DOB: Spring 2006 Securities Bulletin

Securities and Business Investments Division

Securities Bulletin

Vol. XX  No. 1 Spring 2006

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

Save the date.  This year’s annual Securities Forum will be held on Thursday, October 26, 2006 at the Crowne Plaza Hotel and Conference Center in Cromwell, Connecticut.  We are in the process of organizing what we hope will be an interesting and challenging program for all attendees.  Further details concerning the program and the keynote speaker will be posted to our website as soon as they become available.  Among the topics to be discussed will be the regulation of hedge funds, a $1 trillion industry that has captured the interest of pension funds, retail investors and regulators at both the state and federal levels.  Countless hedge funds have called Connecticut home.   Currently, the department regulates investment advisers to hedge funds whose portfolio holdings are less than $25 million, and has antifraud authority over advisers whose holdings surpass $25 million.  Is such authority sufficient?

As was announced in the last issue of the Securities Bulletin, the agency has switched over to electronic delivery of the Securities Bulletin.  The results have exceeded our expectations.  This issue provides tips to listserv subscribers on how to ensure that delivery remains uninterrupted.

Reinforcing the agency’s commitment to the streamlining of filing procedures, we are reprinting reminders to securities broker-dealers and issuers concerning filing shortcuts.  Connecticut-registered broker-dealers that are in compliance with NASD financial reporting requirements do not have to file audited financial statements each year.   Since financial statements are often forwarded to us directly from accounting firms, we would urge affected broker-dealers to keep their accountants up-to-speed on Connecticut requirements.   Similarly, securities issuers registering by coordination do not have to file paper versions of the documents they file electronically with the SEC through EDGAR.  It is more efficient for us to simply read the documents online.

As always, we welcome your comments and suggestions.


John P. Burke
Banking Commissioner


TIPS FOR LISTSERV SUBSCRIBERS

The Securities and Business Investments Division successfully launched a free service to deliver the Securities Bulletin directly to subscribers by E-mail.
 
To ensure that you receive prompt delivery of the Securities Bulletin, please make sure that you type your e-mail address correctly when subscribing and that your spam blocking or other software does not inadvertently prevent you from receiving Connecticut securities news.  In addition, if you change Internet service providers (and therefore your e-mail address), you will have to resubscribe to the listserv.  Because of high subscriber volume, we cannot verify individual e-mail addresses or substitute new ones for those that are bounced back as undeliverable.  When e-mail to a particular recipient is returned to us as undeliverable, we have no choice but to delete that recipient’s e-mail address from the listserv.
 
Joining the listserv is easy.  Each quarter, we will notify you when the Securities Bulletin is available for online viewing, and provide you with a quick link to access its content.
 
To subscribe:

1. Address an E-mail message to:  imailsrv@list.state.ct.us .  Leave the subject line blank.
In the body of the message type:   subscribe CT-Securities (and your name).  (Note: there are no spaces in the list name: CT-Securities).
2. Hit “Send.”
3. You will receive an automatic E-mail confirmation message that you have successfully subscribed to the listserv.

To unsubscribe:

1. Address an E-mail message to:  imailsrv@list.state.ct.us .  (Note:  This should be done from the E-mail address you originally used to subscribe to the listserv).  Leave the subject line blank.  In the body of the message type:  unsubscribe CT-Securities (and your name).
2. Hit “Send.”
3. You will receive an automatic E-mail confirmation message that you have been removed from the listserv.


REMINDER:  CONNECTICUT-REGISTERED BROKER-DEALERS COMPLYING WITH NASD FINANCIAL REPORTING REQUIREMENTS DO NOT HAVE TO FILE ANNUAL AUDITED FINANCIAL STATEMENTS


On May 12, 2004, the Banking Commissioner entered an Order exempting Connecticut-registered broker-dealers that were NASD member firms and that were in compliance with NASD financial reporting requirements from having to file annual audited financial statements with the department.  The Order also stated that financial statements submitted on a voluntary basis by firms that were exempt from filing would not be treated as required records for agency records retention purposes.
 
