DOB: Eckstein, Phil - Denial Order

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IN THE MATTER OF:

PHIL ECKSTEIN
CRD NO. 3080212

    ("Respondent")

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ORDER DENYING
REGISTRATION AS AN AGENT

DOCKET NO. ND-11-7870-S

I. PRELIMINARY STATEMENT

WHEREAS, 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) (“Regulations”);
 
WHEREAS, 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;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation of Respondent pursuant to Section 36b-8 of the Act (“Investigation”);
 
WHEREAS, 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);
 
WHEREAS, 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;
 
WHEREAS, 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  The February 2011 Insurance Order superseded the July 2010 Insurance Order.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;
 
WHEREAS, on April 20, 2011, based on the Investigation, the Commissioner, acting pursuant to Sections 36b-15(a)(2)(F)(v) and 36b-15(e)(1) of the Act, issued a Notice of Intent to Deny Registration as an Agent and Notice of Right to Hearing against Respondent (“Notice”), which Notice is incorporated by reference herein;
 
WHEREAS, the Commissioner alleged in the Notice that the July 2010 Insurance Order and the superseding February 2011 Insurance Order against Respondent 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;
 
WHEREAS, the Notice stated that Respondent’s registration as an agent in Connecticut shall be denied, subject to Respondent’s right to request a hearing on the allegations set forth in the Notice;
 
WHEREAS, the Notice stated that Respondent would be afforded an opportunity for a hearing on the allegations if a written request for a hearing was received by the Department within fourteen (14) days following Respondent’s receipt of the Notice;
 
WHEREAS, the Notice stated that the Commissioner shall issue an order denying Respondent’s registration as an agent in Connecticut if Respondent failed to request a hearing within the prescribed time period or failed to appear at any such hearing;
 
WHEREAS, on April 20, 2011, the Notice was sent by certified mail, return receipt requested, to Respondent;
 
WHEREAS, on April 23, 2011, Respondent received the Notice;
 
WHEREAS, Respondent has failed to request a hearing on the matters set forth in the Notice within fourteen (14) days of its receipt;

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[;]"
 
WHEREAS, Section 36b-15 of the Act provides, in pertinent part, that:  (a) 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 . . . (e) (1) . . . [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 . . . (f)  No 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[;]"
 
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-34, 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-34, inclusive.”

II. FINDINGS OF FACT AND CONCLUSIONS OF LAW

1. The Commissioner finds that the facts as set forth in paragraphs 4 through 8, 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 Denial of Registration as an Agent set forth in paragraphs 9 and 10 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 the facts require the issuance of an order denying Respondent’s registration as an agent in Connecticut.
3. The Commissioner finds that the Notice was given in compliance with Section 36b-15(f) of the Act and Section 4-177 of the General Statutes of Connecticut.
4. The Commissioner finds that the issuance of an order denying Respondent’s registration as an agent in Connecticut 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 Sections [sic] 36b-15 of the Act, that:

1. On the date of entry of this Order, the registration of Phil Eckstein as an agent in Connecticut is hereby DENIED; and
2. This Order shall become final when entered.



Entered at Hartford, Connecticut,       _______/s/____________
this 24th day of June 2011.      Howard F. Pitkin 
         Banking Commissioner 


This Order was sent by certified
mail, return receipt requested, to
Respondent on June 27, 2011.

Phil Eckstein
105 Twin Oak Lane
Wilton, CT 06897
Certified mail no. 7010 1870 0001 3619 4615

Park Avenue Securities LLC 
7 Hanover Square
New York, NY 10004
Certified mail no. 7010 1870 0001 3619 4622


Administrative Orders and Settlements