The Department of Banking News Bulletin
Bulletin # 3109 - Week Ending September 22, 2023
This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten business days from the date of this bulletin.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Burns Capital Investments LLC and Thomas Zachary Burns
On September 18, 2023, the Banking Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Matter No. CRF-23-2022246-S) against Burns Capital Investments LLC and Thomas Zachary Burns, now or formerly of 1401 Windsor Station Drive, Windsor, Connecticut 06095.
The action alleged that Respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered interests in a cryptocurrency investment pool managed by Respondents. From approximately December 2021 through August 2022, Respondents purportedly raised at least $148,000 from at least nine investors located in various states, including Connecticut. In addition, the action alleged that Respondents violated Section 36b-4 of the Act by engaging in fraudulent and dishonest or unethical practices in connection with the sales. More specifically, Respondents purportedly led investors to believe that Burns Capital Investments LLC was a cryptocurrency investment firm; that Respondents used artificial intelligence to trade on the investors’ behalf; that Burns held a patent for the artificial intelligence; and that Burns Capital Investments LLC was licensed and regulated by the “State of Connecticut Money Transmitter Licensing Division” and by FinCEN. In reality, Burns commingled some of the investors’ money with his own and diverted some investor funds for his personal use. In addition, the action claimed that Respondents did not have any patent for artificial intelligence, and that Burns Capital Investments LLC was not licensed and regulated by the Commissioner under Sections 36a-595 to 36a-612, inclusive, of the General Statutes of Connecticut governing money transmitters, or by FinCEN.
The action also alleged that Respondent Burns, individually and under the auspices of Burns Capital Investments LLC, transacted business as an unregistered investment adviser in violation of Section 36b-6(c)(1) of the Act, that Respondents violated Section 36b-5 of the Act by engaging in fraudulent, dishonest or unethical practices in connection with their advisory activity; and that Respondents violated section 3b-23 of the Act by making materially false or misleading statements in connection with an agency investigation.
The Respondents were afforded an opportunity to request a hearing on the allegations in the action.
Jorge L. Perez