DOB: Fall 2005 Securities Bulletin

Securities and Business Investments Division

Securities Bulletin

Vol. XIX  No. 3 Fall 2005

Features

Enforcement and Other Highlights

Contributors

Ralph Lambiase, Division Director
Cynthia Antanaitis, Assistant Director and Bulletin Editor
Eric Wilder, Assistant Director
Helen Crane, Subscription Coordinator


A WORD FROM THE BANKING COMMISSIONER

Securities Forum 2005, held on October 11, 2005 at the Crowne Plaza Hotel in Cromwell, Connecticut, was a highlight of the fall season.  Approximately 300 attendees from the securities industry and the private bar attended the event which featured nine panel presentations and a closing session on the controversial topic of preemption.   This year we were fortunate to have Walter G. Ricciardi, District Administrator of the Securities and Exchange Commission’s Boston District Office, as our keynote speaker.  Mr. Ricciardi’s office is responsible for operating both enforcement and regulatory programs in a six-state area.

On the licensing front, effective October 31, 2005, all new broker-dealer and investment adviser branch office registration and amendment filings (and all related fee payments) will have to be made electronically through the NASD's Central Registration Depository/Investment Adviser Registration Depository ("WebCRD/IARD").  Broker-dealers and investment advisers having a pre-existing branch office registration as of the close of business on October14, 2005 will have until May 1, 2006 to transition to electronic filing.  To make this process easier, the Securities and Business Investments Division has supplied the NASD with data concerning these registrations.  The NASD, in turn, has pre-populated Form BR electronically with basic information.   Division staff will work closely with the NASD to ensure that filers do not incur double state registration fees as a result of their transition to electronic filing.

This issue of the Securities Bulletin also features an important no-action determination affecting customers and securities industry personnel displaced as a result of Hurricanes Katrina and Rita.  In addition, in an effort to reduce the amount of duplicative regulation, effective November 3, 2005, Connecticut-registered investment advisers will no longer be required to file copies of their advertising material with the Securities and Business Investments Division.   Such materials, however, must be retained and produced to Division examiners during the course of an examination.

To make better use of technology and cut costs, the department will be scaling down the paper distribution of its Securities Bulletin during the months ahead.  Interested parties are encouraged to subscribe to the Securities Bulletin by joining the Securities Bulletin listserv.  Simply send an e-mail to imailsrv@list.state.ct.us (leave the subject line blank and, in the body of the message type subscribe CT-Securities [and your name; Note:  there are no spaces in the list name CT-Securities].

As always, we welcome your comments.


John P. Burke
Banking Commissioner


ORDER EXEMPTING CONNECTICUT-REGISTERED INVESTMENT ADVISERS FROM THE FILING OF ADVERTISING MATERIAL

WHEREAS, the Banking Commissioner ("Commissioner") is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act ("Act"), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies ("Regulations") promulgated under the Act;

WHEREAS, Section 36b-31(a) of the Act provides, in pertinent part, that: "[t]he commissioner may from time to time make . . . such . . . orders as are necessary to carry out the provisions of . . . [the Act] . . . . 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 provides, in pertinent part, 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 . . . [the Act]";

WHEREAS, the Commissioner finds that the issuance of this Order is necessary and appropriate in the public interest and for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act;

WHEREAS, Section 36b-22 of the Act provides that:  “The commissioner may, by regulation adopted, in accordance with chapter 54, or order, require the filing of any prospectus, pamphlet, circular, form letter, advertisement or other sales literature or advertising communication addressed or intended for distribution to prospective investors, including clients or prospective clients of an investment adviser registered or required to be registered under sections 36b-2 to 36b-33, inclusive, unless the security or transaction is (1) exempted by subsection (a) or (b) of section 36b-21, except for transactions exempted by subdivision (13) of subsection (b) of said section 36b-21, or (2) a covered security”;

WHEREAS, Section 36b-31-22(c) of the Regulations states that “[u]nless an investment adviser is registered under the Investment Advisers Act of 1940, any prospectus, pamphlet, circular, form letter, advertisement or other sales literature or advertising communication addressed or intended for distribution to clients or prospective clients shall be filed with the commissioner prior to distribution”;

WHEREAS, Section 36b-24(a) of the Act provides, in part, that:  “Neither (1) the fact that an application for registration under sections 36b-6 to 36b-15, inclusive . . . has been filed or (2) the fact that a person . . . is effectively registered constitutes a finding by the commissioner that any document filed under . . . [the Act] is true, complete and not misleading . . . . “;

WHEREAS, with the development of the Internet and other electronic communications, the amount of investment advisory advertising filed with the Commissioner has proliferated;

WHEREAS, Section 36b-5(a) of the Act and Section 36b-31-5a of the Regulations proscribe specific practices, including fraud, in connection with the distribution of advertising and, in so doing, 1) provide investment advisory applicants, registrants and their legal counsel with clear guidance concerning prohibited conduct; and 2) subject investment advisory applicants and registrants to enforcement sanctions for violations of Section 36b-5(a) of the Act and Section 36b-31-5a of the Regulations;

WHEREAS, Section 36b-14(a) of the Act and Section 36b-31-14b(b)(4) of the Regulations require that investment advisers registered under the Act keep and maintain at their principal place of business, open to inspection by the Commissioner, “[a] separate file containing copies of all advertising published, circulated or broadcast in or from Connecticut by the investment adviser in the conduct of its investment advisory business”, and Section 36b-31-14b(d)(10) of the Regulations requires that similar advertising records be maintained at each Connecticut investment advisory branch office;

WHEREAS, 36b-31-31c of the Regulations provides that: "[t]he 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, the Commissioner finds that requiring Connecticut-registered investment advisers to file with the Commissioner the sales literature or advertising communications described in Section 36b-22 of the Act and Section 36b-31-22(c) of the Regulations (“Advertising Material”) is unnecessarily duplicative since the very same materials must be produced to Division staff during the course of an examination under Section 36b-14(a) of the Act and Sections 36b-31-14b(b)(4) and 36b-14b(d)(10) of the Regulations;

AND WHEREAS, the Commissioner further finds that the exemption provided by this Order is in the public interest.

NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

  1. An investment adviser that is registered under the Act shall be exempt from the Advertising Material filing requirement in Section 36b-31-22(c) of the Regulations;

  2. Nothing in this Order shall preclude the Division from requiring the filing of Advertising Material by Connecticut-registered investment advisers on a case-by-case basis as circumstances may warrant, nor shall this Order exempt initial applicants for investment adviser registration from the filing requirement in Section 36b-31-22(c) of the Regulations; and

  3. This Order shall remain in effect until amended or rescinded by the Commissioner or other lawful authority.


So ordered at Hartford, Connecticut    John P. Burke
this 3rd day of  November 2005.         Banking Commissioner


 ORDER ADOPTING THE UNIFORM BRANCH OFFICE REGISTRATION FORM AND GOVERNING BRANCH OFFICE REGISTRATION FILINGS THROUGH THE CENTRAL REGISTRATION DEPOSITORY BY BROKER-DEALER AND INVESTMENT ADVISORY FIRMS

WHEREAS the Banking Commissioner (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act, as amended by P.A. 05-177 (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-6(d) of the Act provides, in part, that:

No broker-dealer or investment adviser shall transact business from any place of business located within this state unless that place of business is registered as a branch office with the commissioner pursuant to this subsection.  An application for branch office registration shall be made on forms prescribed by the commissioner and shall be filed with the commissioner, together with a nonrefundable application fee of one hundred dollars per branch office.  A broker-dealer or investment adviser shall promptly notify the commissioner in writing if such broker-dealer or investment adviser (1) engages a new manager at a branch office in this state, (2) acquires a branch office of another broker-dealer or investment adviser in this state, or (3) relocates a branch office in this state.  In the case of a branch office acquisition or relocation, such broker-dealer or investment adviser shall pay to the commissioner a nonrefundable fee of one hundred dollars . . .;

WHEREAS Section 36b-6(k) of the Act adds that:  “For purposes of . . . [subsection] (d) . . . of this section, ‘investment adviser’ means an investment adviser registered or required to be registered with the commissioner”;

WHEREAS Section 36b-32(a) of the Act states that:  “A document is filed when it is received by the commissioner or any other person designated in writing by the commissioner”;

WHEREAS Section 36b-31-6c of the Regulations states, in part, that:  “For purposes of sections 36b-6 . . . and 36b-32 of the general statutes, the computerized Central Registration Depository operated by the National Association of Securities Dealers, Inc. and its subsidiaries under an agreement with the North American Securities Administrators Association, Inc. is authorized to accept filed documents and collect fees on behalf of the commissioner”;

WHEREAS Section 36b-31 of the Act provides, in part, that:

(a)  The commissioner may from time to time make, amend and rescind such . . . forms and orders as are necessary to carry out the provisions of sections 36b-2 to 36b-33, inclusive, . . . including . . . forms and orders governing registration statements, notice filings, 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 . . . forms and orders, the commissioner may classify securities, persons and matters within his or her jurisdiction, and prescribe different requirements for different classes.

(b)  No . . . form or 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. . . .  In prescribing . . . forms and 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, notice filings, applications and reports wherever practicable.

(c)  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 agencies or administrators of other states, Canadian provinces or territories, . . . the Securities and Exchange Commission, . . . and any self-regulatory organization . . . .  The cooperation authorized by this subsection includes, but is not limited to, the following actions:  (1) Establishing central depositories for the registration of securities or securities industry personnel 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-31-31a(a) of the Regulations provides, in part, that:  “The following forms, as amended from time to time are prescribed for use under the Act and sections 36b-31-2 to 36b-31-33, inclusive of the regulations . . . (12) Form BR-1 (used for broker-dealer and investment adviser branch office registration); [and] (13) Form BR-2 (used for termination of broker-dealer and investment adviser branch office registration) . . . .”

WHEREAS heretofore, the state branch office registration forms described in Section 36b-31-31a(a) of the Regulations were filed in paper form with the Commissioner;

WHEREAS Section 36b-31-7e of the Regulations requires broker-dealer, investment adviser, agent and investment adviser agent applicants and registrants using or planning to use a name different from that appearing on the application filed with the Commissioner (“Trade Name”) to file with the Commissioner a supplement (Form DBA-1) to the registration application (“Trade Name Filing”);

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 representatives from the National Association of Securities Dealers, Inc. (the “NASD”), the New York Stock Exchange, Inc. (the “NYSE”) and the North American Securities Administrators Association, Inc. have developed a uniform branch office registration form (“Uniform Form BR”) that would enable broker-dealers and investment advisers to register branch offices electronically with the NASD, the NYSE and the states through a single filing with the Central Registration Depository/Investment Adviser Registration Depository  (“CRD/IARD”);

WHEREAS the Uniform Form BR would enable broker-dealers and investment advisers to report branch office manager changes, branch office closings, new branch offices and amendments as well as trade or assumed names not reflected on Form BD or ADV that are being used by agents and investment adviser agents to conduct investment-related activities at the branch;

WHEREAS on September 30, 2005, the SEC issued Release No. 34-52544 (“SEC Release”) approving Uniform Form BR on an accelerated basis;

WHEREAS the SEC Release contemplates that (1) from the close of business on October 14, 2005 to October 31, 2005, the NASD, as CRD/IARD administrator, would pre-populate Uniform Forms BR electronically for pre-existing branch offices, using data supplied by the states, the NASD and the NYSE; and (2) electronic filing of Uniform Form BR would be functional on October 31, 2005, with broker-dealers and investment advisers then having the ability to add new branch office registrations.  Broker-dealers and investment advisers with branch offices in existence before the close of business on October 14, 2005 would have until May 1, 2006, to transition to electronic filing by completing the data fields pre-populated by the NASD;

WHEREAS the Commissioner, through the Securities and Business Investments Division, has provided the NASD with data concerning broker-dealer and investment adviser branch offices registered under Section 36b-6(d) of the Act to facilitate the transition to electronic filing;

AND WHEREAS the Commissioner finds that the issuance of this Order, the prescription of forms described herein and the exemption contained herein are necessary and appropriate in the public interest and for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of the Act.

