DOB: Royal Burgundy International - CD-NOIF

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IN THE MATTER OF:

ROYAL BURGUNDY
INTERNATIONAL, INC.

    ("Respondent")

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ORDER TO CEASE AND DESIST

NOTICE OF INTENT TO FINE

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. CF-2009-865-B

I. PRELIMINARY STATEMENT

1. The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672c of the General Statutes of Connecticut, the Connecticut Business Opportunity Investment Act (“Act”), pursuant to Section 36b-70 of the Act.
2.

Pursuant to Section 36b-71(a) of the Act, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, has conducted an investigation into the activities of Respondent, its officers, agents, representatives and employees to determine if any of them have violated, are violating or are about to violate provisions of the Act (Investigation”).

3.

As a result of the Investigation, the Commissioner has reason to believe that Respondent has violated certain provisions of the Act.

4.
As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order to Respondent pursuant to Section 36b-72(a) of the Act.
5. As a result of the Investigation, the Commissioner has the authority to impose a fine on Respondent pursuant to Section 36b-72(b) of the Act, as amended by Public Act 09-160.
II.  RESPONDENT
6.
Respondent is, and at all times relevant hereto was, a Florida corporation with its principal place of business at 172 W. Warren Avenue, Suite 200, Longwood, Florida 32750.
III.  STATEMENT OF FACTS
7. From at least August 2008 to the present, Respondent, through its agents, offered to sell and sold to purchaser-investors in Connecticut the equipment, supplies, display designs, floor stand displays, marketing plans and knowledge necessary to begin a coffee distributorship (“Coffee Distributorship”).
8. From at least August 2008 to the present, Respondent offered and sold the Coffee Distributorship to at least one Connecticut purchaser (“Connecticut Purchaser”).
9. At the time such offer and sale was made to the Connecticut Purchaser, the Coffee Distributorship was not registered as a business opportunity in Connecticut under Section 36b-62 of the Act, as amended by Public Acts 09-160 and 09-209.
IV.  STATUTORY BASIS FOR ORDER TO CEASE AND DESIST AND
ORDER IMPOSING FINE AGAINST RESPONDENT
 
a.  The Coffee Distributorship Offered and Sold by Respondent
is a Business Opportunity
10. Paragraphs 1 through 9, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
11. The Connecticut Purchaser is a “purchaser-investor” within the meaning of Section 36b-61(6) of the Act, as amended by Public Act 09-160, in that the Connecticut Purchaser is a “person who has purchased or is solicited for the purchase of a business opportunity”.
12. Respondent is a “seller” within the meaning of Section 36b-61(8) of the Act, as amended by Public Act 09-160, in that it is “a person who sells or offers to sell a business opportunity or any agent or person who, directly or indirectly, acts on behalf of such person”.
13.
The Coffee Distributorship constitutes a “business opportunity” as defined in Section 36b-61(2) of the Act, as amended by Public Act 09-160, in that it involves “the sale . . . or offer for sale . . . of any product, equipment, supply or service which is sold or offered for sale to the purchaser-investor for the purpose of enabling the purchaser-investor to start a business, and in which the seller represents that: . . . (D) the seller will provide a sales program or marketing program to the purchaser-investor . . . .”

b.  Violation of Section 36b-67 of the Act –
Sale of an Unregistered Business Opportunity

14. Paragraphs 1 through 13, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
15. Section 36b-67 of the Act provides, in pertinent part, that “[n]o person shall in connection with the sale or offer for sale of a business opportunity:  (1) Sell or offer for sale a business opportunity in this state or from this state unless it has first been registered with the commissioner and declared effective by the commissioner in accordance with the provisions of section 36b-62”.
16.
Respondent offered and sold the Coffee Distributorship as more fully described in paragraphs 7 through 9, inclusive.  The offer and sale of such a business opportunity absent registration constitutes a violation of Section 36b-67 of the Act, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-72(a) of the Act, and for the imposition of a fine against Respondent under Section 36b-72(b) of the Act, as amended.
      
V.  ORDER TO CEASE AND DESIST, NOTICE OF INTENT TO FINE AND NOTICE OF RIGHT TO HEARING
 
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the transaction described herein, Respondent has committed at least one violation of Section 36b-67 of the Act, and that further offers to sell or sales of business opportunities in Connecticut would constitute violations of Section 36b-67 of the Act;
 
WHEREAS, the Commissioner ORDERS that Respondent CEASE AND DESIST from directly or indirectly violating the provisions of the Act and from the further sale or offer to sell business opportunities constituting or which would constitute a violation of the provisions of the Act;
 
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 of Section 36b-67 of the Act.
 
AND WHEREAS, pursuant to Section 36b-72 of the Act, as amended, Respondent will be afforded an opportunity for a hearing on the allegations set forth above.
 
NOW THEREFORE, a hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Securities Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following its receipt of this Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If Respondent 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 General Statutes of Connecticut and Section 36a-1-21 of the Regulations of Connecticut State Agencies.  If a hearing is requested, the hearing will be held on February 2, 2010, at 10 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 General Statutes of Connecticut.  At such hearing, Respondent 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.
 
The Order to Cease and Desist shall remain in effect and become permanent if Respondent does not request a hearing within the prescribed time period or fails to appear at such hearing.  Furthermore, if Respondent does not request a hearing within the prescribed time period or fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon Respondent.
 
 
Dated at Hartford, Connecticut,
this 23rd day of December 2009. 
 
 
            _________/s/____________
            Howard F. Pitkin
            Banking Commissioner
 
CERTIFICATION
               
I hereby certify that on this 28th day of December 2009, the foregoing Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Royal Burgundy International, Inc., 172 W. Warren Avenue, Suite 200, Longwood, Florida 32750, certified mail no. 7008 1140 0002 4974 3435.
 
 
           _________/s/____________
           Jesse B. Silverman
           Prosecuting Attorney

  


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