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IN THE MATTER OF: SMH CAPITAL, INC. * * * * * * * * * * * * * * |
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STIPULATION AND AGREEMENT File No. ST-07-7458-S |
WHEREAS, the Banking Commissioner (the “Commissioner”) is responsible for administering 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 (the "Regulations") promulgated under the Act;
WHEREAS, SMH Capital, Inc. (“SMH”) of 600 Travis, Suite 3100, Houston, Texas, is a broker-dealer that became registered under the Act on June 4, 1991. SMH operates a branch office located at 10 Glenville Street, Third Floor, Greenwich, Connecticut that became registered under the Act on May 12, 2006;
WHEREAS, during the course of an examination of SMH, the Securities and Business Investments Division (the “Division”) of the Department of Banking obtained evidence that 1) from May 2007 to approximately August 2007, SMH employed Thomas Munster (“Munster”) (CRD number 2376738) as an agent at a time when such individual was not registered under Section 36b-6(a) of the Act; 2) from approximately May 2007 to August 2007, SMH employed Luke Imperatore (“Imperatore”) (CRD number 2842654) as an agent at a time when such individual was not registered under Section 36b-6(a) of the Act; 3) from approximately May 2007 to September 2007, SMH employed Trevor Barnett (“Barnett”) (CRD number 4722196) as an agent at a time when such individual was not registered under Section 36b-6(a) of the Act; and 4) from approximately May 2007 forward, SMH employed one William Linnan (“Linnan”) (CRD number 1547144) as an agent at a time when such individual was not registered under Section 36b-6(a) of the Act;
WHEREAS, Section 36b-6(b) of the Act provides, in part, that: "No broker-dealer shall employ an agent unless such agent is (1) registered under sections 36b-2 to 36b-33, inclusive, or (2) an associated person who represents a broker-dealer in effecting transactions described in subdivisions (2) and (3) of Section 15(h) of the Securities Exchange Act of 1934";
WHEREAS, Munster and Imperatore became registered as broker-dealer agents of SMH under the Act on August 6, 2007; Barnett became registered as a broker-dealer agent of SMH under the Act on September 25, 2007; and Linnan applied for agent registration under the Act on August 30, 2007 but remains unregistered due to an examination deficiency;
WHEREAS, SMH maintains and represents to the Division that Munster, Imperatore, Barnett and Linnan serviced only institutional clients;
WHEREAS, the Commissioner acknowledges that SMH cooperated with the Division in providing requested information and documents;
WHEREAS Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;
WHEREAS SMH desires to settle the matters described herein and voluntarily enters into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding adjudicating any issue of fact or law on the matters described herein;
WHEREAS SMH, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| (1) | No later than the date this Stipulation and Agreement is executed by the Commissioner, SMH shall pay to the department by check made payable to “Treasurer, State of Connecticut” the sum of three thousand dollars ($3,000), one thousand dollars ($1,000) of which shall represent reimbursement for the Division’s cost of conducting its examination of SMH and two thousand dollars ($2,000) of which shall constitute an administrative fine; |
| (2) |
SMH shall comply with all statutory requirements governing the registration of affected personnel as broker-dealer agents, and shall review, revise and implement such supervisory and compliance procedures as are necessary to ensure such compliance; |
| (3) | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against SMH based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by SMH and reflected herein is subsequently determined to be untrue; and |
| (4) | This Stipulation and Agreement shall become binding when executed by all parties hereto. |
IN WITNESS WHEREOF
________/s/_________
Howard F. Pitkin
Banking Commissioner
this 21st day of November 2007.
I, Thomas Anderson, state on behalf of SMH Capital, Inc., that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of SMH Capital, Inc., and that SMH Capital, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
SMH Capital, Inc.
By
________/s/_______________
Thomas Anderson
Chief Compliance Officer
On this [blank in original] day of [blank in original] 2007, personally appeared Thomas Anderson, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of SMH Capital, Inc. a corporation, and acknowledged the same to be his free act and deed, before me.
___________/s/__________________
Notary Public
My Commission Expires: April 30, 2011