DOB: Eckstein, Phil - NOID

* * * * * * * * * * * * * * * * *



IN THE MATTER OF:

PHIL ECKSTEIN 

CRD No. 3080212 

   ("Respondent")




* * * * * * * * * * * * * * * * *


 
 *
 *
 *
 *
 *
 *
 *
 *
 *
 *
 *
 *
 *
 *

 

NOTICE OF INTENT
TO DENY REGISTRATION
AS AN AGENT

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. ND-11-7870-S

I. PRELIMINARY STATEMENT

1. The Banking Commissioner (“Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (“Act”), and the regulations promulgated thereunder (Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies).
2. Pursuant to Section 36b-8 of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation of Respondent (“Investigation”).
3. As a result of the Investigation by the Division, the Commissioner brings this administrative action pursuant to Section 36b-15 of the Act to deny Respondent’s registration as an agent in Connecticut.

II.  RESPONDENT

4. Respondent is an individual whose address last known to the Commissioner is 105 Twin Oak Lane, Wilton, Connecticut 06897.

III.  STATEMENT OF FACTS

5. On May 24, 2010, Respondent filed with the Commissioner a Form U-4, Uniform Application for Securities Industry Registration or Transfer, to register Respondent as a broker-dealer agent of Park Avenue Securities LLC (CRD No. 46173) under the Act (“Application”).  The Application was subsequently amended on June 7, 2010 and June 8, 2010.
6. On July 26, 2010, the State of Connecticut Insurance Department issued a Complaint, Stipulation and Final Order (Docket No. FC 10-70) against Respondent (the “July 2010 Insurance Order”), which July 2010 Insurance Order is incorporated by reference herein.  The July 2010 Insurance Order alleged that Respondent sold a non-existent annuity to a customer, and that an investigation by Respondent’s former employer concluded that Respondent deposited the customer’s funds into Respondent’s own bank account rather than applying them to an annuity purchase.  The July 2010 Insurance Order placed the Respondent’s insurance licenses on a probationary status for one year and fined the Respondent Eight Thousand Dollars ($8,000).
7. On August 13, 2010, Park Avenue Securities LLC filed with the Commissioner a Form U-5, Uniform Termination Notice for Securities Industry Registration to withdraw the Application.
8. On February 8, 2011, the State of Connecticut Insurance Department issued a Complaint, Stipulation and Final Order (Docket No. FC 10-70) against Respondent (the “February 2011 Insurance Order”), which February 2011 Insurance Order is incorporated by reference herein.  The February 2011 Insurance Order superseded the July 2010 Insurance Order.  Like the July 2010 Insurance Order, the February 2011 Insurance Order alleged that (a) Respondent sold a non-existent annuity to a customer; and (b) an investigation by Respondent’s former employer concluded that Respondent deposited the customer’s funds into Respondent’s own bank account rather than applying them to an annuity purchase.  The February 2011 Insurance Order, inter alia, placed all of Respondent’s insurance licenses on a probationary status for a one-year period, commencing on August 1, 2010, and fined Respondent Eight Thousand Dollars ($8,000) for alleged violations of Sections 38a-702k and 38a-769 of the General Statutes of Connecticut.  The February 2011 Insurance Order is currently effective.

IV.  STATUTORY BASIS FOR DENIAL OF REGISTRATION AS AN AGENT

Sanction Issued Within the Past Ten Years by a
State Financial Services Regulator Based Upon
Nonsecurities Violations of State Law Under Which a
Business Involving Insurance is Regulated

9. Paragraphs 1 through 8, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
10.

The July 2010 Insurance Order and the superseding February 2011 Insurance Order against Respondent, as more fully described in paragraphs 6 and 8, are each a sanction issued within the past ten years by a Connecticut financial services regulator based upon nonsecurities violations of state law under which a business involving insurance is regulated, and thus constitute a basis for the Commissioner to deny the Application pursuant to Section 36b-15(a)(2)(F)(v) of the Act.  Section 36b-15(a) of the Act provides, in part, that:

The commissioner may, by order, deny . . . any registration . . . if the commissioner finds that (1) the order is in the public interest, and (2) the applicant . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years . . . (v) a denial, suspension, revocation or other sanction issued by . . . any other state . . . financial services regulator based upon nonsecurities violations of any state . . . law under which a business involving . . . insurance . . . is regulated . . . .

Section 36b-15(e)(1) of the Act provides, in part, that:

[W]ithdrawal of an application for registration as . . . [an] agent . . . becomes effective ninety days after receipt of . . . a notice of intent to withdraw such application for registration or within such shorter period of time as the commissioner may determine, unless a denial . . . proceeding is pending when the . . . notice is filed or a proceeding to deny . . . or impose conditions upon with withdrawal is instituted within ninety days after the . . . notice is filed. . . . If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial . . . proceeding under subsection (a) of this section within one year after withdrawal became effective.

 
V.  NOTICE OF INTENT TO DENY REGISTRATION AS AN AGENT AND
NOTICE OF RIGHT TO HEARING

WHEREAS, the Commissioner has reason to believe that there are grounds to deny the Respondent’s registration application pursuant to Section 36b-15(a)(2)(F)(v) of the Act;

WHEREAS, the Commissioner believes that the issuance of an order denying Respondent’s registration as an agent in Connecticut would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;

AND WHEREAS, Section 36b-15(f) of the Act provides, in pertinent part, that “[n]o order may be entered under this section . . . without (1) appropriate prior notice to the applicant . . . and to the employer or prospective employer if such applicant . . . is an agent . . . , (2) opportunity for hearing, and (3) written findings of fact and conclusions of law”.

NOW THEREFORE, notice is hereby given to Respondent that Respondent’s registration as an agent shall be denied, subject to Respondent’s right to request a hearing on the allegations set forth above.

A hearing will be granted to Respondent if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following Respondent’s receipt of this Notice.  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 June 21, 2011 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 Commissioner shall issue an order denying Respondent’s registration as an agent in Connecticut if Respondent fails to request a hearing within the prescribed time period or fails to appear at any such hearing. 

Dated at Hartford, Connecticut,          _______/s/_________
this 20th day of April 2011.    Howard F. Pitkin 
    Banking Commissioner



CERTIFICATION

I hereby certify that on this 20th day of April 2011, the foregoing Notice of Intent to Deny Registration as an Agent and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Phil Eckstein, 105 Twin Oak Lane, Wilton, Connecticut 06897, certified mail no. 7010 1870 0001 3618 8645; and Park Avenue Securities LLC, 7 Hanover Square, New York, New York 10004, certified mail no. 7010 1870 0001 3618 8652.

                                                    ________/s/_________
                                                    Jesse B. Silverman
                                                    Prosecuting Attorney
 


Administrative Orders and Settlements