislation in the current General Assembly session to bring Connecticut's definition of "investment adviser agent" more closely in line with SEC Rule 203A-3(a). The legislation would also substitute a notice requirement for the registration now required of branch offices of federally registered investment advisers. This proposed change mirrors the position in my order dated July 25, 1997. (See the June 1997 issue of the Securities Bulletin for text of order.)

In another vein, the Division has recently noticed that more broker-dealers and investment advisers making initial applications for Connecticut registration have sought assistance from filing services. Notwithstanding the helpful support that many filing services provide, we caution potential registrants and their legal counsel that we have encountered an increasing number of problems where applicants have relied upon such services.

In some cases, for example, filing services have not kept abreast of regulatory changes. Some filing services are also using a "cookie cutter" approach to assist potential registrants. As a result, applicants have submitted inaccurate statements to the Division, sometimes contradicting information the agency has on file, and leading to application denials. Poor advice has also caused registrants to violate state law, prompting enforcement review.

It is important to remember that registrants and potential registrants, and not filing services, are ultimately responsible for complying with regulatory requirements, and assume the risk of lack of compliance.

The Division remains committed to easing the registration process for new broker-dealer and investment adviser applicants in Connecticut. We have prepared registration packets with easy-to-follow instructions and we welcome applicants' questions. Connecticut-based applicants can also seek personalized attention through tailored "pre-registration meetings" with the divisionís staff.

-- John P. Burke
Banking Commissioner


Notice to Federally Regulated Investment Advisers
Concerning Investment Adviser Agent Registration Under Connecticut Law

The Securities and Business Investments Division has received a number of inquires from investment advisers registered with the Securities and Exchange Commission requesting guidance on whether certain persons acting on their behalf must register as investment adviser agents under Connecticut law. Many times, these questions come from federally regulated advisers not based in Connecticut. The issues have arisen as a result of the National Securities Markets Improvement Act of 1996 which divided the regulation of investment advisers between the states and the Securities and Exchange Commission.

Historically, Connecticut law has required that compensated solicitors be registered as investment adviser agents (C.G.S. ß 36b-3(11)). Under the SECís interpretation of NSMIA, however, if a solicitor were a "supervised person", a state could only require his registration if he were also an "investment adviser representative" as defined in SEC Rule 203A-3(a) and he had a place of business in the state. NSMIA defined "supervised person" to mean a partner, officer, director (or other person occupying a similar status or performing similar functions) or employee of a federally regulated adviser, or other person who provides advice on behalf of the adviser and is subject to the adviser's supervision and control.

Although Connecticut law does not currently require the registration of "supervised persons" who are also "investment adviser representatives" as defined by federal law, legislation is being proposed which would bring the Connecticut definition of "investment adviser agent" more closely in line with SEC Rule 203A-3(a) which defines "investment adviser representative." If enacted, the proposal would require that "supervised persons" meeting the Rule 203A-3(a) definition of "investment adviser representative" be registered as investment adviser agents under Connecticut law. Generally, Rule 203A-3(a) requires that 1) more than 10% of the representativeís clients nationwide must be natural persons; and 2) that the representative must, on a regular basis, solicit, meet with or otherwise communicate with clients at a Connecticut office or held out location. Because conforming legislation is currently in the works, the department encourages those investment adviser agents who would qualify as "investment adviser representatives" under SEC Rule 203A-3(a) to retain their Connecticut registration.


Order Governing Certain Federally Exempt Investment Advisers

WHEREAS the Commissioner of Banking (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act"), as amended by P.A. 97-220 (effective July 1, 1997), and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the "Regulations") promulgated under the Act;

WHEREAS Section 36b-3(10) of the Act defines the term "investment adviser" to mean "any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities";

WHEREAS Title III of Public Law 104-290, The National Securities Markets Improvement Act of 1996 ("NSMIA"), which became effective on July 8, 1997, preempted the state registration of certain investment advisers who were either registered under Section 203 of the federal Investment Advisers Act of 1940 (the "Advisers Act") or excepted from the federal definition of "investment adviser" under Section 202(a)(11 ) of the Advisers Act;

WHEREAS Title III of NSMIA expressed a Congressional intent that an investment adviser would be required to register under Section 203 of the Advisers Act where it 1) had assets under management of not less than $25 million or such higher amount as the Securities and Exchange Commission (the "SEC") by rule deemed appropriate; or 2) was an adviser to an investment company registered under the Investment Company Act of 1940;

