DOB: Reilly, Michael M - Consent Order

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IN THE MATTER OF:

MICHAEL M. REILLY

CRD NO. 4841098

    ("Reilly")

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CONSENT ORDER

DOCKET NO. CO-2008-7427-S


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, 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 Act into the activities of Reilly to determine whether he had violated, was violating or was about to violate any provisions of the Act or Regulations (“Investigation”);
 
WHEREAS, the Commissioner, as a result of the Investigation, alleges that during the period from February 13, 2006 through May 11, 2007, Reilly was registered as an agent of New Castle Financial Services LLC (CRD No. 102380) (“New Castle”);
 
WHEREAS, the Commissioner, as a result of the Investigation, also alleges that on May 15, 2007, Reilly violated Section 36b-26(d) of the Act by refusing to produce documents in response to a subpoena issued by the Division on March 13, 2007;
 
WHEREAS, Section 36b-27(a) of the 2008 Supplement to the General Statutes authorizes the Commissioner to order any person who has violated, is violating or is about to violate any provision of the Act or any regulation, rule or order adopted or issued under the Act to cease and desist from such violation;
 
WHEREAS, Section 36b-27(d) of the 2008 Supplement to the General Statutes authorizes the Commissioner to impose a fine of up to $100,000 per violation against any person who has violated any of the provisions of the Act or any regulation, rule or order adopted or issued under the Act;
 
WHEREAS, an administrative proceeding initiated under Section 36b-27 of the 2008 Supplement to the General Statutes would constitute a “contested case” within the meaning of Section 4-166(2) of the Connecticut General Statutes;
 
WHEREAS, Section 36b-31(a) of the Act provides, in relevant 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 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
 
WHEREAS, Reilly and the Commissioner now desire to resolve the foregoing matter without the need for administrative proceedings, and agree to the language in this Consent Order;


CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Reilly, through his execution of this Consent Order, voluntarily waives the following rights:

1.
To be afforded notice and an opportunity for a hearing within the meaning of Sections 36b-27(a) and 36b-27(d)(2) of the 2008 Supplement to the General Statutes and Section 4-177(a) of the Connecticut General Statutes;
2.
To present evidence and argument and to otherwise avail himself of Sections 36b-27(a) and 36b-27(d)(2) of the 2008 Supplement to the General Statutes and Section 4-177c(a) of the Connecticut General Statutes;
3. To present his position in a hearing in which he is represented by counsel;
4.
To have a written record of the hearing made, a proposed final decision by a presiding officer, and a final decision by the Commissioner; and
5.
To seek judicial review of, or otherwise challenge or contest the matters described herein, including the validity of this Consent Order.
 

ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS

WHEREAS, Reilly, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, without admitting or denying them:

1.
The entry of this Consent Order 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 the Act;
2.
On May 15, 2007, Reilly violated Section 36b-26(d) of the Act by refusing to produce documents in response to a subpoena issued by the Division on March 13, 2007;

WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Reilly an opportunity for a hearing;
 
WHEREAS, Reilly acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.

CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Reilly, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:

1.
For a period of seven (7) years commencing on the date this Consent Order is issued by the Commissioner, Reilly is barred from acting in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer, as such terms are defined in Section 36b-3 of the Act;
2.
Reilly shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act; and
3.
No later than the date this Consent Order is issued by the Commissioner, Reilly shall remit to the Department of Banking, by cashier’s or certified check made payable to “Treasurer, State of Connecticut”, the sum of Seven Thousand Five Hundred Dollars ($7,500) as an administrative fine.
 
AND WHEREAS, Reilly specifically assures the Commissioner that none of the violations alleged in this Consent Order shall occur in the future.


CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1.
The 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 Reilly based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representations made by Reilly and reflected herein are subsequently discovered to be untrue; and
3.
This Consent Order shall become final when issued.
 

Issued at Hartford, Connecticut
this 27th day of June 2008.               ________/s/_________
                                                    Howard F. Pitkin
                                                    Banking Commissioner

 

CONSENT TO ENTRY OF ORDER

I, Michael M. Reilly, state that I have read the foregoing Consent Order; that I know and fully understand its contents; that I agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and I consent to the issuance of this Consent Order, expressly waiving any right to a hearing on the matters described herein.

                                                    ________/s/_________
                                                    Michael M. Reilly

State of:  New York

County of:  Nassau

On this the 25th day of June 2008, before me, Grace Merkle, the undersigned officer, personally appeared Michael M. Reilly, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained.
 
In witness whereof I hereunto set my hand.


                                                    ________/s/_________
                                                    Notary Public
                                                    Date Commission Expires:  August 1, 2009


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