Although almost two years have passed, old habits die hard, and many NASD member firms that qualify for the exemption are continuing to file financial statements with the department, directly or through their accountants.  The Division urges all registered broker-dealers to reassess their need to file annual audited financial statements in light of the Commissioner’s Order.
 
Annual audited financial statements must only be filed only under the following circumstances:
 
1. The Commissioner requests on a case-by-case basis that financial statements be submitted.
2. The broker-dealer registrant’s financial statements are subject to special review by the NASD or the SEC.
3. The broker-dealer registrant’s liabilities exceed its assets, or its most recent audited financial statements reflect that it has failed at any time covered by the audited
 financial statements, to maintain the minimum net capital required by SEC Rule 15c3-1, 17 C.F.R. § 240.15c3-1.
4. The broker-dealer registrant is not in compliance with NASD and SEC filing requirements.
5. A trustee has been appointed for the broker-dealer under the Securities Investor Protection Act of 1970, 15 U.S.C. §§ 78aaa et seq.
6. The firm is submitting an initial registration application under the Connecticut Uniform Securities Act.
7. The firm is not registered with the NASD.


  {Naomipromo}
 
 
COORDINATION FILERS - DON'T BOG YOURSELF DOWN

"No Need to File a Whole Pile o' Docs -
All We Do is Put 'Em in a Box"
 Examiner Naomi Church
Skims a Typical Paper File
 


HOW TO JUMPSTART YOUR FILING

 
Step 1:   Before SEC Effectiveness, file only 4 items:

 
1. Connecticut Form U-1 Supplement (1 page, file size 48 KB). This form advises us that your EDGAR filing is on-line.
2. Nonrefundable filing fee payable to "Treasurer, State of Connecticut."
3. Form U-2 (Consent to Service of Process) (4 pages, file size 104 KB)
4.

Form U-1 Application to Register Securities (4 pages, legal size; file size 42 KB)

 
 
Step 2:   During the next 5 business days, we'll advise you of any deficiencies
Step 3:   Within 1 business day after SEC Effectiveness, tell us in writing (letter, fax, e-mail) when the registration became effective with the SEC and when you will file the price amendment (if any) via EDGAR
Step 4: You're registered!  The Connecticut effectiveness order will be sent to you via regular mail
Step 5:

After effectiveness (1) unless you’ve paid the maximum filing fee of $1,500, advise us in writing (letter; fax; e-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; and (2) tell us that you’ve filed a post-effective amendment via EDGAR (but don’t file the paper version)

 

*THE FINE PRINT (EDGAR-FILED ITEMS TO AVOID)
 
Unless we specifically ask for an item, do NOT not file paper versions of:
 
1. Prospectus
2. Pre-effective and post-effective Amendments to the registration statement posted to EDGAR
3. Undertaking to forward all amendments to the federal prospectus
4. Issuer's articles of incorporation and by-laws currently in effect
5. Underwriting agreement
6. Indenture or other instrument governing issuance of the security
7. Specimen or copy of the security
8.  Opinion of counsel regarding issuance of the securities
9. Sales literature
10. Post-effective filing of a balance sheet and income statement
 

ADMINISTRATIVE ACTIONS AND SETTLEMENTS

GunnAllen Financial, Inc. (CRD # 17609)) Assessed $10,000 for Failing to Observe Branch Office Registration and Other Requirements

On March 13, 2006, the Banking Commissioner entered a Consent Order (No. CO-06-7238-S) with respect to GunnAllen Financial, Inc., a registered broker-dealer located at 5002 West Waters Avenue, Tampa, Florida.  The Consent Order alleged that the firm 1) violated Section 36b-6(d) of the Connecticut Uniform Securities Act by transacting business from six unregistered branch office locations; 2) violated Section 36b-6(f) of the Act by failing to provide written notice to the Commissioner prior to the termination of business activity at seven of its branch offices; 3) violated Section 36b-6(d)(3) of the Act by failing to promptly notify the Commissioner in writing that three of the firm’s offices had relocated; and 4) violated Section 36b-31-6f(b) of the Regulations under the Act by failing to establish, enforce and maintain an adequate supervisory system.   The Consent Order directed the firm to cease and desist from regulatory violations, and mandated that the firm implement revised supervisory procedures designed to improve regulatory compliance.  In addition, the Consent Order required that the firm pay $10,000 to the agency.  Of that amount, $9,000 constituted an administrative fine and $1,000 constituted reimbursement for agency investigative costs.

