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MLP REAL ESTATE SECURITIES, INC. (CRD Number 140383) * * * * * * * * * * * * * * * |
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WHEREAS, the Banking Commissioner (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies promulgated under the Act (the "Regulations");
WHEREAS, on September 8, 2006, MLP Real Estate Securities, Inc. (hereinafter, the “Applicant”), a newly formed corporation located at 555 Capitol Mall, Suite 766, Sacramento, California, filed with the Securities and Business Investments Division of the Department of Banking (the “Division”) an application for registration as a broker-dealer pursuant to Sections 36b-7 and 36b-32 of the Act;
WHEREAS, Mark Leonard Panattoni (CRD number 4927751) is the sole active officer of the Applicant, serving as president, corporate secretary, treasurer and chief compliance officer;
WHEREAS, Mark Leonard Panattoni has been engaged in the securities business for less than two years during the seven calendar years preceding the date of the Applicant’s submission, serving as president of Panattoni Securities, Inc. (CRD number 134643) from December 2004 to June 2006 and as president and control person of the Applicant from February 2006 forward;
WHEREAS, Mark Leonard Panattoni holds a Juris Doctorate and was previously employed as a legal assistant at Panattoni Law Firm, a firm specializing in commercial real estate;
WHEREAS, Mark Leonard Panattoni has passed the Series 24, Series 63 and Series 7 examinations and has no reported disciplinary history;
WHEREAS, in its application, the Applicant indicated that it would limit its business to the solicitation and effecting of securities transactions in private securities offerings exempt from the registration provisions of the Securities Act of 1933;
WHEREAS, the Applicant has further indicated to the Division that it would also limit its business with Connecticut clients to those clients who are either institutions or accredited investors;
WHEREAS the Commissioner, through the Division, has conducted an investigation of the Applicant pursuant to Section 36b-8 of the Act;
WHEREAS as a result of such investigation, the Division believes that the Applicant has not fulfilled the experience requirements set forth in Section 36b-31-7a of the Regulations;
WHEREAS Section 36b-31-7a of the Regulations under the Act provides that:
WHEREAS Section 36b-31-7a of the Regulations under the Act provides that:
(a) Each applicant for broker-dealer registration shall (1) have been engaged in the securities business as a broker-dealer or agent spending a major portion of his working time in the securities business for at least three years within the seven calendar years preceding the date of the application or (2) be otherwise qualified by knowledge and experience as determined by the commissioner. An attorney who has had at least three years of substantial experience in the practice of securities law, an accountant who has had at least three years of substantial experience in the sale of securities and any other person who can demonstrate equivalent knowledge and experience in the sale of securities may be deemed to have sufficient experience for purposes of this subsection.
(b) If the applicant for broker-dealer registration is a partnership, at least two of its active partners, or if there is only one active partner then that one, shall meet the experience requirements of subsection (a) of this section.
(c) If the applicant for broker-dealer registration is a corporation, at least two of its active officers, or if there is only one active officer then that one, shall meet the experience requirements of subsection (a) of this section.
(d) Persons acting as managers shall meet the experience requirements of subsection (a) of this section. For purposes of this subsection, “manager” means (1) any person who supervises sales personnel either directly or indirectly or (2) any person responsible for the day-to-day operation and supervision of a broker-dealer office located in this state.
WHEREAS as a result of such investigation, the Division also believes that a basis exists under Section 36b-15(a)(2)(J) of the Act for restricting or imposing conditions on the securities or investment advisory activities that the Applicant may perform in this state based on the Applicant’s lack of securities-related experience;
WHEREAS Section 36b-15(a) of the Act provides, in part, that:
WHEREAS Section 36b-15(a) of the Act provides, in part, that:
The commissioner may by order deny … any registration or by order restrict or impose conditions on the securities or investment advisory activities that an applicant … may perform in this state if he finds (1) that the order is in the public interest and (2) that the applicant … (J) is not qualified on the basis of such factors as training, experience, and knowledge of the securities business, except as otherwise provided in subsection (b) of this section ….
