DOB: Mercer Capital Ltd. Consent Order

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IN THE MATTER OF:

MERCER CAPITAL LTD.


(CRD No. 104012) 
   

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CONSENT ORDER

No. CO-09-7742-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 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (the “Regulations”);
 
WHEREAS, Mercer Capital Ltd. (“Mercer”) is a broker-dealer registered in Connecticut under the Act since October 27, 2004, and has its principal office located at 40 Wall Street, 31st Floor, New York, New York;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, conducted an examination of Mercer’s records pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and a related investigation under Section 36b-26 of the Act to determine whether Mercer had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act (the “Investigation and Examination”);
 
WHEREAS, as a result of the Investigation and Examination, the Division obtained evidence, as more fully described in the Findings herein, that would support the initiation of administrative proceedings under Section 36b-15 of the Act to suspend or revoke Mercer’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 Mercer;
 
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 Mercer reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
WHEREAS, Mercer, 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, Mercer, 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, Mercer, 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, Mercer, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner:

1. 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. From April 24, 2007 to August 20, 2008, Mercer violated Section 36b-6(b) of the Act by employing one or more unregistered agents who collectively effected several transactions in the accounts of more than one Connecticut customer;
3. Between June 4, 2007 and January 22, 2008, Mercer violated Section 36b-16 of the Act by offering and selling securities to one or more Connecticut residents at a time when such securities were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act; and
4. In contravention of Section 36b-31-6f(b) of the Regulations, Mercer failed to establish, enforce, and maintain a system for supervising the activities of its agents that was reasonably designed to achieve compliance with applicable securities laws and regulations;

CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Mercer, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions:

1. Mercer, its representatives, agents, employees, affiliates, assigns, successors in interest, and those persons in active concert or participation with them 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, either directly or through any organizational or other device; and
2. No later than the date this Consent Order is entered by the Commissioner, Mercer shall remit to the Department of Banking, via certified bank check or bank wire, payable to "Treasurer, State of Connecticut", the sum of five thousand dollars ($5,000), three thousand five hundred dollars ($3,500) of which shall constitute an administrative fine and one thousand five hundred dollars ($1,500) of which shall be applied to defray the Division’s investigative and examination 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 Mercer 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; and
3. This Consent Order shall become final when entered.
 
 

               ________/s/_________ 
    Howard F. Pitkin
            Banking Commissioner

So ordered at Hartford, Connecticut                 
this 5th day of January 2010.

CONSENT TO ENTRY OF ORDER

I, Lynn G. Schultz, state on behalf of Mercer Capital 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 Mercer Capital Ltd., that Mercer Capital Ltd. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Mercer Capital Ltd. voluntarily consents to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.     


      Mercer Capital Ltd.

By
      _________/s/__________ 
      Lynn G. Schultz 
      Chief Compliance Officer


On this 28th day of December 2009, personally appeared Lynn G. Schultz, 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 Mercer Capital Ltd., a partnership, and acknowledged the same to be his free act and deed, before me.


_____/s/__________________________
Notary Public
Date Commission Expires: June 30, 2010

  


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