DOB: DFS-Greco-CD-NOIR-NOIF-Restitution

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IN THE MATTER OF:


DFS CAPITAL MANAGEMENT, LP
CRD No. 150836

JOHN VINCENT GRECO
CRD No. 1635380

DFS FUND,
LIMITED PARTNERSHIP

    (Collectively "Respondents")




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ORDER TO CEASE AND DESIST

ORDER TO MAKE RESTITUTION

NOTICE OF INTENT TO REVOKE
REGISTRATION AS AN
INVESTMENT ADVISER

NOTICE OF INTENT TO FINE

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. CRF-12-8048-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 Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (“Regulations”) promulgated under the Act.
2. Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), has conducted an investigation into the activities of Respondents to determine if Respondents have violated, are violating or are about to violate provisions of the Act or Regulations (“Investigation”).
3.
As a result of the Investigation, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act and Regulations.
4. As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-27(a) of the Act.
5.
As a result of the Investigation, the Commissioner has the authority to order that Respondents make restitution pursuant to Section 36b-27(b) of the Act.
6. As a result of the Investigation, the Commissioner brings this administrative action pursuant to Section 36b-15(a) of the Act and Section 4-182(c) of the General Statutes of Connecticut to revoke the investment adviser registration of DFS Capital Management, LP in Connecticut.  Section 36b-15(e)(2) of the Act provides, in part, that “[i]f the registration of . . . [an] investment adviser . . . expires due to the registrant’s failure to renew, within one year of such expiration, the commissioner may nevertheless institute a revocation . . . proceeding or issue an order . . . revoking the registration under subsection (a) of this section.”
7. As a result of the Investigation, the Commissioner has the authority to impose a fine upon Respondents pursuant to Section 36b-27(d) of the Act.

II.  RESPONDENTS

8.
DFS Capital Management, LP (“DFS”) is a Delaware limited liability partnership whose principal place of business and address last known to the Commissioner is 50 Old Kings Highway North, Darien, Connecticut 06820.  DFS was previously registered under the Act as an investment adviser from August 6, 2009 to December 31, 2011, when it failed to renew such registration.
9. John Vincent Greco (“Greco”) is an individual whose address last known to the Commissioner is 24 Radio Place #25, Stamford, Connecticut 06906-2219.  At all times relevant hereto, Greco was the President, a principal member, and a control person of DFS, and was responsible for DFS’ day-to-day operation and management.  Greco and DFS are, in all relevant respects hereto, one and the same.  Greco is not and has not been registered in any capacity under the Act.
10. DFS Fund, Limited Partnership (“DFS Fund”) is an investment fund and Delaware limited partnership with its principal place of business located at 50 Old Kings Highway North, Darien, Connecticut 06820.  DFS Fund was formed on June 9, 2009, and at all times relevant hereto, Greco was responsible for the day-to-day management and operation of DFS Fund.  At all times relevant hereto, DFS was the investment adviser to DFS Fund and also was the general partner of DFS Fund.

III.  STATEMENT OF FACTS

Unregistered Investment Adviser Agent Activity

11. From approximately March 18, 2010 to November 22, 2010, and from approximately April 26, 2011 to December 31, 2011, Greco transacted business as an investment adviser agent of DFS by giving investment advice regarding securities to DFS Fund, DFS’ investment advisory client, for compensation without being registered as an investment adviser agent under the Act.
12. From approximately March 18, 2010 to November 22, 2010, and from approximately April 26, 2011 to December 31, 2011, DFS, while transacting business as an investment adviser, engaged Greco as an unregistered investment adviser agent.

