DOB: Summer 2001 Securities Bulletin

Securities and Business Investments Division

Securities Bulletin

Vol. XV  No. 2 Summer 2001

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

In two earlier Bulletin issues, I wrote that the Securities Division had undertaken a broad review of both the investment adviser and broker-dealer licensing processes and, as a result, had simplified the corresponding applications, greatly reducing the associated paperwork.

I'm pleased to report that the Division has recently also instituted a simplified procedure for registering securities by coordination, as outlined in the order contained in this Bulletin issue. Among other changes, persons who file certain documents with the SEC through the Electronic Data Gathering Analysis and Retrieval System, or "EDGAR," will no longer need to file those documents with the Department, provided they notify the agency of such EDGAR filings. The new practice will leverage electronic technology to again significantly reduce paperwork filings.

You'll also find within this Bulletin a tongue-in-cheek trade name quiz that we hope will serve as a friendly reminder concerning a serious issue. As the industry evolves, companies are more frequently engaging in cross-marketing partnerships that may seek to rely on the name and reputation of a local affiliate rather than the name of a registered entity.

While such cross-marketing is perfectly acceptable, Connecticut's regulations do require that a state-registered broker-dealer, investment adviser, agent or investment adviser agent (or any applicant for registration) provide advance notice to the Division prior to using a trade or assumed name. There is no fee for filing such notice.

The Securities Division has received a number of recent public inquiries about entities that were using trade or assumed names not on file with the Division. Without any information on file, the Division must unnecessarily expend resources, sometimes including a physical examination, to ensure that an unregistered entity isn't operating within Connecticut and jeopardizing local investors.

While we aren't grading the trade name quiz results, we do hope that firms' DBA compliance will pass with flying colors.

The department's annual conference, Securities Forum 2001, has been scheduled for Monday, October 22 at the Radisson Hotel and Conference Center in Cromwell, Connecticut. Mark the date on your calendar and visit our Web site later this summer for complete program and registration information.

John P. Burke
Banking Commissioner


ORDER SIMPLIFYING THE FILING OF
REGISTRATIONS BY COORDINATION IN CONNECTICUT


WHEREAS the Commissioner of Banking (the "Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (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, in part, 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(c) of the Act states, in part, that: "To encourage uniform interpretation and administration of sections 36b-2 to 36b-33, inclusive, and effective securities regulation and enforcement, the commissioner may cooperate with … the Securities and Exchange Commission… The cooperation authorized by this subsection includes, but is not limited to, the following actions: (1) Establishing central depositories for the registration of securities … under sections 36b-2 to 36b-33, inclusive, and for documents or records required or allowed to be filed with or maintained by the commissioner under sections 36b-2 to 36b-33, inclusive ….";

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 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 the Commissioner acknowledges that the Electronic Data Gathering, Analysis and Retrieval System (hereinafter, "EDGAR") is a publicly-accessible Internet-based database established by the Securities and Exchange Commission (the "SEC") to perform automated collection, validation, indexing, acceptance and forwarding of submissions by companies and others who are required by law to file forms with the SEC;

WHEREAS the Commissioner also acknowledges that the SEC requires all public companies (except foreign companies and those having less than $10 million in assets and 500 shareholders) to file registration statements, periodic reports and other forms electronically through EDGAR, with participation by other issuers being on a voluntary basis;

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-19(a) of the Act states that: "A registration statement may be filed with the commissioner, or with any other depository that the commissioner may designate by regulation or order, by the issuer, any other person on whose behalf the offering is to be made or a registered broker-dealer";

WHEREAS Section 36b-17(a) of the Act provides that: "Any security for which a registration statement has been filed [with the SEC] under the Securities Act of 1933 in connection with the same offering may be registered by coordination";

WHEREAS Section 36b-17(b) of the Act states that:

A registration statement under this section shall contain the following information and be accompanied by the following documents in addition to the information specified in subsection (c) of section 36b-19 and the consent to service of process required by subsection (g) of section 36b-33: (1) One copy of the latest form of prospectus filed under the Securities Act of 1933, (2) if the commissioner by regulation so requires, a copy of the articles of incorporation and bylaws or their substantial equivalents currently in effect, a copy of any agreements with or among underwriters, a copy of any indenture or other instrument governing the issuance of the security to be registered, and a specimen or copy of the security, (3) if the commissioner requests, any other information or copies of any other documents filed under the Securities Act of 1933, and (4) an undertaking to forward all amendments to the federal prospectus, other than an amendment which merely delays the effective date of the registration statement promptly and in no event later than the first business day after the day they are forwarded to or filed with the Securities and Exchange Commission, whichever first occurs.

WHEREAS Section 36b-19(e) of the Act states that: "The commissioner may by regulation or otherwise permit the omission of any item of information or document from any registration statement";

WHEREAS Section 36b-31-31c of the Regulations states that: "The commissioner may exempt a person, security or transaction from a specified provision of sections 36b-31-2 to 36b-31-33, inclusive, of the regulations upon a finding that such exemption is in the public interest";

WHEREAS Section 36b-17(c) of the Act provides, in part, that:

A registration statement under this section automatically becomes effective at the moment the federal registration statement becomes effective if all the following conditions are satisfied: (1) No stop order is in effect and no proceeding is pending under section 36b-20, (2) the registration statement has been on file with the commissioner for at least fifteen days, and (3) a written or telegraphic statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions has been on file for two full business days or such shorter period as the commissioner permits by regulation or order and the offering is made within those limitations … The commissioner may by regulation or order waive either or both of the conditions specified in subdivisions (2) and (3) of this subsection. If the federal registration statement becomes effective before all the conditions in this subsection are satisfied and they are not waived, the registration statement automatically becomes effective as soon as all the conditions are satisfied … When the conditions specified in subdivisions (1), (2) and (3) of this subsection have been satisfied, the commissioner shall by order issue a confirmation to the registrant of the date when the registration statement became effective.

