DOB: Sandgrain Securities Consent

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IN THE MATTER OF:

Sandgrain Securities, Inc.

(CRD NO. 26004) 
   

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CONSENT ORDER

NO. CO-2007-7445-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, Sandgrain Securities, Inc. (“Sandgrain”) is a broker-dealer registered in Connecticut under the Act since June 28, 1993, and has its principal office located at 1050 Franklin Avenue in Garden City, New York,
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an examination pursuant to Section 36b-31-14f of the Regulations into the alleged activities of Sandgrain, to determine whether Sandgrain had violated, was violating or was about to violate any provision of the Act or Regulations (“Examination”);
 
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 provides, in relevant part, that “[u]nless precluded by law, a contested case may be resolved by . . . consent order”;
 
WHEREAS, the Commissioner finds that 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;
 
WHEREAS, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and Sandgrain reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
WHEREAS Sandgrain, without admitting or denying any of the Commissioner allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
 
WHEREAS Sandgrain, through his execution of this Consent Order, represents and agrees that none of the violations alleged in this Consent Order shall occur in the future;;


CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Sandgrain, through its execution of this Consent Order, voluntarily waives the following rights:

1. To be afforded an opportunity for a hearing within the meaning of Sections 36b-15(f) and 36b 27(d)(2) of the Act, and Section 4 177(a) of the Connecticut General Statutes;
2. To present evidence and argument and to otherwise avail itself of Sections 36b-15(f) and 36b 27(d)(2) of the Act, and Section 4 177c(a) of the Connecticut General Statutes;
3. To present its position in a hearing in which it may be represented by counsel;
4. To have a written record of the hearing made and a written decision issued by a hearing officer; and
5. To seek judicial review of, or otherwise challenge or contest the matters described herein, including the validity of this Consent Order.

CONSENT TO ENTRY OF FINDINGS

WHEREAS, Sandgrain, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner:

1. The entry of this Consent Order is appropriate, in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
2. In contravention of Section 36b-16 of the Act, Sandgrain, through two of its representatives, offered and sold to two Connecticut residents securities in Global General Technologies, True Energy Trust, Nav Energy Trust, Tristar Oil & Gas, and Sure Energy Inc. (collectively, the “Securities”) and that the Securities were never registered in Connecticut nor were they exempt from registration under Section 36b 21 of the Act, nor were they covered securities as defined in Section 36b-3(7) of the Act;


CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Sandgrain, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions:

1. Sandgrain, its representatives, agents, employees, affiliates, assigns, successors in interest, and those persons in active concert or participation with them 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, either directly or through any organizational or other device, such conduct including, without limitation, effecting transactions in unregistered securities in violation of Section 36b-16 of the Act;
2. No later than the date this Consent Order is entered by the Commissioner, Sandgrain shall remit to the department, via certified bank check, payable to "Treasurer, State of Connecticut", the sum of three thousand, five hundred dollars ($3,500), two thousand dollars ($2,000) of which shall constitute an administrative fine, and one thousand, five hundred dollars ($1,500) of which shall defray the Division’s investigative costs;
3. Sandgrain shall reimburse the Department of Banking for the costs associated with one or more future examinations of any of Sandgrain’s offices to be conducted by the Division within twenty-four (24) months following the Commissioner’s entry of this Consent Order, such amount not to exceed two thousand five hundred dollars ($2,500) in total.  Amounts due under this paragraph shall be remitted to the Commissioner via check, payable to “Treasurer, State of Connecticut,” within thirty (30) days following the completion of the examination(s);

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 Sandgrain 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 Sandgrain and reflected herein are subsequently discovered to be untrue; and
3. This Consent Order shall become final when issued.
 
 

               ________/s/_________ 
    Howard F. Pitkin
            Banking Commissioner

Issued at Hartford, Connecticut                 
this 10th day of October 2007.                         
 

CONSENT TO ENTRY OF ORDER

I, Peter D. Grassel, state on behalf of Sandgrain Securities, Inc. that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Sandgrain Securities, Inc.; that Sandgrain Securities, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Sandgrain Securities, Inc. voluntarily consents to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.


      Sandgrain Securities, Inc.

By:
       ________/s/_______________ 
      Peter D. Grassel, President 
      


State of:   [Blank in Original]

County of:  [Blank in Original]


On this the [blank in original] day of [blank in original], 2007, Peter D. Grassel personally appeared before me and acknowledged that he is the President of Sandgrain Securities, Inc., a corporation, and that he, being authorized to do so, executed the foregoing instrument for the purposes therein contained as an officer of the corporation.

In witness whereof I hereunto set my hand.



_______________/s/_____________
Notary Public
My Commission Expires:  July 16, 2010

  


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