To protect the health and safety of the public and our employees, the Department of Banking has limited the number of employees at our office at 260 Constitution Plaza in Hartford. When contacting the Department, please use electronic communication whenever possible. Consumers are encouraged to use our online form for complaints. If you are unsure where to send an inquiry, you may send it to Department.Banking@ct.gov and it will be routed appropriately. Thank you for your patience during this time.

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IN RE APPLICATION OF:

WILLIAM FREDERIC WADSWORTH, SR.
    (CRD No. 456251)

As a Broker-dealer Agent of: 

WADSWORTH INVESTMENT CO., INC.
    (CRD No. 5844)

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CONSENT ORDER
CONDITIONING REGISTRATION
AS AN AGENT AND IMPOSING INTERIM SUSPENSION

No. CO-12-8038-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 (“Regulations”) promulgated under the Act;

WHEREAS, William Frederic Wadsworth, Sr. (“Wadsworth, Sr.”) was previously registered as a broker-dealer agent of Wadsworth Investment Co., Inc. (“WIC”) under the Act from approximately January 1, 1986 to February 7, 2012 when, following an administrative hearing, the Commissioner entered Findings of Fact, Conclusions of Law and an Order (the “Revocation Order”), the terms of which are incorporated by reference herein, revoking such registration as well as Wadsworth, Sr.’s investment adviser agent registration (In the Matter of Wadsworth Investment Co., Inc. et al., Docket No. CFNR-10-7779-S);

WHEREAS, the Revocation Order found that Wadsworth, Sr. wilfully violated Sections 36b-4(a) of the Act, Section 36b-4(b) of the Act and Section 36b-23 of the Act, and engaged in dishonest or unethical practices within the meaning of Section 36b-31-15b of the Regulations;

WHEREAS, on March 22, 2012, WIC amended its Form BD (Uniform Application for Broker-dealer Registration) to no longer list Wadsworth, Sr. as a control person of WIC;

WHEREAS, on April 10, 2012, the Commissioner entered an Order Modifying Remedial Restrictions and Conditions (the “Modifying Order”) with respect to WIC and Wadsworth, Sr. (Docket No. CFNR-10-7779-S).  The Modifying Order, which is incorporated by reference herein, made various changes to the Revocation Order, including 1) permitting Wadsworth, Sr. to continue to hold a minority ownership interest in WIC as long as he was otherwise in compliance with the terms of the Revocation Order; and 2) not precluding Wadsworth, Sr. from reapplying for registration as a broker-dealer agent and/or as an investment adviser agent under the Act, subject to the Commissioner's authority to, inter alia, restrict or condition the registration, impose an interim suspension and/or require heightened supervision;

WHEREAS, WIC, of 879 Church Street, Route 68, Wallingford, Connecticut 06492-2001 has been registered as a broker-dealer under the Act since approximately January 1, 1986;

WHEREAS, Wadsworth, Sr. reapplied for registration as a broker-dealer agent of WIC under the Act on June 18, 2012;

WHEREAS, Section 36b-6(a) of the Act provides, in part, that “[n]o individual shall transact business as an agent in this state unless such individual is (1) registered as an agent of the broker-dealer . . . whom such individual represents in transacting such business”;

WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation of Wadsworth, Sr. pursuant to Section 36b-8 of the Act;

WHEREAS, as a result of the Investigation, the Division ascertained that a basis exists under Sections 36b-15(a)(2)(B), 36b-15(a)(2)(E) and 36b-15(a)(2)(H) of the Act for denying, suspending or revoking the registration of Wadsworth, Sr. and for restricting or imposing conditions on the securities or investment advisory activities that Wadsworth, Sr. may perform in this state;

WHEREAS, Section 36b-15(a) of the Act provides, in part, that “[t]he commissioner may, by order . . . deny, suspend or revoke any registration or, by order, restrict or impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) the applicant or registrant . . .  (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-34, inclusive, or a predecessor statute or any regulation or order under said sections or a predecessor statute . . . (E) is the subject of . . . an order of the commissioner . . . revoking registration as . . . [an] agent . . . or investment adviser agent . . . [or] (H) has engaged in fraudulent, dishonest or unethical practices in the securities . . . business . . . . ”

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-15 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, WIC agrees to the entry of this Consent Order Conditioning Registration as an Agent (“Consent Order”) solely as a condition to the registration of Wadsworth, Sr. as a broker-dealer agent under the Act, and understands that the entry of this Consent Order in and of itself does not constitute a finding by the Commissioner of a violation of any provision of the Act or any regulation or order under the Act by WIC;

WHEREAS, Wadsworth, Sr. expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;

AND 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.

II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS

WHEREAS, Wadsworth, Sr., 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-15(f) 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-15(f) 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. CONSENT TO ENTRY OF ACTIVITY RESTRICTIONS
AND INTERIM SUSPENSION

WHEREAS, Wadsworth, Sr., through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing on him the following restrictions:

1. Upon the Commissioner’s entry of this Consent Order, the name “William Frederic Wadsworth, Sr.” shall be entered on the register of broker-dealer agents in accordance with Section 36b-8 of the Act and such registration shall have an effective date of June 18, 2012; provided, however, that effective on such date, the broker-dealer agent registration of Wadsworth, Sr. shall be immediately SUSPENDED for a period of one hundred twenty (120) days retroactive to June 18, 2012.  Upon the expiration of such suspension, the broker-dealer agent registration of Wadsworth, Sr. shall be reinstated, provided that, prior to such reinstatement, WIC and Wadsworth, Sr. file a written Affidavit with the Division attesting that, during the suspension period, Wadsworth, Sr. has not transacted business in or from this state as a broker-dealer agent or in any capacity requiring registration under the Act.  Following the expiration of such suspension, Wadsworth, Sr. shall be authorized to engage in broker-dealer agent activities on behalf of WIC except as the same may be circumscribed or restricted by the terms of this Consent Order.
  
