DOB: Condor Investment Advisors Consent

* * * * * * * * * * * * * * * * * *


IN THE MATTER OF:

Condor Investment Advisors, LLC

Richard W. Wiegand
   
(CRD No. 2105619)

* * * * * * * * * * * * * * * * * *

*
*
*
*
*
*
*
*
*
*

CONSENT ORDER

NO. CO-06-7267-S

PRELIMINARY STATEMENT

WHEREAS the Banking 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 the Commissioner, through the Securities and Business Investments Division (the Division”) of the Department of Banking, has conducted an investigation pursuant to Section 36b-26 of the Act into the activities of Richard W. Wiegand (“Wiegand”) and Condor Investment Advisors, LLC (“CIA”), to determine whether they, or any of them, have violated or are about to violate any provision of the Act or any regulation or order under the Act;
 
WHEREAS the Commissioner, as a result of such investigation, alleges that, from at least 2005, CIA and Wiegand misrepresented to clients or prospective clients on CIA’s website that CIA and Wiegand were registered as an investment adviser with the Division when that was not the case;
 
WHEREAS CIA and Wiegand maintain that 1) Wiegand inadvertently failed to register as an investment adviser or an investment adviser agent under the Act, believing that Wiegand’s previous registrations as a broker-dealer agent and an investment adviser agent with an unrelated firm with whom he was no longer associated remained in effect and covered Wiegand’s activities with CIA; 2) Wiegand and CIA did not receive any compensation for their investment advisory activities; and 3) the only clients of CIA and Wiegand were members of Wiegand’s family and a longtime acquaintance of Wiegand;
 
WHEREAS Section 36b-27(a) of the Act provides, in part, that:  “Whenever it appears to the commissioner after an investigation that any person has violated, is violating or is about to violate any of the provisions of sections 36b-2 to 36b-33, inclusive, or any regulation, rule or order adopted or issued under said sections, or that the further sale or offer to sell securities would constitute a violation of said sections or any such regulation, rule or order, or that any person has engaged in a dishonest or unethical practice in the securities or commodities business within the meaning of sections 36b-31-15a to 36b-31-15d, inclusive, of the regulations of Connecticut state agencies, the commissioner may, in the commissioner’s discretion, order (1) the person, (2) any other person that directly or indirectly controls such person and that is, was or would be a cause of the violation of such sections or any such regulation, rule or order, due to an act or omission such other person knew or should have known would contribute to such violation, or (3) any other person that has materially aided, is materially aiding or is about to materially aid in such violation, to cease and desist from the violations or the causing of or aiding in the violations of the provisions of said sections or of the regulations, rules or orders thereunder, or from the further sale or offer to sell securities constituting or which would constitute a violation of the provisions of said sections or of the regulations, rules or orders thereunder, or from further engaging in such dishonest or unethical practice . . . . ”
 
WHEREAS Section 36b-27(d) of the Act authorizes the Commissioner to impose a fine of up to $100,000 per violation against any person who has violated, caused a violation or materially aided in the violation of any provision of the Act or any regulation, rule or order under the Act;
 
WHEREAS an administrative proceeding initiated under Section 36b-27 of the Act would constitute a "contested case" within the meaning of Section 4-166(2) of the Connecticut General Statutes;
 
WHEREAS Section 36b-6(c)(1) of the Act provides, in part, that:  “(1)  No person shall transact business in this state as an investment adviser 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 Section 36b-6(c)(2) of the Act states, in part, that:  “No individual shall transact business in this state as an investment adviser agent unless such individual is registered as an investment adviser agent of the investment adviser for which such individual acts in transacting such business”;
 
WHEREAS Section 36b-3(11) of the Act defines the term “investment adviser” to mean “any person who, for compensation, engages in the business of advising others, either directly or through publications or writings, as to the value of securities or as to the advisability of investing in, purchasing or selling securities, or who, for compensation and as a part of a regular business, issues or promulgates analyses or reports concerning securities . . . .”