WHEREAS the Applicant agrees to the entry of this Consent Order solely for the purpose of obviating the need for formal administrative proceedings on the matters described above;
WHEREAS the Applicant voluntarily agrees to waive any right to a hearing upon the entry of this Consent Order, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Consent Order;
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 this Act;
NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:
| (1) | For two years, commencing on the date this Consent Order is entered by the Commissioner, the Applicant and/or its successors in interest shall submit to the Division Director a written report each calendar quarter 1) describing any securities-related written reprimands, censures or warnings issued by the Applicant to its personnel and involving Connecticut securities activity (such written reprimands, censures or warnings referred to collectively as “Reprimands”) and any securities-related complaints, actions or proceedings (including arbitrations) (such complaints, actions or proceedings referred to collectively as "Complaints") involving entities and individuals located in Connecticut and initiated against the Applicant, its successors in interest or any of the Applicant’s officers, directors, control persons, agents, employees or representatives for the quarter; 2) providing information on the disposition of any such Reprimands or Complaints, or on any Reprimands or Complaints reflected in an earlier report filed pursuant to this paragraph; and 3) attaching copies of such Complaints or Reprimands and any dispositional documents. If no securities-related Complaints or Reprimands exist for the quarter, the report shall so indicate. The first such report shall be due no later than ten business days following the close of the quarter ending June 30, 2007, and the final report shall be due no later than ten business days following the close of the quarter ending June 30, 2009; |
| (2) | For two years, commencing on the date this Consent Order is entered by the Commissioner, the Applicant shall restrict its business to institutional investors and to individuals or entities qualifying as "accredited" under Rule 501(a) of federal Regulation D, 17 C.F.R. 230.501(a) and whose status as an “accredited investor” has been verified by the Applicant. During such two year period, the Applicant shall further restrict its business to the offer and sale of securities private placements that have been registered under the Act or for which an exemptive claim or claim of covered security status has been filed pursuant to Section 36b-21 of the Act; |
| (3) | The Applicant shall establish, maintain, and implement such supervisory procedures and monitoring practices as are necessary to ensure that the Applicant adheres to the restrictions imposed under paragraphs (1) and (2) above; |
| (4) | No later than June 30, 2009, the Applicant shall submit to the Division Director a written certification attesting that the Applicant, its officers, directors, agents and representatives have complied with the restrictions imposed by paragraphs (1) and (2) above; |
| (5) | Nothing in this Consent Order Conditioning Registration as a Broker-dealer shall preclude the Applicant from applying in writing to the Division Director for relief from the restrictions in paragraphs (1) and (2) above prior to the expiration of the two year period applicable to such restrictions, if the Applicant demonstrates that it has retained additional qualified individuals to serve as active officers or managers of the Applicant. As used in this paragraph, “qualified” shall mean meeting the experience requirements in Section 36b-31-7a of the Regulations; |
| (6) | Entry of this Consent Order Conditioning Registration as a Broker-dealer by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against the Applicant based upon a violation of this Consent Order or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation or undertaking made by the Applicant in connection with its application for registration is subsequently discovered to be untrue or unfulfilled; |
| (7) | Effective on the date this Consent Order is entered by the Commissioner, the name “MLP Real Estate Securities, Inc.” shall be entered on the Register of Broker-dealers pursuant to Section 36b-8 of the Act; and |
| (8) | This Consent Order Conditioning Registration as a Broker-dealer shall become final when entered. |
________/s/_________
Howard F. Pitkin
Banking Commissioner
So ordered at Hartford, Connecticut
this 25th day of April 2007.
this 25th day of April 2007.
CONSENT TO ENTRY OF ORDER
I, Mark Leonard Panattoni, state on behalf of MLP Real Estate Securities, Inc. that I have read the foregoing Consent Order Conditioning Registration as a Broker-dealer; that I know and fully understand its contents; that I am authorized to execute this Consent Order Conditioning Registration as a Broker-dealer on behalf of MLP Real Estate Securities, Inc.; that MLP Real Estate Securities, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that MLP Real Estate Securities, Inc. consents to the issuance of this Consent Order Conditioning Registration as a Broker-dealer, expressly waiving any right to a hearing on the matters described herein.
MLP Real Estate Securities, Inc.
By
________/s/_______________
Mark Leonard Panattoni
President
On this 24th day of April, 2007, personally appeared Mark Leonard Panattoni, signer of the foregoing Consent Order Conditioning Registration as a Broker-dealer, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of MLP Real Estate Securities, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.
_______________/s/_____________
Notary Public
My Commission Expires: January 30, 2009