WHEREAS the Commissioner finds, pursuant to Section 36b-31(b) of the Act, that the entry of this Order, which acknowledges developments in technology and the need for state and federal uniformity, 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. Pursuant to Sections 36b-19(a) and 36b-31(c) of the Act, EDGAR is hereby designated as a depository for the filing of registration statements and documents filed in connection with the registration of securities by coordination subject to the terms and conditions of this Order;
2. A person who has filed a registration statement with the SEC through EDGAR (the "EDGAR Filer") may elect to follow the procedures set forth in this Order in registering the same offering by coordination pursuant to Sections 36b-17 and 36b-19 of the Act. An EDGAR Filer making such an election shall notify the Commissioner of that fact in writing or by electronic mail and shall identify those documents actually filed via EDGAR and available for on-line viewing;
3. Once the Commissioner receives notice in writing or by electronic mail that a registration statement has actually been filed via EDGAR and is available for on-line viewing, the fifteen day waiting period in Section 36b-17(c) of the Act shall be reduced to five business days; and, to the extent that the EDGAR filing or filings reflect the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions, the two business day waiting period in Section 36b-17(c) of the Act shall be waived for such information. The reduction or waiver of the waiting periods described above is expressly conditioned on the Commissioner receiving from the EDGAR Filer the fee required by Section 36b-19(b) of the Act. In accordance with Section 36b-17(b) of the Act, for purposes of determining the onset of the waiting period in Section 36b-17(c) of the Act, the registration statement shall include the information required to be filed directly with the Commissioner pursuant to paragraphs 6(b) and 6(c) of this Order and Sections 36b-19(c) and 36b-33 of the Act;
4. For purposes of complying with those provisions of the Act and the Regulations governing the registration of securities by coordination, the following documents shall be deemed filed with the Commissioner if, and at such time as, they are available for on-line viewing via EDGAR provided that the EDGAR Filer gives the Commissioner notice in writing or by electronic mail that the documents are so available for on-line viewing:
a) The latest form of prospectus as filed under the Securities Act of 1933, as required by Section 36b-17(b)(1) of the Act;
b) The statement of the maximum and minimum proposed offering prices and the maximum underwriting discounts and commissions required by Section 36b-17(c)(3) of the Act;
c) The content of the price amendment required by Section 36b-17(c)(3) of the Act;
d) The post-effective amendment containing the information in the price amendment, if any, required by Section 36b-17(c)(3) of the Act;
e) The prospectus amendments, other than amendments that merely delay the effective date of the registration statement, required by Section 36b-31-19a(b) of the Regulations. Compliance with Rule 310 under SEC Regulation S-T governing the marking of changed materials electronically shall constitute compliance with the requirement in Section 36b-31-19a(b) of the Regulations that such prospectus amendments be clearly marked to indicate the specific amendments. An EDGAR Filer filing a prospectus amendment electronically pursuant to this paragraph shall be exempt, pursuant to Section 36b-31-31c of the Regulations, from the requirement in Section 36b-31-19a(b) of the Regulations that such amendment be filed within two business days after it has been filed with the SEC;
5. Pursuant to Section 36b-19(e) of the Act, an EDGAR Filer may omit from the registration statement the undertaking to forward all amendments to the federal prospectus otherwise required by Section 36b-17(b)(4) of the Act;
6. An EDGAR Filer shall submit the following directly to the Commissioner:
a) The filing fee required by Section 36b-19(b) of the Act;
b) The Consent to Service of Process (Form U-2) required by Sections 36b-17(b) and 36b-33(g) of the Act and Section 36b-31-17a(a) of the Regulations;
c) A Form U-1 that includes information on the amount of securities to be offered in Connecticut; the states where a registration statement has been, or will be filed; the name of any broker-dealer or agent of issuer registered to do business under the Act who may offer the securities in Connecticut; and any adverse order, judgment, decree entered in connection with the offering by the regulatory authorities in each state or by any court or the SEC, all as required by Section 36b-19(c) of the Act and Section 36b-31-17a(b) of the Regulations;
d) Notice of SEC effectiveness communicated in writing or by electronic mail to the Commissioner within one business day after the federal registration statement became effective with the SEC, which notice shall include, where applicable, an indication of when the price amendment would be filed federally via EDGAR; and
e) Following SEC and Connecticut effectiveness of the registration statement, notice in writing or by electronic mail of the completion date of the initial distribution, the amount of securities sold in Connecticut and the availability of an exemption for any nonissuer distribution, provided that this requirement shall not apply where the registrant has paid the maximum filing fee under Section 36b-19(b) of the Act;
7. Pursuant to Section 36b-31-31c of the Regulations, EDGAR Filers shall be exempt from furnishing the Commissioner with the following documents unless the Commissioner so requests:
a) A copy of the issuer's articles of incorporation and by-laws currently in effect as required by Section 36b-31-17a(b) of the Regulations;
b) A copy of the underwriting agreement otherwise required by Section 36b-31-17a(b) of the Regulations;
c) A copy of any indenture or other instrument governing issuance of the security as required by Section 36b-31-17a(b) of the Regulations;
d) The specimen or copy of the security otherwise required by Section 36b-31-17a(b) of the Regulations;
e) The opinion of counsel regarding issuance of the securities otherwise required by Section 36b-31-17a(b) of the Regulations;
f) Sales literature required by Section 36b-31-22(a) of the Regulations;
g) Post-effective filing of a balance sheet and income statement as required by Section 36b-31-19a(f) of the Regulations.
8. Nothing in this Order shall excuse an EDGAR Filer from notifying the Commissioner of the following events in accordance with Section 36b-31-19a(c) of the Regulations: a) any adverse order, judgment, decree or permanent or temporary injunction entered by a state or federal agency or court concerning the offering or other securities of the issuer or of the person seeking registration; b) a request by the issuer or the person seeking registration to withdraw an application pending before a state or federal agency to register the same security the applicant seeks to register under the Act; and c) final notice from any state or federal administrative agency that the security or any information or document filed with the agency relating to the security fails to meet the agency's requirements;
9. Nothing in this Order shall excuse an EDGAR Filer from its obligation under subsections (c)(1) and (g) of Section 36b-31-19a of the Regulations to promptly file a correcting amendment if the information or documents contained in any registration statement is or becomes inaccurate or incomplete in any material respect;
10. The filing procedures in this Order shall also apply to shelf registration filings made in accordance with Section 36b-31-17b of the Regulations;
11. Nothing in this Order shall preclude the Commissioner from initiating stop order proceedings pursuant to Section 36b-20 of the Act or from requiring that any document filed via EDGAR be provided to the Commissioner in paper form;
12. This Order shall remain in effect unless modified, vacated or superseded by the Commissioner or other legal authority.
So ordered at Hartford, Connecticut
this 3rd day of July, 2001
John P. Burke
Banking Commissioner
 

