DOB: Resilient Partners-Garcia-FINE

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IN THE MATTER OF:

RESILIENT PARTNERS, LLC
("Resilient")

CARLOS M. GARCIA, III
("Garcia")

CRD NO. 1961096

    (Collectively "Respondents")

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ORDER IMPOSING FINE

DOCKET NO. CF-2009-7333-S

I. 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 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division of the Department of Banking (“Department”), conducted an investigation into the activities of Respondents, pursuant to Section 36b-26(a) of the Act, to determine if Respondents had violated, were violating or were about to violate provisions of the Act or Regulations;
 
WHEREAS, on July 1, 2009, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the Act, issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Respondents (collectively “Notice”), which Notice is incorporated by reference herein;
 
WHEREAS, on July 1, 2009, the Notice was sent to by registered mail, return receipt requested, to Resilient (Registered Mail No. RB027869268US);
 
WHEREAS, on July 1, 2009, the Notice was sent to by registered mail, return receipt requested, to Garcia (Registered Mail No. RB027869271US);
 
WHEREAS, on July 3, 2009, Garcia received the Notice, and no request for a hearing was received by the Commissioner;
 
WHEREAS, on July 10, 2009, Resilient received the Notice, and no request for a hearing was received by the Commissioner;
 
WHEREAS, on July 23, 2009, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the Act, issued an Amended and Restated Order to Cease and Desist (“Amended Order”), Amended and Restated Notice of Intent to Fine (“Amended Fine Notice”) and Notice of Right to Hearing against Respondents (collectively “Amended Notice”), which Amended Notice superseded the Notice and is incorporated by reference herein;
 
WHEREAS, the Amended Fine Notice stated that the Commissioner intended to impose a fine against Respondents, that a hearing would be held on the matters alleged in the Amended Fine Notice on September 15, 2009 (“Fine Hearing”), and that if Respondents failed to appear at the Fine Hearing, the Commissioner may order that a maximum fine of One Million Dollars ($1,000,000) be imposed upon Resilient and a maximum fine of Nine Hundred Thousand Dollars ($900,000) be imposed upon Garcia;
 
WHEREAS, on July 24, 2009, the Amended Notice was sent to by registered mail, return receipt requested, to Resilient (Registered Mail No. RB027869360US);
 
WHEREAS, on July 24, 2009, the Amended Notice was sent to by registered mail, return receipt requested, to Garcia (Registered Mail No. RB027869373US);
 
WHEREAS, on July 28, 2009, Garcia received the Amended Notice, and no request for a hearing was received by the Commissioner;
 
WHEREAS, on August 3, 2009, Resilient received the Amended Notice, and no request for a hearing was received by the Commissioner;
 
WHEREAS, on August 12, 2009, the Amended Order issued against Garcia became permanent;
 
WHEREAS, on August 18, 2009, the Amended Order issued against Resilient became permanent;
 
WHEREAS, the Commissioner alleged in the Amended Notice that Resilient transacted business as an investment adviser within Connecticut absent registration as such, in connection with Resilient, through Garcia, advising and soliciting at least eight individuals, including three individuals located in Connecticut, to invest in limited partnership interests in Paramount Equity Partners, LLC (“Paramount”), an investment fund located in Nevada and Connecticut managed by Resilient, and making recommendations and rendering advice regarding securities to Paramount from Connecticut, for which Resilient received compensation.  Such activity is in violation of Section 36b-6(c)(1) of the Act, which constitutes a basis for the imposition of a fine against Resilient under Section 36b-27(d) of the Act;
 
WHEREAS, the Commissioner alleged in the Amended Notice that Resilient engaged Garcia, an unregistered investment adviser agent within Connecticut, to act on its behalf, in violation of Section 36b-6(c)(3) of the Act, which constitutes a basis for the imposition of a fine against Resilient under Section 36b-27(d) of the Act;
 
