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ALEXANDER HAMILTON BRITNELL * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET No. CO-11-7944-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 promulgated under the Act (“Regulations”);
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 Britnell, to determine whether Britnell had violated, was violating or was about to violate any provision of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, the Division obtained evidence that Britnell referred at least four (4) Connecticut residents to invest with Michael S. Goldberg (“Goldberg”), member of Michael S. Goldberg, LLC d/b/a Acquisitions Unlimited Group (“AUG”);
WHEREAS, Britnell maintains that he invested his own funds with Goldberg and AUG;
WHEREAS, Goldberg represented to investors that AUG liquidated distressed assets obtained from JP Morgan Chase Bank (“Chase Asset Deals”). This purportedly enabled Goldberg to pay investors a return on capital of up to 20 percent in a short period of time, typically 90 days;
WHEREAS, Goldberg was arrested and charged with allegedly devising and executing a scheme to defraud investors of more than one hundred million dollars ($100,000,000) over an approximately 12 year period. Goldberg pleaded guilty to three counts of wire fraud, and on May 16, 2011, was sentenced to a term of imprisonment of 120 months on each count, to be served concurrently (United States v. Michael S. Goldberg, D. Conn., Criminal No. 3:10 CR192 (JCH));
WHEREAS, Goldberg is in the custody of the Federal Bureau of Prisons, with a projected release date of April 2, 2020. Goldberg is involved in two Chapter 7 bankruptcy proceedings; the bankruptcy trustee will be the vehicle through which restitution is made to the victims of Goldberg’s scheme;
WHEREAS, following an inquiry by the Division pursuant to Section 36b-26 of the Act, Britnell provided documentation indicating that from approximately November 2008 to November 2009, four (4) Connecticut individuals each invested in Goldberg’s Chase Asset Deals as a result of the efforts of Britnell; and Britnell represented that he had received referral fees for such referrals;
WHEREAS, the Commissioner alleges that, at the time Connecticut sales of the Goldberg Chase Asset Deals were made, Britnell was not registered as an agent under Section 36b-6 of the Act;
WHEREAS, the securities Britnell offered were neither registered, nor had exemptive filings been made, in violation of 36b-16 of the Act, nor were they covered securities;
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 of Connecticut State Agencies 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 Britnell 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 issuance 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, Britnell agrees to the language in this Consent Order;
WHEREAS, Britnell has provided documentation to the Division evidencing his financial inability to pay the fine that otherwise would have been assessed against him pursuant to this Consent Order;
AND WHEREAS, Britnell, 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, Britnell, 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 of the Act 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, Britnell, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, without admitting or denying them, yet admits that sufficient evidence exists for the Commissioner to issue an order to cease and desist 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 thereunder:
| 1. | Britnell violated Section 36b-6(a) of the Act by transacting business as an agent in Connecticut absent registration; and |
| 2. | Britnell violated Section 36b-16 of the Act by offering and selling securities that were not registered under the Act to at least four (4) Connecticut investors. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Britnell an opportunity for a hearing;
AND WHEREAS, Britnell 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 SANCTIONSWHEREAS, Britnell, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Britnell 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 person, organization or other device; |
| 2. | For a period of seven (7) years commencing on the date this Consent Order is entered by the Commissioner, Britnell is barred from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent, as such terms are defined in the Act, including acting as a finder for compensation, splitting commissions, or receiving referral fees, directly or indirectly, in connection with any recommendation, sale or purchase of securities; |
| 3. | Britnell shall consult with Connecticut legal counsel sufficiently experienced in state and federal securities law to discuss any future securities related activities to ensure compliance with applicable securities laws; and |
| 4. | Nothing in this Consent Order shall preclude Britnell, upon a showing of good cause, from applying in writing for relief from the provisions of paragraph 2 of Section IV Consent to Entry of Sanctions of this Consent Order after five (5) years have elapsed from the entry hereof. The grant of such relief shall be in the sole discretion of the Division. |
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 Britnell 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 Britnell and reflected herein are subsequently discovered to be untrue; and |
| 3. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | _______/s/____________ | |
| this 14th day of Ocotber [sic] 2011. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Alexander Hamilton Britnell, 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/____________ |
| Alexander Hamilton Britnell |
State of: Connecticut
County of: Hartford
On this the 12th day of October 2011, before me, Patricia B. Fradeth, the undersigned officer, personally appeared Alexander Hamilton Britnell, 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: 3/31/2012