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MICHAEL JAMES BYL * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CR-14-8150-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 promulgated under the Act (“Regulations”);
WHEREAS, Michael James Byl (“Respondent”) is an individual whose addresses [sic] last known to the Commissioner is 124 West 60th Street, Apt 45A, New York, New York 10021. At all times pertinent hereto, Respondent was and remains a control person of LGAUS LLC d/b/a Landmark Global Advisors LLC (CRD No. 156330) (“Landmark”). Landmark is a Connecticut limited liability company located at 14A Greenbriar Lane, Wilton, Connecticut 06897-3401;
WHEREAS, effective January 3, 2012, Landmark became registered as an investment adviser under the Act and Respondent became registered as an investment adviser agent of Landmark under the Act pursuant to a Stipulated Agreement with the Commissioner. Landmark and Respondent have remained registered under the Act;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Respondent to determine if he had violated, was violating or was about to violate provisions of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, on July 3, 2014, the Commissioner, acting pursuant to Sections 36b-15(a) and 36b-27 of the Act and Section 4-182(c) of the General Statutes of Connecticut, issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as an Investment Adviser Agent and Notice of Right to Hearing (collectively “Notice”) (Docket No. CR-14-8150-S) against Respondent, which Notice is incorporated by reference herein;
WHEREAS, on April 4, 2012, a FINRA arbitration award (“2012 Arbitration Award”) had been issued against Respondent (In the Matter of the Arbitration Between: Coleman McCarthy v. Southridge Investment Group LLC, Michael James Byl, and William Schloth; Case No. 09-06667);
WHEREAS, on December 18, 2013, FINRA, a self-regulatory organization, suspended Respondent pursuant to Article VI, Section 3 of FINRA’s Bylaws and FINRA Rule 9554 for failing to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information concerning the status of compliance (Case No. 09-06667). Such suspension is currently effective and has not been stayed or overturned by appeal or otherwise;
WHEREAS, on July 25, 2014, Respondent requested a hearing on the allegations set forth in the Notice;
WHEREAS, on July 25, 2014, the Commissioner issued a Notification of Hearing and Designation of Hearing Officer, wherein Commissioner scheduled the hearing on the matters alleged in the Notice for October 15, 2014 (“Hearing”), and appointed Department of Banking Attorney Stacey Serrano as the Hearing Officer on the matters alleged in the Notice;
WHEREAS, on October 3, 2014, Hearing Officer Serrano granted a continuance of the Hearing to November 19, 2014;
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, Section 36b-27(f) of the Act provides, in relevant part, that “[a]ny time after the issuance of an order or notice provided for in subsection (a) . . . or subdivision (1) of subsection (d) of this section, the commissioner may accept an agreement by any respondent named in such order or notice to enter into a written consent order in lieu of an adjudicative hearing”;
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, 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, Respondent and the Commissioner now desire to resolve the matters alleged in the Notice without the need for further administrative proceedings;
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 the Act;
WHEREAS, Respondent expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
AND WHEREAS, Respondent, through his execution of this Consent Order, specifically assures the Commissioner that none of the violations alleged in the Notice shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondent, 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 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 himself 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 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. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Respondent, through his execution of this Consent Order, acknowledges the following allegations of the Commissioner, and admits sufficient evidence exists for the Commissioner to issue a permanent order to cease and desist and/or an order revoking Respondent’s registration as an investment adviser agent in Connecticut:
| 1. | Respondent’s failure to pay the April 4, 2012 FINRA Arbitration Award constitutes a dishonest or unethical practice in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act and Sections 36b-31-15d(a)(3) and 36b-31-15c(a)(19) of the Regulations; |
| 2. | The December 18, 2013, FINRA suspension of Respondent forms the basis for the revocation of Respondent’s investment adviser agent registration in Connecticut pursuant to Section 36b-15(a)(2)(F)(iii) of the Act; and |
| 3. | Respondent violated Section 36b-31-14e(a) of the Regulations by failing to update his Form U-4 on file with the Commissioner to disclose, inter alia, the 2012 Arbitration Award, his failure to pay the April, 4, 2012 Arbitration Award and his suspension by FINRA. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondent an opportunity for a hearing;
AND WHEREAS, Respondent 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, Respondent, through his execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Respondent shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any person, organization or other device; |
| 2. | From the date this Consent Order is entered by the Commissioner until one (1) year after the date the April 4, 2012 FINRA arbitration panel award is paid and documented proof of payment furnished to the Commissioner, Respondent is barred from: (a) transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent, as such terms are defined in the Act, and notwithstanding any definitional exclusion that might otherwise be available; (b) acting as a finder for compensation, or receiving referral fees, directly or indirectly, in connection with any recommendation, sale or purchase of securities; (c) directly or indirectly soliciting or accepting funds for investment purposes from public or private investors in or from Connecticut; and (d) maintaining a direct or indirect ownership interest in a broker-dealer or an investment adviser registered or required to be registered in Connecticut; and |
| 3. | No later than the date that this Consent Order is entered by the Commissioner, Respondent shall withdraw Landmark’s registration as an investment adviser under the Act and provide suitable written proof of such withdrawal to the Commissioner. |
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 Respondent 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; |
| 3. | Nothing in this Consent Order shall be construed as limiting the Commissioner's ability to take enforcement action against Respondent based upon evidence of which the Division was unaware on the date hereof relating to a violation of the Act or any regulation or order under the Act; and |
| 4. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | _______/s/_________ | |
| this 3rd day of December 2014. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Michael James Byl, state that I have read the foregoing Consent Order; 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 entry of this Consent Order.
| _____/s/_______ |
| Michael James Byl |
State of: New York
County of: New York
On this the 25th day of November 2014, before me, Joanne Brennan, the undersigned officer, personally appeared Michael James Byl, 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: Sept. 10, 2016 |