2. Wadsworth, Sr. shall refrain from: (a) engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act; and (b) engaging in conduct that would contravene the supervisory and compliance policies and procedures of any broker-dealer with whom he is or becomes associated;
  
3. Prior to the entry of this Consent Order and as a precondition to registration hereunder, Wadsworth, Sr. shall file with the Division an Affidavit under oath attesting that, since February 7, 2012, he has not transacted business in or from Connecticut as a broker-dealer agent or as an investment adviser agent as those terms are defined in Sections 36b-3(1) and 36b-3(12), respectively, of the Act.
  
4.

For two (2) years following the reinstatement of Wadsworth, Sr.’s registration under this Consent Order and during Wadsworth, Sr.’s association with WIC, Wadsworth, Sr. shall abide by, and WIC shall observe, the following procedures with respect to Wadsworth, Sr.’s activities as a broker-dealer agent:

(a)
Wadsworth, Sr. will be subject to supervision by a qualified principal of WIC and will not manage or supervise himself or the securities-related activities of other registered representatives;
 
(b)     Wadsworth, Sr. will be supervised by a primary supervisor of WIC and an interim supervisor of WIC when the primary supervisor is not available;
  
(c) Wadsworth, Sr. will be limited to servicing the accounts of those WIC clients with whom he maintained a broker-dealer agent relationship prior to February 7, 2012;
   
(d)   Wadsworth, Sr. shall not sell or promote any private placements of securities, or any securities other than those listed on a United States exchange registered under the Securities Exchange Act of 1934 or those issued by an investment company as defined in the Investment Company Act of 1940;
 
(e)   Prior to settlement, all order tickets will be reviewed and initialed, either manually or electronically, by Wadsworth, Sr.’s primary supervisor (or interim supervisor if the primary supervisor is unavailable);
 
(f)   Wadsworth, Sr. shall not be permitted to purchase or effect the sale of any mutual funds for customers without the prior written approval of Wadsworth, Sr.’s primary supervisor (or interim supervisor if the primary supervisor is unavailable).  Copies of the primary or interim supervisor’s written approval of Wadsworth, Sr.’s mutual fund orders shall be kept in the subject customer’s file;
  
(g)   All of Wadsworth, Sr.’s written communications with clients relating to mutual funds, including authorizations, advertising and reports, will be approved by Wadsworth, Sr.’s primary supervisor (or interim supervisor if the primary supervisor is unavailable) prior to use or dissemination and copies of such communications shall be maintained by WIC’s compliance officer in Wadsworth, Sr.’s file.
  

IV. CONSENT ORDER

NOW THEREFORE, the Commissioner enters the following:

1. The Activity Restrictions and Suspension set forth above be and are hereby entered;
  
2. Entry of this Consent Order is without prejudice to the right of the Commissioner to take enforcement action against Wadsworth, Sr. based upon a violation of this Consent Order or based on the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed, or if any representation made in any document furnished by or on behalf of Wadsworth, Sr. in connection with Wadsworth, Sr.’s reapplication for registration as a broker-dealer agent or his Affidavit supporting reinstatement is subsequently discovered to be untrue;
  
3. The name “William Frederic Wadsworth, Sr.” is hereby entered on the register of broker-dealer agents in accordance with Section 36b-8 of the Act, subject to the Suspension imposed by paragraph 1. of Section 3 of this Consent Order; and
  
4. This Consent Order shall become final when entered. 


So ordered at Hartford, Connecticut       _______/s/____________
this 13th day of November 2012.      Howard F. Pitkin 
         Banking Commissioner 

CONSENT TO ENTRY OF ORDER

I, William Frederic Wadsworth, Sr., state that I have read the foregoing Consent Order Conditioning Registration as an Agent; 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 Conditioning Registration as an Agent.



_________/s/_______________
William Frederic Wadsworth, Sr.


State of:  Florida

County of: Broward

On this the 25th day of October 2012, before me, the undersigned officer, personally appeared William Frederic Wadsworth, Sr., 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:  Dec. 18, 2014
 

CONSENT TO ENTRY OF ORDER

I, William F. Wadsworth, Jr., President of Wadsworth Investment Co., Inc., state on behalf of Wadsworth Investment Co., Inc. that I have read the foregoing Consent Order Conditioning Registration as an Agent with respect to Williams Frederic Wadsworth, Sr.; that I know and fully understand its contents; that I am authorized to execute the same on behalf of Wadsworth Investment Co., Inc.; that Wadsworth Investment Co., Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Wadsworth Investment Co., Inc. voluntarily consents to the issuance of this Consent Order Conditioning Registration as an Agent, expressly waiving any right to a hearing on the matters described herein.

       Wadsworth Investment Co., Inc.
  
  
By ______/s/_____________
    William F. Wadsworth, Jr.
     President


State of:  Connecticut 
County of:  New Haven

On this the 18 day of October 2012, before me, the undersigned officer, personally appeared William F. Wadsworth, Jr., who acknowledged himself to be the President of Wadsworth Investment Co., Inc., and that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President.
In witness whereof I hereunto set my hand.



_____/s/______________________________
Notary Public
Date Commission Expires:  May 31, 2014
  


Conditional Registrations