DOB: Konior, Jason J - FINE

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IN THE MATTER OF:

JASON JOHN KONIOR
CRD NO. 2818111

    ("Respondent")

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ORDER IMPOSING FINE
DOCKET NO. CF-2007-7406-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 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division of the Department of Banking (“Department”), conducted an investigation into the activities of Respondent, pursuant to Section 36b-26(a) of the Act, to determine if Respondent had violated, was violating or was about to violate provisions of the Act or Regulations;
 
WHEREAS, on December 19, 2007, the Commissioner, acting pursuant to Section 36b-27(a) of the Act, as amended by Public Act 07-91, Section 36b-27(d) of the Act and Section 4-177 of the Connecticut General Statutes, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”), and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated herein by reference;
 
WHEREAS, the Fine Notice stated that the Commissioner intended to impose a fine against Respondent, that a hearing would be held on the matters alleged in the Fine Notice on January 29, 2008 (“Fine Hearing”), and that if Respondent failed to appear at the Fine Hearing, the Commissioner may order that a maximum fine of Ten Thousand Dollars ($10,000) be imposed upon Respondent;
 
WHEREAS, on December 19, 2007, the Notice was sent to by registered mail, return receipt requested, to Respondent (Registered Mail No. RB028034313US);
 
WHEREAS, on December 31, 2007, the Notice was returned to the Department marked “Returned To Writer – Moved, not forwardable”;
 
WHEREAS, on January 10, 2008, the Notice was served on the Commissioner, and on January 11, 2008, Notice of Service on the Banking Commissioner was sent to Respondent in accordance with Section 36b-33(g) of the Act;
 
WHEREAS, Section 36b-33(g) of the Act provides, in pertinent part, that:

Every applicant for registration under sections 36b-2 to 36b-33, inclusive, . . . which proposes to offer a security in this state through any person acting on an agency basis in the common-law sense shall file with the commissioner, in such form as the commissioner by regulation prescribes, an irrevocable consent appointing the commissioner or the commissioner’s successor in office to be his or her attorney to receive service of any lawful process in any noncriminal suit, action, or proceeding against him or her or his or her successor executor or administrator which arises under sections 36b-2 to 36b-33, inclusive, . . . after the consent has been filed, with the same force and validity as if served personally on the person filing the consent.  A person who has filed such a consent in connection with a previous registration need not file another.  Service may be made by leaving a copy of the process in the office of the commissioner, but it is not effective unless (1) the plaintiff, who may be the commissioner in a suit, action, or proceeding instituted by the commissioner, forthwith sends notice of the service and a copy of the process by registered mail, return receipt requested, . . . to the defendant or respondent at the defendant’s or respondent’s last address on file with the commissioner, and (2) the plaintiff’s affidavit of compliance with this subsection is filed in the case on or before the return day of the process, if any, or within such further time as the court allows;

WHEREAS, the Commissioner alleged in the Notice that Respondent effected the purchase of securities for one Connecticut investor without being registered in Connecticut as an agent of a broker-dealer, in violation of Section 36b-6(a) of the Act, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the Act, as amended, and for the imposition of a fine against Respondent under Section 36b-27(d) of the Act;
 
WHEREAS, on January 28, 2008, a certification was issued rendering the Order permanent as of January 28, 2008, which certification is incorporated by reference herein;
 
WHEREAS, the Commissioner found in the Order, with respect to the activity described therein, that Respondent violated Section 36b-6(a) of the Act;
 
WHEREAS, Attorney Paul A. Bobruff, was appointed Hearing Officer for the Fine Hearing;
 
WHEREAS, Attorney Jesse B. Silverman represented the Department at the Fine Hearing;
 
WHEREAS, on January 29, 2008, Respondent failed to appear at the Fine Hearing;
 
WHEREAS, Section 36a-1-31(b) of the Regulations provides, in pertinent 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 Act provides, in pertinent part, that “[i]f such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person”;
 
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”;
 
AND 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.”


