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RESILIENT PARTNERS, LLC (Collectively "Respondents") * * * * * * * * * * * * * * * * * * * |
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AMENDED AND RESTATED AMENDED AND RESTATED AND NOTICE OF RIGHT TO HEARING DOCKET NO. CF-2009-7333-S |
I. AMENDED AND RESTATED PRELIMINARY STATEMENT
| 1. | 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 the regulations promulgated thereunder (Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies) (“Regulations”). |
| 2. |
Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation into the activities of Respondents to determine if they have violated, are violating or are about to violate provisions of the Act or Regulations. Section 36b-26(a) of the Act provides, in pertinent part:
The commissioner may, subject to the provisions of the Freedom of Information Act . . . (1) [m]ake such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated, is violating or is about to violate any provision of sections 36b-2 to 36b-33, inclusive, or any regulation or order thereunder . . . . |
| 3. | As a result of the investigation by the Division, the Commissioner has reason to believe that Respondents have violated certain provisions of the Act. |
| 4. |
As a result of the investigation by the Division, the Commissioner has the authority to issue a cease and desist order against Respondents pursuant to Section 36b-27(a) of the Act, which provides, in pertinent part:
Whenever it appears to the commissioner after an investigation that any person has violated, is violating or is about to violate any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may, in the commissioner’s discretion, order (1) the person . . . to cease and desist from the violations . . . of the provisions of said sections . . . . After such an order is issued, the person named in the order may, within fourteen days after receipt of the order, file a written request for a hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. |
| 5. |
As a result of the investigation by the Division, the Commissioner has the authority to impose a fine on Respondents pursuant to Section 36b-27(d) of the Act, which provides, in pertinent part:
(1) Whenever the commissioner finds as the result of an investigation that any person has violated any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may send a notice to (A) such person . . . by registered mail, return receipt requested . . . . Any such notice shall include: (i) A reference to the title, chapter, regulation, rule or order alleged to have been violated; (ii) a short and plain statement of the matter asserted or charged; (iii) the maximum fine that may be imposed for such violation; and (iv) the time and place for the hearing. Any such hearing shall be fixed for a date not earlier than fourteen days after the notice is mailed.
(2) The commissioner shall hold a hearing upon the charges made unless such person fails to appear at the hearing. Any such hearing shall be held in accordance with the provisions of chapter 54. After the hearing if the commissioner finds that the person has violated . . . any of the provisions of sections 36b-2 to 36b-33, inclusive, . . . the commissioner may, in the commissioner’s discretion and in addition to any other remedy authorized by said sections, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. If such person fails to appear at the hearing, the commissioner may, as the facts require, order that a fine not exceeding one hundred thousand dollars per violation be imposed upon such person. The commissioner shall send a copy of any order issued pursuant to this subsection by registered mail, return receipt requested, . . . to any person named in such order. |
| 6. | As a result of the investigation conducted by the Division, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing on July 1, 2009 (collectively “Notice”) against Respondents, which Notice is hereby restated and superseded. |
| 7. | The Notice provided that a hearing on the Notice of Intent to Fine would be held on September 15, 2009, and if Respondents requested a hearing on the Order to Cease and Desist, such hearing would also be held on September 15, 2009. |
| 8. |
To date, Respondents have not requested a hearing concerning the Order to Cease and Desist. |
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II. AMENDED AND RESTATED RESPONDENTS | |
| 9. |
Resilient is a Nevada limited liability company whose address last known to the Commissioner is 318 North Carson Street, Suite 208, Carson City, Nevada 89701. |
| 10. | Garcia is an individual whose address last known to the Commissioner is 143 Ironwood Road, Guilford, Connecticut 06437. |
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III. AMENDED AND RESTATED STATEMENT OF FACTS | |
| 11. | From at least August 2002 to October 10, 2005, Resilient was the manager of Paramount Equity Partners, LLC (“Paramount”), an investment fund located in Nevada and Connecticut. |
| 12. | From at least August 2002 to October 10, 2005, Garcia was a member and manager of Resilient, and was also a member and manager of Paramount. |
| 13. |
From at least August 2002 to October 10, 2005, Resilient, through Garcia, advised and solicited at least eight individuals, including three individuals located in Connecticut, to invest in limited partnership interests in Paramount. Resilient and Garcia engaged in these activities from Connecticut and received compensation or remuneration for such services. |
| 14. | From at least August 2002 to October 2005, Resilient, through Garcia, made recommendations and rendered advice regarding securities to Paramount from Connecticut. Resilient and Garcia received compensation, directly or indirectly, for providing such advisory services. |
| 15. | At no time has Resilient been registered in Connecticut as an investment adviser, nor does it qualify for any exemption or exclusion from registration as such under the Act. |
| 16. | From at least August 2002 to October 2005, Garcia was a manager or officer of Resilient, while Resilient was an unregistered investment adviser in Connecticut. |
| 17. | At no time was Garcia registered in Connecticut as investment adviser agent of Resilient, nor did he qualify for any exemption or exclusion from registration under the Act. |
IV. AMENDED AND RESTATED STATUTORY BASIS FOR ORDER TO CEASE AND DESIST AND
ORDER IMPOSING FINE AGAINST RESPONDENTS
a. Violation of Section 36b-6(c) of the Act –
Unregistered Investment Adviser Activity
| 18. | Paragraphs 1 through 17, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 19. |
Resilient’s transacting business as an investment adviser within Connecticut absent registration as such, as more fully described in paragraphs 13 through 15, inclusive, was in violation of Section 36b-6(c)(1) of the Act, which constitutes a basis for an order to cease and desist to be issued against Resilient under Section 36b-27(a) of the Act; and for the imposition of a fine against Resilient under Section 36b-27(d) of the Act. |
b. Violation of Section 36b-6(c) of the Act –
Engaging Unregistered Investment Adviser Agents
| 20. | Paragraphs 1 through 19, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 21. |
Resilient’s engagement of an unregistered investment adviser agent within Connecticut, as more fully described in paragraphs 13 through 17, inclusive, was in violation of Section 36b-6(c)(3) of the Act, which constitutes a basis for an order to cease and desist to be issued against Resilient and Garcia under Section 36b-27(a) of the Act; and for the imposition of a fine against Resilient under Section 36b-27(d) of the Act. |
c. Violation of Section 36b-6(c) of the Act –
Unregistered Investment Adviser Agent Activity
22.
