DOB: Rojo, Andres et al - Consent Order

* * * * * * * * * * * * * * * * * * * 

IN THE MATTER OF:


ANDRES DARIO ROJO
(CRD No. 2724759)

ACERBUS, LLC

RED ADVISORS LLC
(IARD No. 171647)

DOMUM EQUITY 1, LTD

DOMUM EQUITY 2, LTD




* * * * * * * * * * * * * * * * * * *

 
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
*
 

CONSENT ORDER

No. CO-15-8252-S



 


I. PRELIMINARY STATEMENT

WHEREAS, the Banking Commissioner (the “Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (the “Act”), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies (the “Regulations”) promulgated under the Act;

WHEREAS, Section 36b-33 of the Act provides that the Commissioner has jurisdiction over offers and sales of securities made to Connecticut residents as well as securities offers and sales made from Connecticut to persons in other jurisdictions;

WHEREAS, Section 36b-33(f) of the Act adds that:  “Sections 36b-5, 36b-6, 36b-23 and 36b-24, so far as they apply to investment advisers and investment adviser agents, apply when any act instrumental in effecting prohibited conduct is done in this state, whether or not either party is then present in this state”;

WHEREAS, Andres Dario Rojo (“Rojo”) is an individual who, at all times pertinent hereto, was a resident of Connecticut;

WHEREAS, Acerbus, LLC (“Acerbus”) is a limited liability company formed in Connecticut on September 22, 2006.  Acerbus, which most recently maintained its principal office at 1 Atlantic Street, Suite 300, Stamford, Connecticut, remains an active entity according to records on file with the Connecticut Secretary of the State;

WHEREAS, Rojo is the Manager of Acerbus;

WHEREAS, from at least 2011, Acerbus represented on its website (acerbusllc.com) that it had “10 years devoted to investing and structuring of high networth [sic] families”; that “We provide ‘Conflict Free’ Advice:  transparency in every step”; and that its services included “Wholistic [sic] consolidation and wealth management.  Interface with money managers and banks.  Assessment and follow up of diversified global investments.  Access to the best money managers in each asset class.  Costs minimization.”  On its website Acerbus held itself out as having an address at 1200 East Putnam Avenue, Second Floor,  Riverside, Connecticut  06878-1460;

WHEREAS, although Acerbus rendered investment services from Connecticut from at least 2007 forward, at no time has Acerbus been registered as an investment adviser under the Act or under the Investment Advisers Act of 1940, nor has Rojo been registered as an investment adviser agent of Acerbus under the Act;

WHEREAS, on April 24, 2014, Rojo formed Red Advisors LLC as a Connecticut limited liability company.  Red Advisors LLC maintains its principal office at 1 Atlantic Street, Suite 300, Stamford, Connecticut 06901.  Red Advisors LLC applied for investment adviser registration under the Act on July 11, 2014, and Rojo applied for registration as an investment adviser agent of Red Advisors LLC in Connecticut on June 30, 2014.  Red Advisors LLC’s Form ADV stated that Rojo was its sole managing member and chief compliance officer, and that Acerbus was under common control with Red Advisors LLC;

WHEREAS, Domum Equity 1, Ltd (“Domum 1”) is a real estate limited partnership that at all times pertinent thereto was located at 1 Atlantic Street, Suite 300, Stamford, Connecticut.  Domum 1 represented in its Form D (Notice of Exempt Offering of Securities) filing with the Securities and Exchange Commission (“SEC”) that it was formed under Connecticut law.  According to the Form D filing, Domum made its first sale of securities on January 2, 2013;

WHEREAS, Domum 1 did not make its private offering exemption filing under the Act until September 24, 2014.  Section 36b-31-21b-9a(b) of the Regulations under the Act requires a pre-sale notice for offerings made pursuant to Section 4(a)(2) [formerly Section 4(2)] of the Securities Act of 1933, and Section 36b-21(e) of the Act requires that, for offerings made pursuant to Rule 506 of federal Regulation D, a Connecticut filing be made within 15 days of the first sale;

WHEREAS, Rojo is and was the Manager of Domum I;

WHEREAS, Domum Equity 2, Ltd (“Domum 2”) is a limited partnership formed under Florida law on December 10, 2014.  The general partner of Domum 2 is Domum Real Estate Partners, LLC.  Both Domum 2 and its general partner maintain a principal business address at 1 Atlantic Street, Stamford, Connecticut;

WHEREAS, in 2015, Domum 2 filed with the SEC a Form D (Notice of Exempt Offering of Securities) indicating that it was relying on the federal exemption from securities registration in Rule 506(b) of Regulation D.  The Form D filing, which was signed by Rojo as general partner, listed Rojo as an executive officer of Domum 2.  The Form D filing also stated that Domum 2 made its first sale of securities on December 8, 2014;

