DOB: Southridge RE Partners et al - Consent Order

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IN THE MATTER OF:


SOUTHRIDGE REAL ESTATE PARTNERS,
LIMITED PARTNERSHIP
a/k/a SOUTHRIDGE REAL ESTATE
PARTNERS, LP

RIDGEBURY PARTNERS, LLC

DOUGLAS R. ESPOSITO
(CRD No. 4259805)

STEPHEN MURRAY HICKS
(CRD No. 1248222)

(Collectively, "Respondents")

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CONSENT ORDER

DOCKET NO. CF-15-8113-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, 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 Respondents to determine if they have violated, were violating or were about to violate provisions of the Act or Regulations (“Investigation”);

WHEREAS, as a result of the Investigation, on July 10, 2015, 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”) (Docket No. CF-15-8113-S) against Respondents, which Notice is incorporated by reference herein;

WHEREAS, on July 27, 2015, Respondents, through their counsel, requested a hearing on the matters alleged in the Notice;

WHEREAS, on August 26, 2015, the Commissioner issued a Notification of Hearing and Designation of Hearing Officer, wherein the Commissioner scheduled the hearing on the matters alleged in the Notice for September 29, 2015 (“Hearing”);

WHEREAS, on September 21, 2015, the designated Hearing Officer granted a continuance of the Hearing to November 17, 2015;

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(4) 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, Respondents and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;

WHEREAS, the Commissioner finds that 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, Respondents expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;

AND WHEREAS, Respondents, through their execution of this Consent Order, specifically assure the Commissioner that none of the violations alleged in the Notice shall occur in the future.

II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive the following rights with respect to the Notice:

1. To be afforded 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 themselves of Section 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut;
3.
To present their position 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, Respondents, through their execution of this Consent Order, acknowledge the Commissioner’s allegations that:  (1) Respondents Douglas R. Esposito and Stephen Murray Hicks each violated Sections 36b-6(a) and 36b-6(c)(2) of the Act; (2) Respondent Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP violated Sections 36b-6(b) and 36b-16 of the Act; and (3) Respondent Ridgebury Partners, LLC violated Sections 36b-6(c)(1) and 36b-6(c)(3) of the Act.  Respondents do not admit or deny these allegations, but agree that sufficient evidence exists from which the Commissioner could find facts to support the issuance of an order to cease and desist and an order imposing an administrative fine per violation of the Act, or any regulation, rule or order adopted or issued under the Act against each of them;

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

AND WHEREAS, Respondents 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, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing on them the following sanctions:

1. Respondents, their 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; and
2. No later than the date this Consent Order is entered by the Commissioner, Respondents shall jointly and severally remit to the department by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut” the total sum of nine thousand four hundred forty dollars ($9,440), seven thousand five hundred dollars ($7,500) of which shall constitute an administrative fine; and one thousand nine hundred forty dollars ($1,940) 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 Respondents based upon a violation of this Consent Order if the Commissioner determines that compliance with the terms herein is not being observed;
3. Respondents shall not take any action or make or permit to be made any public statement, including in regulatory filings, any proceeding in any forum or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis; except that Respondents may state publicly or in any regulatory filing that the terms of the Consent Order recite that Respondents neither admit nor deny the allegations in the Consent Order.
4. Respondents shall not take any position in any proceeding brought by or on behalf of the Commissioner, or to which the Commissioner is a party, that is inconsistent with any part of this Consent Order.  Nothing is this provision affects Respondents’ (i) testimonial obligations; or (ii) right to take a legal or factual position in litigation or other legal proceeding in which the Commissioner is not a party;
5. Nothing in this Consent Order shall be construed as limiting the Commissioner’s ability to take enforcement action against Respondents 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
6. This Consent Order shall become final when entered.

So ordered at Hartford, Connecticut,       ____/s/___________ 
this 23rd day of November 2015.   Jorge L. Perez
    Banking Commissioner 



CONSENT TO ENTRY OF ORDER

I, Douglas R. Esposito state on behalf of Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP, 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 Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP; that Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP consents to the entry of this Consent Order.     

 
   Southridge Real Estate Partners Limited Partnership
     a/k/a Southridge Real Estate Partners, LP
       
By: _______/s/____________________________________
  Douglas R. Esposito
  Managing Member of Bridgewater Partners LLC
The Managing Member of Ridgebury Partners, LLC
The General Partner of Southridge Real Estate Partners
  Limited Partnership

 

State of:  Ct.
 
County of:  Fairfield
 
On this the 6th day of November 2015, before me, the undersigned officer, personally appeared Douglas R. Esposito, who acknowledged himself to be the Managing Member of Bridgewater Partners LLC, the Managing Member of Ridgebury Partners LLC, the General Partner of Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP, 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 company by himself as Managing Member of Bridgewater Partners LLC, the Managing Member of Ridgebury Partners LLC, the General Partner of Southridge Real Estate Partners Limited Partnership a/k/a Southridge Real Estate Partners, LP.
 
In witness whereof I hereunto set my hand.

____/s/_________________________
Notary Public
Date Commission Expires: 01/31/17


CONSENT TO ENTRY OF ORDER

I, Douglas R. Esposito, state on behalf of Ridgebury Partners, 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 Ridgebury Partners, LLC; that Ridgebury Partners, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Ridgebury Partners, LLC consents to the entry of this Consent Order.     

 
     Ridgebury Partners, LLC
       
By: _______/s/________________________________
  Douglas R. Esposito
Managing Member of Bridgewater Partners LLC
  The Managing Member of Ridgebury Partners, LLC

 

State of:  Ct.
 
County of:  Fairfield
 
On this the 6th day of November 2015, before me, the undersigned officer, personally appeared Douglas R. Esposito, who acknowledged himself to be the Managing Member of Bridgewater Partners LLC, the Managing Member of Ridgebury Partners LLC, 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 company by himself as Managing Member of Bridgewater Partners LLC, the Managing Member of Ridgebury Partners LLC.
 
In witness whereof I hereunto set my hand.

____/s/________________________
Notary Public
Date Commission Expires: 1/31/17


CONSENT TO ENTRY OF ORDER

I, Douglas R. Esposito, 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/________
Douglas R. Esposito



State of:  Ct.
 
County of:  Fairfield

On this the 6th day of November 2015, before me, the undersigned officer, personally appeared Douglas R. Esposito, 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/________________________
Notary Public
Date Commission Expires:  01/31/17

 
CONSENT TO ENTRY OF ORDER

I, Stephen Murray Hicks, 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/__________
Stephen Murray Hicks



State of:  Connecticut
 
County of:  Fairfield

On this the 30 day of October 2015, before me, the undersigned officer, personally appeared Stephen Murray Hicks, 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/____________________________
Notary Public
Date Commission Expires: June 30, 2017



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