 
{Is Your Trade Name Hiding Your Registered Identity?}

AGENTS: TEST YOUR TRADE NAME SAVVY WITH THIS QUIZ
(Answers Appear at End)

1. Mary Jones is a registered agent of ABC Brokerage Firm. She also formed her own corporate investment adviser, Jones Planning Inc. Mary Jones conducts her investment advisory business under the name "Stellar Advisory Services." Mary Jones is using what trade or assumed name(s):
a. ABC Brokerage Firm
b. Jones Planning Inc.
c. Stellar Advisory Services
d. All of the above.
2. Moe, Larry and Curley are associated with the regional brokerage firm Shempco and work out of a branch office in Woodbury, Connecticut. The three also are licensed to sell insurance. To provide a local identity for their branch, the three hold the branch out as "Stooge Financial Services." Larry and Curley are registered broker-dealer agents of Shempco, but Moe is not. May Moe receive a securities commission override without being registered as an agent of Shempco?
a. Yes. Moe isn't selling, he just supervises Larry and Curley.
b. No. Under Connecticut's securities regulations, it would be a dishonest or unethical practice for Larry and Curley to share commissions with any individual not registered as an agent of the same broker-dealer, and their registrations could be revoked or suspended as a result. Shempco could also face supervisory issues.
c. Yes. Moe deserves the money.
d. All of the above.
3. Any registrant (broker-dealer or investment advisory firm; broker-dealer agent; investment adviser agent) using a trade or assumed name must file what with the Department of Banking?
a. A trade name notice on Form DBA-1.
b. An income tax return.
c. A letter of recommendation.
d. None of the above.
4. The purpose of filing Form DBA-1 is:
a. To permit the department to identify the trade/assumed name user to public callers and advise them whether the user is registered.
b. Revenue enhancement.
c. To obtain a writing sample.
d. What is Form DBA-1?
5. When using a trade or assumed name in advertising (including web site advertising), state and federal regulations would require that what be disclosed:
a. The name of the broker-dealer (if any) with whom an agent using the trade name is associated.
b. The name of the investment adviser (if any) with whom an investment adviser agent using the trade name is associated.
c. (a) and (b).
d. (d).

Answers

1. c. A trade or assumed name is the name under which the business operates other than its legal name.
2. b.
3. a.
4. a. There is no fee to file Form DBA-1. The form must be amended only if you stop using the trade name or use another trade name.
5. c. Advertising should not be misleading in any way and should be preapproved by your firm.

Scoring

1. 4-5 correct: Request promotion to compliance officer.
2. 2-3 correct: Time to brush up on your trade name knowledge.
3. 0-1 correct: Do you want fries with that?

{ }

Order Exempting Transactions Effected for Customers
Of Foreign Broker-Dealers Temporarily In This State


WHEREAS the Commissioner of Banking (the "Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (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, in part, 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, amended or rescinded 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";

WHEREAS the United States Securities and Exchange Commission (the "SEC") promulgated Rule 15a-6 under the Securities Exchange Act of 1934 (the "'34 Act") exempting foreign brokers and dealers engaging in specific transactions from the registration requirements of Sections 15(a)(1) and 15B(a)(1) of the '34 Act;

WHEREAS SEC Rule 15a-6 exempts, without limitation, a foreign broker-dealer effecting transactions in securities with or for, or inducing or attempting to induce the purchase or sale of any security by a foreign person temporarily present in the United States with whom the foreign broker or dealer had a bona fide, pre-existing relationship before the foreign person entered the United States;

WHEREAS on August 17, 2000, the Commissioner issued an Order Governing Transactions by Foreign Broker-dealers Exempt from Federal Registration and Transactions Exempt Under SEC Rule 237, which order, among other things, excluded from the definition of "broker-dealer" in Section 36b-3(5) of the Act a foreign broker-dealer qualifying for a federal exemption from registration under SEC Rule 15a-6;

WHEREAS Section 36b-16 of the Act provides, in part, 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-21(b)(17) of the Act provides, in part, that: The following transactions are exempted from sections 36b-16 and 36b-22 ... any other transaction 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";

WHEREAS the Commissioner finds that the entry 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";

WHEREAS the Commissioner also finds that the registration under Section 36b-16 of the Act of those securities transactions described in this order is not necessary or appropriate in the public interest or for the protection of investors.

NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

(1) For purposes of this Order, the following definitions shall apply:
(A) "Foreign Broker-dealer" has the meaning given to "foreign broker or dealer" in SEC Rule 15a-6(b)(3) where the securities activities of such broker-dealer would trigger Connecticut jurisdiction under Section 36b-33 of the Act;
(B) "Foreign Customer" means a person who a) is a citizen of a foreign country; b) had a bona fide, pre-existing relationship with a Foreign Broker-dealer prior to the time the foreign customer entered this state; and c) continues to maintain such a relationship during the duration of such person's presence in this state;
(C) "Temporarily present in this state" means residing in Connecticut on an interim basis pending return to a foreign country;
(2) Securities transactions that are effected by a Foreign Broker-dealer exclusively for the account of Foreign Customers who are temporarily present in this state and that are not otherwise exempt or involving covered securities under Section 36b-21 of the Act shall be exempt from securities registration pursuant to Section 36b-21(b)(17) of the Act where the sole purpose of such transactions is to enable the Foreign Broker-dealer to service or effect transactions in the accounts while the Foreign Customers are temporarily present in this state;
(3) The antifraud provisions of Section 36b-4 of the Act shall continue to apply to any securities transaction exempt under the preceding paragraph; 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 15th day of June, 2001

______/s/_______
John P. Burke
Banking Commissioner

{ }

{Mark Your Calendar!}

COMING SOON!

SECURITIES FORUM 2001

Monday, October 22, 2001

Cromwell Radisson Hotel

Watch Our Web Site for More Details

{ }


Enforcement Highlights

 Administrative Actions

Caffe Diva Group Ltd. Ordered to Cease and Desist from Regulatory Violations; Notice of Intent to Fine Issued

On June 13, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-6196-S) against Caffe Diva Group Ltd., a corporation having its principal office at 15688 S.W. 72nd Avenue, Portland, Oregon. The Order to Cease and Desist and Notice of Intent to Fine claimed that, from at least December 1998 forward, the respondent sold promissory notes through at least two unregistered agents of issuer in violation of Section 36b-6(b) of the Connecticut Uniform Securities Act and failed to register the notes as required by Section 36b-16 of the Act. Since the respondent failed to request a hearing on the Order to Cease and Desist that order became permanent on July 20, 2001. A hearing on the Notice of Intent to Fine has been scheduled for August 7, 2001.

W. Peter Massman a/k/a W. Peter Massmann (CRD # 1486969) Ordered to Cease and Desist from Regulatory Violations; Notice of Intent to Fine Issued

On May 10, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-6158-S) against W. Peter Massman of Westport, Connecticut. The action alleged that respondent Massman, formerly a broker-dealer agent of Nutmeg Securities, Ltd. from June 30, 1994 to March 31, 1997, sold unregistered promissory notes of Lighthouse Two Corporation, Prime Time Investments, Inc. and Prime Time Leasing & Financial Services Corporation. The sales occurred during the respondent's association with Nutmeg Securities, Ltd. and continued after his departure from the firm. The Order to Cease and Desist and Notice of Intent to Fine also claimed that the respondent violated Section 36b-31-6e of the Regulations under the Connecticut Uniform Securities Act by engaging in private securities transactions absent notice to his employing broker-dealer. In addition, the action alleged that the respondent transacted business as an unregistered agent of issuer in making the note sales.

The respondent was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for July 24, 2001.

Child Care Choices, Inc. - Order to Cease and Desist and Notice of Intent to Fine Issued

On May 8, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-769-B) against Child Care Choices, Inc. of 15050 Carter Road, Philadelphia, Pennsylvania. The action alleged that from at least June 2000, the corporation offered and sold an unregistered child care provider network business opportunity in violation of Section 36b-67(1) of the Connecticut Business Opportunity Investment Act. The Order to Cease and Desist and Notice of Intent to Fine also claimed that the respondent 1) failed to provide a disclosure statement to purchaser-investors prior to the signing of the business opportunity contract or the receipt of money in violation of Section 36b-63(a) of the Act; and 2) failed to provide purchaser-investors with a disclosure statement that complied with Section 36b-63 of the Act.

The respondent was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for July 10, 2001.

ALumaLex, Inc. f/k/a Auto Shutter, Inc. - Order to Cease and Desist and Notice of Intent to Fine Issued

On April 20, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-6193-S) against ALumaLex, Inc. of 2900 S.W. 60th Avenue, Ocala, Florida. The action alleged that from at least April 1997, the respondent sold unregistered, non-exempt ALumaLex/Auto Shutter promissory notes to the Connecticut investing public through at least two unregistered agents of issuer. Such conduct purportedly violated Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

Since the respondent did not request a hearing on the Order to Cease and Desist, that order became permanent on May 11, 2001. The Notice of Intent to Fine remains pending.

Arthur L. Bisson (CRD # 1355774) - Order to Cease and Desist and Notice of Intent to Fine Issued

On April 20, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-5574-S) against Arthur L. Bisson of Meriden, Connecticut. The Order to Cease and Desist and Notice of Intent to Fine claimed that from at least February 1997, the respondent sold unregistered non-exempt promissory notes and preferred stock to Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The promissory notes were issued by World Vision Entertainment, Inc., Lifeblood Biomedical, Inc., Canko Environmental Technologies, Inc., Redbank Petroleum, Inc., Tri-National Development Corp., ALumaLex, Inc. and Technical Support Services, Inc. The preferred stock was issued by Palm Beach Investment Group. The action also alleged that, in selling the securities, the respondent transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act.

Disposition of the matter remained pending as of the end of the quarter.