NOW THEREFORE THE COMMISSIONER ORDERS AS FOLLOWS:

  1. Effective October 31, 2005, Forms BR-1 and BR-2 shall be rescinded and Uniform Form BR shall be adopted in Connecticut for purposes of fulfilling the branch office registration filing requirements in Section 36b-6(d) of the Act and, to the extent applicable, the Trade Name Filing required by Section 36b-31-7e of the Regulations;

  2. For purposes of Section 36b-6(d) of the Act and, to the extent applicable, Section 36b-31-7e of the Regulations, the CRD/IARD is designated to receive branch office registration filings and Trade Name Filings as well as to collect branch office registration fees on the Commissioner's behalf in accordance with this Order;

  3. Effective October 31, 2005, and for purposes of Section 36b-6(d) of the Act, broker-dealers and investment advisers shall make new Connecticut branch office registration filings, including amendments thereto and related payments, through CRD/IARD;

  4. Effective October 31, 2005, a broker-dealer agent or investment adviser agent whose employing broker-dealer or investment adviser has filed a Uniform Form BR that identifies the Trade Name(s) under which the broker-dealer agent or investment adviser agent conducts business while associated with the branch office shall be exempt from having to file a Form DBA-1 pursuant to Section 36b-31-7e of the Regulations for such Trade Name(s);

  5. Any broker-dealer or investment adviser having, as of the close of business on October 14, 2005, a pre-existing branch office registration under the Act shall transition such registration to electronic filing no later than May 1, 2006, by completing all required CRD/IARD fields online;

  6. This Order shall not affect the obligation of a broker-dealer or investment adviser to provide the Commissioner with specialized notice under Sections 36b-6(g) and 36b-6(h) of the Act where the cessation of branch office business activity is attributable to the commencement of a bankruptcy proceeding or a planned merger or acquisition and where information concerning those events cannot be submitted through electronic filing on Uniform Form BR; and

  7. This Order shall remain in effect until amended or rescinded by the Commissioner or other lawful authority.


So ordered at Hartford, Connecticut                         John P. Burke
this 24th day of October, 2005.                               Banking Commissioner


NO-ENFORCEMENT ACTION DETERMINATION AFFECTING PERSONS
DISPLACED AS A RESULT OF HURRICANE KATRINA OR RITA

Pursuant to Section 36b-31(f) of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (“Act”), as amended by Public Act 05-177, the Banking Commissioner of the State of Connecticut has determined that the Securities and Business Investments Division of the State of Connecticut Department of Banking (“Division”) will not institute a proceeding or an action under the Act with respect to certain securities activities involving investors and/or financial professionals who have been displaced as a result of Hurricane Katrina or Rita (“Statement of Policy”).

Section 36b-6 of the Act, as amended by Public Act 05-177, prohibits broker-dealers, investment advisers, agents and investment adviser agents from transacting business in this state without being registered or exempt from registration.  In the case of an investment adviser registered or required to be registered with the Securities and Exchange Commission (“SEC”) under the Investment Advisers Act of 1940 (“Federally Covered Adviser”), Section 36b-6(e) of the Act, as amended, conditions the Federally Covered Adviser’s exempt status on the Federally Covered Adviser filing a notice with the Department.

The Division will not pursue enforcement action against a broker-dealer, agent, investment adviser, Federally Covered Adviser or investment adviser agent (collectively, “Financial Professionals”) for violations of the registration and notice filing requirements in Section 36b-6 of the Act, as amended, provided that the Financial Professionals comply with Connecticut law and the conditions in this Statement of Policy.

For purposes of this Statement of Policy, the terms “Pre-existing Customers and Clients” and “Pre-Existing Customer or Client” refer to customers or clients with whom the Financial Professional had a bona fide, pre-existing securities brokerage or investment advisory relationship on or before August 29, 2005, and while the Financial Professional was domiciled in its home state.

Temporary Displacement of Pre-Existing Customers and Clients to Connecticut

 Where Pre-Existing Customers and Clients of Financial Professionals have been displaced to Connecticut as a result of Hurricane Katrina or Rita and Financial Professionals do business with such Pre-Existing Customers and Clients temporarily located in this state, the Division will not take enforcement action for violations of the registration and notice filing requirements in Section 36b-6 of the Act, as amended, as long as the Financial Professional satisfies four conditions:

  1. The Financial Professional may only effect securities transactions or render investment advisory services to persons who are Pre-Existing Customers and Clients as defined above;

  2. The Financial Professional must be registered or exempt from registration in the home state of the Pre-Existing Customer or Client;

  3. The Financial Professional must be registered or exempt from registration with the SEC, a “self-regulatory organization” as defined in Section 36b-3(20) of the Act, as amended by Public Act 05-177, and the home state of the Financial Professional to the extent required by law; and

  4. The Financial Professional must disclose to Pre-Existing Customers and Clients who have been displaced and who are temporarily in this state that the Financial Professional is not registered under the Act.

Temporary Displacement of Financial Professionals to Connecticut

Where a Financial Professional has been temporarily displaced to Connecticut as a result of Hurricane Katrina or Rita, the Division will not take enforcement action for violations of the registration and notice filing requirements in Section 36b-6 of the Act, as amended, if such Financial Professional effects securities transactions or renders investment advisory services from Connecticut on behalf of Pre-Existing Customers and Clients, provided that:

  1. The Financial Professional provides written or electronic notice to the Division that the Financial Professional has relocated to Connecticut and plans to transact securities business or render investment advisory services in reliance on this Statement of Policy;

  2. The Financial Professional discloses to such Pre-Existing Customers and Clients that it is temporarily domiciled in Connecticut and that it is not registered under the Act;

  3. The Financial Professional is registered with the home state from which it was displaced or, in the case of a Federally Covered Adviser, has filed a notice with the home state from which it was displaced; and

  4. If the Financial Professional is a broker-dealer, the Financial Professional is registered with the SEC and with a “self-regulatory organization” as defined in Section 36b 3(20) of the Act, as amended.