WHEREAS, the Commissioner alleged in the Amended Notice that Garcia transacted business as an investment adviser agent within Connecticut absent registration as such, in connection with Garcia, on behalf of Resilient, advising and soliciting at least eight individuals, including three individuals located in Connecticut, to invest in limited partnership interests in Paramount, and making recommendations and rendering advice regarding securities to Paramount from Connecticut, for which Garcia received compensation.  Such activity is in violation of Section 36b-6(c)(2) of the Act, which constitutes a basis for the imposition of a fine against Garcia under Section 36b-27(d) of the Act;
 
WHEREAS, the Commissioner found in the Amended Order, with respect to the activity described therein, that Resilient committed nine violations of Section 36b-6(c)(1) of the Act and one violation of Section 36b-6(c)(3) of the Act, and that Garcia committed nine violations of Section 36b-6(c)(2) of the Act;
 
WHEREAS, Attorney Doniel Kitt was appointed Hearing Officer for the Fine Hearing;

WHEREAS, by letter dated September 1, 2009, the Hearing Officer continued the Fine Hearing to September 28, 2009;
 
WHEREAS, Attorney Jesse B. Silverman represented the Department at the Fine Hearing;

WHEREAS, on September 28, 2009, Respondents failed to appear at the Fine Hearing;

WHEREAS, Section 36a-1-31(b) of the Regulations of Connecticut State Agencies provides, in pertinent part, that “[w]hen a party fails to appear at a scheduled hearing, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the presiding officer shall submit to the commissioner a proposed final decision containing the relief sought in the notice, provided the presiding officer may, if deemed necessary, receive evidence from the department, as part of the record, concerning the appropriateness of the amount of any . . . fine . . . sought in the notice”;
 
WHEREAS, Section 36b-27(d)(2) of the Act provides, in pertinent part, that “[i]f 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”;
 
WHEREAS, Section 36b-31(a) of the Act provides, in pertinent 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”;
 
AND WHEREAS, Section 36b-31(b) of the Act provides, in pertinent part, that “[n]o . . . order may be made . . . unless the commissioner finds that the action 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 sections 36b-2 to 36b-33, inclusive.”

II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. The facts as set forth in paragraphs 9 through 17, inclusive, of the Amended Notice shall constitute findings of fact within the meaning of Section 4-180(c) of the Connecticut General Statutes, and the conclusions set forth in paragraphs 18 through 23, inclusive, of the Amended Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the Connecticut General Statutes and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
2. The Notice and Amended Notice were given to Respondents in compliance with Section 36b 27(d) of the Act and Section 4-177 of the Connecticut General Statutes.
3.
Based upon the nature of Respondents’ actions in violation of the Act and the absence of mitigating factors in the record regarding Respondents’ violations of the Act that justify lesser sanctions in this case, the facts require the imposition of the maximum fines against Respondents and this Order Imposing Fine against Respondents is necessary and appropriate in the public interest and for the protection of investors and consistent with the purposes fairly intended by the policy and provisions of Sections 36b-2 to 36b-33, inclusive, of the Act.

III.  ORDER

Having read the record, I hereby ORDER, pursuant to Section 36b-27(d) of the Act, that:

1. A fine of One Million Dollars ($1,000,000) be imposed against Resilient Partners, LLC, to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than 45 days from the date this Order is mailed; and
    
2.  A fine of Nine Hundred Thousand Dollars ($900,000) be imposed against Carlos M. Garcia, III to be remitted to the Department of Banking by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than 45 days from the date this Order is mailed; and
      
 3. This Order shall become effective when mailed.

 
Dated at Hartford, Connecticut,
this 16th day of November 2009.           ________/s/_________
                                                       Howard F. Pitkin
                                                       Banking Commissioner


This Order was sent by registered mail,
return receipt requested, to Respondents
on November 16, 2009.

Resilient Partners, LLC
318 North Carson Street, Suite 208
Carson City, NV 89701
Registered Mail No. RB028036685US

Carlos M. Garcia, III
143 Ironwood Road
Guilford, CT 06437
Registered Mail No. RB028036699US


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