The DFS Fund Offering

13. On or around August 1, 2009, Respondents circulated to at least one investor a Confidential Private Placement Memorandum (“PPM”) in connection with the offer and sale of interests in DFS Fund.  The PPM stated, inter alia, that:  (a) the minimum initial investment that would be accepted from a new Limited Partner was $250,000, although in each case the General Partner had discretion to accept lesser amounts; (b) DFS Fund’s investment objectives were to preserve capital and generate absolute returns using multiple investment strategies; (c) the General Partner intended to execute investment strategies using a multi-faceted approach; and (d) the General Partner might invest, from time to time, in options and derivative instruments, including buying and writing puts and calls on some of the securities held by the Partnership.
14. DFS Fund had approximately fifteen investors, two of whom invested at least $250,000.
15. On August 7, 2009, DFS Fund filed with the Commissioner a Notice of Sale of Securities pursuant to Rule 506 of Regulation D and Section 4(6) of the Securities Act of 1933.
16. At all times relevant hereto, the investment strategy engaged in by DFS Fund was, almost exclusively, speculative options trading through DFS Fund’s margin account.
17. In or about December 2011, Greco closed DFS Fund due to DFS Fund’s trading losses.

Investor One

18. Investor One is a Connecticut resident.  In or around August 2009, Greco and DFS recommended to Investor One that she liquidate her entire brokerage account at another firm and invest in DFS Fund, and provided Investor One with a copy of the PPM.  Greco and DFS represented to Investor One that DFS Fund would generate a much higher income that her then-current investments because it was a “no-lose” investment.  In August 2009, Investor One was approximately seventy-five years old.
19. On or about August 19, 2009, in reliance upon Greco and DFS’ recommendation that DFS Fund was a “no-lose” investment, Investor One liquidated her brokerage account in the amount of $200,000, and invested the proceeds as well as an additional $50,000 in DFS Fund, for a total of $250,000.
20. On or about September 15, 2009, Greco and DFS recommended that Investor One invest her retirement account in DFS Fund because it would be a profitable investment.  In reliance upon Greco and DFS’ representation, Investor One liquidated two annuity policies (“Annuities”) totaling $335,543 that Investor One purchased in her Keogh plan.  Based upon Greco and DFS’ recommendation, on December 18, 2009, Investor One invested the entire proceeds of $335,543 from the Annuities in DFS Fund.
21. When Investor One invested in DFS Fund, Respondents failed to disclose to her:  (a) that the investment strategy engaged in by DFS Fund was, almost exclusively, speculative options trading through DFS Fund’s margin account; (b) the risks associated with speculative options trading; and (c) that only one investor in DFS Fund (a member and controlling person of DFS Fund), had invested the proposed minimum of $250,000.
22. Investor One incurred approximately $462,222 in trading losses in DFS Fund.
23. When Investor One liquidated the Annuities, she incurred a contingent deferred sales/surrender charge (“surrender charge”) of $26,991.11.  On or around September 15, 2009, to induce Investor One to invest the proceeds of the Annuities in DFS Fund, Greco represented to Investor One that Greco and/or DFS would reimburse her for the $26,991.11 surrender charge.  Investor One relied upon such representation when Investor One made her second investment in DFS Fund on December 18, 2009.
24. At the time of Investor One’s December 18, 2009 investment in DFS Fund, Greco and/or DFS had yet to reimburse Investor One for the surrender charge.
25. Finally, on August 23, 2010, Greco and DFS executed a promissory note in favor of Investor One in the amount of $26,000.  Greco represented to Investor One that the promissory note was to compensate Investor One for the surrender charge associated with the Annuities.  The promissory note provided that Investor One would be paid $24,000 on or before December 31, 2011, and that the balance of $2,000 would be due on or before December 31, 2012.  Neither Greco nor DFS has paid Investor One $24,000 in satisfaction of the promissory note.
26. On November 16, 2011, November 18, 2011 and November 21, 2011 the Division conducted an on-site examination of DFS.  During the examination, the Division asked Greco whether he had issued any promissory notes to any individual, either individually or through DFS.  Greco responded that neither he nor DFS issued any promissory notes.

