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DAVID LERNER ASSOCIATES, INC.
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I. PRELIMINARY STATEMENT
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, DLA, through its execution of this Consent Order, voluntarily waives the following rights:
|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;
|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;
|To present its position in a hearing in which it is represented by counsel;
|To have a written record of the hearing made and a written decision issued by a hearing officer; and
|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 ALLEGATION
WHEREAS, DLA, through its execution of this Consent Order, and without admitting or denying the Commissioner’s allegation, acknowledges the following allegation of the Commissioner:
|DLA violated Section 36b-31-6f(b) of the Regulations by failing to follow and enforce DLA’s system for supervising the activities of its agents with respect to the processing of client IRA distributions in DLA’s Connecticut office operations in a manner reasonably designed to achieve compliance with applicable securities laws and regulations.
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting DLA an opportunity for a hearing;
AND WHEREAS, DLA 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, DLA, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
|DLA, its representatives, agents, employees, affiliates, assigns, or successors in interest 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; including without limitation, failing to follow and enforce adequate supervisory procedures with respect to the processing of client IRA distributions in a manner reasonably designed to achieve compliance with applicable securities laws and regulations; and
|No later than the date this Consent Order is entered by the Commissioner, DLA shall remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, or by wire transfer, the sum of five thousand dollars ($5,000) as an administrative fine.
VI. [sic] CONSENT ORDER
NOW THEREFORE, the Commissioner enters the following:
|The Sanctions set forth above be and are hereby entered;
|Entry of this Consent Order by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against DLA 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;
|Upon entry of this Consent Order by the Commissioner, this matter will be resolved and the Commissioner will not take any future enforcement action against DLA based upon the alleged supervisory deficiencies relating to former agent Lombardo; however, nothing in this Consent Order shall be construed as limiting the Commissioner’s ability to take enforcement action against DLA and/or its affiliates and successors in interest 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;
|DLA shall not take any action or make or permit to be made any public statement, including in regulatory filings, any proceeding in any forum or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis;
|DLA shall not take any position in any proceeding brought by or on behalf of the Commissioner, or to which the Commissioner is a party, that is inconsistent with any part of this Consent Order. Nothing in this provision affects DLA’s (i) testimonial obligations or (ii) right to take a legal or factual position in litigation, arbitration, or other legal proceeding in which the Commissioner is not a party; and
|This Consent Order shall become final when entered.
|So ordered at Hartford, Connecticut,
|this 26th day of October 2016.
|Jorge L. Perez
CONSENT TO ENTRY OF ORDER
I, Joseph Pickard, state on behalf of David Lerner Associates, Inc., 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 David Lerner Associates, Inc.; that David Lerner Associates, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that David Lerner Associates, Inc. consents to the entry of this Consent Order.
|David Lerner Associates, Inc.
State of: New York
County of: Nassau
On this the 18th day of October 2016, before me, the undersigned officer, personally appeared Joseph Pickard, who acknowledged himself to be the General Counsel of David Lerner Associates, Inc., and that he, as such General Counsel, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as General Counsel.
|Date Commission Expires: Sept. 30 2018