WHEREAS Title III of NSMIA was silent on whether the states were preempted from regulating investment advisers having $25 million or more in assets under management or acting as advisers to federally registered investment companies where such investment advisers would otherwise be exempt from federal registration by virtue of Section 203(b) of the Advisers Act;

WHEREAS the SEC has interpreted NSMIA as not foreclosing state registration of investment advisers who, despite their assets under management or their status as advisers to federally registered investment companies, were not required to register federally by virtue of Section 203(b) of the Advisers Act;

WHEREAS Section 203(b)(3) of the Advisers Act exempts from federal registration:

Any investment adviser who during the course of the preceding twelve months has had fewer than fifteen clients and who neither holds himself out generally to the public as an investment adviser nor acts as an investment adviser to any investment company registered under ... [the Investment Company Act of 1940], or a company which has elected to be a business development company pursuant to section 54 of title I of this Act and has not withdrawn its election. For purposes of determining the number of clients of an investment adviser under this paragraph, no shareholder, partner, or beneficial owner of a business development company, as defined in this title, shall be deemed to be a client of such investment adviser unless such person is a client of such investment adviser separate and apart from his status as a shareholder, partner, or beneficial owner;

WHEREAS, for purposes of Section 203(b) of the federal Advisers Act, the SEC has developed a non-exclusive safe harbor in Rule 203(b)(3)-1, which rule is incorporated by reference herein and made a part hereof, defining the term "client" and explaining that the term includes non-U.S. residents as well as clients nationwide;

WHEREAS Section 36b-3(10)(G) of the Act excludes from the state definition of "investment adviser" "such other persons not within the intent of this subsection as the commissioner may by ... order designate";

WHEREAS the Commissioner finds that the issuance of this order 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 term "investment adviser" as defined in Section 36b-3(10) of the Act shall not include an investment adviser which, by virtue of its assets under management or its status as an investment adviser to an investment company registered under the Investment Company Act of 1940, would otherwise be required to register with the SEC as an investment adviser were it not for the exemption in Section 203(b)(3) of the federal Advisers Act. For purposes of ascertaining the investment adviserís exempt status under federal law, the Commissioner acknowledges the applicability of SEC Rule 203(b)(3)-1 in counting advisory clients;
(2) Nothing in this Order shall be construed to prohibit an investment adviser otherwise excluded pursuant to the foregoing paragraph from voluntarily seeking investment adviser registration under the Act, nor shall this Order be construed to create a basis for enforcement action against those investment advisers who, on June 30, 1997 (a) were otherwise in compliance with state law; (b) would have been subject to exclusive federal oversight under the criteria established by NSMIA had Title III of NSMIA been effective on that date; and (c) were eligible to rely on the federal exemption from registration in Section 203(b)(3) of the federal Advisers Act; and
(3) This Order shall remain in effect until modified, superseded or vacated by the Commissioner or other lawful authority.
So ordered at Hartford, Connecticut
this 14th day of October, 1997
John P. Burke
Banking Commissioner
 

Order Exempting Securities Approved for Margin
By The Board of Governors of the Federal Reserve System

WHEREAS the Commissioner of Banking (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act"), as amended by P.A. 97-220 (effective July 1, 1997), and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act;

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 ... [the Act], (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-3(7) ascribes to the term "covered security" the meaning given to that term in section 18(b) of the Securities Act of 1933;

WHEREAS Section 18(b)(1) of the Securities Act of 1933, as amended by the National Securities Markets Improvement Act of 1996 ("NSMIA"), designates as a covered security any security listed or authorized for listing on the New York Stock Exchange or the American Stock Exchange or listed on the National Market System of the NASDAQ Stock Market;

WHEREAS in enacting P.A. 97-220 to render the Act in conformity with NSMIA, the Connecticut legislature amended the exemption from securities registration in Section 36b-21(a)(8) of the Act by deleting, inter alia, references to securities appearing on the list of over-the-counter securities approved for margin by the Board of Governors of the Federal Reserve System;

WHEREAS the Commissioner acknowledges that certain marginable securities, including domestic and foreign securities (hereinafter, "Marginable Securities"), which prior to enactment of P.A. 97-220 were exempt from registration under Section 36b-21(a)(8) of the Act, might not qualify as "covered securities" and therefore would require registration under Section 36b-16 of the Act;

