| * * * * * * * * * * * * * * * * * *
* * * * * * * * * * * * * * * * * * |
*
* * * * * * * * * *
* * |
CONSENT ORDER NO. CO-13-7936-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, Howard Baldwin, Sr. (“Baldwin”) is an individual whose address last known to the Commissioner is 140 Huyshope Avenue, Apt. 601, Hartford, Connecticut 06106. Baldwin is not and has not been registered in any capacity under the Act;
WHEREAS, Hollywood Next Holdings LLC (“HNH”), whose name was originally Hollywood East, LLC, is a Delaware limited liability company, with a principal place of business of 225 Parkway North, Waterford, Connecticut 06385. HNH is a now defunct film production studio created with the goal of producing a slate of independent films;
WHEREAS, at all times relevant hereto, Baldwin has been a director and a control person of HNH;
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 Baldwin to determine whether he violated, had violated or was about to violate provisions of the Act or Regulations (“Investigation”);
WHEREAS, Baldwin cooperated with the Division’s requests for information throughout the Investigation;
WHEREAS, as a result of such Investigation, the Division alleges that at various times from approximately April 2008 to approximately December 2008 Baldwin: (1) offered and sold securities in and from Connecticut to at least one investor, which securities were not registered in Connecticut under Section 36b-16 of the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they the subject of a filed exemption claim or claim of covered security status; and (2) in connection with the offer, sale or purchase of such securities, directly or indirectly, omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading;
WHEREAS, the Commissioner has reason to believe that the foregoing conduct violates certain provisions of the Act, and would support administrative proceedings against Baldwin under Section 36b- 27 of the Act;
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(2) 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 Baldwin reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, Baldwin expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
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;
AND WHEREAS, Baldwin, through his execution of this Consent Order, specifically assures 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, Baldwin, through his execution of this Consent Order, voluntarily waives the following rights:
| 1. | To be afforded notice and 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 himself of Section 36b-27 and Section 4-177c(a) of the General Statutes of Connecticut; |
| 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. |
III. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Baldwin, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, and does not admit or deny these allegations, but admits sufficient evidence exists for the Commissioner to issue an order to cease and desist, an order to make restitution, and an order imposing a maximum administrative fine of one hundred thousand dollars ($100,000) per violation of the Act, or any regulation, rule or order adopted or issued under the Act:
| 1. | Baldwin violated Section 36b-16 of the Act through the offer and sale of securities in or from Connecticut to at least one investor, which securities were not registered in Connecticut under the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they subject to an exemption claim or claim of covered security status; |
| 2. | Baldwin violated Section 36b-4(a)(2) of the Act by, in connection with the offer, sale or purchase of any securities, directly or indirectly, omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; and |
| 3. | The foregoing conduct, if proven, forms a basis for the initiation of administrative proceedings against Baldwin pursuant to Section 36b-27 of the Act; |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Baldwin an opportunity for a hearing;
AND WHEREAS, Baldwin acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Baldwin, through his execution of this Consent Order, consents to the Commissioner’s entry of an order imposing on him the following sanctions:
| 1. | Baldwin shall CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: offering and selling unregistered securities in and from Connecticut, and in connection with the offer, sale or purchase of any security, directly or indirectly, omitting to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading; and |
| 2. | No later than the date this Consent Order is entered by the Commissioner, Baldwin shall remit to the Department by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut,” the sum of forty thousand dollars ($40,000), which shall constitute an administrative fine. |
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 Baldwin 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 Baldwin 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 |
| 4. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | _______/s/_________ | |
| this 24th day of September 2013. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Howard Baldwin, Sr., 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/_________ |
| Howard Baldwin, Sr. |
State of: Connecticut
County of: Hartford
On this the 28th day of August 2013, before me, Kevin J. McEleney, the undersigned officer, personally appeared Howard Baldwin, Sr., 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/______________________ |
| Kevin J. McEleney, Esq. |
| Commissioner of the Superior Court |