DOB: Great Eastern - REV BD

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IN THE MATTER OF:

GREAT EASTERN SECURITIES, INC.
CRD NO. 2061

    ("Respondent")

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ORDER REVOKING REGISTRATION
AS BROKER-DEALER

DOCKET NO. RSDF-2007-7309-S


I.  PRELIMINARY STATEMENT

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, Section 36b-15(a) of the Act provides, in pertinent part, that “[t]he commissioner may, by order, . . . revoke any registration . . . if the commissioner finds that (1) the order is in the public interest, and (2) the . . . registrant or, in the case of a broker-dealer . . . any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer . . . (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-33, inclusive, or a predecessor statute or any regulation . . . under said sections or a predecessor statute; . . . (K) has failed reasonably to supervise:  (1) [t]he agents . . . of such . . . registrant, if the . . . registrant is a broker-dealer . . . ; [or] (L) in connection with any investigation conducted pursuant to section 36b-26 or any examination under subsection (d) of section 36b-14, . . . upon request made by the commissioner, has withheld or concealed material information from, or refused to furnish material information to the commissioner”;

WHEREAS, Section 36b-15(f) of the Act provides, in pertinent part, that “[n]o order may be entered under this section . . . without (1) appropriate prior notice to the . . . registrant . . . , (2) opportunity for hearing, and (3) written findings of fact and conclusions of law”;

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 sections 36b-2 to 36b-33, inclusive”;

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 sections 36b-2 to 36b-33, inclusive”;

WHEREAS, on January 26, 2007, the Commissioner, acting pursuant to Sections 36b-15 and 36b-27(d) of the 2006 Supplement to the General Statutes and Section 4-182(c) of the Connecticut General Statutes, issued a Notice of Intent to Revoke Registration as Broker-dealer, Order Summarily Suspending Registration as Broker-dealer, Order Denying Withdrawal of Registration as Broker-dealer, Notice of Intent to Fine and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated by reference herein;

WHEREAS, the Notice stated that the Commissioner intended to revoke Respondent’s registration as a broker-dealer in Connecticut subject to its right to request a hearing, and that if Respondent failed to request a hearing within 14 days following its receipt of the Notice, the Commissioner shall issue an order revoking its registration as a broker-dealer in Connecticut;

WHEREAS, on January 26, 2007, the Notice was sent to by registered mail, return receipt requested, to Respondent;

WHEREAS, on January 29, 2007, the Notice was received by Respondent;

WHEREAS, Respondent failed to request a hearing within the prescribed time period;

WHEREAS, the Commissioner alleged in the Notice that Respondent’s employment of at least six unregistered agents constitutes a wilful violation of Section 36b-6(b) of the 2006 Supplement to the General Statutes, and such wilful violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that Respondent effected at least 26 offers and sales of securities in AFV Solutions, Inc., Ad Venture Partners, Inc., Fidelis Energy, Inc., Produce Safety and Security International, Inc., and Youbet.com, Inc., for the accounts of at least six Connecticut customers, which securities were not registered in Connecticut under the Act.  The offer and sale of such securities absent registration constitutes a wilful violation of Section 36b-16 of the Act, and such wilful violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that Respondent’s failure to establish, enforce and maintain a system for supervising the activities of its agents that is reasonably designed to achieve compliance with applicable securities laws and regulations constitutes a wilful violation of Section 36b-31-6f(b) of the Regulations.  Such wilful violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(K) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that Respondent’s failure to keep true, accurate and current records constitutes a wilful violation of Section 36b-31-14a(a) of the Regulations.  Such wilful violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Section 36b-15(a)(2)(B) of the 2006 Supplement to the General Statutes;

WHEREAS, the Commissioner alleged in the Notice that Respondent’s failure to provide copies or computer printouts of records when so requested constitutes a wilful violation of Section 36b-14(d) of the 2006 Supplement to the General Statutes and Section 36b-31-14f(b)(3) of the Regulations.  Such wilful violation forms a basis for the revocation of Respondent’s registration as a broker-dealer pursuant to Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(L) of the 2006 Supplement to the General Statutes;

AND WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in relevant part, that “[w]hen a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies”;


II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. The Commissioner finds that the facts as set forth in paragraphs 6 through 23, inclusive, of the Notice shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies, and the statutory and regulatory basis for the revocation of registration as a broker-dealer in Connecticut set forth in paragraphs 24 through 33, inclusive, of the Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
 
2. The Commissioner finds that this action 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.
 
3.
The Commissioner finds that the Notice was given in compliance with the requirements of Section 36b-15(f) of the Act and Section 4-182(c) of the Connecticut General Statutes.
 

III.  ORDER

Having read the record, I HEREBY ORDER, pursuant to Sections 36b-15 and 36b-31 of the Act, that:

1.
The registration of Great Eastern Securities, Inc., as a broker-dealer in Connecticut is hereby REVOKED; and
 
2.
This Order shall become final when entered.
 

Entered at Hartford, Connecticut
this 22nd day of March 2007.               ________/s/_________
                                                      Howard F. Pitkin
                                                      Banking Commissioner

This Order was sent by registered mail,
return receipt requested, to Respondent
on March 23, 2007.

Great Eastern Securities, Inc.                    Registered Mail No. RB027865822US
50 Broad Street, Suite 1401
New York, NY 10004


Administrative Orders and Settlements