State of Connecticut Department of Banking

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IN RE APPLICATION OF:

RKS ADVISORS, LLC
    (CRD number 145927)

ROBERT KEITH STRAUSS
    (CRD number 1863131)

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CONSENT ORDER CONDITIONING
REGISTRATION AS AN
INVESTMENT ADVISER AND AS
AN INVESTMENT ADVISER AGENT

No. CO-08-7583-S

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 February 5, 2008, RKS Advisors, LLC (“RKS”), a Connecticut limited liability company formed on October 4, 2007 and located at 184 Atlantic Street, Stamford, Connecticut filed with the Commissioner an application for registration as an investment adviser pursuant to Sections 36b-7 and 36b-32 of the Act;

WHEREAS, Robert Keith Strauss (“Strauss”), the sole officer and control person of RKS, applied for registration as an investment adviser agent of RKS under the Act on February 6, 2008;

WHEREAS, Strauss, a member of the Connecticut bar, is also the president of Emerging Money Corporation, an entity organized under Nevada law and licensed to sell insurance in Connecticut;

WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking has, in conjunction with its review of RKS’ registration application and Strauss’ application for registration as an investment adviser agent, conducted an investigation of RKS and of Strauss pursuant to Section 36b-8 of the Act;

WHEREAS as a result of such investigation, the Division ascertained that on October 20, 2006, the State of Oklahoma Department of Securities issued an Order of Investigation (the “Oklahoma Order of Investigation”) (ODS File No. 05-013) against Emerging Money Corporation, Strauss and others.  The Oklahoma Order of Investigation recited that the Oklahoma Department of Securities had received information that the Respondents may have participated and/or might be participating in the unlawful offer, sale and/or purchase of securities in and/or from the state of Oklahoma, in connection with a "Stock-to-Cash Program."  The Oklahoma Order of Investigation directed that an investigation be conducted into the activities of the Respondents to determine whether they had violated or were continuing to violate any provision of the Oklahoma's securities laws and rules;

WHEREAS, the Division also ascertained that on June 9, 2008, the Oklahoma Department of Securities entered into an Agreement with Emerging Money Corporation and Strauss resolving the matters alleged in the Oklahoma Order of Investigation.  Pursuant to the Agreement, Emerging Money Corporation and Strauss agreed to terminate all activities involving the Stock to Cash program or any similar program in and/or from Oklahoma until such time as 1) the Stock to Cash product was registered, excluded or exempt from registration, under Oklahoma's securities act; and 2) Emerging Money Corporation, Strauss and any other person acting of behalf of Emerging Money Corporation and/or Strauss who offered the program complied with the broker-dealer, agent, investment adviser and/or investment adviser representative registration provisions of Oklahoma's securities act.  In addition, Emerging Money Corporation and/or Strauss agreed not to arrange funding with, through or by Alexander Capital Markets, LLC and/or any other entity owned or controlled by William Dean Chapman, Jr., the then president of Alexander Capital Markets, LLC;

WHEREAS, the Form ADV (Uniform Application for Investment Adviser Registration) filed by RKS on February 5, 2008 and RKS’ amendment to that form dated February 22, 2008 each answered Item 11D.(4) in the negative, such item inquiring “[h]as . . . any state regulatory agency . . . in the past ten years, entered an order against you or any advisory affiliate in connection with an investment-related activity?”;

WHEREAS, Strauss, in signing the February 5, 2008 Form ADV filing and the February 22, 2008 amendment certified that the statements therein contained were true and correct;

WHEREAS, on April 21, 2008, after the Division brought the disclosure deficiency to its attention, RKS amended Item 11D.(4) of Form ADV to indicate an affirmative response;

WHEREAS, Strauss and RKS maintain that they retained a consulting firm to file RKS’ investment adviser application under the Act;

WHEREAS, Section 36b-23 of the Act provides that:  “No person shall make or cause to be made orally or in any document filed with the commissioner or in any proceeding, investigation or examination under sections 36b-2 to 36b-33, inclusive, any statement that is, at the time and in the light of the circumstances under which it is made, false or misleading in any material respect or, in connection with the statement, omit to state a material fact necessary to make the statement made, in the light of the circumstances under which it was made, not false or misleading”;

WHEREAS, the Division also uncovered evidence that Strauss listed himself as an investment adviser representative of RKS on the web site of Emerging Money Corporation at a time when RKS was not registered as an investment adviser and Strauss was not registered as an investment adviser agent of the firm under the Act;

WHEREAS, Sections 36b-31-15c(a)(8) and 36b-31-15d(a)(3) of the Regulations support the initiation of denial proceedings under Section 36b-15(a)(2)(H) of the Act by making it a dishonest or unethical business practice for an investment adviser and an investment adviser agent, respectively, to “[misrepresent] to any client or prospective client the qualifications of the investment adviser or any investment adviser agent, representative or employee of the investment adviser . . .  [or to omit] to state a material fact necessary to make the statements made regarding qualifications, services or fees, in light of the circumstances under which they are made, not misleading”;

WHEREAS, Strauss maintains that the verbiage was added in preparation for the approval of RKS, and that he immediately removed the above described references from Emerging Money Corporation’s website following notice from the Division;

WHEREAS, Strauss represents that he has not rendered investment advisory services on behalf of RKS to any person to date, and RKS represents that it likewise has not rendered such investment advisory services;