WHEREAS Section 36b-21(a)(21) of the Act exempts from registration "any other security that the commissioner may exempt, conditionally or unconditionally, on a finding that registration is not necessary or appropriate in the public interest or for the protection of investors";

NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

(1) Any Marginable Security which is not otherwise a covered security within the meaning of Section 36b-3(7) of the Act shall be exempt from the registration requirement in Section 36b-16 of the Act;
(2) Any warrant or right to purchase or subscribe to a Marginable Security described in the preceding paragraph shall be exempt from the registration requirement in Section 36b-16 of the Act;
(3) The Commissioner finds that registration of the securities described in paragraphs (1) and (2) of this Order is not necessary or appropriate in the public interest or for the protection of investors;
(4) Nothing in this Order shall be construed to limit the Commissioner's authority to enforce the antifraud provisions in Section 36b-4 of the Act with respect to any person; and
(5) This Order shall remain in effect until modified, superseded or vacated by the Commissioner or other lawful authority.
So ordered at Hartford, Connecticut
this 4th day of November, 1997
John P. Burke
Banking Commissioner
 

Enforcement Highlights

Administrative Sanctions

Cease and Desist Orders

Jetstarr International and David L. MacDonald

On December 3, 1997, the Banking Commissioner issued an Order to Cease and Desist and Notice of Right to Hearing (Docket number CD-97-729-B) under the Connecticut Business Opportunity Investment Act against Jetstarr International of 975 Imperial Golf Course Boulevard, Naples, Florida, and its representative, David L. MacDonald of 11 Bliss Place, Norwich, Connecticut. The Order to Cease and Desist alleged that in October 1996, Jetstarr International, through MacDonald, offered unregistered non-exempt business opportunities in the Jetstarr Program to at least one purchaser-investor located in Connecticut. The respondents were afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist.

San Clemente Securities, Inc. (CRD #21895) and Peter Liounis (CRD #2520335)

On December 3, 1997, the Banking Commissioner issued an Order to Cease and Desist and Notice of Right to Hearing (Docket number CD-96-3061-S) under the Connecticut Uniform Securities Act against San Clemente Securities, Inc., a broker-dealer located at 1031 Calle Recodo, Suite B, San Clemente, California, and its sales representative, Peter Liounis. The Order to Cease and Desist alleged that on July 11, 1996, Respondent Liounis sold shares of Sports Vision Technology, Inc. common stock to at least one person in Connecticut at a time when Liounis was not registered as an agent of San Clemente Securities, Inc. and at a time when the stock in question was neither registered under the Act nor the subject of a claim of exemption. Both respondents were afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist.

Douglas N. Berkey (CRD #1253762)

On December 4, 1997, the Banking Commissioner issued an Order to Cease and Desist and Notice of Right to Hearing (Docket number CD-97-4022-S) under the Connecticut Uniform Securities Act against Douglas N. Berkey, of 4 Woodbridge Drive, Suffield, Connecticut and 8240 Hugh Alison Place, Sarasota, Florida. The Order to Cease and Desist alleged that, from June 11, 1996 to at least November 23, 1996, Respondent Berkey sold unregistered non- exempt interests in the Garrett Financial trading program to at least five individuals residing in Connecticut. The Order to Cease and Desist further claimed that such sales constituted private securities transactions, and that Respondent Berkey failed to provide notice of the same to United Securities Alliance, Inc., his employing broker-dealer, as required by Section 36b-31-6e of the Regulations under the Act. In addition, the Order to Cease and Desist alleged that from October 1, 1996 to November 1996, Respondent Berkey offered and sold unregistered non-exempt interests in Beyond Jurisdiction Ltd. to at least one Connecticut individual at a time when Berkey was not registered as an agent under the Act. The Commissioner also claimed that, in guaranteeing a twenty percent return on the Garrett Financial and Beyond Jurisdiction Ltd. offerings as well as failing to make disclosures concerning risk, the unregistered status of the offerings and the fact that the offerings were not being sold through a broker-dealer, Berkey violated the antifraud provisions in Section 36b-4 of the Act. Since the respondent did not request a hearing within the prescribed time period, the Order to Cease and Desist became permanent on December 25, 1997.

