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CONSENT ORDER No. CO-13-8073-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 (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, Vista Investment Advisors LLC (“Vista”) is a Connecticut limited liability company formed on May 8, 2000 and having its principal office at 191 Post Road West, Westport, Connecticut 06880;
WHEREAS, 1) Vista was initially registered as an investment adviser under the Act from August 16, 2000 until December 31, 2008 when it failed to timely renew such registration; 2) Vista was re-registered as an investment adviser in Connecticut from February 6, 2009 to December 31, 2011 when it failed to timely renew that registration; and 3) Vista was again re-registered as an investment adviser under the Act on March 16, 2012 and remains so registered;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (the “Division”) of the Department of Banking, conducted an examination of Vista pursuant to Section 36b-14(d) of the Act and 36b-31-14f of the Regulations, and a related investigation under Section 36b-26(a) of the Act into the activities of Vista to determine whether Vista had violated, was violating or was about to violate any provisions of the Act or the Regulations or any order thereunder;
WHEREAS, as a result of the examination and investigation, the Division obtained evidence that 1) from approximately April 13, 2004 to December 31, 2012, the former Chief Investment Officer of Vista transacted business as an investment adviser agent of Vista without being registered as such under the Act; and 2) from approximately January 1, 2009 to March 2012, the Chief Compliance Officer of Vista, although registered as a broker-dealer agent of another firm in Connecticut, transacted business as an investment adviser agent of Vista without being registered as such under the Act. The Chief Compliance Officer has since reapplied for investment adviser agent registration under the Act;
WHEREAS, Section 36b-6(c)(3) of the Act provides, in part, that: “No investment adviser shall engage an investment adviser agent unless such investment adviser agent is registered under sections 36b-2 to 36b-34, inclusive”;
WHEREAS, a violation of Section 36b-6(c)(3) of the Act would support the initiation of administrative proceedings against Vista under Sections 36b-15 and 36b-27 of the Act;
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 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, without holding a hearing and without trial or adjudication of any issue of fact or law, and prior to the initiation of any formal proceeding, the Commissioner and Vista reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, Vista, without admitting or denying any of the Commissioner’s allegations or findings, expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
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;
AND WHEREAS, Vista, through its execution of this Consent Order, specifically assures the Commissioner that none of the violations alleged in this Consent Order shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Vista, through its 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(f) 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 itself of Sections 36b-15(f) and 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. | To present its position in a hearing in which it 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, Vista, through its execution of this Consent Order, acknowledges the following allegations of the Commissioner, without admitting or denying them:
| At various times between April 13, 2004 and December 31, 2012, Vista engaged unregistered investment adviser agents in contravention of Section 36b-6(c)(3) of the Act as more fully described above. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Vista an opportunity for a hearing;
AND WHEREAS, Vista acknowledges the possible consequences of an administrative hearing and voluntarily agrees to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Vista, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | No later than the date this Consent Order is entered by the Commissioner, Vista shall remit to the department by certified bank check payable to “Treasurer, State of Connecticut” the sum of two thousand five hundred dollars ($2,500), one thousand five hundred dollars ($1,500) of which shall constitute an administrative fine; and one thousand dollars ($1,000) of which shall be applied to reimburse the department for past due registration fees; and |
| 2. | Vista, its officers, members, representatives, agents, employees, affiliates, and successors in interest shall refrain from engaging, directly or indirectly, in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act; |
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 Vista 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; and |
| 3. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut | _______/s/_________ | |
| this 26th day of March, 2013. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, William D. Donaldson, state on behalf of Vista Investment Advisors LLC, that I have read the foregoing Consent Order; that I know and fully understand its contents; that I am authorized to execute this Consent Order on behalf of Vista Investment Advisors LLC; and that Vista Investment Advisors LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
| Vista Investment Advisors LLC | |
| By | ______/s/________________ |
| William D. Donaldson | |
| Chief Compliance Officer |
On this 19th day of March 2013, personally appeared William D. Donaldson, signer of the foregoing Consent Order, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Vista Investment Advisors LLC, a limited liability company, and acknowledged the same to be his free act and deed, before me.
In witness whereof I hereunto set my hand.
_____/s/________________________________
Notary Public/Commissioner of the Superior Court
My Commission Expires: 5/31/2017