DOB: Miller, David - Revocation Notice

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IN THE MATTER OF:

DAVID MILLER 

(CRD No. 2570012) 

 




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NOTICE OF INTENT
TO REVOKE REGISTRATION
AS AN AGENT

AND

NOTICE OF RIGHT TO HEARING

DOCKET NO. NR-13-8093-S

I. PRELIMINARY STATEMENT

1. The Banking Commissioner (the “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. The Commissioner brings this administrative action to revoke the registration of David Miller (“Respondent”) as a broker-dealer agent in Connecticut pursuant to Section 36b-15 of the Act and in accordance with Sections 46a-80 and 4-182(c) of the General Statutes of Connecticut.

II.  RESPONDENT

3. Respondent is an individual whose addresses last known to the Commissioner are (a) 9 Vernon Avenue, Rockville Centre, New York 11570; and (b) c/o Rochdale Securities LLC, 750 East Main Street, 7th Floor, Stamford, Connecticut 06902.

III.  STATEMENT OF FACTS

4. From February 17, 2009 to November 21, 2012, Respondent was registered under the Act as a broker-dealer agent of Rochdale Securities LLC (CRD No. 6863) (“Rochdale”).
5. On November 21, 2012, Rochdale filed with the Commissioner a Form U-5, Uniform Termination Notice for Securities Industry Registration to terminate Respondent’s registration as a broker-dealer agent of Rochdale in Connecticut and other jurisdictions.  The Form U-5 stated that Respondent had been discharged effective October 26, 2012 for unauthorized trading in the securities of Apple, Inc.
6. Section 36b-15(e)(1) of the Act provides, in pertinent part, that “[w]ithdrawal from registration as . . . [an] agent . . . becomes effective ninety days after receipt of an application to withdraw such registration . . . unless a . . . revocation . . . proceeding is pending when the application . . . is filed or a proceeding to . . . revoke, suspend or impose conditions upon the withdrawal is instituted within ninety days after the application . . . is filed.  If a proceeding is pending or instituted, withdrawal becomes effective at such time and upon such conditions as the commissioner by order determines.  If no proceeding is pending or instituted and withdrawal automatically becomes effective, the commissioner may nevertheless institute a . . . revocation . . . proceeding under subsection (a) of this section within one year after withdrawal became effective.”
7. On April 15, 2013, Respondent pleaded guilty to one count of conspiracy to commit wire fraud, and one count of wire fraud, both felonies (United States of America v. David Miller, Case No. 3:13CR-00075-RNC (D. Conn.)) in conjunction with the unauthorized purchases of Apple, Inc. securities described in paragraph 5 above.  Respondent was released on bail and is currently awaiting sentencing.
8. On April 18, 2013, the United States District Court for the District of Connecticut entered a judgment permanently enjoining Respondent from violating the antifraud provisions in Section 10(b) of the Securities [Exchange] Act of 1934, Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933; and directing Respondent to pay a civil penalty to be determined (Securities and Exchange Commission v. David Miller, C.A. No. 13-522 JBA (D. Conn.)).  The civil complaint leading up to the injunction alleged that Respondent had fraudulently and without authorization from a Rochdale customer entered a series of orders to purchase 1,625,000 shares of Apple, Inc. at a cost of almost $1 billion; and that Respondent had misrepresented to Rochdale and its principals and employees that the customer authorized the orders and assumed the risk of loss on any trades executed pursuant to the orders.
9. On April 25, 2013, the Securities and Exchange Commission (the “SEC”) entered against Respondent an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions (Release No. 69460; Administrative Proceeding File No. 3-15303).  The SEC proceeding was based on Respondent’s unauthorized purchases of Apple, Inc. securities.  Among other things, the SEC barred Respondent from association with any broker, dealer or investment adviser and from participating in any penny stock offering.
10. Section 36b-15(a) of the Act provides, in pertinent part, that “[t]he commissioner may, by order . . . revoke any registration . . . if the commissioner finds that (1) the order is in the public interest, and (2) the . . . registrant . . . (C) has been convicted, within the past ten years, of any misdemeanor involving a security, any aspect of a business involving securities, commodities, investments, franchises, business opportunities, insurance, banking or finance, or any felony, provided any . . . revocation of such registration shall be in accordance with the provisions of section 46a-80; (D) is permanently or temporarily enjoined by any court of competent jurisdiction from engaging in or continuing any conduct or practice involving any aspect of a business involving securities, commodities, investments, franchises, business opportunities, insurance, banking or finance . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years . . . (ii) an order of the Securities and Exchange Commission . . .  suspending or expelling such . . . registrant or person from a national securities or commodities exchange or national securities or commodities association registered under the Securities Exchange Act of 1934 . . . or, in the case of an individual, an order of the Securities and Exchange Commission . . . barring such individual from association with a broker dealer or an investment adviser . . . .”
11. On February 21, 2013, the request to withdraw Respondent’s registration as a broker-dealer agent of Rochdale in Connecticut became effective by operation of law.
12. On May 7, 2013, the Commissioner, through the Securities and Business Investments Division of the Department of Banking, provided Respondent with written notice that a basis existed under Section 36b-15(a)(2) of the Act to revoke Respondent’s registration as an agent.  The written notice gave Respondent an opportunity to respond to the Division’s position and to provide evidence of rehabilitation under Section 46a-80(c) of the General Statutes of Connecticut.  The Commissioner requested a written response from the Respondent by May 17, 2013.  To date, Respondent has failed to respond to the May 17, 2013 notice.