John A. Thompson (CRD # 727168) Ordered to Cease and Desist from Regulatory Violations; Notice of Intent to Fine Issued

On April 17, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-5572-S) against John A. Thompson of Brooklyn, Connecticut. The action alleged that, from at least July 1998 forward, the respondent sold unregistered non-exempt promissory notes of Pacific Air Transport, Inc., Redbank Petroleum, Inc., Taormina Omne SRL, Tri-National Development Corp. and Caffe Diva Group, Ltd. to Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act. In selling the promissory notes, the respondent also purportedly acted as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act.

Since the respondent did not request a hearing on the Order to Cease and Desist, that order became permanent on June 29, 2001. The Notice of Intent to Fine remains pending.

Tri-National Development Corp. Ordered to Cease and Desist from Securities Violations; Notice of Intent to Fine Issued

On April 17, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-6197-S) against Tri-National Development Corp. of 480 Camino Del Rio South, Suite 140, San Diego, California. The Order to Cease and Desist and Notice of Intent to Fine alleged that, from at least April 1999 forward, the respondent sold unregistered non-exempt promissory notes to at least seventeen Connecticut investors through at least four unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

The respondent was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for August 7, 2001.

Couch & Company, Incorporated f/k/a Thomas M. Couch, Inc. (CRD # 18433) Ordered to Cease and Desist from Regulatory Violations; Notice of Intent to Fine Issued

On April 2, 2001, the Banking Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-2001-5562-S) against Couch & Company, Incorporated, a broker-dealer located at 40 Exchange Place, Suite 1601, New York, New York. The action alleged that from at least June 1999, the firm had transacted business as a broker-dealer absent registration under the Connecticut Uniform Securities Act and had employed unregistered agents. The Order to Cease and Desist and Notice of Intent to Fine also claimed that the firm had filed a materially false or misleading document in conjunction with its application for broker-dealer registration. In the application, since withdrawn, the firm had purportedly denied that it had transacted any brokerage business in Connecticut.

Since the respondent did not request a hearing on the Order to Cease and Desist, that order became permanent on May 9, 2001. The Notice of Intent to Fine remains pending.

Pacific Air Transport, Inc. Fined $20,000 in Connection with Promissory Note Sales; Order to Cease and Desist Made Permanent

On June 13, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2001-6195-S) against Pacific Air Transport, Inc. of 12304 Santa Monica Boulevard, Suite 116, Los Angeles, California. The Order Imposing Fine, which was uncontested by the corporation, imposed a $20,000 penalty. Pacific Air Transport, Inc. had also been the subject of an April 2, 2001 Order to Cease and Desist that was also uncontested and that became permanent on May 9, 2001 and an April 2, 2001 Notice of Intent to Fine. In fining the firm, the Commissioner found that, from October 1998 forward, Pacific Airport Transport, Inc. had sold unregistered non-exempt promissory notes to at least nine Connecticut investors through unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

Pond Securities Corp. d/b/a Pond Equities (CRD # 30934) - Notice of Intent to Deny Registration as Broker-dealer, Order to Cease and Desist and Notice of Intent to Fine Issued

On April 2, 2001, the Banking Commissioner issued a Notice of Intent to Deny Registration as Broker-dealer, Order to Cease and Desist and Notice of Intent to Fine (Docket No. NDCDF-2001-6130-S) with respect to Pond Securities Corp. of 4522 Fort Hamilton Parkway, Brooklyn, New York. The action alleged that the respondent had 1) transacted business as a broker-dealer absent registration under the Connecticut Uniform Securities Act from at least April 1997 forward; 2) employed at least five unregistered agents; 3) failed to implement a supervisory system that would have prevented the alleged registration violations; and 4) been censured and fined by the NASD three times on March 4, 1999, February 25, 1999 and December 11, 1999, respectively, for failing to abide by proper standards of commercial behavior and to observe regulatory requirements. The action also claimed that the firm had filed a materially false or misleading document in conjunction with its application for broker-dealer registration. In the application, the firm had purportedly denied that it had transacted any brokerage business in Connecticut.

The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Deny Registration as Broker-dealer and the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for May 23, 2001.

Taormina Omne SRL Fined $20,000 in Connection with Promissory Note Sales; Order to Cease and Desist Made Permanent

On June 13, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2001-6209-S) against Taormina Omne SRL, a corporation having its principal place of business at 43 Via Sicilia, Rome Italy. The Order Imposing Fine, which was uncontested by the firm, imposed a $20,000 penalty. Taormina Omne SRL had also been the subject of an April 2, 2001 Order to Cease and Desist that was also uncontested and that became permanent on April 25, 2001 and an April 2, 2001 Notice of Intent to Fine. In fining the firm, the Commissioner found that, from at least April 1999 forward, Taormina Omne SRL had sold unregistered non-exempt promissory notes to at least four Connecticut investors through unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

Sun Broadcasting Systems Inc. Fined $20,000 in Connection with Promissory Note Sales; Order to Cease and Desist Made Permanent

On June 13, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2001-6198-S) against Sun Broadcasting Systems, Inc. of 1000 East Tahquitz Canyon Way, Palm Springs, California. The Order Imposing Fine, which was uncontested by the firm, assessed a $20,000 penalty. Sun Broadcasting Systems, Inc. had also been the subject of an April 2, 2001 Order to Cease and Desist that was also uncontested and that became permanent on May 15, 2001 and an April 2, 2001 Notice of Intent to Fine. In fining the firm, the Commissioner found that from April 1998 forward, Sun Broadcasting Systems Inc. sold unregistered non-exempt promissory notes to at least one Connecticut investor through one or more unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

Technical Support Services, Inc. Fined $20,000 for Regulatory Violations in Connection with Promissory Note Sales; Order to Cease and Desist Made Permanent