Granite Securities, LLC  (CRD # 104255)) Fined $500 for Unregistered Branch Office Activity

On March 3, 2006, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-05-7247-S) with Granite Securities, LLC, a Connecticut-registered broker-dealer with its main office located at 27980 Main Road, P.O. Box 1307, Cutchogue, New York.  The Stipulation and Agreement alleged that from November 2004 until December 2005, the firm transacted business from an unregistered branch office at 7 Main Street, Stafford Springs, Connecticut in contravention of Section 36b-6(d) of the Connecticut Uniform Securities Act.  The Stipulation and Agreement fined the firm $500 and required that it implement revised supervisory procedures designed to prevent violations of Connecticut branch office registration requirements.

UVest Financial Services Group, Inc.  (CRD # 13787)) Fined $1,500 for Unregistered Branch Office Activity

On March 3, 2006, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-05-7249-S) with UVest Financial Services Group, Inc. of 200 South College Street, 21st Floor, Charlotte, North Carolina.  The firm is registered as a broker-dealer under the Connecticut Uniform Securities Act.  The Stipulation and Agreement alleged that from March 2003 until December 2005, the firm transacted business from an unregistered branch office at 378 New Britain Avenue, Plainville, Connecticut in contravention of Section 36b-6(d) of the Act.  The Stipulation and Agreement fined the firm $1,500 and required that it implement revised supervisory procedures designed to prevent violations of Connecticut branch office registration requirements.

Walnut Street Securities, Inc. (CRD # 15840) and Tower Square Securities, Inc. (CRD @ 833) Assessed $4,000 in the Aggregate for Failing to Notify the Commissioner of Branch Office Closures

On March 3, 2006, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-05-7239-S) with Walnut Street Securities, Inc. of 13045 Tesson Ferry Road, B1-50, St. Louis Missouri, and with Tower Square Securities, Inc. of One CityPlace, 18th Floor, Hartford, Connecticut.  Both entities are registered as broker-dealers under the Connecticut Uniform Securities Act and are under common control.  The Stipulation and Agreement claimed that 1) Walnut Street Securities, Inc. violated Section 36b-6(f) of the Act by filing to provide written notice to the Commissioner prior to the termination of business activity at four registered branch offices; 2) Tower Square Securities, Inc. violated Section 36b-6(f) of the Act by failing to provide written notice to the Commissioner prior to the termination of business activity at one registered branch office; and 3) both firms violated Section 36b-31-6f(b) of the Regulations by failing to enforce a system for supervising the activities of their agents and Connecticut office operations that was reasonably designed to achieve compliance with Section 36b-6(f) of the Act.  Pursuant to the Stipulation and Agreement, Walnut Securities, Inc. and Tower Square Securities, Inc. were fined $2,000 and $500, respectively, for failing to notify the Commissioner of the branch closures.  In addition, under the Stipulation and Agreement, both firms agreed to jointly and severally remit $1,500 as a fine for failing to enforce an adequate supervisory system.

