DOB: Carrington Capital Stipulation

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IN THE MATTER OF:

CARRINGTON CAPITAL MANAGEMENT, LLC

(IARD number 130813)

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STIPULATION AND AGREEMENT

File No. ST-06-7302-S

 

WHEREAS, the Banking Commissioner (the "Commissioner") is charged with the administration of 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, Carrington Capital Management, LLC (“CCM”) is an investment adviser located at 7 Greenwich Office Park, Greenwich, Connecticut;

WHEREAS, on May 20, 2004, CCM became registered as an investment adviser with the Securities and Exchange Commission ("SEC") under the federal Investment Advisers Act of 1940;

WHEREAS, CCM made a notice filing under Section 36b-6(e) of the Act on March 22, 2006;

WHEREAS, CCM’s business focuses on rendering investment advisory services to four affiliated funds:  Carrington Investment Partners, LP; Carrington Investment Partners (US) LP, Carrington Investment Partners (Cayman) LP and Carrington Securities LP f/k/a Carrington Mortgage Credit Fund I LP;

WHEREAS, Section 36b-6(c) of the Act provides that: "No person shall transact business as an investment adviser, within or from this state, unless registered as such by the commissioner as provided in sections 36b-2 to 36b-33, inclusive, or exempted pursuant to subsection (e) of this section … ";

WHEREAS, while reviewing the broker-dealer application of an affiliate of CCM, it came to the attention of the staff of the Securities and Business Investments Division of the Department of Banking (the “Division”) that CCM had been delinquent in filing the investment advisory notice required by Section 36b-6(e) of the Act;

WHEREAS, the Commissioner, acting pursuant to Section 36b-26 of the Act and through the Division, conducted a follow-up investigation to evaluate the scope of the delinquency and to determine whether CCM, its officers, agents, representatives and employees had violated or are about to violate any provision of the Act or any regulation or order under the Act; 

WHEREAS, as a result of such investigation, the Commissioner alleges that from approximately May 2004 until March 2006, CCM transacted business as an investment adviser in Connecticut without making the requisite notice filing under Section 36b-6(e) of the Act;

WHEREAS, as a result of such investigation, the Commissioner also alleges that, in contravention of Section 36b-16 of the Act and at various times commencing in 2004, interests in Carrington Investment Partners (US) LP and Carrington Investment Partners (Cayman) LP were sold in or from Connecticut at a time when no registration, exemption or claim of covered security status had been filed with the department;

WHEREAS, Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;

WHEREAS, CCM and the Commissioner desire to settle the matters described herein in an informal manner and, CCM, without either admitting or denying the truth of the Commissioner's allegations set forth hereinabove, voluntarily enters into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding or order adjudicating or finding as to any issue of fact or law on the matters described herein;

WHEREAS, CCM, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;

NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:

1. No later than the date this Stipulation and Agreement is executed by the Commissioner, CCM shall remit to the department by check payable to "Treasurer, State of Connecticut" the sum of three thousand eight hundred dollars ($3,800), one thousand dollars ($1,000) of which shall constitute an administrative penalty for failing to timely file the notice required by Section 36b-6(e) of the Act; two thousand five hundred dollars of which shall constitute an administrative penalty for failing to comply with Section 36b-16 of the Act with respect to the sale of interests in Carrington Investment Partners (US) LP and Carrington Investment Partners (Cayman) LP; and three hundred dollars ($300) of which shall represent past due investment adviser notice filing fees;
2.
CCM shall refrain from offering or selling securities in or from Connecticut absent compliance with Section 36b-16 of the Act, including timely compliance with any applicable exemptive or covered security filing requirements, and shall comply with the investment advisory notice filing and renewal requirements described in Section 36b-6(e) of the Act;
3. Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against CCM based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof; and
4. This Stipulation and Agreement shall become binding when executed by CCM and the Commissioner.


IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.

 

               ________/s/_________
     Howard F. Pitkin
            Banking Commissioner

Dated at Hartford, Connecticut                 
this 19th day of October, 2006.                         
 

I, Bruce Marshall Rose, state on behalf of Carrington Capital Management, LLC, that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Carrington Capital Management, LLC and that Carrington Capital Management, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
                                                                 

      Carrington Capital Management, LLC

By
       ________/s/_______________
       Bruce Marshall Rose
       President


On this 16 day of October 2006, personally appeared Bruce Marshall Rose, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Carrington Capital Management, LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.


_______________/s/_______________________
Notary Public/Commissioner of the Superior Court
My Commission Expires:   12/31/08




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