DOB: Excel Securities Consent Order

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IN THE MATTER OF:

EXCEL SECURITIES & ASSOCIATES, INC.

    (CRD Number 16629)


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CONSENT ORDER

No. CO-08-7497-S

PRELIMINARY STATEMENT

WHEREAS, the Banking 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, Excel Securities & Associates, Inc. (“Excel”) of 200 Canal View Boulevard, Suite 204, Rochester, New York, 1) was registered as a broker-dealer under the Act from October 22, 2002 to February 26, 2004 when the firm requested that its Connecticut registration be terminated; and 2) is registered in several states as an investment adviser but is not registered in that capacity under the Act;
 
WHEREAS, in June 2007, Excel filed with the Securities and Business Investments Division of the Department of Banking (the “Division”) an application for registration as a broker-dealer pursuant to Sections 36b-7 and 36b-32 of the Act and disclosed in such application that it had effected securities transactions for Connecticut customers at a time when Excel was not registered as a broker-dealer in Connecticut;
 
WHEREAS, the Commissioner, through the Division, conducted a follow-up investigation pursuant to Sections 36b-8 and 36b-26 of the Act to assess the extent of the firm’s prior unregistered activity and the firm’s compliance with the Act and the Regulations thereunder;
 
WHEREAS, as a result of such investigation, the Commissioner obtained evidence that:  1) from February 2004 forward, Excel effected securities transactions for at least three Connecticut customers at a time when the firm was not registered as a broker-dealer under the Act; and 2) from February 2004 forward, Excel employed one or more unregistered agents in contravention of Section 36b-6(b) of the Act;
 
WHEREAS, if proven, the foregoing conduct could result in 1) proceedings under Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(K) of the Act to deny Excel’s broker-dealer registration under the Act or to restrict or impose conditions on the securities activities that Excel may perform in this state; and/or 2) proceedings under Section 36b-27 of the Act seeking the entry of an order to cease and desist and/or an order imposing an administrative fine of up to $100,000 per violation;
 
WHEREAS, an administrative proceeding under Sections 36b-15 and 36b-27 of the Act would constitute a "contested case" within the meaning of Section 4-166(2) of the Connecticut General Statutes;
 
WHEREAS, Section 4-177(c) of Chapter 54 of the Connecticut General Statutes provides that"[u]nless precluded by law, a contested case may be resolved by stipulation, agreed settlement, or consent order or by the default of a party";
 
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;

CONSENT TO WAIVER OF PROCEDURAL RIGHTS

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

1. To receive prior written notice within the meaning of Sections 36b-15(f), 36b-27(a), 36b-27(d) and 4-177(b) of the Connecticut General Statutes;
2. To present evidence and argument and to otherwise avail itself of Section 4-177c(a) of the Connecticut General Statutes;
3. To present its position in a hearing in which it is 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, Excel, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner:

1. That 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. From February 2004 forward, in contravention of Section 36b-6(a) of the Act, Excel effected securities transactions for at least three Connecticut customers at a time when the firm was not registered as a broker-dealer under the Act;
3. From February 2004 forward, Excel employed one or more unregistered agents in contravention of Section 36b-6(b) of the Act;
4. In allowing its agents to transact business in Connecticut absent registration, Excel failed to establish, enforce and maintain a system for supervising the activities of its agents reasonably designed to achieve compliance with applicable securities laws and regulations.  Such failure to supervise constituted a violation of Section 36b-31-6f(b) of the Regulations and forms a basis for the denial of Excel’s registration as a broker-dealer under Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(K) of the Act;


CONSENT TO ENTRY OF SANCTIONS

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

1. Excel, its officers, directors, employees and representatives shall refrain from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, including, without limitation, transacting business as a broker-dealer absent registration and employing unregistered agents in or from this state;
2. Excel shall implement revised supervisory and compliance procedures designed to improve regulatory compliance which procedures shall, at a minimum, provide for enhanced monitoring of state broker-dealer and agent licensing requirements, agent outside business activity and conflict of interest management;
3. No later than the date this Consent Order is entered by the Commissioner, Excel shall remit to the department by certified bank check payable to “Treasurer, State of Connecticut” the sum three thousand six hundred ($3,600) dollars, two thousand five hundred dollars ($2,500) of which shall constitute an administrative fine; six hundred dollars ($600) of which shall represent past due broker-dealer and agent registration fees; and five hundred dollars ($500) of which shall defray Division investigative costs;

ORDER

THE COMMISSIONER HEREBY ORDERS THAT:

1. The Findings and Sanctions set forth above be and are hereby entered;
2. The entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Excel based upon a violation of this Consent Order or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any written representation made to the Commissioner or the Division by Excel in connection with the matters reflected herein is subsequently discovered to be untrue;
3. In the event that Excel fails to abide by the terms and conditions of this Consent Order, Excel agrees to the immediate revocation of its broker-dealer registration, knowingly, wilfully and voluntarily waiving its right to notice and an administrative hearing in conjunction therewith; provided that, prior to invoking this paragraph, the Commissioner shall provide Excel with an informal opportunity to demonstrate its compliance with this Consent Order; and
4. This Consent Order shall become final when entered.
 
 

               ________/s/_________
    Howard F. Pitkin
            Banking Commissioner

So ordered at Hartford, Connecticut                 
this 22nd day of July 2008.                         
 

I, Joseph Anthony Lanzisera, state on behalf of Excel Securities & Associates, 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 Excel Securities & Associates, Inc.; that Excel Securities & Associates, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Excel Securities & Associates, Inc. voluntarily consents to the entry of this Consent Order expressly waiving any rights it may have to a hearing on the matters described herein.


      Excel Securities & Associates, Inc.

By
       ________/s/_______________
      Joseph Anthony Lanzisera
      President


On this 18th day of July 2008, personally appeared Joseph Anthony Lanzisera, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Excel Securities & Associates, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.


_______________/s/______________
Notary Public
My Commission Expires:  1/31/2010

 


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