Steven Gray (CRD # 2665911) – Notice of Intent to Revoke Registration as Agent and Notice of Intent to Fine Issued

On March 2, 2006, the Banking Commissioner issued a Notice of Intent to Revoke Registration as Agent and Notice of Intent to Fine (Docket No. RF-2006-7155-S) with respect to Steven Gray, a former registered broker-dealer agent of Independent Securities Investors Corporation (CRD number 43598).  Connecticut law permits the Commissioner to initiate revocation proceedings within one year following an agent’s withdrawal of registration.  The Notice of Intent to Revoke Registration as Agent and Notice of Intent to Fine alleged that respondent Gray 1) violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered, non-exempt notes issued by Charter One Capital Holding, Inc., an entity of which he was president and that owned and operated a branch of Independent Securities Investors Corporation in New York, New York; 2) violated Section 36b-4 of the Act by engaging in fraudulent practices with respect to sales of the Charter One Capital Holdings, Inc. notes; 3) failed to supervise one or more Independent Securities Investors Corporation agents who engaged in unauthorized trading, effected securities transactions while unregistered,  and violated Section 36b-16 of the Act by selling unregistered securities of Bio-Solutions Manufacturing and Stake Technology; 4) violated Section 36b-31-6e of the Regulations by engaging in private securities transactions; 5) engaged in dishonest or unethical practices; and 6) withheld material information from the Commissioner by failing to provide agency staff with requested documents.  Respondent Gray was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Agent.  A hearing on the Notice of Intent to Fine is pending.

Ernest P. Lamonica (CRD # 1277052), Digital Entertainment Corp. and Pacific Rim Investment Partners Ordered to Cease and Desist from Further Sales of Unregistered Stock and Notes, Unregistered Agent of Issuer Activity; Notice of Intent to Fine Issued

On February 9, 2006, the Banking Commissioner issued an Order to Cease and Desist and Notice of Intent to Fine (Docket Nos. CF-2006-7111-S and CF-2006-7186-S) against Digital Entertainment Corp. and Pacific Rim Investment Partners, both of 3702 South Virginia Street, #G-12, Reno, Nevada, and Ernest P. Lamonica of 6200 Meadowood #131, Reno, Nevada.  Respondent Lamonica was the president and CEO of Digital Entertainment Corp. and Pacific Rim Investment Partners.  The action alleged that 1) the respondents sold unregistered, non-exempt securities consisting of Digital Entertainment Corp. stock and notes and Pacific Rim Investment Partners stock to Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act; 2) respondent Lamonica violated Section 36b-6(a) of the Act by transacting business as an unregistered agent of issuer; and 3) respondents Lamonica and Digital Entertainment Corp. violated Section 36b-4(a)(2) of the Act by failing to disclose to Connecticut investors that they had been the subject of cease and desist orders issued by the states of Iowa and Tennessee alleging violations of the antifraud provisions of those states’ securities laws.  Since respondents Lamonica and Pacific Rim Investment Partners did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent as to them on March 28, 2006.   Similarly, the Order to Cease and Desist against Digital Entertainment Corp., being uncontested, became permanent as to Digital Entertainment Corp. on March 9, 2006.  A hearing on the Notice of Intent to Fine is pending.

Comprehensive Capital Management, Inc.  (CRD # 119890) Assessed $3,000 for Unregistered Investment Adviser Agent Activity, Late Investment Advisory Notice Filing

On February 2, 2006, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-05-7224-S) with Comprehensive Capital Management, Inc., an SEC-registered investment adviser located at 2001 Route 46, Suite 506, Parsippany, New Jersey.   The Stipulation and Agreement alleged that from approximately August 4, 2004 until August 19, 2005, the firm engaged an unregistered investment adviser agent at its Woodbury, Connecticut office in contravention of Section 36b-6(c) of the Connecticut Uniform Securities Act; and that from approximately 2003 to August 3, 2005, the firm transacted investment advisory business in Connecticut without having filed the requisite notice.  The notice was filed and the investment adviser agent registered after the agency brought the issues to the firm’s attention.  Pursuant to the Stipulation and Agreement, the firm agreed to implement revised procedures to ensure compliance with state investment advisory notice filing requirements and all statutory requirements governing the registration of affected personnel as investment adviser agents.  In addition, the firm agreed to pay $3,000 to the department.  Of that amount, $1,500 constituted an administrative fine for failing to timely file the notice required by Section 36b-6(c) of the Act, $1,000 constituted an administrative fine for failing to register its investment adviser agent and $500 represented past due notice filing and registration fees.