WHEREAS, it was only on June 25, 2015, and following an inquiry by the Division, that Domum 2 made its Rule 506 notice filing with the Commissioner pursuant to Section 36b-21(e) of the Act.  The associated filing fee was drawn on the account of Acerbus.  Section 36b-21(e) of the Act requires that any person who offers or sells a security that is a covered security under Section 18(b)(4)(D) of the Securities Act of 1933 must file a notice with the commissioner within fifteen days following the first sale;

WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation of Rojo, Acerbus, Red Advisors LLC, Domum 1 and Domum 2 pursuant to Sections 36b-26(a) and 36b-8 of the Act (the “Investigation”) to determine whether they, or any of them, had violated, were violating or were about to violate provisions of the Act or Regulations or any order thereunder;

WHEREAS, as a result of the Investigation, the Division obtained evidence that 1) from at least 2007 forward, Acerbus transacted business as an unregistered investment adviser in violation of Section 36b-6(c)(1) of the Act; 2) from at least 2007 forward, Rojo transacted business as an unregistered investment adviser agent of Acerbus in violation of Section 36b-6(c)(2) of the Act; 3) Domum 1 and Domum 2 violated Section 36b-16 of the Act by failing to timely file an exemptive claim or a claim of covered security status under Section 36b-21 of the Act and the Regulations thereunder; and 4) grounds exist under Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(M) of the Act for denying the registrations of Red Advisors LLC and Rojo as an investment adviser and investment adviser agent, respectively, based upon the conduct described herein;

WHEREAS, the Commissioner has reason to believe that the conduct described herein conduct [sic] violates certain provisions of the Act and Regulations, and would support administrative proceedings against Rojo, Acerbus, Domum 1, Domum 2 and Red Advisors LLC 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(4) 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, 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 the parties to this Consent Order reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;

WHEREAS, Rojo, Acerbus, Domum 1 and Domum 2 expressly consent 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, Rojo, Acerbus, Domum 1 and Domum 2, through their respective execution of this Consent Order, specifically represent and agree that the violations alleged in this Consent Order shall not occur in the future;

II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Rojo, Acerbus, Domum 1 and Domum 2, through their respective execution of this Consent Order, voluntarily waive 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 themselves 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 their respective positions in a hearing in which each 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, Rojo, Acerbus, Red Advisors LLC, Domum 1 and Domum [2], through their respective execution of this Consent Order, acknowledge the following allegations of the Commissioner and admit sufficient evidence exists for the Commissioner to issue an order to cease and desist, an order denying Rojo’s registration as an investment adviser agent in Connecticut, an order denying Red Advisors LLC’s registration as an investment adviser in Connecticut, and an order imposing an administrative fine of up to one hundred thousand dollars ($100,000) per violation of the Act, or any regulation, rule or order adopted or issued under the Act:

1.     From at least 2007 forward, Acerbus transacted business as an unregistered investment adviser in violation of Section 36b-6(c)(1) of the Act;
2.     From at least 2007 forward, Rojo transacted business as an unregistered investment adviser agent of Acerbus in violation of Section 36b-6(c)(2) of the Act;
3.     Domum 1 and Domum 2 violated Section 36b-16 of the Act by failing to timely file an exemptive claim or a claim of covered security status under Section 36b-21 of the Act and the Regulations thereunder; 
4.     Grounds exist under Sections 36b-15(a)(2)(B) and 36b-15(a)(2)(M) of the Act for denying the registrations of Red Advisors LLC and Rojo as an investment adviser and investment adviser agent, respectively; 

WHEREAS, the foregoing conduct would support administrative proceedings against Red Advisors LLC and Rojo under Section 36b-15 of the Act, and against Rojo, Acerbus, Domum 1 and Domum 2 under subsections (a) and (d) of Section 36b-27 of the Act;

AND WHEREAS, Rojo, Acerbus, Red Advisors LLC, Domum 1 and Domum 2 acknowledge the possible consequences of an administrative hearing and voluntarily agree to consent to the entry of the sanctions described below. 

IV.  CONSENT TO ENTRY OF SANCTIONS

WHEREAS, Rojo, Red Advisors LLC, Acerbus, Domum 1 and Domum 2, through their respective execution of this Consent Order, consent to the Commissioner’s entry of an order imposing on them the following sanctions:

1. Rojo, Acerbus, Domum 1 and Domum 2, their representatives, agents, employees, affiliates (including, without limitation, Red Advisors LLC), 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;
2. No later than the date this Consent Order is entered by the Commissioner, Rojo and Acerbus shall jointly and severally remit to the department via certified bank check made payable to “Treasurer, State of Connecticut” the total sum of four thousand seven hundred dollars ($4,700), two thousand five hundred dollars ($2,500) of which shall constitute an administrative fine and two thousand two hundred dollars ($2,200) of which shall be applied to reimburse the department for past due investment adviser and investment adviser agent registration fees; and
3. No later than the date this Consent Order is entered by the Commissioner, Rojo, Domum 1 and Domum 2 shall jointly and severally remit to the department via certified bank check made payable to “Treasurer, State of Connecticut” the total sum of one thousand two hundred fifty dollars ($1,250) as an administrative fine.