Paragraphs 1 through 21, inclusive, are incorporated and made a part hereof as if more fully set forth herein.
23.
Garcia’s transacting business as an investment adviser agent within Connecticut absent registration as an investment adviser agent of Resilient, as more fully described in paragraphs 13 through 17, inclusive, was in violation of Section 36b-6(c)(2) of the Act, which constitutes a basis for an order to cease and desist to be issued against Garcia under Section 36b-27(a) of the Act; and for the imposition of a fine against Garcia under Section 36b-27(d) of the Act.
V. AMENDED AND RESTATED ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING
AS A RESULT OF THE INVESTIGATION BY THE DIVISION, THE COMMISSIONER FINDS that, with respect to the activity described herein, Resilient Partners, LLC has committed nine violations of Section of 36b-6(c)(1) of the Act and one violation of Section of 36b-6(c)(3) of the Act; and Carlos M. Garcia, III has committed nine violations of Section of 36b-6(c)(2) of the Act;
THE COMMISSIONER FURTHER FINDS that the issuance of this Order is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act.
THE COMMISSIONER THEREFORE ORDERS that Resilient Partners, LLC CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation: (1) engaging in the business of directly advising others, for compensation, as to the advisability of investing in, purchasing and selling securities in Connecticut absent registration as an investment adviser; and (2) engaging unregistered investment adviser agents;
THE COMMISSIONER THEREFORE ORDERS that Carlos M. Garcia, III CEASE AND DESIST from directly or indirectly violating the provisions of the Act, including without limitation, transacting business in Connecticut as an investment adviser agent absent registration as such;
THE COMMISSIONER FURTHER ORDERS that, pursuant to Section 36b-27(a) of the Act, Resilient Partners, LLC and Carlos M. Garcia, III will be afforded an opportunity for a hearing on the allegations set forth above.
A hearing will be granted to Resilient Partners, LLC and Carlos M. Garcia, III if a written request for a hearing is received by the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut 06103-1800, within fourteen (14) days following each Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Resilient Partners, LLC and Carlos M. Garcia, III will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations of Connecticut State Agencies. If a hearing is requested, the hearing will be held on September 15, 2009, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At such hearing, Resilient Partners, LLC and Carlos M. Garcia, III will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
This Order shall remain in effect and become permanent against Resilient Partners, LLC if it does not request a hearing within the prescribed time period; and against Carlos M. Garcia, III if he does not request a hearing within the prescribed time period.
VI. AMENDED AND RESTATED NOTICE OF INTENT TO FINE RESPONDENTS AND NOTICE OF HEARING
WHEREAS, the Commissioner finds as a result of an investigation by the Division that Resilient has committed at least has committed nine violations of Section of 36b-6(c)(1) of the Act and one violation of Section of 36b-6(c)(3) of the Act; and Garcia has committed nine violations of Section of 36b-6(c)(2) of the Act;
WHEREAS, the Commissioner believes that the imposition of a fine upon Respondents would be in the public interest and consistent with the purposes fairly intended by the policy and provisions of the Act;
AND WHEREAS, notice is hereby given to Respondents that the Commissioner intends to impose a fine not to exceed One Hundred Thousand Dollars ($100,000) per violation; or a maximum fine against Resilient of One Million Dollars ($1,000,000), and a maximum fine against Garcia of Nine Hundred Thousand Dollars ($900,000).
NOW THEREFORE, a hearing will be held in accordance with Section 36b-27(d)(2) of the Act and Chapter 54 of the General Statutes of Connecticut.
The hearing will be held on September 15, 2009, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
At the hearing, Respondents will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law relating to the allegations stated herein. If any Respondent fails to appear at such hearing, the Commissioner may order that the maximum fine be imposed upon such Respondent.
Dated at Hartford, Connecticut,
this 23rd day of July 2009. ________/s/_________
Howard F. Pitkin
Banking Commissioner
CERTIFICATION
I hereby certify that on this 24th day of July 2009, the foregoing Amended and Restated Order to Cease and Desist, Amended and Restated Notice of Intent to Fine and Notice of Right to Hearing was sent by registered mail, return receipt requested, to Resilient Partners, LLC, 318 North Carson Street, Suite 208, Carson City, Nevada 89701, registered mail no. RB027869360US; and to Carlos M. Garcia, III, 143 Ironwood Road, Guilford, Connecticut 06437, registered mail no. RB027869373US.
________/s/_________
Paul A. Bobruff
Prosecuting Attorney