Limitations

This Statement of Policy does not permit any Financial Professional that has not fulfilled the filing requirements under Section 36b-6 of the Act, as amended, to solicit any new customers or clients in Connecticut.

This Statement of Policy does not prohibit the Division from taking enforcement action based on any other violation of the Act, including, without limitation, violations of the antifraud provisions in Sections 36b-4 and 36b-5 of the Act.

A Financial Professional effecting securities transactions or rendering investment advisory services on behalf of Pre-Existing Customers and Clients may only act within the scope of this Statement of Policy.  Any activity beyond the scope of this Statement of Policy may constitute grounds for enforcement action by the Commissioner.

This Statement of Policy describes the enforcement position of the Division, and does not create an independent exemption from the registration and notice filing requirements in Section 36b-6 of the Act, as amended.  In addition, Section 36b-29 of the Act provides certain remedies to investors and to investment advisory clients when the Act has been violated.  These remedies are applicable notwithstanding this Statement of Policy.

UNLESS EXTENDED BY THE COMMISSIONER, THIS STATEMENT OF POLICY SHALL BE LIMITED TO ACTIVITIES DESCRIBED HEREIN OCCURRING ON OR BEFORE DECEMBER 31, 2005.

Dated at Hartford, Connecticut,         John P. Burke
this 18th day of October 2005.          Banking Commissioner

 


 ADMINISTRATIVE ACTIONS AND SETTLEMENTS


Candy King of America, Inc. Ordered to Cease and Desist From Violating Business Opportunity Laws; Notice of Intent to Fine Issued

On September 16, 2005, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-2005-823-B) against Candy King of America, Inc.  The corporation, which allegedly was in the business of selling vending machines and offering location assistance, is headquartered at 7890 Peters Road, Building G-100, Plantation, Florida.  The action alleged that Candy King of America, Inc. 1) sold unregistered business opportunities through its agents Harvey Wall, Alan Goodman and George Kunkel in violation of Section 36b-67(1) of the Connecticut Business Opportunity Investment Act; 2) failed to provide prospective purchaser-investors with the disclosure document required by Section 36b-63 of the Act; 3) violated Section 36b-67(3) of the Act by using the trademark of Kraft® foods without authorization; and 4) violated Section 36b-80 of the Act by making two false statements in its registration application concerning the extent of its prior offers and sales in Connecticut.  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 is pending.

Stanley L. Gladstone (CRD # 1837178) Ordered to Cease and Desist From Violating Business Opportunity Laws; Notice of Intent to Fine Issued

On September 16, 2005, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-2005-823-B) against Stanley L. Gladstone, president of Candy King of America, Inc.   Candy King of America, Inc., which allegedly was in the business of selling vending machines and offering location assistance, is headquartered at 7890 Peters Road, Building G-100, Plantation, Florida.  The action alleged that respondent Gladstone caused two materially false statements to be made in the corporation’s application for registration under the Connecticut Business Opportunity Investment Act.  Those purportedly false statements concerned the extent of Candy King of America, Inc.’s prior offers and sales in Connecticut.  Respondent Gladstone was afforded an opportunity to request a hearing on the Order to Cease and Desist.  A hearing on the Notice of Intent to Fine is pending.

Louis P. Celentano (CRD # 2112977), Ex-Officer of Circle Trust Company, Fined $25,000, Barred from Serving as Financial Institution Officer or Director for Five Years in Connection With Alleged Improper Market Timing

On August 25, 2005, the Banking Commissioner entered a Consent Order (Docket No. CF-2004-7101-S) with respect to Louis P. Celentano, former Chairman and Chief Executive Officer of Circle Trust Company, a Connecticut bank organized to function solely in a fiduciary capacity.  The Consent Order followed a March 7, 2005 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against respondent Celentano.  The Order to Cease and Desist and Notice of Intent to Fine had alleged that Celentano violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act by 1) introducing Brean Murray, a broker-dealer, and Canary Investment Management, LLC, a Secaucus, New Jersey-based investment adviser and hedge fund, to PEA Capital LLC f/k/a PIMCO Advisors LLC for the purpose of market timing PIMCO mutual funds, an arrangement that resulted in $77,578 in fees being paid to Circle Trust Company for the market timing of PIMCO funds by Canary Investment Management, LLC; and 2) facilitating improper market timing by Kaplan & Co. Securities Inc., Geek Securities, Inc. and Canary Investment Management, LLC by permitting those entities to use the bank’s electronic trading platform for that purpose, an arrangement that resulted in approximately $1.2 million in profits for Kaplan & Co. Securities, Inc., $5.5 million in profits for Geek Securities, Inc. and $1.7 in profits for Canary Investment Management, LLC as well as $211,000 in fees for Circle Trust Company.

The Consent Order fined respondent Celentano $25,000 and barred him from working as an officer or director of any broker-dealer, investment adviser, bank, out-of-state bank, Connecticut credit union, federal credit union, out-of-state credit union or out-of-state trust company for five years.  In addition, the Consent Order rendered the March 7, 2005 Order to Cease and Desist permanent, required that respondent Celentano periodically consult with legal counsel concerning his activities in the financial services industry; and required that respondent Celentano report his compliance with the Consent Order to the agency.

Michelle Montano (CRD # 1894686), Ex-Officer of Circle Trust Company, Fined $10,000, Barred From Conducting Securities Activity in Connecticut for Two Years in Connection With Alleged Improper Market Timing

On August 25, 2005, the Banking Commissioner entered a Consent Order (Docket No. CF-2004-7102-S) with respect to Michelle Montano, former President and Chief Operating Officer of Circle Trust Company, a Connecticut bank organized to function solely in a fiduciary capacity.  The Consent Order followed a March 7, 2005 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against respondent Montano.  The Order to Cease and Desist and Notice of Intent to Fine had alleged that respondent Montano violated the antifraud provisions in Section 36b-4(a) of the Act by authorizing Canary Investment Management, LLC, Kaplan & Co. Securities, Inc. and Geek Securities, Inc. to use the bank’s electronic trading platform to engage in improper marketing timing and failing to stop the practice, notwithstanding complaints from various mutual funds concerning the excessive trading activity.