Investor Two

27. Investor Two is a Connecticut resident and is approximately fifty-seven years old.
28. In or around December 2009, Greco and DFS recommended to Investor Two that she invest her retirement account in DFS Fund.  Specifically, Greco and DFS represented to Investor Two that DFS Fund was generating a return of approximately 20% and that DFS Fund would continue to be profitable.  Greco and/or DFS did not mention any risks associated with investing in DFS Fund to Investor Two.
29. Respondents did not provide Investor Two with a copy of the PPM, or any other offering document disclosing the risks associated with an investment in DFS Fund or any material information on DFS Fund.  Moreover, Respondents failed to disclose to Investor Two:  (a) that the investment strategy engaged in by DFS Fund was, almost exclusively, speculative options trading through DFS Fund’s margin account; (b) the risks associated with speculative options trading; and (c) that only two investors in DFS Fund (Investor One and another investor, a member and control person of DFS Fund), had invested the proposed minimum of $250,000.
30. In or around December 2009, in reliance upon Greco and DFS’ recommendation, Investor Two liquidated her 401k retirement account at another firm and invested the proceeds of approximately $153,000 in DFS Fund.  Investor Two’s investment in DFS Fund represented approximately 50% of her net worth.
31. Investor Two incurred approximately $122,000 in trading losses in DFS Fund.

Books and Records

32. In connection with the Division’s on-site examination in November 2011 and the Division’s Investigation, the Division made multiple requests to Greco and DFS to produce certain books and records pursuant to Section 36b-14(d) and Section 36b-26 of the Act.  In particular, the Division sent Greco and DFS the following requests for documents:

    (a)     On December 8, 2011, the Division sent a request via electronic correspondence (“E-mail”) requesting, inter alia, copies of DFS Fund’s 2010 audited financial statements.  On December 30, 2011, Greco and DFS represented to the Division that these documents would be forthcoming;
 
    (b)   On March 8, 2012, the Division sent an E-mail requesting that Greco and DFS produce DFS Fund’s audited financial statements for the year 2010; and
   
    (c)   On March 9, 2012, the Division sent a certified letter to Greco and DFS requesting that they produce DFS Fund’s audited financial statements for the year 2010 and its current balance sheet. 

To date, the Division has not received the above requested documents from Greco and/or DFS.
33. In addition, the Division obtained on-the-record, sworn testimony from Greco on March 1, 2012, wherein Greco represented that he would provide the Division with a copy of DFS Fund’s audited financial statements for the year 2010.  To date, the Division has not received these documents from Greco.

Prior Matters Involving Greco

34. Darien Financial Services, Inc. is a Connecticut corporation that was licensed as a mortgage lender in Connecticut.  At all times relevant hereto, Greco was the President, Vice President and a control person of Darien Financial Services, Inc.
35. On December 21, 2011, the Commissioner entered a Consent Order sanctioning Greco for violating Section 36a-17(d) of the Connecticut General Statutes by failing to cooperate with the Commissioner in conjunction with an investigation conducted by the Consumer Credit Division of the Department into alleged rate lock violations.

IV.  STATUTORY AND REGULATORY BASIS FOR
ORDER TO CEASE AND DESIST, ORDER TO MAKE RESTITUTION,
REVOCATION OF REGISTRATION AS AN INVESTMENT ADVISER
AND ORDER IMPOSING FINE

a.  Violation of Section 36b-6(c)(2) of the Act by Greco -
Unregistered Investment Adviser Agent Activity

36. Paragraphs 1 through 35, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
37.
Greco transacted business as an investment adviser agent of DFS absent registration, as more fully described in paragraph 11.  Such conduct constitutes a violation of Section 36b-6(c)(2) of the Act, which forms a basis for an order to cease and desist to be issued against Greco under Section 36b-27(a) of the Act, and for the imposition of a fine upon Greco under Section 36b-27(d) of the Act.

b.  Violation of Section 36b-6(c)(3) of the Act by DFS –
Engaging an Unregistered Investment Adviser Agent

