DOB: Mittler Mercaldo - Consent Order

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IN THE MATTER OF: 

MITTLER & MERCALDO
INVESTMENT ADVISORS


CRD No. 126033

   

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CONSENT ORDER

NO. CO-14-8188-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 (“Regulations”) promulgated under the Act;
 
WHEREAS, Mittler & Mercaldo Investment Advisors (“M & M”) is an investment adviser registered under the Act since March 2, 2004, with its principal office located at 42 Main Street, Danbury, Connecticut 06810;
 
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an examination of M & M pursuant to Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations (“Examination”) and a related investigation pursuant to Section 36b-26(a) of the Act (“Investigation”) to determine whether M & M had violated, was violating or was about to violate provisions of the Act or Regulations or any order thereunder;
 
WHEREAS, as a result of the Examination and Investigation, the Division obtained evidence that M & M employed an unregistered investment adviser agent between 2006 and 2014, who was paid for client referrals.  On July 10, 2014, such investment adviser agent became registered under the Act;
 
WHEREAS, the Commissioner has reason to believe that the foregoing conduct violates certain provisions of the Act and Regulations, and would support administrative proceedings against M & M under Sections 36b-15 and 36b-27 of the Act;
 
WHEREAS, an administrative proceeding initiated under Sections 36b-15 and 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 4-177(c) of the General Statutes of Connecticut and Section 36a-1-55(a) of the Regulations provide that a contested case may be resolved by consent order, unless precluded by law;
 
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, M &M has represented to the Division that it has retained a compliance consultant;
 
WHEREAS, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and M & M reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
WHEREAS, M & M expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
 
WHEREAS, the Commissioner finds that the entry 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;
 
AND WHEREAS, M & M, through its execution of this Consent Order, specifically represents and agrees that the violation alleged in this Consent Order shall not occur in the future.   

II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, M & M, through its 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 Sections 36b-15(f) and 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 itself of Sections 36b-15(f) and 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut;
3. To present its position in a hearing in which it 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, M & M, through its execution of this Consent Order, acknowledges the following allegation of the Commissioner and admits sufficient evidence exists for the Commissioner to issue an order to cease and desist, an order suspending or revoking M & M’s registration as an investment adviser in Connecticut, and an order imposing a maximum administrative fine of one hundred thousand dollars ($100,000) per violation of the Act, or any regulation, rule or order adopted or issued under the Act:

  M & M violated Section 36b-6(c) of the Act by employing an unregistered investment adviser agent.

WHEREAS, the foregoing conduct would support administrative proceedings against M & M under Section 36b-15(a)(2)(B) of the Act and subsections (a) and (d) of Section 36b-27 of the Act;

AND WHEREAS, M & M 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, M & M, through its execution of this Consent Order, consents to the Commissioner’s entry of an order imposing on it the following sanctions:

1. M & M, its representatives, agents, employees, affiliates, assigns, subsidiaries, and successors in interest shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation, rule or order adopted or issued under the Act, either directly or through any person, organization or other device, including without limitation employing one or more unregistered investment adviser agents; and
2. No later than the date this Consent Order is entered by the Commissioner, M & M shall remit to the Department, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of five thousand six hundred dollars ($5,600), five thousand dollars ($5,000) of which shall constitute an administrative fine; and six hundred dollars ($600) of which shall be applied to reimburse the department for past due registration fees.

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 M & M and/or its affiliates and successors in interest 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;
3. Nothing in this Consent Order shall be construed as limiting the Commissioner’s ability to take enforcement action against M & M and/or its affiliates and successors in interest based upon evidence of which the Division was unaware on the date hereof relating to a violation of the Act or any regulation or order under the Act; and
4. This Consent Order shall become final when entered.


 
So ordered at Hartford, Connecticut,      _______/s/_________
this 5th day of January 2015.      Howard F. Pitkin 
    Banking Commissioner 

   
CONSENT TO ENTRY OF ORDER

I, Anthony J. Mercaldo, state on behalf of Mittler & Mercaldo Investment Advisors, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Mittler & Mercaldo Investment Advisors; that Mittler & Mercaldo Investment Advisors agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Mittler & Mercaldo Investment Advisors consents to the entry of this Consent Order.   

 
    Mittler & Mercaldo Investment Advisors
   
              
By: ________/s/______________________
[Anthony J. Mercaldo]
  Partner



State of:  Connecticut

County of:  Fairfield


On this the 23 day of December 2014, before me, Sofia Morais, the undersigned officer, personally appeared Anthony J. Mercaldo, who acknowledged himself to be a Partner in Mittler & Mercaldo Investment Advisors, a Partnership, and that he, as such Partner, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the Partnership by himself as Partner.
 
In witness whereof I hereunto set my hand.
  
 
         
_____/s/_______________________
Notary Public
Date Commission Expires:  12/31/16
    

  

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