CONSENT ORDERS

Temper of the Times Communications, Inc. (CRD # 39753)

On October 14, 1997, the Banking Commissioner entered a Consent Order (No. CO-97-5028-S) pursuant to the Connecticut Uniform Securities Act with respect to Temper of the Times Communications, Inc., an applicant for broker-dealer registration having its principal office at 1010 Mamaroneck Avenue, Mamaroneck, New York. The Commissionerís action followed a Securities and Business Investments Division investigation which revealed indications that, from at least 1995 through 1997, the firm had transacted business as a broker-dealer absent registration by facilitating investor participation in direct reinvestment plans offered by certain issuers.

The Consent Order directed the firm to cease and desist from regulatory violations and to remit three thousand dollars to the department, $2,000 of which constituted an administrative fine, $500 of which represented reimbursement for back registration fees and $500 of which constituted reimbursement for Division investigative costs. Contemporaneously with the entry of the Consent Order, the firm became registered as a broker-dealer in Connecticut.

Geoffrey William Collier (CRD # 725915) and Arnhold & S. Bleichroeder, Inc. (CRD # 1101) - Consent Order Conditioning Registration as an Agent Issued

On October 14, 1997, Geoffrey William Collier and Arnhold & S. Bleichroeder, Inc. agreed to the entry of a Consent Order conditioning Geoffrey William Collierís registration as an agent of the firm under the Connecticut Uniform Securities Act. Arnhold & S. Bleichroeder, Inc. ("ASB") has its principal office at 1345 Avenue of the Americas, New York, New York. The firm agreed to the entry of the Consent Order solely as a condition to its employment of Collier as an agent in Connecticut, and the Consent Order stated that it did not allege any regulatory violations by the firm.

In entering the Consent Order, the Commissioner acknowledged that on July 27, 1988, the United States District Court for the Central District of California had permanently enjoined Collier from violating the antifraud provisions of the federal securities laws (Securities and Exchange Commission v. Geoffrey W. Collier and Michael B. Cassell, Civil Action No. 88-04505 WMB, GHK). The Commissioner also alleged that 1) on July 1, 1987, in the Central Criminal Court of the Crown Court, London, England, Collier was convicted of violating Section 1 (2) and 8 (1) of the Company Securities Inside Dealing Act of 1985; ordered to pay a fine of 25,000 pounds plus 7,000 pounds to the Department of Trade and Industry; and in default, to be imprisoned for twelve months in respect of the fine; and 2) on July 15, 1987, Collier paid such fine and costs.

The Consent Order prohibited Collier, during his association with ASB, from becoming directly involved in the day-to-day supervision of agents, and limited his activities to ASBís institutional equity department and to institutional trading. In addition, the Consent Order prohibited Collier from exercising supervisory authority over proprietary trading or market-making, underwriting, corporate finance or employee personal trading activities, and from using for his personal benefit any material non-public information he obtained during his association with ASB. The Consent Order also required that Collier receive supervision from the firmís co-president and director, and that he obtain prior approval from the firm with respect to any transactions in personal accounts. Both ASB and Collier were obligated by the Consent Order to abide by ASBís July 26, 1996 representations to the New York Stock Exchange, representations which formed the basis for the NYSEís January 8, 1997 Rule 19h-1 Notice of Proposed Approval Notwithstanding a Statutory Disqualification. Finally, the Consent Order obligated ASB to provide to the Division quarterly reports for two years concerning any securities-related complaints, actions or proceedings involving Collier.

Mark Stephen Buciak (CRD # 1394350) d/b/a MB Financial Services (CRD # 42542)

On November 21, 1997, the Banking Commissioner entered a Consent Order (No. 97-4070- CO) pursuant to the Connecticut Uniform Securities Act with respect to Mark Stephen Buciak, an applicant for broker-dealer registration having his principal office at 87 Secret Lake Road, Avon, Connecticut. On September 15, 1997, the Banking Commissioner had issued a Notice of Intent to Condition Buciakís broker-dealer registration application (Docket number NC-97-4070-S) based on allegations that Buciak did not satisfy regulatory qualification standards for broker-dealer applicants under the stateís securities laws, including pertinent experience requirements.