38. Paragraphs 1 through 37, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
39.
DFS engaged an unregistered investment adviser agent, as described more fully in paragraph 12.  Such conduct constitutes a violation of Section 36b-6(c)(3) of the Act, which forms a basis for an order to cease and desist to be issued against DFS under Section 36b-27(a) of the Act and the imposition of a fine upon DFS pursuant to Section 36b-27(d) of the Act.

c.  Violation of Section 36b-4(a) of the Act by Greco and DFS –
Fraud in Connection with the Offer, Sale or Purchase of any Security

40. Paragraphs 1 through 39, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
41.
The conduct of Greco and DFS, as more fully described in paragraphs 13 through 16, inclusive, 18 through 21, inclusive, and 28 through 30, inclusive, constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person.  Such conduct constitutes a wilful violation of Section 36b-4(a) of the Act, which constitutes a basis for an order to cease and desist to be issued against Greco and DFS under Section 36b-27(a) of the Act, an order that Greco and DFS make restitution under Section 36b-27(b) of the Act, the revocation of DFS’ investment adviser registration in Connecticut pursuant to Section 36b-15(a) of the Act, and for the imposition of a fine upon Greco and DFS under Section 36b-27(d) of the Act.

d.  Violation of Section 36b-4(a) of the Act by DFS Fund –
Fraud in Connection with the Offer, Sale or Purchase of any Security

42. Paragraphs 1 through 41, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
43.
The conduct of DFS Fund, through the actions of Greco and/or DFS, as more fully described in paragraphs 13 through 16, inclusive, 21, 23, 25 and 29, constitutes, in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person.  Such conduct constitutes a violation of Section 36b-4(a) of the Act, which constitutes a basis for an order to cease and desist to be issued against DFS Fund under Section 36b-27(a) of the Act, an order that DFS Fund make restitution under Section 36b-27(b) of the Act, and for the imposition of a fine upon DFS Fund under Section 36b-27(d) of the Act.

e.  Violation of Section 36b-4(b) of the Act by Greco and DFS –
Dishonest and Unethical Practices in Connection with the
Offer, Sale or Purchase of any Security

44. Paragraphs 1 through 43, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
45.
Greco and DFS, as more fully described in paragraphs 16, 18 through 20, inclusive, 27, 28, and 30, in connection with the offer, sale or purchase of any security, directly or indirectly engaged in a dishonest or unethical practice.  Such conduct constitutes a wilful violation of Section 36b-4(b) of the Act, which forms a basis for an order to cease and desist to be issued against Greco and DFS under Section 36b-27(a) of the Act, an order that Greco and DFS make restitution under Section 36b-27(b) of the Act, the revocation of DFS’ investment adviser registration in Connecticut pursuant to Section 36b-15(a)(2)(B) and 36b-15(a)(2)(H) of the Act, and for the imposition of a fine upon Greco and DFS under Section 36b-27(d) of the Act.

f.  Violation of Section 36b-23 of the Act by Greco and DFS –
Making a Statement in an Investigation that is False or
Misleading in a Material Respect

46. Paragraphs 1 through 45, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
47.
Greco’s statement to the Division, on his individual behalf and/or on behalf of DFS, as more fully described in paragraph 26, was, at the time and in light of the circumstances under which it was made, false or misleading in a material respect, which constitutes a wilful violation of Section 36b-23 of the Act.  Such violation forms a basis for an order to cease and desist to be issued against Greco and DFS under Section 36b-27(a) of the Act, the revocation of DFS’ investment adviser registration in Connecticut under Section 36b-15(a)(2)(B) and 36b-15(a)(2)(L) of the Act, and the imposition of a fine upon Greco and DFS under Section 36b-27(d) of the Act.

g.  Violation of Section 36b-14(d) of the Act
and Section 36b-31-14f of the Regulations by DFS -
Failure to Provide Books and Records When Requested

