DOB: Forman Financial Services LLC - Fine Order

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IN THE MATTER OF:

FORMAN FINANCIAL
SERVICES, LLC




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ORDER IMPOSING FINE

DOCKET NO. CF-2010-7554-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 Forman Financial Services, LLC (“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 Section 36b-27(a) of the Act and Section 36b-27(d) of the Act, as amended by Public Act 09-160, issued an Order to Cease and Desist (“Order”), Notice of Intent to Fine 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 unregistered securities to at least two Connecticut investors, which securities were not registered in Connecticut under the Act.  The offer and sale of such securities absent registration constitutes violations 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 Act, and for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended;

WHEREAS, the Commissioner alleged in the Notice that Respondent employed Rogers Forman III as an agent of issuer on at least two occasions, absent registration.  Such conduct constitutes violations of Section 36b-6(b) 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 Act, and for the imposition of a fine against Respondent under Section 36b-27(d) of the Act, as amended;

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 appear at such hearing 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 March 31, 2010, and April 7, 2010, the Notices were returned to the Department of Banking marked “Returned To Sender – Forwarding Time Expired” and “Returned To Sender – Unclaimed”, respectively;

WHEREAS, on May 18, 2010, the Notice was served on the Commissioner, and on May 18, 2010, in accordance with 36b-33(h) of the General Statutes of Connecticut, Notice of Service on the Banking Commissioner dated May 18, 2010 (“Notice of Service”), was sent by registered mail, return receipt requested, to Respondent;

WHEREAS, Respondent has failed to request a hearing on the matters set forth in the Order within 14 days of the date of the Notice of Service;

WHEREAS, on July 7, 2010, a Certification was issued rendering the Order permanent as of June 2, 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, as amended by Public Act 10-141, 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-34, inclusive”;

AND WHEREAS, Section 36b-31(b) of the Act, as amended by Public Act 10-141, 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-34, inclusive.”

II.  FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. The Commissioner finds that the facts as set forth in paragraphs 6 through 12, 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 13 through 17, 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 two violations of Section 36b-16 of the Act, and two violations of Section 36b-6(b) 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 Act, as amended, 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-34, inclusive, of the Act.

III.  ORDER

Having read the record, I hereby ORDER, pursuant to Section 36b-27(d) of the 2010 Supplement to the General Statutes, as amended by Public Act 10-141, that:

1. A fine of Twenty-five Thousand Dollars ($25,000) be imposed against Forman Financial Services, LLC, 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 Forty-five (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 8th day of July 2010.      Howard F. Pitkin 
      Banking Commissioner 



This Order was sent by certified mail,
return receipt requested, to
Respondent on July 9, 2010.

Forman Financial Services, LLC
60 Gillett Street, Suite 204 
Hartford, CT 06105
Certified mail no. 7008 1140 0002 4974 3596

Forman Financial Services, LLC
201 Bingham Street
New Britain, CT 06051
Certified mail no.7008 1140 0002 4974 3602                          


Administrative Orders and Settlements