The Consent Order fined respondent Montano $10,000 and barred her from transacting business in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer for two years, with leave to apply after one year had elapsed from the entry of the Consent Order.  In addition, the Consent Order rendered the March 7, 2005 Order to Cease and Desist permanent, required that respondent Montano periodically consult with legal counsel concerning her activities in the financial services industry; and required that respondent Montano report her compliance with the Consent Order to the agency.

Investment Management Corp. f/k/a Kunz & Cline Investment Management, Inc. (CRD # 37196)  - Order to Cease and Desist Made Permanent; Firm Assessed $5,000 for Unregistered Activity

On August 23, 2005, the Banking Commissioner entered a Consent Order resolving certain allegations against Investment Management Corp. contained in a June 30, 2005 Amended and Restated Order to Cease and Desist, Notice of Intent to Deny Registration and Notice of Intent to Fine (Docket No. NDCDF-2005-7164-S).  The firm had applied for broker-dealer registration under the Connecticut Uniform Securities Act and is located at 563 West 500 South, Suite 225, Bountiful, Utah.  The June 30, 2005 action had alleged that from at least December 2003 forward, the respondent transacted business as a broker-dealer absent registration in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act and employed an unregistered agent.  In addition, the action had claimed that the firm and its officer, owner and control person, Kevin Dee Kunz (CRD number 1274540) had been subject to NASD sanctions imposed in 2003 and 1999, including two suspensions against Kevin Dee Kunz.

The Consent Order rendered the Order to Cease and Desist permanent and required that the firm remit $5,000 to the department.  Of that amount $4,500 constituted an administrative fine and $500 constituted reimbursement for Division investigative costs.  The Consent Order also required that the firm 1) designate a Connecticut Compliance Supervisor other than Kevin Dee Kunz and submit the name of such individual to the Division for approval; and 2) for two years, provide a quarterly report to the Division describing any complaints, actions or proceedings involving Connecticut residents.  Investment Management Corp. became registered as a broker-dealer under the Act on August 23, 2005.

Kevin O. Kelley (CRD # 1183995) Permanently Barred from Conducting Securities Business in Connecticut

On August 23, 2005, the Banking Commissioner entered a Consent Order (No. CO-2005-7033-S) with respect to Kevin O. Kelley of Norwalk, Connecticut.  Kelley was a former broker-dealer agent of Royal Alliance, Inc.  The Consent Order alleged that 1) Kelley violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered, non-exempt  securities of First Ventures Leasing, LP, e-tel, M-Power, Ausam Biotechnologies, Swift Energy and HEP to at least ten investors; 2) Kelley violated the antifraud provisions of the Act by falsely representing to investors the use to which their funds would be put, providing false valuations to investors with respect to their holdings, failing to disclose the risks associated with an investment in First Ventures Leasing LP and failing to disclose that First Ventures Leasing, LP’s main customers were e-tel and Coyote Network Systems, Inc., entities in which Kelley had a controlling interest.  In addition, the Consent Order claimed that Kelley engaged in dishonest or unethical practices by 1) making unauthorized, excessive purchases of Coyote Network Systems, Inc. securities for the accounts of clients and falsely stating that those transactions were unsolicited; 2) guaranteeing clients against losses in First Ventures Leasing LP and e-tel; and 3) reimbursing clients for losses incurred in their brokerage accounts without obtaining prior approval from Royal Alliance, Inc.  The Consent Order also alleged that Kelley engaged in private securities transactions in violation of Section 36b-31-6e of the Regulations under the Act through his sales of First Ventures Leasing LP, e-tel, M-Power, Ausam Biotechnologies, Swift Energy and HEP.  According to the Consent Order, investor losses attributable to Kelley’s conduct exceeded $5.1 million.

In entering the Consent Order, the Commissioner determined that no fine would be imposed on Kelley since Kelley had been indicted by the U.S. Attorney for the Southern District of New York and since an action by the Securities and Exchange Commission had resulted in the freezing of Kelley’s assets (SEC Litigation Release No. 19084).

The Consent Order permanently barred Kelley from transacting business in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer.  In addition, the Consent Order directed that Kelley cease and desist from regulatory violations.

McKinnon & Company, Inc. (CRD # 21907) Fined $10,000 for Unregistered Broker-dealer Activity; Ordered to Cease and Desist from Regulatory Violations

On August 10, 2005, the Banking Commissioner entered a Consent Order (No. CO-05-7202-S) with respect to McKinnon & Company, Inc., an applicant for broker-dealer registration located at 555 Main Street, Norfolk, Virginia.  The Consent Order alleged that the firm had transacted business as a broker-dealer absent registration, earning concessions from a bank stock underwriting and $1,267 in commissions, and had disclosed only part of its unregistered activity to the Division.  The Consent Order required that the firm pay $10,000 to the department.  Of that amount, $7,500 constituted an administrative fine, $1,200 represented partial disgorgement of commissions earned as a result of the unregistered activity, $500 of which represented past due broker-dealer and agent registration fees and $800 of which constituted reimbursement for Division investigative costs.  In addition, the Consent Order directed the firm to cease and desist from regulatory violations; implement revised supervisory and compliance procedures; and provide the Division with quarterly reports concerning complaints, actions and proceedings involving Connecticut residents for two years.  The firm’s broker-dealer registration became effective in Connecticut on August 10, 2005.

