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Casimir Capital L.P. * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER No. CO-2008-7606-S |
PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (the “Commissioner”) is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the “Act”), and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (the “Regulations”);
WHEREAS, Casimir Capital L.P. (“Casimir”) is a broker-dealer registered in Connecticut under the Act since January 30, 2001, and has its principal office located at 546 Fifth Avenue, 5th Floor, New York, New York;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, conducted an examination of Casimir’s records pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and a related investigation under Section 36b-26 of the Act to determine whether Casimir had violated, was violating or was about to violate any provision of the Act or any regulation or order under the Act (the “Investigation and Examination”);
WHEREAS, as a result of the Investigation and Examination, the Division obtained evidence, as more fully described in the Findings herein, that would support the initiation of administrative proceedings under Section 36b-15 of the Act to suspend or revoke Casimir’s broker-dealer registration under the Act or to restrict or impose conditions on the securities activities that the firm may perform in this state; and/or proceedings under Section 36b-27 of the Act seeking the entry of an order to cease and desist and/or an order imposing an administrative fine against Casimir;
WHEREAS, an administrative proceeding 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 Connecticut General Statutes;
WHEREAS, Section 4-177(c) of Chapter 54 of the Connecticut General Statutes provides that"[u]nless precluded by law, a contested case may be resolved by stipulation, agreed settlement, or consent order or by the default of a party";
WHEREAS, Section 36b-31(a) of the Act provides, in part, that: "The Commissioner may from time to time make, amend and rescind such ... orders as are necessary to carry out the provisions of Sections 36b-2 to 36b-33, inclusive [of the Connecticut Uniform Securities Act]";
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 Casimir reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, Casimir, independent of this matter, had previously determined to exit the retail brokerage business and has provided the Division with a written statement confirming that such decision was made in the summer of 2008 and has in fact ceased its retail brokerage operations and no longer employs a retail brokerage sales force;
WHEREAS, Casimir, without admitting or denying any of the Commissioner’s allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order; and
WHEREAS, Casimir, through its execution of this Consent Order, represents and agrees that none of the violations alleged in this Consent Order shall occur in the future;
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Casimir, through its execution of this Consent Order, voluntarily waives the following rights:
| 1. | To receive prior written notice within the meaning of Sections 36b-15(f), 36b-27(a), 36b-27(d) and 4-177(b) of the Connecticut General Statutes; |
| 2. | To present evidence and argument and to otherwise avail itself of Section 4-177c(a) of the Connecticut General Statutes; |
| 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. |
CONSENT TO ENTRY OF FINDINGS
WHEREAS, Casimir, through its execution of this Consent Order, accepts and consents to the entry of the following Findings by the Commissioner:
| 1. | The entry of this Consent Order is necessary or appropriate in the public interest and for the protection of investors, and consistent with the purposes fairly intended by the policy and provisions of the Act; |
| 2. | In contravention of Section 36b-6 of the Act, Casimir employed at least one agent who effected transactions in this state while not registered as an agent of the firm under the Act; |
| 3. | In contravention of Section 36b-16 of the Act, Casimir, through one or more of its agents, offered and sold to multiple Connecticut residents securities that were not registered under Sections 36b-17, 36b-18 or 36b-19 of the Act nor the subject of an exemptive claim or claim of covered security status under Section 36b-21 of the Act; |
| 4. | In employing unregistered “cold callers” who pre-qualified customers, Casimir engaged in conduct proscribed by FINRA Rule 1031. Such conduct constitutes a violation under Section 36b-31-15a(b) of the Regulations, and forms a basis for initiating administrative proceedings under Section 36b-15(a)(2)(H) of the Act; |
| 5. | In contravention of Section 36b-31-6f(b) of the Regulations, Casimir failed to reasonably supervise the activities of at least four of its agents who were in possession of unapproved research materials, sales presentations and/or sales scripts; |
| 6. | In contravention of Section 36b-14(a)(2) of the Act and Section 36b-31-14a of the Regulations, Casimir failed to accurately keep and maintain required books and records by maintaining an order ticket for a securities purchase in the account of at least one Connecticut client which indicated that the transaction was “solicited” while maintaining a trade confirmation for the same purchase which indicated that the transaction was “unsolicited”; and |
| 7. | In contravention of Section 36b-31-6f(b) of the Regulations, Casimir failed to establish, enforce, and maintain a system for supervising the activities of its agents that was reasonably designed to achieve compliance with applicable securities laws and regulations referenced herein. |
CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Casimir, through its execution of this Consent Order, consents to the Commissioner issuing an order imposing on it the following sanctions:
| 1. | Casimir, its representatives, agents, employees, affiliates, assigns, successors in interest, and those persons in active concert or participation with them shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any organizational or other device; |
| 2. | No later than the date this Consent Order is entered by the Commissioner, Casimir shall remit to the Department of Banking, via certified bank check or bank wire, payable to "Treasurer, State of Connecticut", the sum of fifteen thousand dollars ($15,000) representing the following: (a) twelve thousand five hundred dollars ($12,500) as an administrative fine; and (b) two thousand five hundred dollars ($2,500) as reimbursement for the Division’s costs of investigation; and |
| 3. | Casimir shall provide the Division Director with at least thirty (30) days advance written notice prior to re-establishing its retail brokerage operations and conducting solicited, retail brokerage business in the brokerage accounts of Connecticut customers. |
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 Casimir 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 or if any representations made by Casimir and reflected herein are subsequently discovered to be untrue; and |
| 3. | This Consent Order shall become final when issued. |
________/s/_________
Howard F. Pitkin
Banking Commissioner
Dated at Hartford, Connecticut
this 15th day of January 2009.
this 15th day of January 2009.
CONSENT TO ENTRY OF ORDER
I, Richard F. Sands, state on behalf of Casimir Capital L.P. 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 Casimir Capital L.P.; that Casimir Capital L.P. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Casimir Capital L.P. voluntarily consents to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
Casimir Capital L.P.
By
________/s/_______________
Richard F. Sands
President
State of: New York
County of: New York
On this 8th day of January 2009, personally appeared Richard F. Sands, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Casimir Capital L.P., a limited partnership, and acknowledged the same to be his free act and deed, before me.
_______________/s/______________
Notary Public
Date Commission Expires: 06/15/2011