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DAVID P. PETRUZZI * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER No. CO-10-7758-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, on October 21, 2009, David P. Petruzzi (“Petruzzi”) filed with the Commissioner an application for registration as a broker-dealer agent of MTL Equity Products, Inc. (CRD number 15764) pursuant to Sections 36b-7 and 36b-32 of the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking conducted an investigation of Petruzzi pursuant to Section 36b-8 of the Act;
WHEREAS, as a result of such investigation, the Division obtained evidence that on July 24, 2008, the State of Connecticut Insurance Department issued a Complaint, Stipulation and Final Order (Docket No. MC-08-25) against Petruzzi placing all insurance licenses issued to Petruzzi on a probationary status for one year and fining Petruzzi $500 based on allegations that Petruzzi sold an unsuitable insurance policy to an elderly Connecticut resident and misrepresented himself by signing the related insurance application as the applicant’s “trusted relative, friend or financial advisor” when this was not the case;
WHEREAS, Section 36b-15(a) of the Act provides, in part, that “[t]he commissioner may, by order, deny . . . any registration or, by order, restrict or impose conditions on the securities or investment advisory activities that an applicant . . . may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) the applicant . . . (F) is the subject of any of the following sanctions that are currently effective or were imposed within the past ten years . . . (v) a denial, suspension, revocation or other sanction issued by . . . any other state . . . financial services regulator based upon nonsecurities violations of any state . . . law under which a business involving . . . insurance . . . is regulated, or . . . (H) has engaged in . . . dishonest or unethical practices in the . . . insurance business, including abusive sales practices in the business dealings of such applicant . . . with current or prospective customers or clients”;
WHEREAS, MTL Equity Products, Inc. subsequently filed to withdraw Petruzzi’s application as a broker-dealer agent, which withdrawal request became effective by operation of law ninety days following the notice of intent to withdraw;
WHEREAS, Section 36b-15(e)(1) of the Act provides, in part, that “[i]f withdrawal automatically becomes effective, the commissioner may nevertheless institute a denial . . . proceeding under subsection (a) of this section within one year after withdrawal became effective”;
WHEREAS, Petruzzi neither admits nor denies that the activities and sanctions described herein would support administrative proceedings under Section 36b-15 of the Act;
WHEREAS, Petruzzi, through his consent to the entry of this Consent Order, represents that 1) during the limited term of his association with MTL Equity Products, Inc. he did not conduct any securities sales activities that would cause him be deemed an “agent” within the meaning of Section 36b-3(1) of the Act; and 2) he will not engage in any future securities-related activities in or from this state without compliance with the Act and the Regulations thereunder;
WHEREAS, an administrative proceeding under Section 36b-15 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 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-33, inclusive [of the Act]”;
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, 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 Petruzzi reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Petruzzi, through his execution of this Consent Order, voluntarily waives the following rights:
| 1. | To receive prior written notice within the meaning of Sections 36b-15(f) and 4-177(b) of the Connecticut General Statutes; |
| 2. | To present evidence and argument and to otherwise avail himself of Section 4-177c(a) of the Connecticut General Statutes; |
| 3. | To present his position in a hearing in which he 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. |
FINDINGS OF THE COMMISSIONER AS TO EVIDENTIARY SUFFICIENCY TO INITIATE ADMINISTRATIVE PROCEEDINGS
WHEREAS, the Commissioner finds that the issuance of the July 24, 2008 Complaint, Stipulation and Final Order (Docket No. MC-08-25) against Petruzzi by the State of Connecticut Insurance Department, as more fully described above, would support the initiation of administrative proceedings under Sections 36b-15(a)(2)(F) and 36b-15(a)(2)(H) of the Act to deny Petruzzi’s broker-dealer agent registration under the Act or to restrict or impose conditions on the securities activities that Petruzzi may perform in this state;
WHEREAS, Petruzzi, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:
| 1. | (a) For a period of twenty-four months, Petruzzi shall not (1) apply for registration under the Act, or transact business in or from Connecticut as, a broker-dealer, agent, investment adviser or investment adviser agent as such terms are defined in Section 36b-3 of the Act; (2) rely on any definitional exclusion or exemption under the Act that would otherwise excuse registration by a person transacting business in or from Connecticut as an agent of issuer, broker-dealer agent, investment adviser agent, broker-dealer or investment adviser; (3) supervise any broker-dealer agents with respect to securities business transacted in or from Connecticut or with respect to Connecticut-based securities brokerage accounts; and (4) act as a finder for compensation, receive or split commissions or similar remuneration and/or receive referral fees in conjunction with the offer, sale or purchase of securities effected in or from Connecticut; (b) The twenty-four month term hereunder shall run from the date of Petruzzi's application for registration as an agent of MTL Equity Products, Inc. and shall conclude on November 1, 2011; and |
| 2. | After November 1, 2011, Petruzzi may apply for registration under the Act as an agent, investment adviser agent, investment adviser or broker-dealer, provided he files with the Division Director, concurrent with such application, a written submission stating that he has not been the subject of any securities-related complaints, actions or proceedings since the entry of this Consent Order and that he has at all times been in compliance with this Consent Order. The Commissioner, in the Commissioner’s sole discretion, may enter Petruzzi’s name on the appropriate register, deny Petruzzi’s registration, or restrict or impose conditions on the securities or investment advisory activities that Petruzzi may perform in this state without making the findings required by Section 36b-15(a) of the Act or complying with the requirements of subsections (f) and (g) of Section 36b-15 of the Act; |
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 Petruzzi if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by Petruzzi and reflected herein is subsequently discovered to be untrue; |
| 3. | This Consent Order shall not preclude additional proceedings by the Commissioner against Petruzzi for acts or omissions not specifically addressed in this Consent Order or for acts and/or omissions that do not arise from the facts or transactions addressed herein; and |
| 4. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut | _______/s/_________ | |
| this 23rd day of June 2010. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, David P. Petruzzi, being duly sworn, 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 voluntarily consent to the entry of this Consent Order, expressly waiving any right to a hearing on the matters described herein.
| ______/s/__________________ | |
| David P. Petruzzi | |
Subscribed and sworn to before me
this 17th day of June 2010.
______/s/__________________________
Notary Public
My Commission Expires: Sept. 30, 2014