Pursuant to the Consent Order, Buciak agreed to abide by certain restrictions set forth in Buciakís April 3, 1997 pre-membership interview with the National Association of Securities Dealers, Inc., including limiting his securities activities to the purchase, sale and redemption of mutual fund shares or variable annuity interests and not opening any discretionary accounts absent prior written permission from the NASD. In addition, Buciak agreed to limit his Connecticut activities as follows, absent written permission from the Division Director: 1) Buciakís Connecticut securities brokerage business would be restricted to the purchase, sale or redemption of redeemable mutual funds shares, with no wire orders being permitted; 2) Buciak would not transact business from any Connecticut branch office, as statutorily defined; and 3) Buciak would refrain from opening any discretionary accounts in his capacity as a broker-dealer. Buciak also agreed to fully disclose in writing to his investment advisory clients any conflicts of interest, whether derived from his receipt of commissions or otherwise, and associated with his business as a broker-dealer. In addition, the Consent Order required Buciak, for two years, to file with the Division Director on a quarterly basis reports concerning any securities-related complaints, actions or proceedings concerning him. Finally, the Consent Order mandated that Buciak retain legal counsel familiar with state securities laws to ensure that Buciakís broker-dealer activities comply with Connecticut requirements.

Performance Centered Engineering, Inc. and William E. Higgins, Jr.

On December 30, 1997, the Banking Commissioner entered a Consent Order (No. CO-97-4013-S) pursuant to the Connecticut Uniform Securities Act with respect to Performance Centered Engineering, Inc., a Connecticut corporation, and its ex-president, William E. Higgins, Jr. The Commissionerís action followed a Securities and Business Investments Division investigation which revealed indications that, at various times beginning in February 1995, Higgins offered and sold unregistered securities of Performance Centered Engineering, Inc. to Connecticut residents in purported violation of Section 36b-16 of the Act.

Without admitting or denying the Commissionerís allegations, the parties agreed to the entry of a Consent Order requiring that Higgins cease and desist from regulatory violations; that, absent regulatory compliance, Higgins refrain from representing a broker-dealer or issuer in effecting or attempting to effect securities transactions; and that Higgins employ legal counsel familiar with the Act to ensure observance of regulatory requirements.

Stipulation and Agreements

Amherst Securities Group, Inc. (CRD # 31141)

On December 1, 1997, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-97-5055-S) under the Connecticut Uniform Securities Act with Amherst Securities Group, Inc., a broker-dealer with its principal office at 1900 West Loop South, Suite 500, Houston, Texas. The Stipulation and Agreement followed an investigation by the Securities and Business Investments Division. That investigation uncovered evidence that, from approximately May 1997 to September 1997, the firm had transacted business from a Connecticut location without registering that location as a branch office under the Act. Pursuant to the Stipulation and Agreement, the firm agreed to 1) implement revised compliance procedures; 2) provide quarterly reports to the department for two years describing any complaints, actions or proceedings involving Connecticut residents; and 3) pay $1,000 to the agency as reimbursement for agency investigative costs.

Licensing Actions

Hampton Capital Management Corp. (CRD # 26109) - Broker-dealer Registration Revoked; $10,000 Civil Penalty Imposed

On December 22, 1997, the Banking Commissioner ordered that the broker-dealer registration of Hampton Capital Management Corp. be revoked and that the firm pay a civil penalty of $10,000. Hampton Capital Management Corp. maintained a place of business at 100 Prospect Street, Suite 302, Stamford, Connecticut. In his order, the Commissioner found that on October 17, 1997, the firm had denied access by Securities and Business Investments Division staff to books and records maintained by the firm at its Stamford office, and that such denial of access contravened Section 36b-14(d) of the Connecticut Uniform Securities Act as well as Section 36b-31-14f of the Regulations under the Act. Hampton Capital Management Corp. did not contest the Commissionerís action. The firm had been the subject of an October 24, 1997 summary suspension order and Order to Cease and Desist based upon the same conduct.(Docket number SS/C/F-97-5053-S).

SFI Investments, Inc. (CRD # 21663) - Notice of Intent to Deny Registration as a Broker-dealer Issued

On December 12, 1997, the Banking Commissioner issued a Notice of Intent to Deny (Docket number ND-97-3058-S) the broker-dealer registration of SFI Investments, Inc., now or formerly of 88 Pine Street, 16th Floor, New York, New York. SFI Investments, Inc., an applicant for broker-dealer registration, had been the subject of a March 27, 1997 Consent Order entered by the Commissioner. The Consent Order, which alleged unregistered activity by the firm in contravention of the Connecticut Uniform Securities Act, required that the firm remit $7,532 to the department; that amount represented the disgorgement of commissions earned, past due registration fees and an administrative fine. In the Notice of Intent to Deny Registration, the Commissioner alleged that the firm wilfully violated the Consent Order by forwarding to the department a check which was returned twice for insufficient funds and by failing to cure the deficiency after notice. The respondent was afforded an opportunity for a hearing on the allegations in the Notice of Intent to Deny Registration.