On June 13, 2001, the Banking Commissioner entered an Order Imposing Fine (Docket No. CF-2001-6194-S) against Technical Support Services, Inc. of 1700 Avenue F. Dodge City, Kansas. The Order Imposing Fine, which was uncontested by the firm, assessed a $20,000 penalty. Technical Support Services, Inc. had also been the subject of an April 2, 2001 Order to Cease and Desist that was also uncontested and that became permanent on April 26, 2001 and an April 2, 2001 Notice of Intent to Fine. In fining the firm, the Commissioner found that from October 1998 forward, the respondent sold unregistered non-exempt promissory notes to at least four Connecticut investors through unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

Settlements

Vincent J. Esposito, Jr. (CRD # 1320279) Suspended from Effecting Securities Transactions for 45 days, Fined $15,000

On June 27, 2001, the Banking Commissioner entered a Consent Order (Docket No. NRCDF-2001-6021-S) with respect to Vincent J. Esposito, Jr., a broker-dealer agent of Jefferson Pilot Securities Corporation. The respondent had been the subject of a March 15, 2001 Notice of Intent to Revoke Registration as Agent, Order to Cease and Desist and Notice of Intent to Fine. The March 15, 2001 action had alleged 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 claimed misconduct occurred in 1999 when the respondent was associated with Legg Mason Wood Walker, Incorporated, a broker-dealer. In addition, the agency had 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.

In resolution of the March 15, 2001 action, the respondent agreed to the entry of a Consent Order suspending him for 45 days from effecting securities transactions in or from Connecticut. The suspension would run from August 17, 2001 to September 30, 2001. Following the expiration of the suspension, the respondent's Connecticut registration would be reinstated. The Consent Order also fined the respondent $15,000 and required that he complete the Regulatory Element of the Securities Industry Continuing Education Program within 120 days. In addition, the Consent Order vacated the March 15, 2001 Order to Cease and Desist.

John Charles Keating, Jr. (CRD # 1666772) Sanctioned for Unregistered Agent Activity

On June 22, 2001, the Banking Commissioner executed a Stipulation and Agreement (No. ST-01-6281-S) with respect to John Charles Keating, Jr., currently a registered broker-dealer agent of Bengal Partners, LLC. The Stipulation and Agreement alleged that between June 1999 and approximately April 2001, respondent Keating transacted business as an agent of Southport Securities, LLC absent registration under Section 36b-6 of the Connecticut Uniform Securities Act. The Stipulation and Agreement acknowledged the respondent's representation that he had submitted all required registration paperwork to the firm, and had relied upon the firm to ensure that the registration process had been completed. The respondent had also provided the Division with a copy of the Form U-4 previously submitted to the firm.

Pursuant to the Stipulation and Agreement, respondent Keating agreed to pay a $500 fine and to complete the Regulatory Element of the Securities Industry Continuing Education Program within ninety days.

Michael C. Dailey (CRD # 1885685) Fined, Subject to Five-Year Bar in Connection With Unregistered Promissory Note Sales

On June 19, 2001, the Banking Commissioner entered a Consent Order (No. CO-01-5591-S) with respect to Michael C. Dailey of Trumbull, Connecticut. The Consent Order alleged that Michael Dailey violated Section 36b-6(a) of the Connecticut Uniform Securities Act by transacting business as an unregistered agent of issuer in selling promissory notes of Ameritech Petroleum, Inc., Sebastian International Enterprises, Inc., South Mountain Resort & Spa, Inc. and Tri- National Development Corporation. The sales were purportedly made from August 1997 to October 1998. The Consent Order also claimed that the notes were not registered or exempt from registration under the Act.

The Consent Order barred the respondent for five years from acting as a broker-dealer agent, agent of issuer, broker-dealer, investment adviser, investment adviser agent or business opportunity seller. In addition, the Consent Order directed that the respondent cease and desist from regulatory violations and pay $2,000 to the department, $1,500 of which constituted an administrative fine and $500 of which represented reimbursement for investigative costs.

Legg Mason Wood Walker, Inc. (CRD # 6555) Fined for Failing to Timely Make its Records Available to the Agency

On June 19, 2001, the Banking Commissioner entered a Consent Order (No. CO-00-6019-S) with respect to Legg Mason Wood Walker, Inc. of 100 Light Street, Baltimore, Maryland. The Consent Order claimed that, at various times between August 1999 and February 2001, the firm violated Section 36b-31-14f(b)(3) of the Regulations under the Connecticut Uniform Securities Act by failing to make its records available to the Commissioner in a timely manner. The Consent Order directed the firm to cease and desist from violating those provisions of the Act and the Regulations governing agency examinations and to pay $20,000 to the department, $15,000 of which constituted an administrative fine and $5,000 of which represented reimbursement for agency investigative costs.

Charles Joseph Noble III (CRD # 715430) Censured and Fined for Failing to Open Records to the Agency

On June 19, 2001, the Banking Commissioner entered a Consent Order (No. CO-01-6256-S) with respect to Charles Joseph Noble III, a registered broker- dealer agent of Legg Mason Wood Walker, Inc. (CRD # 6555) employed at the New Haven branch office of the firm. The Consent Order alleged that, at various times between August 1999 and February 2001, Charles Noble violated Section 36b-31-14f(b)(3) of the Regulations under the Connecticut Uniform Securities Act by failing to make firm records available to the Commissioner in a timely manner. The Consent Order censured Noble, directed him to cease and desist from violating those provisions of the Act and the Regulations governing agency examinations and fined him $10,000.

