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IN THE MATTER OF: LAIDLAW & COMPANY (UK) LTD., ("Laidlaw") * * * * * * * * * * * * * * * * * * * CONSENT ORDER DOCKET NO. RCF-2007-7093-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 (“Department”), conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Laidlaw to determine whether it had violated, was violating or was about to violate any provisions of the Act or Regulations (“Investigation”); WHEREAS, on November 29, 2004, Sands Brothers Asset Management LLC (CRD No. 110076) (“Sands Brothers”), Martin Scott Sands (CRD No. 1186904) (“Sands”), a registered broker-dealer agent of Laidlaw, and Laidlaw entered into a consent order with the Commissioner (“2004 Consent Order”), pursuant to Section 36b-15(a) of the Act, conditioning the registration of Sands as an investment adviser agent of Sands Brothers and restricting his securities-related activities; WHEREAS, as one of the conditions ordered by the Commissioner in the 2004 Consent Order, Laidlaw was required to, inter alia, “notify the Division Director in writing each calendar quarter of any securities-related complaints, actions or proceedings (including arbitrations and updates thereto) involving Sands which occur during the quarter, including the disposition thereof. Such report shall be provided no later than ten business days following the close of the quarter and shall include any written reprimands, censures or warnings issued by . . . [Laidlaw] to Sands. If no complaints, actions, proceedings, firm actions or updates exist for the quarter, the report shall so indicate. The first report shall cover the quarter ending December 31, 2004, and the final report shall cover the quarter ending December 31, 2006”; WHEREAS, as a result of the Investigation, the Division alleges that Laidlaw: (1) Failed to disclose an October 1, 2004, claim for arbitration filed against Sands with the National Association of Securities Dealers (“NASD”) in the quarterly report filed with the Division for the quarter ending December 31, 2004; (2) failed to disclose a May 16, 2005, Consent Order of Withdrawal issued against Sands by the State of Illinois, Secretary of State, Securities Department, in the quarterly report filed with the Division for the quarter ending June 30, 2005; and (3) failed to disclose a February 1, 2006, Settlement Agreement and Release of the NASD arbitration claim in the quarterly report filed with the Division for the quarter ending March 31, 2006; WHEREAS, as a result of the Investigation, the Division alleges that Laidlaw, in violation of Section 36a-23 of the Act, filed quarterly reports with the Commissioner which were, at the time and in the light of the circumstances under which they were made, false or misleading in any material respect and omitting to state a material fact; WHEREAS, on May 18, 2007, the Commissioner, acting pursuant to Sections 36b-27(a), 36b 15(a), 36b-27(d) and 4-182(c) of the Connecticut General Statutes, issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-Dealer, Notice of Intent to Fine and Notice of Right to Hearing (“Order”) against Laidlaw and others; WHEREAS, the Order stated that the Commissioner had ordered Laidlaw to cease and desist from violating the Consent Order and Section 36b-23 of the Act; that he intended to revoke the registration of Laidlaw; and that he intended to impose a fine against Laidlaw; that a hearing would be held on July 17, 2007, on the matters alleged in the Order (“Hearing”); and that, if Laidlaw failed to appear at such hearing, the Commissioner may order that a maximum fine of Four Hundred Thousand Dollars ($400,000) be imposed upon Laidlaw; WHEREAS, Laidlaw requested a hearing on the matters alleged in the Order; WHEREAS, Laidlaw and the Division requested continuances of the Hearing; WHEREAS, the Hearing is currently scheduled for February 5, 2009; 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 36b-27(f) of the Act provides, in relevant part, that “[a]ny time after the issuance of . . . [a] notice provided for in . . . subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such . . . notice to enter into a written consent order in lieu of an adjudicative hearing”; 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, Laidlaw recognizes the necessity for full compliance with the provisions of the Act and Regulations, including, without limitation, the timely filing with the Department of Regulation D offerings offered in Connecticut; WHEREAS, Laidlaw has implemented a new Supervisory Procedures Manual and adopted a new regimen and compliance organization, including the hiring of a new Chief Compliance Officer; WHEREAS, Laidlaw and the Commissioner now desire to resolve the matters alleged in the Order and agree to the language in this Consent Order; WHEREAS, Laidlaw agrees that the Order may be used in construing the terms of this Consent Order and agrees to the language in this Consent Order. CONSENT TO WAIVER OF PROCEDURAL RIGHTS WHEREAS, Laidlaw, through its execution of this Consent Order, voluntarily waives the following rights:
ACKNOWLEDGEMENT OF THE COMMISSIONER’S ALLEGATIONS WHEREAS, Laidlaw, through its execution of this Consent Order, acknowledges that the Commissioner has made the following allegations, without admitting or denying them:
WHEREAS, if proven, the Commissioner would have the authority to enter findings after granting Laidlaw an opportunity for a hearing; WHEREAS, Laidlaw voluntarily agrees to consent to the entry of the sanctions described below. CONSENT TO ENTRY OF SANCTIONS WHEREAS, Laidlaw, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on it the following sanctions:
WHEREAS, Hugh Regan, through his signature, is CEO of Laidlaw and its sole Director and has corporate authority to direct the affairs of Laidlaw and recognizes that as CEO and sole Director through his designees, including without limitation, the firm’s Chief Compliance Officer, he bears the responsibility to ensure that Laidlaw’s practices conform to standards acceptable for a Connecticut registered broker-dealer; AND WHEREAS, Laidlaw specifically assures the Commissioner that none of the violations alleged herein shall occur in the future. CONSENT ORDER NOW THEREFORE, the Commissioner enters the following:
Issued at Hartford, Connecticut CONSENT TO ENTRY OF ORDER I, Hugh Regan, state on behalf of Laidlaw & Company (UK) Ltd., f/k/a Sands Brothers International Ltd., 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 Laidlaw & Company (UK) Ltd., f/k/a Sands Brothers International Ltd.; that Laidlaw & Company (UK) Ltd., f/k/a Sands Brothers International Ltd., agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Laidlaw & Company (UK) Ltd., f/k/a Sands Brothers International Ltd., consents to the issuance of this Consent Order, expressly waiving any right to a hearing on the matters described herein. State of: New York County of: New York On this the 31st day of December, before me, a notary public, the undersigned officer, personally appeared Hugh Regan, who acknowledged himself/herself to be the CEO of Laidlaw & Company (UK) Ltd., f/k/a Sands Brothers International Ltd., a limited liability company, and that he/she, as such CEO, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself/herself as CEO. |
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