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WALTER JOHN DUBIEL * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER NO. CO-18-8440-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 (“Regulations”) promulgated under the Act;
WHEREAS, Walter John Dubiel (“Respondent”) is an individual whose address last known to the Commissioner is 353 Main Street, Farmington, Connecticut 06032. Respondent was registered with ProEquities, Inc. (CRD No. 15708) (“ProEquities”) as a broker-dealer agent from April 8, 2014 to July 3, 2014, and as an investment adviser agent from April 15, 2014 to July 3, 2014. Respondent was registered as a broker-dealer agent of First Allied Securities, Inc. (CRD No. 32444) from June 6, 2014 to November 30, 2015 and was registered as an investment adviser agent of First Allied Advisory Services, Inc. (CRD No. 137888) from June 12, 2014 to December 11, 2015. Collectively, First Allied Securities, Inc. and First Allied Advisory Services, Inc. are referred to as “First Allied”;
WHEREAS, Matthew Charles Woodard (“Woodard”) is an individual whose address last known to the Commissioner is 44 Fenwick Drive, Farmington, Connecticut 06032. Woodard was registered as a broker-dealer agent of ProEquities, Inc. (CRD No. 15708) from September 13, 2013 to September 16, 2014, and was employed at First Allied Securities, Inc. (CRD No. 32444) as a non-registered branch assistant from July 22, 2015 to October 28, 2015;
WHEREAS, the Commissioner, through the Securities and Business Investments Division “Division”) of the Department of Banking (“Department”), conducted an investigation (“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;
WHEREAS, as a result of the Investigation, the Commissioner has reason to believe that Respondent has violated certain provisions of the Act and Regulations, and that such violations would support administrative proceedings against Respondent under Section 36b-27 of the 2018 Supplement to the General Statutes (“2018 Supplement”);
WHEREAS, as a result of such Investigation, the Division obtained evidence that:
| 1. | In approximately 2014, Respondent and Woodard began working together as agents of ProEquities out of office space Woodard rented at 1031 Farmington Avenue, Farmington, Connecticut; | |
| 2. | Investor One is a Connecticut investor and was one of Woodard’s active brokerage clients at ProEquities from approximately September 2013 to June 2014; | |
| 3. | By September 2014, both Respondent and Woodard ceased working at ProEquities and Respondent began working as an agent of First Allied out of the same 1031 Farmington Avenue, Farmington Connecticut location. When Woodard left ProEquities, he was not registered under the Act in any capacity, and through this arrangement, Woodard’s role was to assist Respondent with computer, technological and administrative tasks related to Respondent’s securities business at First Allied. Several of Woodard’s clients, including Investor One, moved their accounts to First Allied and became Respondent’s clients. Investor One was one of Respondent’s clients at First Allied from approximately June 2014 to approximately November 2015. Investor One’s accounts were serviced by a joint representative number belonging to Respondent and another First Allied agent. During testimony, Respondent represented to the Commissioner that he has never met or communicated with Investor One; | |
| 4. | In approximately January 2015, Respondent, without giving notice to the affected clients, shared his First Allied confidential client account log-in credentials with Woodard. Respondent knew Woodard was not registered in any capacity under the Act, but thought Woodard was affiliated with First Allied in some capacity. The account log-in credentials gave Woodard access to all of Respondent’s client accounts, including Investor One’s account. First Allied policies and procedures prohibited agents from sharing log-in credentials with any other individual; and | |
| 5. | As a result of Respondent sharing his confidential client account log-in credentials with Woodard, Woodard used the credentials to access Investor One’s advisory account to execute securities transactions in Investor One’s account. These transactions were done without Investor One’s knowledge or consent and despite the fact that Woodard was not registered under the Act. |
WHEREAS, the Commissioner has reason to believe that the foregoing conduct would support the initiation of administrative proceedings seeking the entry of a cease and desist order against Respondent under Section 36b-27(a) of the 2018 Supplement and the imposition of a fine against Respondent under Section 36b-27(d) of the 2018 Supplement;
WHEREAS, on March 23, 2018, the Commissioner entered a Consent Order against Woodard relating to his activities involving Investor One (No. CO-17-8279-S), wherein the Division received documentation evidencing that Woodard paid $325,000 in restitution and/or repayment to Investor One for, among other things, monies Investor One either loaned to or invested with Woodard. This repayment included activities that took place during the time period Respondent was Investor One’s broker of record at First Allied;
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 Section 36b-27 of the 2018 Supplement would constitute a “contested case” within the meaning of Section 4-166(4) 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 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 Respondent reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
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 represents and agrees that none of the violations alleged in this Consent Order 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 Section 36b-27 of the 2018 Supplement and Section 4-177(a) of the General Statutes of Connecticut; |
| 2. | To present evidence and argument and to otherwise avail himself of Section 36b-27 of the 2018 Supplement 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: (i) Respondent violated Section 36b-5(f) of the Act; and (ii) engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act and Section 36b-31-15b(c) of the Regulations;
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 an order imposing on him the following sanctions:
| 1. | Respondent, either directly or through any person, organization, entity or other device, shall cease and desist from directly or indirectly violating any provision of the Act and the Regulations, including, without limitation, Section 36b-5(f) of the Act and from engaging in dishonest or unethical business practices within the meaning of Section 36b 15(a)(2)(H) of the Act and Section 36b-31-15b(c) of the Regulations; |
| 2. | No later than the date this Consent Order is entered by the Commissioner, Respondent shall remit to the Department, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut” the sum of ten thousand dollars ($10,000) as an administrative fine; and |
| 3. | From the date this Consent Order is entered by the Commissioner, Respondent shall be, for a period of seven years, BARRED from directly or indirectly, through any person, organization, entity or other device, (i) 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 under the Act; and (ii) acting in any other capacity which requires a license or registration from 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: (i) 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; or (ii) evidence indicating that Respondent withheld material information from, or made any material misstatement or omission to, the Commissioner in connection with this matter; |
| 4. | Respondent shall not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, that the Commissioner had a basis to pursue the allegations set forth in Section III of this Consent Order, or create the impression that this Consent Order is without factual basis; |
| 5. | Respondent 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. However, nothing in this Consent Order affects Respondent’s (i) testimonial obligations; or (ii) right to take any legal or factual position in litigation, arbitration, or other legal proceedings in which the Commissioner is not a party; and |
| 6. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut | , | _____/s/____________ |
| this 12th day of July 2018. | Jorge L. Perez | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Walter John Dubiel, 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/_______ |
| Walter J. Dubiel |
State of: Connecticut
County of: Hartford
On this the 5th day of July 2018, before me, the undersigned officer, personally appeared Walter John Dubiel, 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: 07-31-2021