WHEREAS Section 36b-3(12)(A) of the Act defines the term “investment adviser agent” to include:  “(i) any individual, including an officer, partner or director of an investment adviser, or an individual occupying a similar status or performing similar functions, employed, appointed or authorized by or associated with an investment adviser to solicit business from any person for such investment adviser, within or from this state, and who receives compensation or other remuneration, directly or indirectly, for such solicitation; or (ii) any partner, officer, or director of an investment advisor, or an individual occupying a similar status or performing similar functions, or other individual employed, appointed, or authorized by or associated with an investment adviser, who makes any recommendation or otherwise renders advice regarding securities to clients and who receives compensation or other remuneration, directly or indirectly, for such advisory services”;
 
WHEREAS Section 4-177(c) of Chapter 54 of the Connecticut General Statutes provides that"[u]nless precluded by law, a contested case may be resolved by stipulation, agreed settlement, or consent order or by the default of a party";
 
WHEREAS Section 36b-31(a) of the Act provides, in part, that: "The commissioner may from time to time make, amend and rescind such ... orders as are necessary to carry out the provisions of Sections 36b-2 to 36b-33, inclusive [of the Connecticut Uniform Securities Act]";
 
WHEREAS Wiegand and CIA have provided documentation to the Division evidencing their financial inability to pay the fine that otherwise would have been assessed against them pursuant to this Consent Order;


CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS CIA and Wiegand, through their execution of this Consent Order, voluntarily waive the following rights:

1. To be afforded written notice and opportunity for a hearing within the meaning of Sections 36b-27, 4-177(a) and 4-177(b) of the Connecticut General Statutes;
2. To present evidence and argument and to otherwise avail themselves of Section 4-177c(a) of the Connecticut General Statutes;
3. To present their position in a hearing in which each is represented by counsel;
4. To have a written record of the hearing made and a written decision issued by a hearing officer; and
5. To seek judicial review of, or otherwise challenge or contest, the matters described herein, including the validity of this Consent Order;

CONSENT TO ENTRY OF FINDINGS

WHEREAS CIA and Wiegand through their execution of this Consent Order, accept and consent to the entry of the following Findings by the Commissioner:

1. That the entry of this Consent Order is appropriate, in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
2. That from at least 2005, CIA and Wiegand transacted business absent registration as  an investment adviser or an investment adviser agent in contravention of 36b-6(c) of the Act, and
3. That the department's allegations would support the initiation of an administrative proceedings against CIA and Wiegand pursuant to Section 36b-27 of the Act;


CONSENT TO ENTRY OF SANCTIONS AND REMEDIAL MEASURES

WHEREAS CIA and Wiegand through their execution of this Consent Order, consent to the Commissioner issuing an order imposing on them the following sanctions and remedial measures:

1. Wiegand and CIA shall cease and desist from engaging, directly or indirectly, in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, including, without limitation, transacting business in or from this state as an adviser or an investment adviser agent;
2. Wiegand, CIA, their affiliates and successors in interest shall not render investment advisory services or hold themselves out [as] performing such services unless they first consult with outside legal counsel experienced in securities law, and abide by counsel’s recommendations to ensure that Wiegand, CIA, their affiliates and successors in interest are in compliance with the Act, the Regulations thereunder and the terms of this Consent Order; and
3. No later than the date this Consent Order is entered by the Commissioner, Wiegand shall remit to the department via certified bank check payable to Treasurer, State of Connecticut” the sum of two hundred fifty dollars ($250) as an administrative penalty.

ORDER

THE COMMISSIONER HEREBY ORDERS THAT:

1. The Findings and Sanctions set forth above be and are hereby entered;
2. Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Wiegand and against CIA, its members, agents, employees or representatives based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by CIA, Wiegand or both and reflected herein is subsequently determined to be untrue; and
3. This Consent Order shall become final when issued.
 
 

               ________/s/_________ 
    Howard F. Pitkin
            Banking Commissioner

So ordered at Hartford, Connecticut                 
this 11th day of January 2007.                         
 

CONSENT TO ENTRY OF ORDER

I, Richard W. Wiegand, state individually and on behalf of Condor Investment Advisors, LLC, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Condor Investment Advisors, LLC; that I and Condor Investment Advisors, LLC agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Condor Investment Advisors, LLC and I voluntarily consent to the entry of this Consent Order expressly waiving any rights either may have to a hearing on the matters described herein.


      Condor Investment Advisors, LLC

By
       ________/s/_______________
      Richard W. Wiegand
      Managing Member


On this [blank in original] day of [blank in original] 2007,  personally appeared Richard W. Wiegand, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Condor Investment Advisors, LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.


_______________/s/_____________
Notary Public
My Commission Expires:  July 31, 2008

 



       ________/s/_______________
      Richard W. Wiegand
      (Individually)



Subscribed and sworn to before me this
4th day of January 2007.



Administrative Orders and Settlements