IV.  STATUTORY BASIS FOR REVOCATION OF REGISTRATION AS AN AGENT

A. Felony Conviction Within the Past Ten Years

13. Paragraphs 1 through 12, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
14.

Respondent’s conviction of a felony, as more fully described in paragraph 7, forms a basis for the revocation of Respondent’s registration as an agent in Connecticut pursuant to Section 36b-15(a)(2)(C) of the Act.

 
B. Subject of a Permanent Injunction
  
15. Paragraphs 1 through 14, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
16.

The entry of a permanent injunction against Respondent by the U.S. District Court for the District of Connecticut prohibiting Respondent from engaging in conduct proscribed by the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934, Rule 10b-5 thereunder and Section 17(a) of the Securities Act of 1933, as more fully described in paragraph 8, forms a basis for the revocation of Respondent’s registration as an agent in Connecticut pursuant to Section 36b-15(a)(2)(D) of the Act.

 
C. Subject of an SEC Bar
  
17. Paragraphs 1 through 16, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
18.

The SEC’s entry of an order barring Respondent from association with any broker, dealer or investment adviser, as more fully described in paragraph 9, forms a basis for the revocation of Respondent’s registration as an agent in Connecticut pursuant to Section 36b-15(a)(2)(F)(ii) of the Act.

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

WHEREAS, the Commissioner has reason to believe that grounds exist to revoke Respondent’s registration as an agent in Connecticut pursuant to Sections 36b-15(a)(2)(C), 36b-15(a)(2)(D) and 36b-15(a)[2](F)(ii) of the Act;

WHEREAS, the Commissioner believes that the issuance of an order revoking 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 except as provided in subsection (c) of this section without (1) appropriate prior notice to the . . . registrant and to the employer or prospective employer if such . . . registrant 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 revoked, 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 July 30, 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, 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 revoking 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 8th day of July 2013.    Howard F. Pitkin 
    Banking Commissioner



CERTIFICATION

I hereby certify that on this 8th day of July 2013, the foregoing Notice of Intent to Revoke Registration as an Agent and Notice of Right to Hearing was sent by certified mail, return receipt requested, to David Miller, 9 Vernon Avenue, Rockville Centre, New York 11570, certified mail no. 7012 3050 0002 1692 5982; and David Miller, c/o Rochdale Securities LLC, 750 East Main Street, 7th Floor, Stamford, Connecticut 06902, certified mail no. 7012 3050 0002 1692 5999.
  

____/s/___________
Elena Zweifler
Prosecuting Attorney
                                         


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