DOB: Tirex Corp - Threshie, John - Consent Order

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IN THE MATTER OF: 


JOHN L. THRESHIE, JR.

THE TIREX CORPORATION



(Collectively "Respondents")  
   

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CONSENT ORDER

NO. CO-17-8199-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 Tirex Corporation (“Tirex”), now or formerly of 1771 Post Road East, Westport, Connecticut, is a Connecticut based entity that holds itself out being involved in the tire recycling business.  Tirex is not and has not been registered in any capacity under the Act;
 
WHEREAS, John L. Threshie, Jr. (“Threshie”) is an individual whose address last known to the Commissioner is in Wilton, Connecticut.  At all times relevant hereto, Threshie was the President, Chief Executive Officer and sole employee of Tirex.  Threshie is not and has not been registered in any capacity 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 whether they have violated, were violating or were about to violate provisions of the Act or the Regulations (“Investigation”);
 
WHEREAS, as a result of such Investigation, the Division obtained evidence that, from at least 2013, Respondents offered and sold securities of Tirex pursuant to a letter agreement Threshie provided to investors at the time of their investment.  The letter agreement stated that in exchange for payment, shares of restricted Tirex stock would be issued when Tirex effected a share authorization.  In at least one instance, Respondents guaranteed the investment by representing in the letter agreement that “[i]f at any time you wish to recover any of your investment Tirex will gladly trade your shares and reimburse you.”  The securities offered and sold by Respondents during such time frame were not registered in Connecticut under Section 36b-16 of the Act, nor were they the subject of a filed exemption claim or claim of covered security status;
 
WHEREAS, in connection with the offer and sale of the unregistered securities, Respondents failed to disclose, inter alia, the risks associated with investing in Tirex and that the investors’ shares might never be issued if authorization failed to occur;
 
WHEREAS, on December 21, 2016, the Securities and Exchange Commission (“SEC”) filed a civil complaint against Threshie in the United States District Court for the District of Connecticut (“SEC Action”).  The complaint alleged that, beginning in 2006, Threshie offered and sold hundreds of millions of shares of Tirex stock to at least ninety-four individuals in at least nine states and in the process violated Sections 5(a) and 5(c) of the Securities Act of 1933 (SEC v. John L. Threshie, Jr., D. Conn. (Docket No. 3:16 CV 2013 (WWE));
 
WHEREAS, on December 28, 2016, the U.S. District Court for the District of Connecticut entered a Final Judgment against Threshie ordering that:  (a) Threshie be permanently enjoined from violating Sections 5(a) and 5(c) of the Securities Act of 1933; (b) Threshie be permanently barred from participating in an offering of penny stock; (c) Threshie be permanently restrained and enjoined from directly or indirectly soliciting or accepting funds or anything of value from any person to whom Threshie provides or has provided any information about Tirex without first providing such person a copy the SEC’s filed complaint and any related judgment against Threshie and the SEC’s November 12, 2015 Order of Suspension of Trading in Tirex Corporation stock; and (d) Threshie be liable for disgorgement of $581,815, representing profits gained as a result of the conduct alleged in the complaint, together with prejudgment interest of $140,446.57, and a civil penalty in the amount of $50,000;
 
WHEREAS, as a result of the Investigation, the Commissioner has reason to believe a basis exists to initiate administrative proceedings against Respondents under Section 36b-27 of the Act, as amended by Public Act 17-236;
 
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-24, 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, as amended, 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, 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 Respondents reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
 
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;
 
WHEREAS, Respondents expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
 
WHEREAS, Threshie has provided the Commissioner with a written financial affidavit demonstrating that neither he nor Tirex is financially able to pay any restitution and/or fine in addition to the amount ordered as a result of the aforementioned SEC Action, or that might otherwise have been imposed against either of them pursuant to Section 36b-27 of the Act, as amended, as a result of an administrative proceeding or as a term 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 this Consent Order 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:

1. To be afforded notice and an opportunity for a hearing within the meaning of Section 36b-27 of the Act, as amended, 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, as amended, 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 following allegations of the Commissioner without admitting or denying them:

1. Respondents violated Section 36b-16 of the Act by offering and selling unregistered securities in or from Connecticut; and
2. Respondents violated Section 36b-4 of the Act by failing to disclose, inter alia, the risks associated with investing in Tirex and that the investors’ shares might never be issued if authorization failed to occur;

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 an order imposing on them the following sanctions:

1. Respondents, their representatives, officers, agents, employees, affiliates, assigns, control persons or successors in interest shall cease and desist from directly or indirectly violating the provisions of the Act or any Regulation or order under the Act, including, without limitation engaging in any activity in or from Connecticut that violates Sections 36b-16 or 36b-4 of the Act; and
2. For a period of ten (10) years commencing on the date this Consent Order is entered by the Commissioner, Respondents shall be BARRED from:  (a) transacting business in or from Connecticut as an agent, broker-dealer, broker-dealer agent, investment adviser or investment adviser agent, as such terms are defined in the Act, and notwithstanding any definitional exclusion that might otherwise be available under the Act; (b) maintaining a direct or indirect ownership interest in a broker-dealer or an investment adviser registered or required to be registered in Connecticut; and (c) acting in any other capacity that requires a license or registration under laws administered by the Commissioner.

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 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 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;
4. Respondents shall not take any action or make or permit to be made any public statement, including in regulatory filings 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;
5. 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.  However, nothing in this Consent Order affects Respondents’ testimonial obligations or right to take any legal or factual position in litigation, arbitration, or other legal proceedings in which the Commissioner is not a party; and
6. This Consent Order shall become final when entered.


 
So ordered at Hartford, Connecticut,      ____/s/_____________
this 22nd day of September 2017.      Jorge L. Perez
    Banking Commissioner 

   
CONSENT TO ENTRY OF ORDER

I, John L. Threshie, Jr., 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/_________
John L. Threshie, Jr.



State of:  CT
 
County of:  Fairfield
 

On this the 20 day of Sept. 2017, before me, the undersigned officer, personally appeared John L. Threshie, Jr., 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:  12/31/2020
      

      
CONSENT TO ENTRY OF ORDER

I, John L. Threshie, Jr., state on behalf of The Tirex Corporation, 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 The Tirex Corporation; that The Tirex Corporation agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that The Tirex Corporation consents to the entry of this Consent Order.   

 
    The Tirex Corporation
   
              
By: ____/s/______________________
John L. Threshie, Jr.
  President and Chief Executive Officer



State of:  CT
 
County of: Fairfield
 

On this the 20th day of September 2017, before me, the undersigned officer, personally appeared John L. Threshie, Jr., who acknowledged himself to be the President and Chief Executive Officer of The Tirex Corporation, a corporation, and that he, as such President and Chief Executive Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President and Chief Executive Officer.
 
In witness whereof I hereunto set my hand.
  
 
         
_____/s/________________________
Notary Public
Date Commission Expires:  12/31/2020

 

  

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