Eddie Papic (CRD # 3140836) Fined $40,000, Ordered to Cease and Desist from Regulatory Violations Following a Hearing

On August 8, 2005, following a hearing, the Banking Commissioner issued Findings of Fact, Conclusions of Law and an Order in the matter of Eddie Papic of Darien, Connecticut.  Respondent Papic had been the subject of a contested Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing issued on February 5, 2004.  The respondent was the managing member of Criterion Investment Capital, LLC, which in turn was the general partner of Criterion Investment Fund I L.P., a partnership that pooled funds for investment purposes.  Criterion Investment Capital, LLC maintained an office at One Lafayette Place, Greenwich Connecticut and subsequently at 56 John Street, Southport, Connecticut.

In rendering his decision, the Commissioner determined that the respondent violated the antifraud provisions in the Connecticut Uniform Securities Act by 1) failing to disclose the respondent’s prior bankruptcy in an offering circular distributed to prospective investors in Criterion Investment Fund I L.P.; 2) failing to disclose to partnership investors that, contrary to representations in the offering circular, investments of less than $500,000 had been accepted; 3) failing to disclose to partnership investors that, contrary to the offering circular’s requirement that investors have a net worth in excess of $1 million, two Connecticut investors did not, in fact, meet the net worth requirement; 4) failing to disclose to investors that, contrary to the offering circular’s requirement that the general partner provide each limited partner with an annual report containing financial statements and a quarterly report, such reports would not be furnished; 5) misrepresenting when a partnership investor’s funds would be invested in the partnership; and 6) informing a Connecticut investor that the investor’s investment had experienced a 10% drop in value when in reality it had decreased from $152,724.01 to $10,974.  The Commissioner also determined that respondent Papic violated Section 36b-6(c) of the Connecticut Uniform Securities Act by transacting business as an unregistered investment adviser agent of Criterion Investment Capital, LLC, an investment adviser.

The Commissioner ordered that the respondent pay a $40,000 fine and cease and desist from further regulatory violations.

Power Internet Terminals, Inc. Fined $20,000 for Offering Unregistered Business Opportunities, Making Unsubstantiated Earnings Claims

On August 8, 2005, the Banking Commissioner entered an Order fining Power Internet Terminals, Inc. $20,000 for violations of the Connecticut Business Opportunity Investment Act.  Power Internet Terminals, Inc. maintains an office at 3400 Lakeside Drive, Suite 510, Miramar, Florida.  The respondent was also the subject of a June 29, 2005  Stop Order (Docket No. CSF-2005-819-B) denying effectiveness to the respondent’s pending business opportunity registration, and an April 26, 2005 Order to Cease and Desist and Notice of Intent to Fine alleging that 1) the respondent, which purportedly offered a public access Internet terminal business opportunity, filed a materially incomplete registration application that failed to disclose, inter alia, a May 1, 2003 Final Order to Cease and Desist, Denying Exemptions and Assessing Civil Penalties entered by the State of Oregon against Frank Mineo, president of the respondent, based on alleged violations of the Oregon antifraud provisions, and a September 13, 2004 Summary Order to Cease and Desist and Denying Registration issued by the State of Washington against the respondent and Frank Mineo; 2) the respondent offered unregistered business opportunities through its web site in violation of Section 36b-71(1) of the Connecticut Business Opportunity Investment Act; and 3) the respondent violated Section 36b-67(2) of the Act by making representations of income and earnings potential without providing substantiating data to prospective purchaser-investors.  The Order to Cease and Desist, being uncontested by the respondent, had become permanent on May 17, 2005.

In fining the respondent $20,000, the Commissioner found that the respondent had violated Sections 36b-67(1) and 36b-67(2) of the Connecticut Business Opportunity Investment Act as described above.  The respondent did not appear or contest the imposition of the fine.

Geek Securities, Inc. (CRD # 14834) - Notice of Intent to Revoke Registration as Broker-dealer, Notice of Intent to Fine and Order to Cease and Desist Issued

On August 4, 2005, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine (Docket No. RCF-2005-7125-S) against Geek Securities, Inc., a Connecticut-registered broker-dealer having its principal office at 999 Yamato Road, Suite 100, Boca Raton, Florida.  The action was based on allegations that the firm’s president and control person, Kautilya Sharma, had been convicted of federal felony charges involving conspiracy to sell unregistered securities and conspiracy to commit securities fraud on October 15, 2004 in the U.S. District Court for the Southern District of Florida (United States v. Kautilya Sharma, Case No. 03-80146-CR-Marra).  The Commissioner’s action also alleged that the firm violated Section 36b-31-14e(a) of the Regulations under the Connecticut Uniform Securities Act by wilfully failing to disclose Kautilya Sharma’s conviction on the firm’s amendment to its Uniform Application for Broker-dealer Registration (Form BD).  Since the respondent did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent on September 19, 2005.  The Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine remain pending.

Kautilya (“Tony”) Sharma (CRD # 2124304) - Notice of Intent to Revoke Registration as Agent, Notice of Intent to Fine and Order to Cease and Desist Issued

On August 4, 2005, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Agent and Notice of Intent to Fine (Docket No. RCF-2005-7125-S) against Kautilya (“Tony”) Sharma of 7363 Sedona Way, Delray Beach, Florida.  The respondent was the president and a control person of Geek Securities, Inc., a Connecticut-registered broker-dealer having its principal office at 999 Yamato Road, Suite 100, Boca Raton, Florida.  The action alleged that respondent Sharma had been convicted of federal felony charges involving conspiracy to sell unregistered securities and conspiracy to commit securities fraud on October 15, 2004 in the U.S. District Court for the Southern District of Florida (United States v. Kautilya Sharma, Case No. 03-80146-CR-Marra).  The Commissioner’s action also alleged that respondent Sharma violated Section 36b-31-14e(a) of the Regulations under the Connecticut Uniform Securities Act by wilfully failing to disclose the conviction on his amended Uniform Application for Securities Industry Registration or Transfer (Form U-4).  Since the respondent failed to request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent on September 19, 2005.  The Notice of Intent to Revoke Registration as Agent and Notice of Intent to Fine remain pending.