CRIMINAL PROCEEDINGS

Sentence Imposed on David Andrew Stevenson (CRD # 1335836)

On December 16, 1997, former Waddell & Reed, Inc. agent David Andrew Stevenson was sentenced in Hartford Superior Court following charges of larceny and securities fraud. Stevenson was sentenced to a prison term of twelve years for larceny and five years for securities fraud, with the larceny sentence to be suspended after six years. Both sentences would run concurrently, and Stevenson would be subject to a five year probationary period following the completion of his incarceration. Stevenson, whom the Commissioner had permanently barred from securities related activity on February 14, 1997, had allegedly misappropriated customer funds while an agent of Waddell & Reed, Inc.


QUARTERLY STATISTICAL SUMMARY

October 1, 1997 through December 31, 1997

Registration & Notice Filings Securities Business
Opportunities
YTD
Coordination Registrations (initial) 71 n/a 324
Coordination Registrations (renewal) 12 46
Qualification Registrations (initial) 7 23
Qualification Registrations (renewal) 1 1
Investment Company Notices (initial) 374 1,112
Investment Company Notices (renewal) 5,922 9,352
Regulation D and Section 4(2) Filings 455 n/a 1,651
Other Exemption or Exclusion Notices 15 5 119 (SE)
49 (BO)
Business Opportunity Registrations (initial) n/a 7 35
Business Opportunity Registrations (renewal) n/a 3 26
 
 
Licensing & Branch Office
Registration

Broker-Dealers

Investment Advisers

Issuers

YTD

Firm Initial Registrations Processed 60 23 n/a 341 (BD)
96 (IA)
Firm Notice Filings Processed n/a 38 n/a 58 (IA)
Firms Registered as of 12/31/97 2,266 560 n/a n/a
Firms Filing Notice as of 12/31/97 n/a 522 n/a n/a
Agent Initial Registrations Processed 6,978 203 12 35,727 (BD)
1,874 (IA)
73 (IS)
Agents Registered
as of 12/31/97
88,701 4,001 155 n/a
Branch Offices Registered
as of 12/31/97
1,252 454 n/a n/a
Branch Office Notice Filings
as of 12/31/97
n/a 14 n/a n/a
Examinations Conducted 19 32 n/a 107 (BD)
95 (IA)
 
 
Investigations Securities Business
Opportunities
YTD
Investigations Opened 52 0 207 (SE)
2 (BO)
Investigations Closed 60 0 207 (SE)
2 (BO)
Investigations in Progress
as of 12/31/97
80 2 n/a
Referrals from Attorney General 1 0 4 (SE)
0 (BO)
Referrals from Other Agencies 4 1 11 (SE)
1 (BO)
Subpoenas Issued 16 0 43 (SE)
4 (BO)
 
 
Administrative Enforcement
Actions
Number Parties YTD (#/Parties)
Securities
Consent Orders 4 5 11/12
Stipulation and Agreements 1 1 4/4
Cease and Desist Orders 3 4 7/8
Denial, Suspension & Revocation Orders 2 1 8/7
Conditional Licensing Orders 0 0 1/1
Other Notices and Orders 4 2 9/7
Referrals (Civil) 1 2 1/2
Referrals (Criminal) 2 2 2/2
Business Opportunities
Consent Orders 0 0 0/0
Stipulation and Agreements 0 0 0/0
Cease and Desist Orders 1 2 1/2
Other Notices and Orders 0 0 0/0
Referrals (Civil) 0 0 0/0
Referrals (Criminal) 0 0 0/0
 
 
Monetary Sanctions $ Assessed YTD
Consent Orders and
Stipulation and Agreements (Securities)
$ 4,000 $ 78,532
Formal Administrative Fines (Securities) $ 10,000 $ 170,000
_______ ______
Totals $14,000 $248,532
 
 
Reimbursement to the
Investing Public
Voluntary Restitution Offers;
Other Monetary Relief
YTD
Securities $ 442,429 $1,572,299
Business Opportunities 0 0
________ ________
Totals $ 442,429 $ 1,572,299


Securities Division