48. Paragraphs 1 through 47, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
49.
DFS’ failure to make its required books and records available to the Commissioner when so requested, as more fully described in paragraphs 32 and 33, constitutes a wilful violation of Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations.  Such wilful violation forms a basis for an order to cease and desist to be issued against DFS pursuant to Section 36b-27(a) of the Act, the revocation of DFS’ investment adviser registration in Connecticut pursuant to Section 36b-15(a)(2)(B) and 36b-15(a)(2)(L) of the Act, and the imposition of a fine upon DFS pursuant to Section 36b-27(d) of the Act.

V.  ORDER TO CEASE AND DESIST, ORDER TO MAKE RESTITUTION,
NOTICE OF INTENT TO REVOKE REGISTRATION AS AN
INVESTMENT ADVISER, NOTICE OF INTENT TO FINE
AND NOTICE OF RIGHT TO HEARING

WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, DFS has committed at least one violation of Section 36b-6(c)(3) of the Act, at least one violation Section 36b-4(a) of the Act, at least one violation of Section 36b-4(b) of the Act, at least one violation of Section 36b-23 of the Act, at least one violation of Section 36b-14(d) of the Act; and at least one violation of Section 36b-31-14f of the Regulations;

WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Greco has committed at least one violation of 36b-6(c)(2) of the Act, at least one violation of Section 36b-4(a) of the Act, at least one violation of Section 36b-4(b) of the Act, and at least one violation of Section 36b-23 of the Act;

WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, DFS Fund, through the actions of Greco and/or DFS, has committed at least one violation of Section 36b-4(a) of the Act;

WHEREAS, the Commissioner has reason to believe that DFS has engaged in acts or conduct that, pursuant to Section 36b-15(a) of the Act, constitute grounds for revoking DFS’ registration as an investment adviser;

WHEREAS, Section 36b-15(f) of the Act provides, in pertinent part, that “[n]o order may be entered under this section except as provided in subsection (c) of this section without (1) appropriate prior notice to the . . . registrant . . . , (2) opportunity for hearing, and (3) written findings of fact and conclusions of law;

WHEREAS, notice is hereby given to DFS that its registration as an investment adviser in Connecticut shall be revoked, subject to its right to request a hearing on the allegations set forth above;

WHEREAS, notice is hereby given to each Respondent that the Commissioner intends to impose a maximum fine not to exceed one hundred thousand dollars ($100,000) per violation upon each Respondent;

WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist and an Order to Make Restitution against Respondents, the issuance of an order revoking the investment adviser registration of DFS and the imposition of a fine upon Respondents is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act;

WHEREAS, the Commissioner ORDERS that DFS CEASE AND DESIST from directly or indirectly violating the provisions of the Act and Regulations, including without limitation:  (1) engaging  an unregistered investment adviser agent; (2) in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person; (3) in connection with the offer, sale or purchase of any security, directly or indirectly engaging in any dishonest or unethical business practice; (4) making a statement to the Division which is, at the time and in light of the circumstances under which it is made, false or misleading in a material respect; and (5) failing to make its required books and records available to the Commissioner when so requested;

WHEREAS, the Commissioner ORDERS that GRECO CEASE AND DESIST from directly or indirectly violating the provisions of the Act and Regulations, including without limitation:  (1) transacting business as an investment adviser agent without being registered under the Act; (2) in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person; (3) in connection with the offer, sale or purchase of any security, directly or indirectly engaging in any dishonest or unethical business practice; and (4) making a statement to the Division which is, at the time and in light of the circumstances under which it is made, false or misleading in a material respect;

WHEREAS, the Commissioner ORDERS that DFS FUND CEASE AND DESIST from directly or indirectly violating the provisions of the Act and Regulations, including without limitation, in connection with the offer, sale or purchase of any security, directly or indirectly employing a device, scheme or artifice to defraud, making an untrue statement of a material fact or omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading, or engaging in an act, practice or course of business which operates as a fraud or deceit upon any person;