WHEREAS, as a result of such investigation, the Division believes that a basis exists under Sections 36b-15(a)(2)(A), 36b-15(a)(2)(B) and 36b-15(a)(2)(H) of the Act for restricting or imposing conditions on the securities or investment advisory activities that RKS and Strauss may perform in this state;

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 … or, in the case of a investment adviser  … any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the investment adviser . . . (A) Has filed an application for registration which . . . as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-33, inclusive . . . or any regulation or order under said sections . . . [or] (H) has engaged in fraudulent, dishonest or unethical practices in the securities or commodities business, including abusive sales practices in the business dealings of such applicant, registrant or person with current or prospective customers or clients . . . .
WHEREAS, RKS and Strauss neither admit nor deny that the foregoing would support administrative proceedings under Section 36b-15 of the Act, and agree to the entry of this Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent (“Consent Order Conditioning Registration”) solely for the purpose of obviating the need for formal administrative proceedings on the matters described above;
WHEREAS, RKS and Strauss voluntarily agree to waive any right to a hearing upon the entry of this Consent Order Conditioning Registration, and waive the right to seek judicial review or otherwise challenge or contest the validity of this Consent Order Conditioning Registration;
WHEREAS, the Commissioner finds that the entry of this Consent Order Conditioning Registration 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)
Strauss, RKS, their officers, directors, employees, agents and representatives, shall refrain from 1) marketing the Stock-to-Cash or any similar program on behalf of Alexander Capital Markets, LLC or any other lender in or from Connecticut; or 2) engaging, employing or affiliating with any individuals or entities that sell or offer the Stock-to-Cash program or any similar program offered in or from Connecticut;
(2)
No later than the date this Consent Order Conditioning Registration is entered by the Commissioner, RKS and Strauss shall remit to the department by certified bank check payable to “Treasurer, State of Connecticut” the sum of three thousand five hundred dollars ($3,500), two thousand five hundred dollars ($2,500) of which shall constitute an administrative fine and one thousand dollars ($1,000) of which shall be applied to defray the Division’s investigative costs;
(3) For two years, commencing on the date this Consent Order Conditioning Registration is entered by the Commissioner, RKS and Strauss shall limit their investment advice to securities listed on the New York Stock Exchange, the American Stock Exchange and/or the National Market System of NASDAQ; covered options and warrants relating to any of the foregoing; commercial paper; certificates of deposit; corporate debt securities; municipal securities; securities issued by investment companies subject to regulation under the Investment Company Act of 1940; United States government securities; and insurance products subject to regulation by the Connecticut Insurance Commissioner.  Nothing in this paragraph shall preclude RKS and Strauss from referring clients to advisers whose activities are not so limited and receiving a referral fee in conjunction therewith provided full written disclosure of the fee arrangement is made to the client;
(4) For two years, RKS and Strauss shall notify the Division Director in writing each calendar quarter of any securities-related complaints, actions or proceedings (including arbitrations and updates thereto) involving RKS and/or Strauss, as the case may be, that occur during the quarter, including the disposition thereof.  Such report shall be provided no later than ten business days following the close of the quarter.  If no complaints, actions, proceedings or updates exist for the quarter, the report shall so indicate.  The first report shall be due no later than ten business days following the quarter ending December 31, 2008, and the final report shall be due no later than ten business days following the quarter ending December 31, 2010;
(5) Entry of this Consent Order Conditioning Registration by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against RKS, Strauss or both based upon a violation of this Consent Order Conditioning Registration or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof or if any representation made by RKS, Strauss or both in connection with their applications for registration or as otherwise reflected herein is subsequently discovered to be untrue;
(6) The name of RKS Advisors, LLC be and is hereby entered on the Register of Investment Advisers pursuant to Section 36b-8 of the Act;
(7) The name of Robert Keith Strauss be and is hereby entered on the Register of Investment Adviser Agents pursuant to Section 36b-8 of the Act; and
(8)
This Consent Order Conditioning Registration shall become final when entered.


            ________/s/_________
            Howard F. Pitkin
            Banking Commissioner


So ordered at Hartford, Connecticut
this 4th day of November 2008.

CONSENT TO ENTRY OF ORDER

I, Robert Keith Strauss, state on behalf of RKS Advisors, LLC, that I have read the foregoing Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent; that I know and fully understand its contents; that I am authorized to execute this Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent on behalf of RKS Advisors, LLC; that RKS Advisors, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that RKS Advisors, LLC voluntarily consents to the entry of this Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent, expressly waiving any rights it may have to a hearing on the matters described herein.

      RKS Advisors, LLC


By    _________/s/_________________ 
      Robert Keith Strauss 
      President


On this 31st day of October 2008, personally appeared Robert Keith Strauss, signer of the foregoing Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of RKS Advisors, LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.

____________/s/_________________
Notary Public
My Commission Expires:  Oct. 31, 2011


I, Robert Keith Strauss, being duly sworn, do state that I agree voluntarily and without threat or coercion of any kind to the entry of this Consent Order Conditioning Registration as an Investment Adviser and as an Investment Adviser Agent, voluntarily waiving any right to a hearing on the matters described herein.



_________/s/_________________ 
Robert Keith Strauss 


Subscribed and sworn to before me this
31st day of October, 2008.

____________/s/________________
Notary Public
My Commission Expires:  Oct. 31, 2011

Conditional Registrations