Black Diamond Research, LLC  (CRD # 130836) Assessed $10,900 for Unregistered Investment Advisory Activity, Failure to Reduce Advisory Contracts to Writing

On January 17, 2006, the Banking Commissioner entered a Consent Order (No. CO-05-7235-S) with respect to Black Diamond Research, LLC, an applicant for investment adviser registration located at 51 East 42nd Street, Suite 416, New York, New York.   The Consent Order alleged that 1) from at least 2003, the firm transacted business as an investment adviser absent registration under the Connecticut Uniform Securities Act; and 2) the firm violated Section 36b-5(1) of the Act by entering into, extending or renewing investment advisory contracts for Connecticut clients without reducing those contracts to writing and providing mandated contractual disclosures.  The Consent Order directed the firm to pay $10,900 to the department.  Of that amount, $10,000 constituted an administrative fine, $400 represented past due registration fees and $500 constituted reimbursement for agency investigative costs.  In addition, the Consent Order required that the firm implement revised supervisory and compliance procedures and provide quarterly reports to the agency for two years regarding any securities-related complaints, actions or proceedings involving Connecticut individuals and entities.

Black Diamond Research, LLC became registered as an investment adviser under the Act on January 17, 2006.

Geek Securities, Inc. (CRD # 14834) – Broker-dealer Registration Revoked

On January 9, 2006, the Banking Commissioner entered an Order revoking the broker-dealer registration of Geek Securities, Inc.  (Docket No. RCF-2005-7125-S), a broker-dealer having its principal office at 999 Yamato Road, Suite 100, Boca Raton, Florida.  The firm had also been the subject of a December 14, 2005 Order imposing a $100,000 fine (Docket No. RCF-2005-7125-S) and an August 4, 2005 Order to Cease and Desist which, being uncontested, had become permanent on September 19, 2005.

In revoking the respondent’s registration, the Commissioner found that Kautilya (“Tony”) Sharma, the firm’s president and control person, had been convicted in the U.S. District Court for the Southern District of Florida following federal felony charges that Sharma conspired to sell unregistered securities and conspired to commit securities fraud (United States v. Kautilya Sharma, Case No. 03-80146-CR-Marra).  The Commissioner also found that Geek Securities, Inc. violated Section 36b-31-14e(a) of the Regulations under the Connecticut Uniform Securities Act by failing to disclose Kautilya Sharma’s criminal conviction on the firm’s amendment to its Uniform Application for Broker-dealer Registration (Form BD).  Geek Securities, Inc. did not contest the revocation of its broker-dealer registration.

Kautilya (“Tony”) Sharma (CRD # 2124304) – Agent Registration Revoked

On January 9, 2006, the Banking Commissioner entered an Order revoking the broker-dealer agent registration of Kautilya (“Tony”) Sharma (Docket No. RCF-2005-7125-S) of 7363 Sedona Way, Delray Beach, Florida.  The respondent was the president and a control person of Geek Securities, Inc., a broker-dealer having its principal office at 999 Yamato Road, Suite 100, Boca Raton, Florida.  Respondent Sharma had also been the subject of a December 14, 2005 Order imposing a $100,000 fine (Docket No. RCF-2005-7125-S) and an August 4, 2005 Order to Cease and Desist which, being uncontested, had become permanent on September 19, 2005.

In revoking the respondent’s registration, the Commissioner found that respondent Sharma had been convicted in the U.S. District Court for the Southern District of Florida following federal felony charges that respondent Sharma conspired to sell unregistered securities and conspired to commit securities fraud (United States v. Kautilya Sharma, Case No. 03-80146-CR-Marra).   The Commissioner also found that respondent Sharma violated Section 36b-31-14e(a) of the Regulations under the Connecticut Uniform Securities Act by failing to disclose his criminal conviction on his amended Uniform Application for Securities Industry Registration or Transfer (Form U-4).  Kautilya Sharma did not contest the revocation of his agent registration.