Dana J. Andrusik (CRD # 859311) Forfeits Investment Advisory License; Barred from Securities Industry for Ten Years

On June 5, 2001, the Banking Commissioner entered a Consent Order (Docket No. CF-2000-5460-S) directing Dana J. Andrusik of Glastonbury, Connecticut to forfeit his investment advisory license and barring Andrusik from acting as an investment adviser, broker-dealer agent, agent of issuer or investment adviser agent for ten years. The Consent Order also required that the respondent pay $7,500 to the department, $5,000 of which constituted an administrative fine and $2,500 of which represented reimbursement for agency investigative costs. Andrusik had been the subject of a February 27, 2001 Notice of Intent to Revoke Investment Adviser Registration and an Order to Cease and Desist and Notice of Intent to Fine. The Consent Order provided that the Order to Cease and Desist would become permanent as of June 5, 2001.

In resolving the matter with the department, the respondent consented to the entry of findings that 1) he had 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.; and 2) he had acted as an unregistered agent of issuer in effecting the note transactions.

Christopher John Frascella (CRD # 2672168) Sanctioned for Unregistered Agent Activity

On June 5, 2001, the Banking Commissioner executed a Stipulation and Agreement (No. ST-01-6283-S) with respect to Christopher John Frascella, currently a registered broker-dealer agent of Broadmark Capital Corp. The Stipulation and Agreement alleged that between June 1998 and March 2001, respondent Frascella transacted business as an agent of Southport Securities, LLC absent registration under Section 36b-6 of the Connecticut Uniform Securities Act. The Stipulation and Agreement acknowledged the respondent's representation that he had submitted all required registration paperwork to the firm, and had relied upon the firm to ensure that the registration process had been completed.

Pursuant to the Stipulation and Agreement, respondent Frascella agreed to pay a $500 fine and to complete the Regulatory Element of the Securities Industry Continuing Education Program within ninety days.

Andre Vincent Russo (CRD # 407745) Sanctioned for Unregistered Agent Activity

On May 31, 2001, the Banking Commissioner executed a Stipulation and Agreement (No. ST-01-6282-S) with respect to Andre Vincent Russo, currently a registered broker-dealer agent of Broadmark Capital Corp. The Stipulation and Agreement alleged that between November 1998 and March 2001, respondent Russo transacted business as an agent of Southport Securities, LLC absent registration under Section 36b-6 of the Connecticut Uniform Securities Act. The Stipulation and Agreement acknowledged the respondent's representation that he had submitted all required registration paperwork to the firm, and had relied upon the firm to ensure that the registration process had been completed.

Pursuant to the Stipulation and Agreement, respondent Russo agreed to pay a $500 fine and to complete the Regulatory Element of the Securities Industry Continuing Education Program within ninety days.

Northeast Financial Consultants, Inc. (CRD # 110361) Assessed $14,000 for Registration and Notice Filing Violations

On May 10, 2001, the Banking Commissioner executed a Stipulation and Agreement (No. ST-01-6260-S) with respect to Northeast Financial Consultants, Inc., an SEC- registered investment adviser having its principal office at 244 Saugatuck Avenue, Westport, Connecticut. The Stipulation and Agreement alleged that at various times between 1984 and 2001, the firm transacted business as an investment adviser absent registration under Section 36b-6(a) of the Connecticut Uniform Securities Act and failed to make the investment advisory notice filing required by Section 36b-6(e) of the Act on and after October 1, 1997.

Without admitting or denying the Commissioner's allegations, the firm agreed to 1) revise and implement such supervisory and compliance procedures as were necessary to ensure compliance with state notice filing requirements; and 2) pay $14,000 to the department, $10,000 of which constituted a monetary penalty, $2,500 of which represented reimbursement for past due registration and notice filing fees and $1,500 of which constituted reimbursement for Division investigative costs.

Nicholas Mario Antonelli (CRD # 2459572) Subject to Ten Year Bar; Assessed $3,500

On May 2, 2001, the Banking Commissioner entered a Consent Order with respect to Nicholas Mario Antonelli of 25 Sioux Drive Commack, New York (Docket No. CF-2000-6121-S). Antonelli, who was formerly affiliated with the securities brokerage firm of Morgan, Taylor & Associates, Inc., had been the subject of a November 21, 2000 Order to Cease and Desist and Notice of Intent to Fine based upon allegations of unregistered agent activity and engaging in private securities transactions without notice to his employing broker-dealer. The Consent Order resolved the allegations in the Order to Cease and Desist and Notice of Intent to Fine. Specifically, the Consent Order barred Antonelli from transacting business in Connecticut as a broker-dealer agent, investment adviser or investment adviser agent for ten years. The Consent Order also assessed the respondent $3,500. Of that amount $2,500 constituted an administrative fine and $1,000 represented reimburse- ment for agency investigative costs. In addition, the Consent Order provided that the November 21, 2000 Order to Cease and Desist would be made permanent.

Timothy J. Pimentel (CRD # 2634753) Subject to 12 Month Bar on Agent and Advisory Activity; Assessed $750 for Unregistered Agent Activity

On May 2, 2001, the Banking Commissioner entered a Consent Order (Docket No. NDCDF-2000-6157-S) with respect to Timothy J. Pimentel of Hacienda Heights, California. Pimentel had been the subject of a December 20, 2000 Order to Cease and Desist, Notice of Intent to Deny Registration as Agent and Notice of Intent to Fine. The Consent Order resolved the allegations in the department's December 20, 2000 action. In settling the matter, the Commissioner found that Pimentel violated Section 36b-6(a) of the Connecticut Uniform Securities Act by transacting business as a broker-dealer agent of Hampton Securities, Inc. (CRD number 18305) absent registration.

