DOB: Silver Oak Securities Consent Order

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IN THE MATTER OF:

SILVER OAK SECURITIES, INC.

(CRD No. 46947) 
   

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CONSENT ORDER

No. CO-09-7624-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, Silver Oak Securities, Inc. (“Silver Oak”) is a registered broker-dealer under the Act and maintains its principal place of business at 3339 North Highland Avenue, Jackson, Tennessee 38305;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, has conducted an examination of Silver Oak’s records pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and an investigation of Silver Oak’s activities pursuant to Section 36b-26 of the Act to determine whether Silver Oak had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act;
 
WHEREAS, the Commissioner, as a result of such examination and investigation, alleges that, from early 2008 forward, Silver Oak violated Section 36b-6(d) of the Act by transacting business from the following three places of business prior to those locations being registered as branch offices:  1) 100 Great Meadows Road, Wethersfield, Connecticut (the “Wethersfield Branch”); 2) 6 North Main Street, Wallingford, Connecticut (the “Wallingford Branch”); and 3) 146 Hopmeadow Street, Simsbury, Connecticut (the “Simsbury Branch);
 
WHEREAS, the Commissioner acknowledges that the Wallingford Branch and the Wethersfield Branch became registered under the Act on December 1, 2008, and that the Simsbury Branch became registered under the Act on January 30, 2009;
 
WHEREAS, the foregoing allegations of the Commissioner would support the initiation of administrative proceedings under Section 36b-15 of the Act to suspend or revoke Silver Oak’s broker-dealer registration under the Act or to restrict or impose conditions on the securities activities that the firm may perform in this state; and/or 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 against Silver Oak;
 
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 part, that:  “The Commissioner may from time to time make, amend and rescind such . . . orders as are necessary to carry out the provisions of Sections 36b-2 to 36b-33, inclusive [of the Connecticut Uniform Securities 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 Silver Oak reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
WHEREAS, Silver Oak, without admitting or denying any of the Commissioner’s allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order; and
 
WHEREAS, Silver Oak, through its 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, Silver Oak, 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, Silver Oak, 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. That from early 2008 forward, Silver Oak violated Section 36b-6(d) of the Act by transacting business from three places of business located in Connecticut at a time when such locations were not registered as branch offices under the Act;

CONSENT TO ENTRY OF SANCTIONS AND REMEDIAL MEASURES

WHEREAS, Silver Oak, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions and remedial measures:

1. Silver Oak, its officers, directors, representatives, agents, employees, affiliates, and successors in interest shall cease and desist from engaging, directly or indirectly, 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 from any place of business in the State of Connecticut unless that place of business is registered as a branch office under Section 36b-6(d) of the Act;
2. Silver Oak shall implement revised supervisory and compliance procedures designed to improve regulatory compliance, which procedures shall, at a minimum, provide for enhanced monitoring of branch office registration requirements; and
3. No later than the date this Consent Order is entered by the Commissioner, Silver Oak shall remit to the department by check made payable to “Treasurer, State of Connecticut” the sum of five thousand dollars ($5,000), three thousand dollars ($3,000) of which shall constitute an administrative fine and two thousand dollars ($2,000) of which shall be applied to defray the Division’s examination and investigative costs;

CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1. The Findings, Sanctions and Remedial Measures 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 Silver Oak, its officers, directors, agents, employees and representatives based upon a violation of this Consent Order or the matters underlying its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by Silver Oak and reflected herein is subsequently determined 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 26th day of June 2009.                         
 

CONSENT TO ENTRY OF ORDER

I, William E. Hopkins II, state on behalf of Silver Oak 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 Silver Oak Securities, Inc.; that Silver Oak Securities, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Silver Oak Securities, 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.


      Silver Oak Securities, Inc.

By
      _________/s/________________________ 
      William E. Hopkins, II 
      President


On this 23 day of June 2009, personally appeared William E. Hopkins, II, 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 Silver Oak Securities, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.


_______________/s/_______________
Notary Public
My Commission Expires:  Nov. 29, 2009

  


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