Bayou Securities, LLC (CRD 39323) – Order Revoking and Canceling Registration as Broker-dealer Issued

On January 9, 2006, the Banking Commissioner issued an Order revoking and canceling the broker-dealer registration of Bayou Securities, LLC (Docket No. NRC-2005-7218-S).  The firm is located at 40 Signal Road, Stamford, Connecticut.  The Commissioner found that  the firm had ceased doing business and had been the subject of a September 8, 2005 NASD suspension predicated on the firm’s failure to pay outstanding fees.  Bayou Securities, LLC did not contest the revocation and cancellation of its registration.

Independent Securities Investors Corporation (CRD # 43598) – Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine Issued

On January 6, 2006, the Banking Commissioner issued a Notice of Intent to Revoke Registration as Broker-dealer, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. RF-2006-7155-S) with respect to Independent Securities Investors Corporation, a Connecticut-registered broker-dealer located at 795 Main Street, Chipley, Florida.  The action alleged that the respondent engaged in dishonest or unethical practices in the securities business by 1) employing as “cold callers” at least two individuals who were not registered with the NASD; 2) paying commissions to Charter One Capital Holding, Inc., an entity that was not registered with the NASD; 3) exceeding the number of associated persons permitted under the firm’s Membership Agreement with the NASD; and 4) engaging in unauthorized trading.  The action also claimed that the respondent wilfully violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered, non-exempt securities of Advanced Optics Electronics, Bio-Solutions Manufacturing, Deltagen Inc., GoAmerica Inc., Hop-On.com, Loudeye Technologies, Paradigm Med Inds, Peregrine Pharmaceuticals Inc., Predictive Systems, Inc., Robotic Vision Systems Inc., Sagent Tech Inc., Skyway Communications, Stake Technology, Tellium Inc., Valicert Inc. and Vodavi Technology.  In addition, the action alleged that the respondent employed at least two unregistered agents in violation of Section 36b-6(b) of the Act; withheld material information from the Commissioner; failed to maintain required books and records; and failed to enforce and maintain adequate supervisory procedures.

The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Broker-dealer.  A hearing on the Notice of Intent to Fine is pending.

Dennis Michael Quirk (CRD # 1247996) d/b/a United Resources Group Assessed $2,500 for Transacting Business as an Unregistered Agent of Issuer

On January 4, 2006, the Banking Commissioner entered a Consent Order  (Docket No. CO-2005-7044-S) with respect to Dennis Michael Quirk d/b/a United Resources Group of Wilton, Connecticut.  The Consent Order alleged that, from December 2002 through January 2004, Dennis Quirk transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act in conjunction with securities sales of Ambient Corporation, a Newton, Massachusetts-based issuer.  The Consent Order directed Dennis Quirk to 1) pay $2,500 to the department, representing a monetary fine and reimbursement for agency investigative costs; 2) for thirty months, consult with securities legal counsel on a quarterly basis concerning any business activities conducted or contemplated by Dennis Quirk in the financial services industry, and file quarterly affidavits with the Commissioner verifying that Quirk is complying with the advice of counsel; and 3) file an affidavit verifying that, from February 2004 until the entry of the Consent Order, Dennis Quirk had not effected securities transactions with any Connecticut residents in violation of the Connecticut Uniform Securities Act or its regulations.  In addition, the Consent Order required that Dennis Quirk notify the department concerning any change in the identity of his legal counsel and the reasons behind the change.

CHF Technologies, Inc., Gerald Grayson, Grayson & Associates, Inc., Douglas Miscoll, Ravello Partners, LLC – Unregistered “Finder” Activity Prompts $102,400 Rescission Offer, $10,500 in Penalties

On January 4, 2006, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-05-7205-S) with CHF Technologies, Inc., an issuer of securities located at 4135 Blackhawk Plaza Circle, Suite 280, Danville, California.  Other parties to the Stipulation and Agreement were:  1) Gerald Grayson, a director of the issuer and a principal of Grayson & Associates, Inc. of One Tabor Center, Suite 980, 1200 Seventeenth Street, Denver, Colorado; and 2) Douglas Miscoll, a principal of Ravello Partners, LLC of 1197 Broadway, New York, New York.   The Stipulation and Agreement alleged that Gerald Grayson and Douglas Miscoll each received $4,096 in finder’s fees plus warrants for introducing certain Connecticut investors to the issuer; and that no agent of issuer or broker-dealer registration was in effect for Gerald Grayson, Douglas Miscoll or their related entities.

