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WILLIAM F. WADSWORTH, JR. * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET No. CFNR-10-7779-S |
I. PRELIMINARY STATEMENT
WHEREAS, the Banking Commissioner (the “Commissioner”) is charged with the administration of Chapter 672a of the General Statutes of Connecticut, the Connecticut Uniform Securities Act (the “Act”), and Sections 36b-31-2 to 36b-31-33, inclusive, of the Regulations of Connecticut State Agencies promulgated under the Act (the “Regulations”);
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking (the “Department”), conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of William F. Wadsworth, Jr. (“Respondent”) to determine if he had violated, was violating or was about to violate provisions of the Act or the Regulations;
WHEREAS, Respondent has been registered as a broker-dealer agent of Wadsworth Investment Co., Inc. (CRD No. 5844) since November 11, 1996, and is also the national sales manager of Portfolio Timing Service d/b/a PTS Asset Management (IARD No. 111047), an investment adviser registered with the Securities and Exchange Commission;
WHEREAS, on June 1, 2011, the Commissioner, acting pursuant to Sections 36b-15 and 36b-27 of the Act, issued an Amended and Restated Order to Cease and Desist, Amended and Restated Notice of Intent to Revoke Registration as a Broker-dealer Agent and Amended and Restated Notice of Intent to Fine (Docket No. CFNR-10-7779-S) against Respondent; which Amended Notice is incorporated by reference herein and made a part hereof;
WHEREAS, the Amended Notice alleged that Respondent engaged in conduct prohibited by Sections 36b-4 and 36b-23 of the Act and Section 36b-31-15b of the Regulations, and that a basis therefore existed under Sections 36b-15 and 36b-27 of the Act to revoke the broker-dealer agent registration of Respondent in this state, impose an administrative fine against Respondent and issue a cease and desist order against Respondent;
WHEREAS, Respondent requested a hearing on the matters alleged in the Amended Notice (the “Hearing”), which Hearing is currently in progress as to Respondent;
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 Sections 36b-15 and 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, Respondent and the Commissioner now desire to resolve the matters alleged in the Amended Notice without the need for further administrative proceedings as to Respondent;
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, Respondent agrees that the Amended Notice may be used in construing the terms of this Consent Order and agrees to the language in this Consent Order.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondent, 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 Sections 36b-15 and 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 Sections 36b-15 and 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, Respondent, through his execution of this Consent Order, acknowledges the allegations of the Commissioner contained in the Amended Notice, without admitting or denying such allegations;
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondent an opportunity for a hearing;
WHEREAS, Respondent acknowledges the possible consequences of an administrative hearing and voluntarily consents to the entry of the sanctions described below;
AND WHEREAS, Respondent, through his execution of this Consent Order, specifically represents to the Commissioner that none of the violations alleged against him in the Amended Notice or this Consent Order shall occur in the future.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondent, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following sanctions:
| 1. | Respondent 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 organizational or other device, including, without limitation: (a) using, or directing others to use, false names and holding himself out, or directing others to hold themselves out, to third party mutual funds as employees of other registered broker-dealers in order to gain access to client account information which otherwise would have been denied to them; and (b) making statements to the Division which are, at the time and in light of the circumstances under which they were made, false or misleading in a material respect. The Order to Cease and Desist set forth in the Amended Notice shall become permanent upon the entry of this Consent Order by the Commissioner; and |
| 2. | No later than the date this Consent Order is entered by the Commissioner, Respondent shall remit to the Department, by certified or cashier’s check payable to “Treasurer, State of Connecticut”, the sum of Five Thousand Dollars ($5,000) as 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 Respondent 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 Respondent and reflected herein are subsequently discovered to be untrue; |
| 3. | In addition to any other legal remedies or sanctions available to the Department under law, if Respondent fails to comply with the sanctions imposed by this Consent Order, the Department may impose a monetary penalty of up to $100,000 per violation, and Respondent, through his execution of this Consent Order, knowingly waives notice and an opportunity for a hearing in connection with the imposition of any such sanction. Prior to imposing sanctions pursuant to this paragraph, the Division shall provide Respondent with an informal opportunity to demonstrate his compliance with this Consent Order. This paragraph does not constitute a waiver of any rights of appeal under the General Statutes of Connecticut and, for the purposes of Section 4-183 of the General Statutes of Connecticut, any sanction imposed pursuant to this section shall be considered a final decision; and |
| 4. | This Consent Order shall become final when issued. |
| Issued at Hartford, Connecticut, | _______/s/_________ | |
| this 19th day of September 2011. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, William F. Wadsworth, Jr., 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 issuance of this Consent Order.
| ______/s/______________ |
| William F. Wadsworth, Jr. |
State of: Connecticut
County of: Hartford
On this the 19th day of September 2011, before me, Amy B. Grillo, the undersigned officer, personally appeared William F. Wadsworth, Jr., 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/Commissioner of the Superior Court
Date Commission Expires: Feb. 28, 2013