The Consent Order barred Pimentel for twelve months from transacting business as an agent, investment adviser agent or investment adviser in Connecticut; required that he complete the Regulatory Element of the Securities Industry Continuing Education Program within 120 days; and assessed him seven hundred fifty dollars, $500 of which constituted an administrative fine and $250 of which represented reimbursement for department investigative costs. In addition, the Consent Order vacated the December 20, 2000 Order to Cease and Desist.

Hampton Securities, Inc. (CRD # 18305) Directed to Refrain from Applying for Broker-dealer or Investment Adviser Registration for Three Years; Assessed $12,000 for Unregistered Activity

On April 27, 2001, the Banking Commissioner entered a Consent Order (Docket No. NDCDF-2000-6120-S) with respect to Hampton Securities, Inc. of 3807 Wilshire Boulevard, Suite 1220, Los Angeles, California. The firm had been the subject of a December 20, 2000 Order to Cease and Desist, Notice of Intent to Deny Registration as a Broker-dealer and Notice of Intent to Fine. The Consent Order resolved the allegations in the department's December 20, 2000 action. In settling the matter, the Commissioner found that the firm 1) wilfully violated Section 36b-6(a) of the Connecticut Uniform Securities Act by transacting business as a broker-dealer absent registration; 2) wilfully violated Section 36b-6(b) of the Act by employing at least one unregistered agent; 3) wilfully violated Section 36b-16 of the Act by offering unregistered securities of playersworld.com for sale via the firm's web site; and 4) had been the subject of two NASD suspensions imposed within the previous five years.

The Consent Order directed Hampton Securities, Inc. not to pursue broker-dealer or investment adviser registration in Connecticut for 36 months, but did permit the firm to execute liquidating sales transactions for any Connecticut accounts remaining open on April 27, 2001. The Consent Order also assessed the firm $12,000. Of that amount, $10,000 constituted an administrative fine and $2,000 represented reimbursement for agency investigative costs. Finally, the Consent Order provided that the December 20, 2000 Order to Cease and Desist would become permanent as of April 27, 2001. The December 20, 2000 Notice of Intent to Deny Registration as Broker-dealer and Notice of Intent to Fine were withdrawn effective April 27, 2001.

Gerald A. Kalish (CRD # 1006908) Sanctioned for Use of Unapproved Prospecting Material

On April 23, 2001, the Banking Commissioner entered a Consent Order (No. CO-01-6093-S) with respect to Gerald A. Kalish, a former broker-dealer agent of Moors & Cabot, Inc. from November 12, 1999 to September 13, 2000. The Consent Order alleged that, while associated with Moors & Cabot, Inc., respondent Kalish conducted an unsolicited mailing of sales material that was not approved by the firm and that included the recipients' personal mutual fund account numbers and holdings. The recipients allegedly did not have a pre-existing relationship with either respondent Kalish or the firm.

The Consent Order barred respondent Kalish from acting as a supervising broker-dealer agent for three years; fined him $500; and directed him to cease and desist from regulatory violations.


{ }

STATISTICAL SUMMARY

Licensing At A Glance
June 30, 2001
Broker-dealers Registered 2,584
Broker-dealer Agents Registered 119,501
Broker-dealer Branch Offices Registered 1,606
Investment Advisers Registered 379
SEC Registered Advisers Filing Notice 961
Investment Adviser Agents Registered 4,759
Investment Advisory Branch Offices Registered 534
Agents of Issuer Registered 154

{ }

  1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Securities Investigations  
Opened 88 54     142
Closed 63 78     141
Ongoing as of June 30, 2001 135 110    
Subpoenas issued 9 4     13
Cases referred from Attorney General 3 4     7
Cases referred from Other Agencies 5 5     10
{ }  
Securities Enforcement: Remedies and Sanctions  
Notices of Intent to Deny (Licensing) 0 1     1
Notices of Intent to Suspend (Licensing) 0 0     0
Notices of Intent to Revoke (Licensing) 3 0     3
Denial Orders (Licensing) 0 0     0
Suspension Orders (Licensing) 0 1     1
Revocation Orders (Licensing) 0 0     0
Notices of Intent to Fine 4 12     16
Orders Imposing Fine 9 4     13
Cease and Desist Orders 9 16     25
Notice of Intent to Condition Registration 0 0     0
Notices of Intent to Issue Stop Order 0 0     0
Activity Restrictions/Bars 3 6     9
Stop Orders 0 0     0
Vacating/Withdrawal Orders 2 3     5
Censures 0 1     1
{ }  
Examinations  
Broker-dealers 11 10     21
Investment Advisers 19 2     21
{ }  
Proceedings and Settlements  
Administrative Actions 13 12     25
Consent Orders 7 9     16
Stipulation and Agreements 1 4     5
{ }  
Monetary Relief  
Monetary Sanctions Imposed $231,100 $86,750     $317,850
Restitution or Other Monetary Relief $4,117,847 $332,154     $4,450,001
{ }  
Securities Referrals  
Criminal (Chief State's Attorney) 0 0     0
Criminal (Other) 0 0     0
Civil (Attorney General) 0 0     0
Other Agency Referrals 0 12     12

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 1     3
Investigations Closed 5 0     5
Investigations ongoing as of June 30, 2001 4 5    
Cases referred by Attorney General 0 0     0
Cases referred by Other Agencies 0 0     0
Subpoenas issued 0 0     0
Cease and Desist Orders 0 1     1
Notices of Intent to Issue Stop Order 0 0     0
Stop Orders 1 0     1
Notices of Intent to Fine 0 1     1
Orders Imposing Fine 0 0     0
Monetary Sanctions Imposed 0 0     0
Restitution or Other Monetary Relief $6,000 0     $6,000
Criminal Referrals (Chief State's Attorney) 0 0     0
Civil Referrals (Attorney General) 0 0     0
Other Agency Referrals 0 0     0

Securities Division