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DANIEL QUENTIN HUMPHREY * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CF-11-7719-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 Respondents to determine if they had violated, were violating or were about to violate provisions of the Act or Regulations;
WHEREAS, on March 4, 2011, the Commissioner, acting pursuant to Section 36b-27 of the Act, issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (collectively “Notice”) against Respondents, which Notice is incorporated by reference herein;
WHEREAS, Respondents requested a hearing on the matters alleged in the Notice (“Hearing”);
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 36b-27(f) of the Act provides, in relevant part, that “[a]ny time after the issuance of an order or notice provided for in subsection (a) . . . or subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing”;
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, Respondents and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;
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, Respondents agree that the Notice may be used in construing the terms of this Consent Order, and agree to the language in this Consent Order;
WHEREAS, Humphrey has provided documentation to the Division evidencing his financial inability to pay the fine that otherwise would have been assessed against him pursuant to the Notice and this Consent Order;
AND WHEREAS, Respondents specifically assure the Commissioner that none of the violations alleged in the Notice or this Consent Order shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive 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 themselves of Section 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. | To present their position in a hearing in which they are 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, Respondents, through their execution of this Consent Order, acknowledge the following allegations of the Commissioner, without admitting or denying them, yet admits [sic] sufficient evidence exists for the Commissioner to issue a permanent 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. | Humphrey offered and sold securities to at least one Connecticut investor on at least three occasions, which securities were not registered in Connecticut under the Act. The offer and sale of such securities absent registration constitutes a violation of Section 36b-16 of the Act; |
| 2. | Humphrey transacted business as an agent of issuer absent registration on at least five occasions in violation of Section 36b-6(a) of the Act; |
| 3. | Humphrey violated Section 36b-31-6e of the Regulations by participating in private securities transactions without providing prior written notice to his employing broker-dealer describing in detail the proposed transactions and his proposed role therein and stating whether he had received or would receive selling compensation in connection with such transactions; and |
| 4. | Both Finity Financial Group, LLC and Humphrey, alone and doing business as Finity Financial Group, transacted business as an investment adviser in Connecticut absent registration in violation of Section 36b-6(c)(1) of the Act. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondents an opportunity for a hearing;
AND WHEREAS, Respondents acknowledge the possible consequences of an administrative hearing and voluntarily agree to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Respondents, their representatives, agents, employees, affiliates, assigns, or successors in interest 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, including without limitation, (1) offering and selling unregistered securities, (2) transacting business as an agent of issuer in this state absent registration, (3) participating in private securities transactions without providing prior written notice to the employing broker-dealer, and (4) transacting business as an investment adviser in this state absent registration; |
| 2. | Except as provided in paragraph 3 of Section IV Consent to Entry of Sanctions of this Consent Order, for a period of five (5) years commencing on the date this Consent Order is entered by the Commissioner, Humphrey is barred from (1) 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, and notwithstanding any definitional exclusion that might otherwise be available; (2) acting as a finder for compensation, or receiving referral fees, directly or indirectly, in connection with any recommendation, sale or purchase of securities; and (3) directly or indirectly soliciting or accepting funds for investment purposes from public or private investors in or from Connecticut; and |
| 3. | No earlier than three (3) years from the date this Consent Order is entered by the Commissioner, Humphrey may apply for registration as a broker-dealer, agent, investment adviser or investment adviser agent in Connecticut. The Commissioner, in the Commissioner’s sole discretion, may enter Humphrey’s name on the appropriate register, deny Humphrey’s registration, or restrict or impose conditions on any such registration 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. |
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 Respondents 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; and |
| 3. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut | _______/s/_________ | |
| this 10th day of November 2011. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Daniel Quentin Humphrey, 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/________________ |
| Daniel Quentin Humphrey |
State of: Utah
County of: Utah
On this the 27 day of October 2011, before me, Linda H. Giles, the undersigned officer, personally appeared Daniel Quentin Humphrey, 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/_____________________
_____/s/_____________________
Notary Public
Date Commission Expires: 4-11-15
Date Commission Expires: 4-11-15
CONSENT TO ENTRY OF ORDER
I, Daniel Quentin Humphrey, state on behalf of Finity Financial Group, LLC, 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 Finity Financial Group, LLC; that Finity Financial Group, LLC, agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Finity Financial Group, LLC consents to the entry of this Consent Order.
| Finity Financial Group, LLC | |
| By: | ______/s/______________ |
| Daniel Quentin Humphrey | |
| Member |
State of: Utah
County of: Utah
On this the 27 day of October 2011, before me, Linda H. Giles, the undersigned officer, personally appeared Daniel Quentin Humphrey, who acknowledged himself to be a Member of Finity Financial Group, LLC, a limited liability company, and that he, as such Member, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as Member.
In witness whereof I hereunto set my hand.
_____/s/______________________
Notary Public
Date Commission Expires: [4-11-15]