DOB: Smirnow, Nicholas - Fine Order

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IN THE MATTER OF:

NICHOLAS ALEXANDER SMIRNOW
a/k/a NICK SMIRNOW
d/b/a P-2-P NETWORK and
d/b/a PATHWAY-2-PROSPERITY

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ORDER IMPOSING FINE

DOCKET NO. CF-2010-7588-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 Nicholas Alexander Smirnow a/k/a Nick Smirnow d/b/a P-2-P Network and d/b/a Pathway-2-Prosperity (“Respondent”), pursuant to Section 36b-26(a) of the Act, to determine if Respondent had violated, was violating or was about to violate provisions of the Act or Regulations (“Investigation”);

WHEREAS, on February 26, 2010, based on the Investigation, the Commissioner, acting pursuant to Sections 36b-27(a) and 36b-27(d) of the 2010 Supplement to the General Statutes (“2010 Supplement”), issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine (“Fine Notice”) and Notice of Right to Hearing against Respondent (collectively “Notice”), which Notice is incorporated by reference herein;

WHEREAS, the Commissioner alleged in the Notice that Respondent offered and sold securities to at least one Connecticut investor, which securities were not registered in Connecticut under the Act, and that the offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act, which forms a basis for an order to cease and desist to be issued to Respondent under Section 36b-27(a) of the 2010 Supplement, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2010 Supplement;

WHEREAS, the Commissioner alleged in the Notice that Respondent’s conduct constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly, employing any device, scheme or artifice to defraud or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in any act, practice or course of business which operates as a fraud or deceit upon any person, and that such conduct constitutes a violation of Section 36b-4(a) of the Act, which forms a basis for an order to cease and desist to be issued to Respondent under Section 36b-27(a) of the 2010 Supplement, and for the imposition of a fine against Respondent under Section 36b-27(d) of the 2010 Supplement;

WHEREAS, the Notice stated, inter alia, that the Commissioner intended to impose a fine against Respondent, that Respondent would be afforded an opportunity for a hearing on the allegations set forth in the Notice if a written request for a hearing was received by the Department within fourteen (14) days following Respondent’s receipt of the Notice, and that if Respondent failed to request a hearing within the prescribed time period, the Commissioner may order that the maximum fine be imposed upon Respondent;

WHEREAS, on March 1, 2010, the Notice was sent by registered mail, return receipt requested, to Respondent at two addresses;

WHEREAS, on April 7, 2010, the Notices were returned to the Department marked “Return to Sender – Unclaimed”;

WHEREAS, on April 12, 2010, the Notice was served on the Commissioner, and on April 14, 2010, in accordance with 36b-33(h) of the General Statutes of Connecticut, Notice of Service on the Banking Commissioner dated April 13, 2010 (“Notice of Service”), was sent by registered mail, return receipt requested, to Respondent;

WHEREAS, Respondent has failed to request a hearing on the allegations set forth in the Notice within fourteen (14) days of the date of the Notice of Service;

WHEREAS, on May 18, 2010, a Certification was issued rendering the Order permanent as of April 28, 2010, which Certification is incorporated by reference herein;

WHEREAS, Section 36a-1-31(a) of the Regulations of Connecticut State Agencies provides, in pertinent part, that:  "When a party fails to request a hearing within the time specified in the notice, the allegations against the party may be deemed admitted.  Without further proceedings or notice to the party, the commissioner shall issue a final decision in accordance with section 4-180 of the Connecticut General Statutes and section 36a-1-52 of the Regulations of Connecticut State Agencies, provided the commissioner 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-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 Commissioner finds that the facts as set forth in paragraphs 6 through 20, inclusive, of the Notice, shall constitute findings of fact within the meaning of Section 4-180(c) of the General Statutes of Connecticut and Section 36a-1-52 of the Regulations of Connecticut State Agencies, and that the Statutory Basis for Order to Cease and Desist and Order Imposing Fine Against Respondent set forth in paragraphs 21 through 24, inclusive, of the Notice shall constitute conclusions of law within the meaning of Section 4-180(c) of the General Statutes of Connecticut and Section 36a-1-52 of the Regulations of Connecticut State Agencies.
2. The Commissioner finds that Respondent committed one violation of Section 36b-16 of the Act and one violation of Section 36b-4(a) of the Act.
3. The Commissioner finds that the facts require the imposition of a fine against Respondent.
4.
The Commissioner complied with Section 36b-27 of the 2010 Supplement and Section 4-177 of the General Statutes of Connecticut.
5. The Commissioner finds that the imposition of a fine against Respondent 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 2010 Supplement, that:

1. A fine of Eighty-five Thousand Dollars ($85,000) be imposed against Nicholas Alexander Smirnow a/k/a Nick Smirnow d/b/a P-2-P Network and d/b/a Pathway-2-Prosperity, to be remitted to the Department by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, no later than 45 days from the date the Order Imposing Fine is mailed; and
2. This Order Imposing Fine shall become final when mailed.


Dated at Hartford, Connecticut,        ______/s/__________ 
this 3rd day of June 2010.      Howard F. Pitkin 
      Banking Commissioner 


This Order was sent by registered mail,
return receipt requested, to
Respondent on June 4, 2010.

Nicholas Alexander Smirnow 
a/k/a/ Nick Smirnow
d/b/a P-2-P Network and Pathway-2-Prosperity
2635 Highway #117
P.O. Box 66
Baysville, Ontario, Canada POB 1AO
Registered mail no. RB027869736US

Nicholas Alexander Smirnow 
a/k/a/ Nick Smirnow
d/b/a P-2-P Network and Pathway-2-Prosperity
1013 Fairy Falls Road 
Baysville, Ontario, Canada POB 1AO
Registered mail no. RB027869740US                               


Administrative Orders and Settlements