DOB: Hen, Aviv - Consent Order

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IN THE MATTER OF:

AVIV MICHAEL HEN

CRD No. 2927545



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CONSENT ORDER

No. CO-11-7712-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, Aviv Michael Hen ("Hen") has been registered under the Act as a broker-dealer agent of J.H. Darbie & Co., Inc. (CRD No. 43520) since July 13, 2009 and was previously registered under the Act as a broker-dealer agent of Andrew Garrett Inc. (CRD No. 29931) from August 18, 2008 to July 10,2009;
 
WHEREAS, J.H. Darbie & Co., Inc. of 99 Wall Street, New York, New York is registered as a broker-dealer under the Act;
 
WHEREAS, Andrew Garrett Inc. ("AGI") of 140 East 45th Street, 11th Floor, New York, New York is also registered as a broker-dealer under the Act;
 
WHEREAS, the Commissioner, acting pursuant to Section 36b-26 of the Act and through the Securities and Business Investments Division (the "Division") of the Department of Banking, has conducted an investigation into the activities of AGI and its current and former agents to determine whether they, or any of them, have violated, are violating or are about to violate any provision of the Act or any regulation or order under the Act;
 
WHEREAS, as a result of such investigation, the Division obtained evidence, as more fully described herein, that would support the initiation of administrative proceedings under Section 36b-15 of the Act to suspend or revoke Hen's agent registration under the Act 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 Hen;
 
WHEREAS, (1) NASD Rule 2510(b) prohibits the exercise of discretionary power in a customer's account unless the customer has given prior written authorization; and (2) NASD Rule 2510(d) excepts from such prohibition discretion as to the price at which or the time when an order given by a customer for the purchase or sale of a definite amount of a specified security shall be executed, such time and price discretion only being effective until the end of the business day on which the customer granted such discretion;
 
WHEREAS, as a result of such investigation, the Division obtained evidence that, while employed as a broker-dealer agent of AGI, Hen failed to fulfill the requirements in NASD Rule 2510(d) by executing transactions for a Connecticut client utilizing time and price discretion which had been granted to him a day or several days prior to the execution of the transactions;
 
WHEREAS, Section 36b-31-15b(c) of the Regulations provides that: "In construing the term 'dishonest or unethical practices in the securities . . . business' as used in this section and in section 36b-15(a)(2)(H) of the general statutes, the commissioner may consider whether the conduct in question is proscribed by any rule of a national securities exchange or self-regulatory organization registered under federal securities laws administered by the United States Securities and Exchange Commission";
 
WHEREAS, Section 36b-4(b) of the Act prohibits any person, in connection with the offer, sale or purchase of any security, from directly or indirectly engaging in any dishonest or unethical practice;
 
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-34, inclusive [of the Connecticut Uniform Securities Act]"; and

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 Hen reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;

CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Hen, through his 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), 4-177(a) and 4-177(b) of the Connecticut General Statutes;
2. To present evidence and argument and to otherwise avail himself of Section 4-177c(a) of the Connecticut General Statutes;
3. To present his position in a hearing in which he 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;

FINDINGS OF THE COMMISSIONER AS TO EVIDENTIARY SUFFICIENCY
TO INITIATE ADMINISTRATIVE PROCEEDINGS 

WHEREAS, the Commissioner finds that, based on the following, which Hen neither admits nor denies, sufficient grounds would exist to initiate administrative proceedings under Sections 36b-15 and 36b-27 of the Act to suspend or revoke Hen's broker-dealer agent registration in this state and/or to enter an order to cease and desist and/or an order imposing an administrative fine of up to $100,000 per violation against Hen:

  From at least January 2009 and while employed as a broker-dealer agent of AGI, Hen engaged in dishonest or unethical practices in the securities business within the meaning of Sections 36b-15(a)(2)(H) and 36b-4(b) of the Act by failing to fulfill the requirements in NASD Rule 2510(d) by executing transactions for a Connecticut client utilizing time and price discretion which had been granted to him a day or several days prior to the execution of the transactions.

NOW, THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:

1. Commencing on the date this Consent Order is entered by the Commissioner and continuing for a period of three years thereafter, Hen shall not: (a) offer or sell in or from Connecticut securities trading on the NASDAQ Bulletin Board or listed for quotation on the Pink Sheets. Hen is not precluded from effecting liquidating sales transactions for his existing accounts in securities trading on the NASDAQ Bulletin Board or listed for quotation on the Pink Sheets for his Connecticut clients; (b) open any new account approved for options trading for any Connecticut customer unless that Connecticut customer is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933; (c) open any new margin accounts for any Connecticut customer unless that Connecticut customer is an "accredited investor" as defined in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933. During such three year period, Hen shall limit his new accounts for non-accredited investors in this state to cash accounts; and (d) open or maintain any discretionary accounts for Connecticut clients;
2. Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Hen if the Commissioner determines that compliance is not being observed with the terms hereof;
3. This Consent Order shall not preclude additional proceedings by the Commissioner against Hen for acts or omissions not specifically addressed in this Consent Order or for acts and/or omissions that do not arise from the facts or transactions addressed herein; and
4. This Consent Order shall become final when entered.



So ordered at Hartford, Connecticut       _______/s/____________
this 19th day of April 2011.      Howard F. Pitkin 
         Banking Commissioner 
 

CONSENT TO ENTRY OF ORDER

I, Aviv Michael Hen, state that I have read the foregoing Consent Order; that I know and fully understand its contents; that I agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that I voluntarily consent to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.


  
______/s/_____________
Aviv Michael Hen


On this [blank in original] day of March 2011, personally appeared Aviv Michael Hen, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge the same to be his free act and deed, before me.



______/s/_____________________________
Notary Public
My Commission Expires:  September 19, 2011


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