Mutual Trust Company of America Securities, Inc.  Assessed $6,200 for Unregistered Broker-dealer Activity, Unregistered Agent

On July 21, 2005, the Banking Commissioner entered a Consent Order (No. CO-2005-7183-S) with respect to Mutual Trust Company of America Securities, Inc., a broker-dealer located at 2963 Gulf to Bay Boulevard, Suite 120, Clearwater, Florida.  The Consent Order alleged that, in applying for broker-dealer registration under the Connecticut Uniform Securities Act, the firm had not initially disclosed that, commencing in 2002,  it had transacted business in Connecticut absent registration and had employed an unregistered agent.  A follow-up review by the Division revealed that the firm had earned approximately $3,200 in commissions from unregistered Connecticut activity.  After being notified of the Division’s concerns, the firm updated its broker-dealer application to reflect the prior trading activity.  The Consent Order required that the firm remit $6,200 to the department.  Of that amount, $5,000 constituted an administrative fine, $700 represented reimbursement for past due broker-dealer and agent registration fees; and $500 represented reimbursement for Division investigative costs.  The Consent Order also required that the firm implement revised compliance procedures designed to prevent and detect future regulatory violations.

Scott M. Radcliff d/b/a Golden Bananas! Permanently Barred from Securities Activity in Connecticut

On July 19, 2005, the Banking Commissioner entered a Consent Order (No. CO-2005-6877-S) with respect to Scott M. Radcliff of Danbury, Connecticut.  The Consent Order claimed that Scott Radcliff violated 1) Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered, non-exempt interests in Golden Bananas!; 2) Section 36b-4(a)(2) of the Act by making material misstatements and omissions concerning the rate of return on the Golden Bananas! investment; and 3) Section 36b-6 of the Act by transacting business as an unregistered agent of issuer.  In entering the Consent Order, the Commissioner acknowledged that Scott Radcliff had demonstrated economic hardship such that he could not pay the maximum fine that could have been imposed for the alleged misconduct.  The Consent Order permanently barred Scott Radcliff from acting as a broker-dealer, investment adviser, broker-dealer agent, investment adviser agent or agent of issuer in Connecticut; directed that he cease and desist from regulatory violations; and required that he pay a $500 fine.

Cambridge Coffee Company a/k/a Cambridge Gourmet Coffee Ordered to Cease and Desist From Violating Business Opportunity Law; Notice of Intent to Fine Issued

On July 13, 2005, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-2005-822-B) against Cambridge Coffee Company under the Connecticut Business Opportunity Investment Act.  The company maintains its principal office at 1714 Avenida Del Sol, Boca Raton, Florida.  The action alleged that, from at least February 6, 2005 forward, the respondent offered unregistered coffee distributorship business opportunities in violation of the state’s business opportunity statute.  A hearing on the allegations is pending.


CRIMINAL MATTERS

Gregory Katsaros Arrested

On October 12, 2005, Chief State's Attorney Christopher L. Morano announced the arrest of the owner of a Stamford investment firm on securities fraud charges.  Gregory Katsaros, age 29, of 29 Hanover Street, Stamford, was arrested by inspectors from the Chief State's Attorney's Office and charged with one count each of Prohibited Activities re the Offer, Sale or Purchase of Any Security, Failure to Register as a Broker-Dealer, Agent or Investment Advisor, and Sale of Unregistered Securities.  The arrest is the result of complaint filed with the Office of the Chief State's Attorney by the Securities and Business Investments Division of the State of Connecticut Department of Banking against International Marketing Consultants, LLC, and Mr. Katsaros, one of its owners.  The department had permanently barred Gregory Katsaros from engaging in securities activities on October 1, 2002.

According to the arrest warrant affidavit, an audit and investigation by the Department of Banking found that Mr. Katsaros received $18,214.50 in November and December 2000 from a client for investment purposes, but instead used the money for payroll, office and personal expenses.  It was subsequently determined that Mr. Katsaros was not a licensed broker in Connecticut and that the securities he offered for sale were not registered as required by law, according to the warrant.  Mr. Katsaros was released on a Written Promise to Appear and was scheduled to be arraigned in Stamford Superior Court, G.A. No. 1, on October 26, 2005.

Prohibited Activities re the Offer, Sale or Purchase of Any Security is a felony carrying a maximum prison term of ten years.  Failure to Register as a Broker-Dealer, Agent or Investment Advisor and Sale of Unregistered Securities are also felonies, each carrying a maximum sentence of two years.  The case will be prosecuted by the Statewide Prosecution Bureau in the Chief State's Attorney's Rocky Hill office.

The charges against Mr. Katsaros are merely accusations, and he is presumed innocent unless and until proven guilty.

Frank Kania Charged in Antiques Investments Case

On September 7, 2005, Chief State's Attorney Christopher L. Morano announced the arrest of a Stafford Springs man accused of arranging investments without required licenses and failing to make good on the deals he made.  Frank Kania, age 47, of 39 Gulf Road, Stafford Springs, was arrested by Inspectors from the Office of the Chief State's Attorney and charged with six counts of Prohibited Activities Regarding the Offer, Sale or Purchase of any Security.  Mr. Kania also was charged with two counts of Larceny in the First Degree, two counts of Larceny in the Second Degree of a Victim over Age 60, one felony count of Issuing a Bad Check and two misdemeanor counts of issuing a Bad Check.  According to the arrest warrant affidavit, Mr. Kania signed promissory notes for funds he received from his 78-year-old neighbor and her friend to be used in the purchase of antique furniture that he would sell to investors at a higher price.  The warrant alleged that Mr. Kania made initial payments in accordance with the notes, but subsequently defaulted on the amounts due.   According to the warrant, the investigation determined that Mr. Kania was not registered with the State of Connecticut Department of Banking as required by the state's Uniform Securities Act.

Mr. Kania was arraigned in Superior Court G.A. No. 19, Rockville, Connecticut.  The Honorable Marsha Gleeson set a $50,000 non-surety bond.  Mr. Kania's next court appearance is scheduled for October 5, 2005.  The case was prosecuted by the Elder Abuse Unit of the Elder Services Bureau in the Chief State's Attorney's Rocky Hill office.

