DOB: Ehinger, Nelson Jr. Consent Order

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IN THE MATTER OF:

NELSON NOREN EHINGER, JR.

(CRD No. 1488381)
   

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CONSENT ORDER

No. CO-09-7567-S

PRELIMINARY STATEMENT

WHEREAS, the Banking Commissioner (the “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 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies promulgated under the Act (the “Regulations”);
 
WHEREAS, Nelson Noren Ehinger, Jr. (“Ehinger”) has been registered under the Act as a broker-dealer agent of Infinex Investments, Inc. (“Infinex”) (CRD No. 35371) since May 24, 1999 and as an investment adviser agent of that firm since March 23, 2000;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, has conducted an investigation (the “Investigation”) pursuant to Section 36b-26(a) of the Act into the activities of Ehinger to determine if he had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act;
 
WHEREAS, as a result of the Investigation, the Division alleges that Ehinger, while associated with Infinex, engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act and Sections 36b-31-15b(a)(8) and 36b-31-15a(a)(5) of the Regulations by executing transactions on behalf of a customer without authority to do so;
 
WHEREAS, as a result of the Investigation, the Division also alleges that Ehinger, while associated with Infinex, engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act by creating and submitting to his employing firm a document that was false and misleading with respect to whether securities transactions in a customer’s account were authorized;
 
WHEREAS, as a result of the Investigation, the Division further alleges that, in connection with an investigation conducted by the Division, Ehinger violated Section 36b-23 of the Act by making oral statements that were, at the time and in the light of the circumstances under which they were made, materially false or misleading;
 
WHEREAS, if proven, the foregoing allegations would support 1) proceedings under Sections 36b-15(a)(2)(B), 36b-15(a)(2)(H) and 36b-15(a)(2)(L) of the Act to revoke or suspend Ehinger’s broker-dealer agent and/or investment adviser agent registration under the Act or to restrict or impose conditions on the securities activities that Ehinger 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 against Ehinger;
 
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, 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 [of the Act]”;
 
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 Ehinger reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
WHEREAS, Ehinger, 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; and
 
WHEREAS, Ehinger agrees to the terms of this Consent Order, and agrees to the language in this Consent Order;

CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Ehinger, through his 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 himself of Section 4-177c(a) of the Connecticut General Statutes;
3. To present his position in a hearing in which he 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.

FINDINGS OF THE COMMISSIONER AS TO EVIDENTIARY SUFFICIENCY TO INITIATE ADMINISTRATIVE PROCEEDINGS

WHEREAS, the Commissioner finds that, based on the following, which Ehinger admits, sufficient grounds would exist to initiate administrative proceedings 1) under Sections 36b-15(a)(2)(B), 36b-15(a)(2)(H) and 36b-15(a)(2)(L) of the Act to revoke or suspend Ehinger’s broker-dealer agent and/or investment adviser agent registration under the Act or to restrict or impose conditions on the securities activities that Ehinger 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 against Ehinger:

1. Ehinger, while associated with Infinex, engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act and Sections 36b-31-15b(a)(8) and 36b-31-15a(a)(5) of the Regulations by executing transactions on behalf of a customer without authority to do so, although he still maintains he had implied authority;
2. Ehinger, while associated with Infinex, engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act by creating and submitting to his employing firm a document that was false and misleading with respect to whether securities transactions in a customer’s account were authorized; and
3. In connection with an investigation conducted by the Division, Ehinger violated Section 36b-23 of the Act by making oral statements that were, at the time and in the light of the circumstances under which they were made, materially false or misleading;

CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Ehinger, through his execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:

1. Upon the entry of this Consent Order by the Commissioner, Ehinger’s registrations as a broker-dealer agent and as an investment adviser agent in Connecticut shall be SUSPENDED for a period of thirty (30) consecutive days;
2. Ehinger 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; and
3. No later than the date this Consent Order is entered by the Commissioner, Ehinger shall remit to the Department of Banking, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of Twelve Thousand Five Hundred Dollars ($12,500), representing the following:  (a) Ten Thousand Dollars ($10,000) of such amount shall constitute an administrative fine; and (b) Two Thousand Five Hundred Dollars ($2,500) of such amount shall be applied to defray the Division’s investigative costs;

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 Ehinger 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 representation made by Ehinger and reflected herein is subsequently discovered to be untrue; and
3. This Consent Order shall become final when entered.
 
 

               ________/s/_________ 
    Howard F. Pitkin
            Banking Commissioner

So ordered at Hartford, Connecticut                 
this 7th day of August 2009.                         
 

CONSENT TO ENTRY OF ORDER

I, Nelson Noren Ehinger, Jr., state that I have read the foregoing Consent Order; that I know and fully understand its contents; that I agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that I voluntarily consent to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein. 


  
________/s/_______________  
Nelson Noren Ehinger, Jr.  


On this the 5th day of August 2009, before me, the undersigned officer, personally appeared Nelson Noren Ehinger, Jr., known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained.

In witness whereof I hereunto set my hand.


______________/s/_________________________
Notary Public/Commissioner of the Superior Court
Date Commission Expires:  4/30/2010


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