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ORION CAPITAL LLC * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER DOCKET NO. CF-14-8080-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, Orion is a Connecticut limited liability company with its principal place of business last known to the Commissioner at 1297 Main Street, Watertown, Connecticut 06795. At no time has Orion been registered in any capacity under the Act;
WHEREAS, Gibson is an individual whose addresses last known to the Commissioner are: 11 Fleming Street, Waterbury, Connecticut 06710; and 850 Straits Turnpike, Suite 101, Middlebury, Connecticut 06762. Gibson has never been registered as an agent of issuer of Orion under the Act. Gibson was registered as a broker-dealer agent under the Act at various times from July 23, 1985 through April 26, 1996;
WHEREAS, at all relevant times hereto, Gibson has been the sole member and control person of Orion;
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 Respondents to determine whether they, or either of them, had violated, were violating or were about to violate provisions of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, on May 8, 2014, the Commissioner, acting pursuant to Section 36b-27 of the Act, issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (collectively “Notice”) (Docket No. CF-14-8080-S) against Respondents, which Notice is incorporated by reference herein;
WHEREAS, on May 23, 2014, Respondents requested a hearing on the allegations set forth in the Notice;
WHEREAS, on May 27, 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 July 1, 2014 (“Hearing”), and appointed Department of Banking Attorney Stacey Serrano as the Hearing Officer;
WHEREAS, on June 26, 2014, Hearing Officer Serrano granted a continuance of the Hearing to August 28, 2014; on August 13, 2014, Hearing Officer Serrano granted a continuance of the Hearing to October 8, 2014; and on October 3, 2014, Hearing Officer Serrano granted a continuance of the Hearing to November 12, 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 provide that a contested case may be resolved by consent order, unless precluded by law;
WHEREAS, an administrative proceeding initiated under Section 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, Respondents 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, Respondents expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS, Respondents have demonstrated to the Division that they are financially unable to pay the fine that otherwise would have been imposed against them pursuant to Section 36b-27(d) of the Act;
AND WHEREAS, Respondents, through their execution of this Consent Order, specifically assure the Commissioner that none of the violations alleged in the Notice shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Respondents, through their execution of this Consent Order, voluntarily waive the following rights:
| 1. | To be afforded notice and an opportunity for a hearing within the meaning of Section 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 themselves of Section 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. | To present their respective positions in a hearing in which each 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, Respondents, through their execution of this Consent Order, acknowledge the following allegations of the Commissioner and admit evidence exists for the Commissioner to issue an order to cease and desist and an order imposing a maximum administrative fine of one hundred thousand dollars ($100,000) per violation of the Act, or any regulation, rule or order adopted or issued under the Act:
| 1. | Respondents violated Section 36b-16 of the Act through the offer and sale of securities in or from Connecticut to at least one investor, which securities were not registered in Connecticut under the Act, nor were they exempt from registration under Section 36b-21 of the Act, nor were they the subject of a filed exemption claim or claim of covered security status; |
| 2. | Gibson violated Section 36b-6(a) of the Act by transacting business as an unregistered agent of issuer; and |
| 3. | Orion violated Section 36b-6(b) of the Act by employing an unregistered agent of issuer. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Respondents an opportunity for a hearing;
AND WHEREAS, Respondents acknowledge the possible consequences of an administrative hearing and voluntarily agree to consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of an order imposing on them the following sanctions:
| 1. | Gibson shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including without limitation: (a) offering and selling securities in and from Connecticut in contravention of Section 36b-16 of the Act; and (b) transacting business as an agent of issuer in this state without registering as an agent of issuer under the Act; |
| 2. | For a period of ten (10) years commencing on the date this Consent Order is entered by the Commissioner, Gibson, either directly or through any person, organization, entity or other device, shall be 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 under the Act; (b) directly or indirectly soliciting or accepting funds for investment purposes from public or private investors in or from Connecticut; and (c) directly or indirectly engaging in any activity which would require Gibson to register under the Act; and |
| 3. | Orion, its representatives, agents, employees, affiliates, assigns, subsidiaries, and successors in interest shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including without limitation: (a) offering and selling securities in and from Connecticut in contravention of Section 36b-16 of the Act and (b) employing one or more unregistered agents of issuer. |
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 any Respondent and/or its affiliates and successors in interest 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 any Respondent 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; and |
| 4. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | _______/s/_________ | |
| this 7th day of November 2014. | Howard F. Pitkin | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Herman Wayne Gibson, state on behalf of Orion Capital 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 Orion Capital LLC; that Orion Capital LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Orion Capital LLC consents to the entry of this Consent Order.
| Orion Capital LLC | |
| By: | ________/s/__________ |
| Herman Wayne Gibson | |
| Managing Member |
State of: Connecticut
County of: Hartford
On this the 5th day of November 2014, before me, Stephen H. Solomson, the undersigned officer, personally appeared, Herman Wayne Gibson, who acknowledged himself to be Managing Member of Orion Capital LLC., and that he, as such Managing Member, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company as Managing Member.
In witness whereof I hereunto set my hand.
| _____________/s/_______________ |
| Commissioner of the Superior Court |
CONSENT TO ENTRY OF ORDER
I, Herman Wayne Gibson, 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/_________ |
| Herman Wayne Gibson |
State of: Connecticut
County of: Hartford
On this the 5th day of November 2014, before me, Stephen H. Solomson, the undersigned officer, personally appeared Herman Wayne Gibson, 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/_______________ |
| Commissioner of the Superior Court |