The charges against Mr. Kania are merely accusations, and he is presumed innocent unless and until proven guilty.

Anthony Brooks (CRD # 2254104), Former Stamford Resident, Charged in Securities Fraud Cases

On August 3, 2005, Chief State's Attorney Christopher L. Morano announced the arrest of a former Stamford resident for allegedly defrauding several investors of nearly $250,000.  Anthony Brooks, age 37, formerly of 1450 Washington Boulevard, Stamford, was returned to Connecticut on August 2, 2005 after being detained in Pennsylvania and charged as a fugitive from justice.  He waived extradition and was arrested on August 3, 2005 on three warrants by inspectors from the Chief State's Attorney's Office.  Mr. Brooks was charged with five counts of Larceny in the First Degree; three counts of Larceny in the Second Degree; five counts of Forgery in the Second Degree; seven counts of Prohibited Activities Regarding the Offer, Sale or Purchase of a Security; seven counts of Transacting Business as an Unregistered Broker; and seven counts of Sale of Unregistered Securities, all felonies.  According to the arrest warrant affidavits, the Connecticut Department of Banking, Securities and Business Investments Division, forwarded a complaint to the Chief State's Attorney's Office for investigation after its own investigation revealed the possibility of fraud.  According to investigators, Mr. Brooks was not registered nor licensed by the State of Connecticut to sell securities.   Between July 1996 and November 2000, it was alleged that Mr. Brooks, through Integrated Financial Solutions, 1450 Washington Boulevard, Stamford, represented himself to be a certified investment specialist.  Solicited investors were usually friends or relatives of Mr. Brooks, who gave him money to invest on their behalf, according to the warrants.  As a result of his fraudulent activity, seven different investors were defrauded of nearly $250,000, the warrants alleged.

Larceny in the First Degree carries a maximum prison term of 20 years and/or a $15,000 fine.  Larceny in the Second Degree and Prohibited Activities Regarding the Offer, Sale or Purchase of a Security each carries a maximum prison term of 10 years and/or a $10,000 fine.  Forgery in the Second Degree carries a maximum prison term of 5 years and/or a $5,000 fine.  Transacting Business as an Unregistered Broker and Sale of Unregistered Securities each carries a maximum prison term of two years and/or a $2,000 fine.

Mr. Brooks was arraigned on August 3, 2005 in Stamford Superior Court, G.A. No. 1.   Bond was set in the amount of $75,000.  The case will be prosecuted by the Statewide Prosecution Bureau in the Chief State's Attorney's Rocky Hill office.  The charges against Mr. Brooks are merely accusations, and he presumed innocent unless and until proven guilty in a court of law.

Anthony Brooks had been the subject of a July 25, 2001 Order to Cease and Desist entered by the Banking Commissioner.  The Order to Cease and Desist became permanent on September 6, 2001.  Anthony Brooks was also the subject of a December 12, 2001 agency-issued order fining him $30,000.  Both actions followed allegations of fraud and unregistered activity (Docket No. CF-2001-6173-S).


{ } STATISTICAL SUMMARY

 

Licensing At A Glance
at the end of the quarter

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Broker-dealers Registered 2,567 2,601 2,635     
Broker-dealer Agents Registered 117,009 119,587 122,165     
Broker-dealer Branch Offices Registered 2,447 2,481 2,470     
Investment Advisers Registered 422 444 449     
SEC Registered Advisers Filing Notice 1,442 1,465 1,510     
Investment Adviser Agents Registered 6,673 6,922 7,154     
Investment Advisory Branch Offices Registered 178 184 182     
Agents of Issuer Registered 63 62 54     
 
 

  Securities and Business
Opportunity Filings

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Offerings Reviewed 73  68
68
   209
Investment Company Notice Filings 348 274 
306
   928
Exemptions and Exemptive Notices 728  765 848    2,341
Examinations      
Broker-dealers 13  26
  22
    61
Investment Advisers 3 2
   4
     9
Securities Investigations  
Opened 29  37  28     94
Closed 24 37   28      89
Ongoing as of End of Quarter 106  107     96           
Subpoenas issued 9 23  12     44
Cases referred from Attorney General       1         4         2         7
Cases referred from Other Agencies 4 9    1      14
Business Opportunity Investigations 
Investigations Opened 2 4 1        7
Investigations Closed 1  7 6        14
Ongoing as of End of Quarter 17 15 9           
Securities Enforcement: Remedies and Sanctions 
Notices of Intent to Deny (Licensing)
0
 2
   0   
   
2
Notices of Intent to Suspend (Licensing)
0
0
   0   
   
0
Notices of Intent to Revoke (Licensing)
1
0
2
   
3
Denial Orders (Licensing) 0 1
0
    1
Suspension Orders (Licensing) 1 0
0
    1
Revocation Orders (Licensing) 2  1
0
    3
Notices of Intent to Fine 6 2
5
    13
Orders Imposing Fine 3 0
 2
    5
Cease and Desist Orders 6  4
   8  
    18
Notices of Intent to Issue Stop Order 1 1
    0   
    2
Activity Restrictions/Bars 2 1     4        7
Stop Orders 0 1    0       1
Vacating/Withdrawal Orders 2 1     0        3
Censures 0 0
    0   
    0
Restitutionary Orders 2 0
 0
    2
Cancellation Orders 0  0
    0   
    0

Proceedings and Settlements

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Administrative Actions
12
4
7  
   
23
Consent Orders
3
3
7   
   
13
Stipulation and Agreements
4
3
0   
   
7

Monetary Relief

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Monetary Sanctions Imposed
$512,550
 $12,650
$116,700   
   
$641,900
Restitution or Other Monetary Relief
$872,225
 $5,096,797
$57,000   
   
$6,026,022

Securities Referrals

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Criminal (Chief State's Attorney)
2
 0
3
   
5
Civil (Attorney General)
0
 0
0
   
0
Other Agency Referrals
0
 0
1
   
1