DOB: Grove, Kenneth H - CD

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IN THE MATTER OF:

KENNETH HENRY GROVE
CRD NO. 5115225

    ("Respondent")

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ORDER TO CEASE AND DESIST

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. CD-2008-7429-S


I. PRELIMINARY STATEMENT

1. The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (“Act”), and the regulations promulgated thereunder (Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies) (“Regulations”).
2.
Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation into the activities of Respondent to determine if he has violated, is violating or is about to violate provisions of the Act or Regulations.  Section 36b-26(a) of the Act provides, in pertinent part, that:
The commissioner may, subject to the provisions of the Freedom of Information Act . . . (1) [m]ake such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated, is violating or is about to violate any provision of sections 36b-2 to 36b-33, inclusive, or any regulation or order thereunder . . . .
3.
As a result of the investigation by the Division, the Commissioner has the authority to issue a cease and desist order against Respondent pursuant to Section 36b-27(a) of the 2008 Supplement to the General Statutes, which provides, in pertinent part, that:
Whenever it appears to the commissioner after an investigation . . . that any person has engaged in a dishonest or unethical practice in the securities . . . 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 . . . to cease and desist from the violations . . . of the provisions . . . of the regulations . . . or from further engaging in such dishonest or unethical practice . . . .  After such an order is issued, the person named in the order may, within fourteen days after receipt of the order, file a written request for a hearing.  Any such hearing shall be held in accordance with the provisions of chapter 54.

II.  RESPONDENT

4.
Respondent is an individual whose address last known to the Commissioner is 59 Barnum Road, New Fairfield, Connecticut 06812.
 

III.  STATEMENT OF FACTS

5. Between February 23 and April 2, 2007, Respondent, while associated with New Castle Financial Services LLC (“New Castle”), a broker-dealer registered with the State of Connecticut during all relevant times, “cold-called” prospective customers and asked them qualifying questions from New Castle’s Connecticut office.
6.
At all times relevant hereto, Respondent was not registered with the National Association of Securities Dealers, Inc. (“NASD”), now known as Financial Industry Regulatory Authority, as a representative of New Castle.
7.
The NASD was a self-regulatory organization registered with the Securities and Exchange Commission pursuant to Section 15A of the Securities Exchange Act of 1934.
 

IV.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST

Unethical Practice in the Securities Business

8. Paragraphs 1 through 7, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
9.
Respondent’s conduct as described in paragraphs 5 and 6 constitutes an unethical practice in the securities business within the meaning of Section 36b-31-15b(c) of the Regulations, in that it is conduct proscribed by NASD Rule 1031.  Such unethical practice in the securities business by Respondent forms a basis for an order to cease and desist to be issued against Respondent pursuant to Section 36b-27(a) of the 2008 Supplement to the General Statutes.
 

V.  ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING

AS A RESULT OF THE INVESTIGATION BY THE DIVISION, THE COMMISSIONER FINDS that, with respect to the activity described herein, Kenneth Henry Grove engaged in an unethical practice in the securities business;
 
THE COMMISSIONER FURTHER FINDS that the issuance of this Order is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act.
 
THE COMMISSIONER THEREFORE ORDERS that Kenneth Henry Grove CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, engaging in dishonest and unethical practices in the securities business;
 
THE COMMISSIONER FURTHER ORDERS that, pursuant to Section 36b-27(a) of the 2008 Supplement to the General Statutes, Kenneth Henry Grove will be afforded an opportunity for a hearing on the allegations set forth above.
 
A hearing will be granted to Kenneth Henry Grove if a written request for a hearing is received by the Department of Banking, Legal Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following Respondent’s receipt of this Order.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If Kenneth Henry Grove will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”.  Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the Connecticut General Statutes and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on April 22, 2008, at 9 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
 
The hearing will be held in accordance with the provisions of Chapter 54 of the Connecticut General Statutes.  At such hearing, Kenneth Henry Grove will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
 
This Order shall remain in effect and become permanent against Kenneth Henry Grove if he does not request a hearing within the prescribed time period.


Dated at Hartford, Connecticut
this 18th day of March 2008.  

________/s/_________
Howard F. Pitkin
Banking Commissioner

 

CERTIFICATION

I hereby certify that on this 18th day of March 2008, the foregoing Order to Cease and Desist and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Kenneth Henry Grove, 59 Barnum Road, New Fairfield, Connecticut 06812, registered mail no. RB028034494US.

________/s/_________
Nirja Savill
Prosecuting Attorney
 


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