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 Andres Dario Rojo, Acerbus, LLC, Red Advisors LLC, Domum Equity 1, Ltd., Domum Equity 2, Ltd and/or their respective 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 Andres Dario Rojo, Acerbus, LLC, Red Advisors LLC, Domum Equity 1, Ltd., Domum Equity 2, Ltd and/or their respective 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;
4. Contemporaneously with the entry of this Consent Order, the name “Red Advisors LLC” be and is hereby entered on the register of investment advisers pursuant to Section 36b-8 of the Act;
5. Contemporaneously with the entry of this Consent Order, the name “Andres Dario Rojo” be and is hereby entered on the register of investment advisers agents pursuant to Section 36b-8 of the Act; and
6. This Consent Order shall become final when entered.

So ordered at Hartford, Connecticut       ____/s/___________ 
this 26th day of October,  2015.   Jorge L. Perez
    Banking Commissioner 



CONSENT TO ENTRY OF ORDER

I, Andres Dario Rojo, 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 entry of this Consent Order.     

 
______/s/______
Andres Dario Rojo
Individually



State of:  Connecticut
 
County of:  Fairfield

On this the 15th day of October 2015, before me, the undersigned officer, personally appeared Andres Dario Rojo, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained.
 
In witness whereof I hereunto set my hand.
    

_______/s/______________________
Jonathan J. Pezo
Notary Public
Date Commission Expires: 10-31-2019


CONSENT TO ENTRY OF ORDER

I, Andres Dario Rojo, state on behalf of Acerbus, LLC and on behalf of Red Advisors LLC, 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 Acerbus, LLC and on behalf of Red Advisors LLC; that Acerbus, LLC and Red Advisors LLC each agree freely and without threat or coercion of any kind to comply with the terms and conditions stated herein pertaining to them; and that Acerbus, LLC and Red Advisors LLC each consent to the entry of this Consent Order.     

 
     Acerbus, LLC
            
By   _____/s/__________
  Andres Dario Rojo
  Its Managing Member

 
     Red Advisors LLC
            
By   _____/s/__________
  Andres Dario Rojo
  Its Managing Member


State of:  Connecticut
 
County of:  Fairfield
 
On this the 15th day of October 2015, before me, the undersigned officer, personally appeared Andres Dario Rojo, who acknowledged himself to be the Managing Member of Acerbus, LLC and of Red Advisors LLC, both limited liability companies, and that he, as such Managing Member, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability companies by himself as Managing Member.
 
In witness whereof I hereunto set my hand.

 
_______/s/______________________
Jonathan J. Pezo
Notary Public
Date Commission Expires: 10-31-2019


CONSENT TO ENTRY OF ORDER

I, Andres Dario Rojo, state on behalf of Domum Equity 1, Ltd, 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 Domum Equity 1, Ltd; that Domum Equity 1, Ltd agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Domum Equity 1, Ltd consents to the entry of this Consent Order.     

 
Domum Equity 1, Ltd
By Domum Real Estate Partners,
     the General Partner of Domum Equity 1, Ltd
   
            
By   _______/s/____________________________
  Andres Dario Rojo
  A General Partner of Domum Real Estate Partners

 

State of:  Connecticut
 
County of:  Fairfield
 
On this the 15th day of October 2015, before me, the undersigned officer, personally appeared Andres Dario Rojo, who acknowledged himself to be the Manager of Domum Equity 1, Ltd, a limited partnership, and that he, as such Manager, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited partnership by himself as Manager.
 
In witness whereof I hereunto set my hand.

   
_______/s/______________________
Jonathan J. Pezo
Notary Public
Date Commission Expires: 10-31-2019



CONSENT TO ENTRY OF ORDER

I, Andres Dario Rojo, state on behalf of Domum Equity 2, Ltd, 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 Domum Equity 2, Ltd; that Domum Equity 2, Ltd agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Domum Equity 2, Ltd consents to the entry of this Consent Order.

Domum Equity 2, Ltd
By Domum Real Estate Partners,
     the General Partner of Domum Equity 2, Ltd
   
            
By   _______/s/____________________________
  Andres Dario Rojo
  A General Partner of Domum Real Estate Partners

 
 
State of:  Connecticut
 
County of:  Fairfield
 
On this the 15th day of October 2015, before me, the undersigned officer, personally appeared Andres Dario Rojo, who acknowledged himself to be the Executive Officer of Domum Equity 2, Ltd, a limited partnership, and that he, as such Executive Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited partnership by himself as Executive Officer.
 
In witness whereof I hereunto set my hand.

    
_______/s/______________________
Jonathan J. Pezo
Notary Public
Date Commission Expires: 10-31-2019



Administrative Orders and Settlements