DOB: Hanscome, Thomas Consent Order

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IN THE MATTER OF:

THOMAS C. HANSCOME

("Hanscome")

(CRD No. 1243201)


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CONSENT ORDER

DOCKET NO. CF-11-7790-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 Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies promulgated under the Act (“Regulations”);
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Hanscome to determine if he had violated, was violating or was about to violate provisions of the Act or Regulations;
 
WHEREAS, on February 16, 2011, the Commissioner, acting pursuant to Section 36b-27 of the Act, issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (collectively “Notice”) against Hanscome, which Notice is incorporated by reference herein;
 
WHEREAS, Hanscome requested a hearing on the matters alleged in the Notice (“Hearing”);
 
WHEREAS, Section 36b-31(a) of the Act,  provides, in relevant 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”;
 
WHEREAS, Section 36b-31(b) of the Act, provides, in relevant 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”;
 
WHEREAS, an administrative proceeding initiated under Section 36b-27 of the Act would constitute a “contested case” within the meaning of Section 4-166(2) of the General Statutes of Connecticut;
 
WHEREAS, Section 36b-27(f) of the Act, provides, in relevant part, that “[a]ny time after the issuance of an order or notice provided for in subsection (a) . . . or subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing”;
 
WHEREAS, Section 4-177(c) of the General Statutes of Connecticut and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by consent order, unless precluded by law;
 
WHEREAS, Hanscome and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;
 
WHEREAS, the issuance of this Consent Order 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 the Act;
 
WHEREAS, Hanscome agrees that the Notice may be used in construing the terms of this Consent Order, and agrees to the language in this Consent Order;
 
WHEREAS, Hanscome has provided documentation to the Division evidencing his financial inability to pay the fine that otherwise would have been assessed against him pursuant to the Notice and this Consent Order;
 
AND WHEREAS, Hanscome specifically assures the Commissioner that none of the violations alleged in the Notice or this Consent Order shall occur in the future.

II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Hanscome, through his execution of this Consent Order, voluntarily waives the following rights:

1. To be afforded notice and an opportunity for a hearing within the meaning of Section 36b-27 of the Act and Section 4-177(a) of the General Statutes of Connecticut;
2. To present evidence and argument and to otherwise avail himself of Section 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut;
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.

III. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS

WHEREAS, Hanscome, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, without admitting or denying them:

1. Hanscome offered and sold securities consisting of joint venture units of CherryHomes Joint Venture to at least one Connecticut investor, which securities were not registered in Connecticut under the Act nor the subject of an exemptive claim or claim of covered security status.  The offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act;
2. Hanscome failed to disclose, inter alia, any financial statements for the joint venture; any financial information on the joint venture manager; sufficient disclosure of the risks involved in the enterprise; detailed background information on third parties whose services were critical to the success of the venture; and any information on Lance David Brooks’ role in the distribution.  Each of Hanscome’s omissions was material to investors and prospective purchasers of the joint venture units, and constitute violations of Section 36b-4(a) of the Act, and also constitute in connection with the offer, sale or purchase of any security, directly or indirectly, engaging in dishonest or unethical practices, in violation of Section 36b-4(b) of the Act; and
3. Hanscome transacted business as an agent of issuer absent registration in violation of Section 36b-6(a) of the Act.

WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Hanscome an opportunity for a hearing;

AND WHEREAS, Hanscome acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.

IV. CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Hanscome, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:

1. Hanscome shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any person, organization or other device; and
2. For a period of ten (10) years commencing on the date this Consent Order is entered by the Commissioner, Hanscome is barred from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent, as such terms are defined in the Act, and notwithstanding any definitional exclusion that might otherwise be available.

V. CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1. The Sanctions set forth above be and are hereby entered;
2. Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Hanscome based upon a violation of this Consent Order or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed; and
3. This Consent Order shall become final when issued.



Issued at Hartford, Connecticut,       _______/s/____________
this 23rd day of September 2011.      Howard F. Pitkin 
         Banking Commissioner 
 

CONSENT TO ENTRY OF ORDER

I, Thomas C. Hanscome, 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 consent to the issuance of this Consent Order.


  
_______/s/__________
Thomas C. Hanscome


CALIFORNIA ALL-PURPOSE ACKNOWLEDMENT [sic]
 
State Of California
County Of Orange
 
On 9/18/11 before me, Andrew Charles Bagent, a notary public, personally appeared Thomas C. Hanscome who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity (ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.
 
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct
 
WITNESS my hand and official seal.
 
 
 
_____/s/__________________
Notary Public
My Term Exp. Feb. 14, 2015
 
Title/Type of the document:  Consent Order
 
Document Date:  9/18/11
 
Number of Pages 5 + 1
 
Signer(s) other than named above   -
 
Signer’s Capacity:   -


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