WHEREAS, the Commissioner ORDERS that RESPONDENTS MAKE RESTITUTION of any sums obtained as a result of Respondents’ violations of Section s [sic] 36b-4(a) and 36b-4(b) of the Act, plus interest at the legal rate set forth in Section 37-1 of the General Statutes of Connecticut.  Specifically, the Commissioner ORDERS that:

1.  Within forty-five (45) days from the date this Order to Make Restitution becomes permanent, Respondents shall reimburse a) Investor One the net losses in the DFS Fund for the period from August 1, 2009 to the date this Order to Make Restitution comes permanent and the outstanding balance owed to Investor One on the Promissory Note referenced in paragraph 27; and b) Investor Two the net losses in the DFS Fund for the period from December 1, 2009 to the date this Order to Make Restitution comes permanent.  Such restitution shall be made by certified check, and shall be sent by certified mail, return receipt requested, to the respective Investor; and
   
2.  Within ninety days (90) days from the date this Order to Make Restitution becomes permanent, Respondents shall provide the Division with proof, in the form of copies of the certified checks and the return receipts, that Respondents have reimbursed Investor One and Investor Two the amounts delineated in paragraph 2 of Section V of this Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke Registration as an Investment Adviser, Notice of Intent to Fine and Notice of Right to Hearing (collectively “Order”).

THE COMMISSIONER FURTHER ORDERS THAT, pursuant to Section 36b-15(f) and subsections (a), (b) and (d) of Section 36b-27 of the Act, Respondents will be afforded an opportunity for a hearing on the allegations set forth above 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 the Respondents’ receipt of this Order.  The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address.  If any 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.  If a hearing is requested, the hearing will be held on January 9, 2013, 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, each 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.

This Order to Cease and Desist shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.

This Order to Make Restitution shall remain in effect and become permanent against any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.

The Commissioner shall issue an order revoking DFS’ registration as an investment adviser in Connecticut if DFS fails to request a hearing within the prescribed time period or fails to appear at any such hearing.

The Commissioner may order that the maximum fine be imposed upon any Respondent that fails to request a hearing within the prescribed time period or fails to appear at any such hearing.

Dated at Hartford, Connecticut,       ________/s/________ 
this 6th day of November 2012.   Howard F. Pitkin 
    Banking Commissioner 



CERTIFICATION

I hereby certify that on this 6th day of November 2012, the foregoing Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke Registration as an Investment Adviser, Notice of Intent to Fine and Notice of Right to Hearing was sent by certified mail, return receipt requested, to:  (1) DFS Capital Management, LP, 50 Old Kings Highway North, Darien, Connecticut 06820, certified mail no. 7011 0470 0002 2573 4544; (2) DFS Capital Management, LP, 3500 S. Dupont Highway, Dover, Delaware 19901, certified mail no. 7011 0470 0002 2573 4551; (3) DFS Capital Management, LP, c/o John Vincent Greco, as agent, 50 Old Kings Highway North, Darien, Connecticut 06820, certified mail no. 7011 0470 0002 2573 4568; (4) John Vincent Greco, 24 Radio Place #25, Stamford, Connecticut 06906-2219, certified mail no. 7011 0470 0002 2573 4575; (5) John Vincent Greco, 134 Five Mile River Road, Darien, Connecticut 06820, certified mail no. 7011 0470 0002 2573 4582; and (6) John Vincent Greco, 108 Old Kings Highway North, Darien, Connecticut 06820, certified mail no. 7011 0470 0002 2573 4599; and (7) DFS Fund, Limited Partnership, 50 Old Kings Highway North, Darien, Connecticut 06820, certified mail no. 7011 0470 0002 2573 4605.


                                                    ____/s/___________  
                                                    Elena Zweifler  
                                                    Prosecuting Attorney 


Administrative Orders and Settlements