DOB: Crystal Sky Enterprises-FINE

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IN THE MATTER OF:

CRYSTAL SKY ENTERPRISES, LLC

    ("Respondent")

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ORDER IMPOSING FINE

DOCKET NO. CF-2006-7137-S


WHEREAS,  the Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (“Act”), and Sections 36b-31-2, et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (“Regulations”);

WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36b-26(a) of the 2006 Supplement to the General Statutes, into the activities of Respondent, to determine whether Respondent had violated, was violating or was about to violate any provisions of the Act or Regulations;

WHEREAS, on November 21, 2006, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the 2006 Supplement to the General Statutes, issued an Order to Cease and Desist, Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated by reference herein;

WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Respondent; that a hearing would be held on January 18, 2007, on the matters alleged in the Fine Notice, and that if Respondent failed to appear at the hearing, the Commissioner may order that a maximum fine of Three Hundred Thousand Dollars ($300,000) be imposed upon Respondent;

WHEREAS, on November 21, 2006, the Notice was sent to by registered mail, return receipt requested, to Respondent;

WHEREAS, on December 26, 2006, the Notice was returned to the Department of Banking marked “Return to Sender – Unclaimed”;

WHEREAS, on January 2, 2007, the Notice was served on the Commissioner, and on January 3, 2007, Notice of Service on the Banking Commissioner was sent to Respondent in accordance with Section 36b-33(h) of the 2006 Supplement to the General Statutes;

WHEREAS, Section 36b-33(h) of the 2006 Supplement to the General Statutes provides, in relevant part, that “[w]hen any person . . . engages in conduct prohibited or made actionable by sections 36b-2 to 36b-33, inclusive, or any regulation or order thereunder, and such person has not filed a consent to service of process under subsection (g) of this section and personal jurisdiction over such person cannot otherwise be obtained in this state, that conduct shall be considered equivalent to such person’s appointment of the commissioner . . . to be such person’s attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against such person . . . which grows out of that conduct and which is brought under said sections or any regulation or order thereunder, with the same force and validity as if served on such person personally.  Service may be made by leaving a copy of the process in the office of the commissioner”;

WHEREAS, William Nahas, Jr., was appointed Hearing Officer in this matter;

WHEREAS, the Commissioner alleged in the Notice that Respondent offered and sold unregistered securities to at least one Connecticut investor, which securities were not registered in Connecticut under the Act, in violation of Section 36b-16 of the Act, which forms a basis for the imposition of a fine against Respondent under Section 36b-27(d) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that the conduct of Respondent constitutes, in connection with the offer, sale or purchase of any security, employing any device, scheme or artifice to defraud, making of any untrue statements of material facts or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice or course of business which operates as a fraud or deceit upon any person, which constitutes a violation of Section 36b-4(a) of the Act and forms a basis for the imposition of a fine against Respondent under Section 36b-27(d) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that Respondent employed Christina E. Foster as an agent of issuer, absent registration, which constitutes a violation of Section 36b-6(b) of the 2006 Supplement to the General Statutes, which forms a basis for the imposition of a fine against Respondent under Section 36b-27(d) of the 2006 Supplement to the General Statutes;

WHEREAS, on January 18, 2007, Respondent failed to appear at the Hearing;

WHEREAS, Section 36a-1-31(b) of the Regulations provides, in relevant part, that “[w]hen a party fails to appear at a scheduled hearing, the allegations against the party may be deemed admitted”;

WHEREAS, Section 36b-27(d)(2) of the 2006 Supplement to the General Statutes provides, in relevant part, that “[i]f such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine . . . be imposed upon such person”;

WHEREAS, the facts as set forth in paragraph 6 through 16, inclusive, of the Notice shall constitute findings of fact, and the statutory and regulatory basis for the imposition of a fine set forth in paragraphs 17 through 23, inclusive, of the Notice shall constitute conclusions of law;

WHEREAS, the Commissioner finds that Respondent has violated Sections 36b-16 and 36b-4(a) of the Act and Section 36b-6(b) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner finds that the facts require the imposition of a fine against Respondent;

WHEREAS, the Commissioner complied with the provisions of Sections 36b-27(d) and 36b-33(h) of the 2006 Supplement to the General Statutes;

WHEREAS, Section 36b-31(a) of the 2006 Supplement to the General Statutes 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 sections 36b-2 to 36b-33, inclusive”;

WHEREAS, Section 36b-31(b) of the 2006 Supplement to the General Statutes 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 sections 36b-2 to 36b-33, inclusive”;

AND WHEREAS, the Commissioner finds that the imposition of a fine 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 Sections 36b-2 to 36b-33, inclusive, of the Act.


ORDER

Having read the record, I HEREBY ORDER, pursuant to Section 36b-27(d) of the 2006 Supplement to the General Statutes that:

1.
A civil penalty of Three Hundred Thousand Dollars ($300,000) be imposed against Respondent Crystal Sky Enterprises, LLC, to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than 21 days from the date the Order is mailed; and
 
2.
This Order shall become final when mailed.

                                                     
Dated at Hartford, Connecticut
this 21st day of March 2007.                     ________/s/_________
                                                            Howard F. Pitkin
                                                            Banking Commissioner

This Order was mailed by registered mail,
return receipt requested, to Respondent
on March 21, 2007.

Crystal Sky Enterprises, LLC                       Registered Mail No. RB027865853US
238 Raritan Street
Keyport, NJ 07735



Administrative Orders and Settlements