DOB: Hinkley, Jesse - CD - NOIF

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IN THE MATTER OF:

JESSE JOHN HINKLEY

CRD No. 5098659

    ("Respondent")

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ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO FINE

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. CF-2008-7426-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: part:
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 reason to believe that Respondent has violated certain provisions of the Act.
4.
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:
Whenever it appears to the commissioner after an investigation that any person has violated, is violating or is about to violate any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . or that the further sale or offer to sell securities would constitute a violation of said sections . . . the commissioner may, in the commissioner’s discretion, order (1) the person . . . to cease and desist from the violations . . . of the provisions of said sections . . . or from the further sale or offer to sell securities constituting or which would constitute a violation of the provisions of said sections . . . .  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.
5.
As a result of the investigation by the Division, the Commissioner has the authority to impose a fine on Respondent pursuant to Section 36b-27(d) of the 2008 Supplement to the General Statutes, which provides, in pertinent part:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may send a notice to (A) such person . . . by registered mail, return receipt requested . . . .  Any such notice shall include:  (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (ii) a short and plain statement of the matter asserted or charged; (iii) the maximum fine that may be imposed for such violation; and (iv) the time and place for the hearing.  Any such hearing shall be fixed for a date not earlier than fourteen days after the notice is mailed.
 
(2)  The commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing.  Any such hearing shall be held in accordance with the provisions of chapter 54.  After the hearing if the commissioner finds that the person has violated . . . any of the provisions of sections 36b 2 to 36b 33, inclusive, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person.  If 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.  The commissioner shall send a copy of any order issued pursuant to this subsection by registered mail, return receipt requested, or by any express delivery carrier that provides a dated delivery receipt, to any person named in such order.
II.  RESPONDENT
6.
Respondent is an individual whose address last known to the Commissioner is 218 Rt. 37, New Fairfield, Connecticut 06812.

III.  STATEMENT OF FACTS
7.

Between November 8, 2006 and July 16, 2007, Respondent, while employed by 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 solicited customers from New Castle’s Connecticut office located at 4 Old Mill Plain Road, Danbury, Connecticut.

8. Respondent, in connection with the offer and sale of securities to at least one potential investor, utilized scripted sales presentations and stated, inter alia, that he would cut the potential investor a check for $13,000 six weeks later if the potential investor cut him a check for $8,500, but failed to disclose any investment risks, and stated that his other clients were making 40% returns and he was “bringing them winner after winner” when in fact he had no other clients.
9. Respondent was not, at all times relevant hereto, registered in Connecticut as an agent of New Castle, nor was he an associated person.

IV.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST AND
ORDER IMPOSING FINE AGAINST RESPONDENT
 

a.  Violation of Section 36b-4(a) of the Act – Fraud in Connection with the Offer and Sale of any Security
10. Paragraphs 1 through 9, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
11. The conduct of Respondent, as more fully described in paragraph 8, constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly, making an untrue statement of a material fact and omitting to state a material fact necessary in order to make the statement made, in the light of the circumstances under which they are made, not misleading.  Such conduct constitutes a violation of Section 36b-4(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 2008 Supplement to the General Statutes, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2008 Supplement to the General Statutes.  Section 36b-27(d) of the 2008 Supplement to the General Statutes authorizes the Commissioner to impose a fine upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a fine upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondent’s right to a hearing on the allegations set forth above.

b.  Violation of Section 36b-6(a) of the Act – Unregistered Agent Activity
12. Paragraphs 1 through 11, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
13. Respondent acted as an agent of a broker-dealer on at least one occasion, as more fully described in paragraphs 7 and 8, absent registration, as more fully described in paragraph 9.  Such conduct constitutes a 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 2008 Supplement to the General Statutes, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2008 Supplement to the General Statutes.  Section 36b-27(d) of the 2008 Supplement to the General Statutes authorizes the Commissioner to impose a fine upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000) per violation.  The Commissioner intends to impose a fine upon Respondent in an amount not to exceed One Hundred Thousand Dollars ($100,000), subject to Respondent’s right to a hearing on the allegations set forth above.

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, Jesse John Hinkley has violated Sections 36b 4(a) and 36b-6(a) of the Act;

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 Jesse John Hinkley CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including, without limitation, acting as an agent of a broker-dealer in Connecticut absent registration; and in connection with the offer, sale or purchase of any security, directly or indirectly, making any untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading,

THE COMMISSIONER FURTHER ORDERS that, pursuant to Section 36b-27(a) of the 2008 Supplement to the General Statutes, Jesse John Hinkley will be afforded an opportunity for a hearing on the allegations set forth above.

A hearing will be granted to Jesse John Hinkley 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 Jesse John Hinkley 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 January 22, 2009, 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, Jesse John Hinkley 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 Jesse John Hinkley if he does not request a hearing within the prescribed time period.

VI.  NOTICE OF INTENT TO FINE RESPONDENT AND NOTICE OF HEARING

WHEREAS, the Commissioner finds as a result of an investigation by the Division that Respondent committed one violation of Section 36b-4(a) of the Act and one violation of Section 36b-6(a) of the Act;

WHEREAS, the Commissioner believes that the imposition of a fine upon Respondent would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;

AND WHEREAS, notice is hereby given to Respondent that the Commissioner intends to impose a fine not to exceed One Hundred Thousand Dollars ($100,000) per violation, or a maximum fine of Two Hundred Thousand Dollars ($200,000).

NOW THEREFORE, a hearing will be held in accordance with Section 36b-27(d)(2) of the 2008 Supplement to the General Statutes and Chapter 54 of the Connecticut General Statutes.

The hearing will be held on January 22, 2009, at 9 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.

At the hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law relating to the allegations stated herein.  If Respondent fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon Respondent.

Dated at Hartford, Connecticut
this 1st day of December 2008.              ________/s/_________
                                                             Howard F. Pitkin
                                                             Banking Commissioner


 CERTIFICATION

I hereby certify that on this 1st day of December 2008, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Jesse John Hinkley, 218 Rt. 37, New Fairfield, Connecticut 06812, registered mail no. RB028035509US.


________/s/_________
Jesse Silverman
Prosecuting Attorney


Administrative Orders and Settlements