II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1.
The facts as set forth in paragraphs 6 through 8, inclusive, of the Notice shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and the conclusions set forth in paragraphs 9 and 10 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.
Section 36b-31(b) of the Act requires that the Commissioner find that an 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 sections 36b-2 to 33b-33, inclusive.  Although the Commissioner is not required to make all these findings to make an order, since Section 36b-31(b) is clearly in the disjunctive, all of these elements are present in this case.  While the term “public interest” is not defined in the Act, courts have determined that words of wide generality, like “public interest”, must take their meaning from the substantive provisions and purposes of the legislation and the words must be interpreted in the context of the regulatory scheme, see NAACP v. Federal Power Comm’n, 425 U.S. 662 (1975); N.Y. Central Sec. Corp. v. United States, 287 U.S. 12 (1932); and “it is for the legislature to determine what is in the public interest . . .”.  Brosnan v. Sacred Heart Univ., 1997 Conn. Super. Lexis 2815, *47 (1997) (internal quotation marks omitted) (quoting West v. Egan, 18 Conn. Supp. 447, 450 (1953)).  “[T]he primary purpose behind . . . [the Act] was to institute comprehensive registration requirements and thereby improve surveillance of securities trading.”  State v. Andresen, 256 Conn. 313, 329 (2001) (internal quotation marks omitted) (quoting Connecticut National Bank v. Giacomi, 233 Conn. 304, 320 (1995)).  “[S]tate securities laws, or ‘blue sky laws,’ are remedial statutes.  See Connecticut National Bank v. Giacomi, 242 Conn. 17, 67 699 A.2d 101 (1997); see also Securities & Exchange Commission v. C.M. Joiner Leasing Corp., 320 U.S. 344, 353, 64 S.Ct. 120, 88 L.Ed. 88 (1943) (noting that state securities laws have ‘dominating purpose to prevent and punish fraudulent floating of securities’); Connecticut National Bank v. Giacomi, 233 Conn. 304, 320, 659 A.2d 1166 (1995) (noting that state securities laws contain antifraud provisions, require registration of brokers and sellers of securities and registration of securities themselves); People v. Landes, 84 N.Y.2d 655, 660, 645 N.E.2d 716, 621 N.Y.S.2d 283 (1994) (‘purpose of [New York securities] statute is remedial: to protect the public from fraudulent exploitation in the offering and sale of securities’).”  State v. Andresen, supra, 256 Conn. 322-23 (footnote omitted).  See also Papic v. Burke, 2007 Conn. Super. LEXIS 820 (Conn. Super. Ct. 2007)  Thus, the “public interest” as it relates to the purposes of the Act includes comprehensive registration requirements to improve surveillance of securities trading which is a key element in the network of safeguards the legislature has enacted to protect the public investor.  In this case, Respondent’s actions in violation of the Act involved disregarding a regulatory prohibition on transacting business in Connecticut by effecting the purchase of securities for one Connecticut investor as an agent of a broker-dealer absent registration.  Consequently, the Commissioner finds that based upon the nature of Respondent’s actions in violation of the Act, the facts require the imposition of a fine in the amount of $10,000 against Respondent for Respondent’s violation of Section 36b-6(a) of the Act, and that this order imposing fine against Respondent 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 Section 36b-27(d) of the Act and Section 4-177 of the Connecticut General Statutes.
 

III.  ORDER

Having read the record, I hereby ORDER, pursuant to Section 36b-27(d) of the Act, that:

1.
A fine of Ten Thousand Dollars ($10,000) be imposed against Jason John Konior, 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 45 days from the date the Order is mailed; and
2.
This Order shall become effective when mailed.

                                                    
Dated at Hartford, Connecticut
this 11th day of July 2008.                   ________/s/_________
                                                       Howard F. Pitkin
                                                       Banking Commissioner

This Order was mailed by registered mail,
return receipt requested, to Respondent
on July 14, 2008.


Jason John Konior                                Registered Mail No. RB027868015US
145 Spring Street, Second Floor
New York, NY 10012


Administrative Orders and Settlements