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HANLEY & ASSOCIATES, LLC * * * * * * * * * * * * * * * * * * |
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STIPULATION AND
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WHEREAS, the Banking Commissioner (the “Commissioner”) is responsible for administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the “Act”) and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the “Regulations”) promulgated under the Act;
WHEREAS, Hanley & Associates, LLC is an investment adviser having its principal place of business at 449 Pittsfield Road, Suite 203-B, Lenox, Massachusetts 01240-2107. The sole member and chief compliance officer of Hanley & Associates, LLC is Francis Joseph Hanley (CRD No. 1473476). A large part of Hanley & Associates, LLC’s investment advisory business relates to a Co-Adviser relationship Hanley & Associates, LLC maintains with Matson Money, Inc., an investment adviser registered with the Securities and Exchange Commission;
WHEREAS, Hanley & Associates, LLC became registered as an investment adviser in its home state of Massachusetts on August 23, 2012;
WHEREAS, in early 2017, the Massachusetts Securities Division conducted an audit of Hanley & Associates, LLC’s operations, noting that, while Hanley & Associates, LLC had Connecticut clients, Hanley & Associates, LLC was not registered as an investment adviser under the Act;
WHEREAS, on March 8, 2017, Hanley & Associates, LLC applied for registration as an investment adviser under the Act, which registration shall become effective upon the Commissioner’s execution of this Stipulation and Agreement;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation of Hanley & Associates, LLC pursuant to Sections 36b-8 and 36b-26(a) of the Act to determine the extent to which it had violated, was violating or was about to violate provisions of the Act or Regulations;
WHEREAS, as a result of the foregoing investigation, the Commissioner obtained evidence indicating that since at least 2013, Hanley & Associates, LLC transacted business as an investment adviser in Connecticut while unregistered in contravention of Section 36b-6(c)(1) of the Act, and that Hanley & Associates, LLC engaged an unregistered investment adviser agent in violation of Section 36b-6(c)(3) of the Act;
WHEREAS, Hanley & Associates, LLC maintains that its failure to register was attributable to faulty advice from a compliance consultant;
WHEREAS, the Commissioner believes that the conduct described above would support administrative proceedings against Hanley & Associates, LLC under Section 36b-15 and Section 36b-27 of the Act;
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(4) of the General Statutes of Connecticut;
WHEREAS, Hanley & Associates, LLC desires to settle the matters described above, and voluntarily enters into this Stipulation and Agreement;
WHEREAS, Section 4-177(c) of Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;
WHEREAS, the Commissioner and Hanley & Associates, LLC acknowledge that this Stipulation and Agreement is in lieu of any court action or administrative proceeding against Hanley & Associates, LLC, its members, officers, employees, agents or representatives adjudicating any issue of fact or law on the specific matters described herein;
WHEREAS, Hanley & Associates, LLC, through its execution of this Stipulation and Agreement, voluntarily waives any rights it may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;
NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:
| 1. |
Hanley & Associates, LLC, its representatives, agents, employees, affiliates, assigns and successors in interest shall refrain from engaging in conduct constituting or which would constitute a violation of the Act or any regulation, rule or order adopted or issued under the Act, either directly or through any person, organization or other device, including, without limitation, transacting business as an unregistered investment adviser and engaging unregistered investment adviser agents; |
| 2. |
No later than the date this Stipulation and Agreement is executed by the Commissioner, Hanley & Associates, LLC shall remit to the Department, by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum of five thousand seventy five dollars ($5,075), one thousand five hundred seventy five dollars ($1,575) of which shall constitute reimbursement for past due investment adviser and investment adviser agent registration fees and three thousand five hundred dollars ($3,500) of which shall constitute an administrative fine; |
| 3. | Execution of this Stipulation and Agreement by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against Hanley & Associates, LLC based upon a violation of this Stipulation and Agreement or the basis for its entry if the Commissioner determines that compliance is not being observed with the terms hereof; |
| 4. | Nothing in this Stipulation and Agreement shall be construed as limiting the Commissioner's ability to take enforcement action against Hanley & Associates, LLC based upon evidence of which the Commissioner was unaware on the date hereof relating to a violation of the Act or any regulation or order under the Act; |
| 5. | Through its execution of this Stipulation and Agreement, Hanley & Associates, LLC agrees that it 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, any allegation referenced in this Stipulation and Agreement or create the impression that this Stipulation and Agreement is without factual basis; and |
| 6. | This Stipulation and Agreement shall become binding when executed by Hanley & Associates, LLC and the Commissioner. |
IN WITNESS WHEREOF, the undersigned have executed this Stipulation and Agreement on the dates indicated.
| Dated at Hartford, Connecticut | ____/s/_____________ | |
| this 23rd day of February 2018. | Jorge L. Perez | |
| Banking Commissioner |
I, Francis Joseph Hanley, state on behalf of Hanley & Associates, LLC, that I have read the foregoing Stipulation and Agreement; that I know and fully understand its contents; that I am authorized to execute this Stipulation and Agreement on behalf of Hanley & Associates, LLC; and that Hanley & Associates, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein.
| Hanley & Associates, LLC | ||
| By | _______/s/_____________ | |
| Francis Joseph Hanley | ||
| Managing Member |
On this 14 day of February 2018, personally appeared Francis Joseph Hanley, signer of the foregoing Stipulation and Agreement, who, being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of Hanley & Associates, LLC and acknowledged the same to be his free act and deed, before me.
_____/s/____________________
Notary Public
My Commission Expires: 7/9/21