DOB: KMH Management Stipulation

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IN THE MATTER OF:

KMH MANAGEMENT, INC.
 (CRD number 143036)


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STIPULATION AND AGREEMENT

File No. ST-07-7380-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, KMH Management, Inc. (“KMH”) is an applicant for investment adviser registration under the Act and has its principal office located at 133 Lords Highway, Weston, Connecticut;

WHEREAS, in connection with an examination of a Connecticut-registered broker-dealer with whom the president of KMH is associated as an agent, the staff of the Securities and Business Investments Division (the “Division”) of the Department of Banking ascertained that from at least 2002 forward, KMH had rendered investment advisory services through one or more unregistered investment adviser agents and at a time when the firm was not registered as an investment adviser under the Act;

WHEREAS, after having been apprised of the Division’s findings, KMH filed for investment adviser registration and investment adviser agent registration under the Act;

WHEREAS, in connection with its application for investment adviser registration, KMH represented that from 2002 forward, it had rendered investment advisory services to three clients in Connecticut and in Hong Kong, and that it had obtained such clients through the family connections of its president, Karen Mae Ho;

WHEREAS, Section 36b-8 of the Act provides, in part, that:  “[o]n receipt of the application for registration as a[n] . . . investment adviser or investment adviser agent, the commissioner may make such investigation of the applicant and the applicant’s affairs as the commissioner deems necessary or advisable”;

WHEREAS. the Commissioner acknowledges that KMH cooperated with the Division in providing requested information and documents in conjunction with such investigation, and that neither KMH nor its president, Karen Mae Ho, has any reported disciplinary history;

WHEREAS, as a result of such investigation, the Commissioner alleges that from at least 2002 forward, KMH transacted business as an investment adviser while unregistered and employed one or more unregistered investment adviser agents in contravention of Section 36b-6(c) of the Act;

WHEREAS, Section 36b-6(c) 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 . . . (3) No investment adviser shall engage an investment adviser agent unless such investment adviser agent is registered under ... [the Act]";

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

WHEREAS, KMH desires to settle the matter described herein and, without either admitting or denying 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 adjudicating any issue of fact or law on the matters described herein;

WHEREAS, KMH, 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, KMH shall remit to the department by certified bank check payable to "Treasurer, State of Connecticut" the sum of one thousand five hundred dollars ($1,500), one thousand dollars ($1,000) of which shall constitute reimbursement for past due investment adviser and investment adviser agent registration fees and five hundred dollars of which shall be applied to defray the Division’s investigative costs;
2.
KMH, its officers, directors, employees, agents and representatives shall comply with all statutory requirements governing investment advisers and their operations, including, without limitation, requirements concerning registration, and shall review, revise and implement such supervisory and compliance procedures as are necessary to ensure such compliance;
3. Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against KMH 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 or if any representation made by KMH in connection with its investment advisory application is subsequently discovered to be untrue; and
4. This Stipulation and Agreement shall become binding when executed by KMH 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 4th day of May 2007.                         
 

I, Karen Mae Ho, state on behalf of KMH Management, Inc., 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 KMH Management, Inc. and that KMH Management, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
                                                                 

       KMH Management, Inc.

By
       ________/s/_______________
       Karen Mae Ho
       President


On this 27th day of April 2007, personally appeared Karen Mae Ho, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that she was authorized to execute the same on behalf of KMH Management, Inc., a corporation, and acknowledged the same to be her free act and deed, before me.



_______________/s/_______________________
Notary Public/Commissioner of the Superior Court
My Commission Expires:  Aug. 31, 2011




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