Upon learning of the agency’s regulatory concerns, the issuer extended a $102,400 rescission offer to the affected Connecticut investors, each of whom represented himself as “accredited under Rule 501(a) of federal Regulation D.

Without admitting or denying the department’s allegations, 1) Gerald Grayson and Grayson & Associates, Inc. agreed to refrain from transacting business as an agent or a broker-dealer in Connecticut absent registration or an applicable exclusion and to pay a $4,000 fine reflecting the disgorgement of finder’s fees earned; 2) Douglas Miscoll and Ravello Partners agreed to refrain from transacting business as an agent or a broker-dealer in Connecticut absent registration or an applicable exclusion and to pay a $4,000 fine reflecting the disgorgement of finder’s fees earned; and 3) CHF Technologies, Inc. agreed to refrain from employing an unregistered agent of issuer or engaging an unregistered broker-dealer in connection with future securities sales in Connecticut and to pay a $2,500 fine.


S { } TATISTICAL SUMMARY

 

Licensing At A Glance
at the end of the quarter

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Broker-dealers Registered 2,585      
Broker-dealer Agents Registered 121,951      
Broker-dealer Branch Offices Registered 2,582      
Investment Advisers Registered 422      
SEC Registered Advisers Filing Notice 1,668      
Investment Adviser Agents Registered 7,548      
Investment Advisory Branch Offices Registered 123      
Agents of Issuer Registered 44      
 
 

Securities and Business
Opportunity Filings

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Offerings Reviewed 79  
 
  79
Investment Company Notice Filings 456  
 
    456
Exemptions and Exemptive Notices 920       920
 
 
Examinations
     
Broker-dealers 25  
 
  25
Investment Advisers 13  
 
  13
 
 
Securities Investigations
 
Opened 39       39
Closed 30       30
Ongoing as of End of Quarter 121           
Subpoenas issued 16     16
Cases referred from Attorney General 2       2
Cases referred from Other Agencies 3       3
 
 
Business Opportunity Investigations
 
Investigations Opened 13       13
Investigations Closed 1       1
Ongoing as of End of Quarter 21        
 
 
Securities Enforcement: Remedies and Sanctions
 
Notices of Intent to Deny (Licensing)
0
 
 
 
0
Notices of Intent to Suspend (Licensing)
0
 
 
 
0
Notices of Intent to Revoke (Licensing)
2
 
 
 
2
Denial Orders (Licensing) 0  
 
  0
Suspension Orders (Licensing) 0  
 
  0
Revocation Orders (Licensing) 3  
 
  3
Notices of Intent to Fine 5  
 
  5
Orders Imposing Fine 0  
 
  0
Cease and Desist Orders 4  
 
  4
Notices of Intent to Issue Stop Order 0  
 
  0
Activity Restrictions/Bars 1       1
Stop Orders 0       0
Vacating/Withdrawal Orders 0       0
Censures 0  
 
  0
Restitutionary Orders 0  
 
  0
Cancellation Orders 1       1
Notices of Intent to Cancel Registration 0  
 
  0
 
 

Proceedings and Settlements

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Administrative Actions
8
 
 
 
8
Consent Orders
3
 
 
 
3
Stipulation and Agreements
5
 
 
 
5
 
 

Monetary Relief

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Year
to Date
Monetary Sanctions Imposed
$42,900
 
 
 
$42,900
Restitution or Other Monetary Relief
$115,036
 
 
 
$115,036
 
 

Securities Referrals

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



Securities Division