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M.M. DILLON & CO. LLC * * * * * * * * * * * * * * * * * * |
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CONSENT ORDER NO. CO-15-8221-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, M. M. Dillon & Co. LLC (“Dillon”) is a broker-dealer registered under the Act since April 1, 2009, with its principal office located at One Sound Shore Drive, Suite 101, Greenwich, Connecticut 06830;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking (“Department”), conducted an investigation pursuant to Section 36b-26(a) of the Act into the activities of Dillon to determine if Dillon had violated, is violating or was about to violate any provision of the Act or Regulations (“Investigation”);
WHEREAS, as a result of the Investigation, the Division obtained evidence that at various times from approximately early 2009 until April 14, 2015, Dillon employed unregistered agents who effected securities transactions in or from this state. Dillon took curative measures to register such individuals as agents under the Act, and the last agent became registered on April 14, 2015;
WHEREAS, as a result of the Investigation, the Commissioner has reason to believe that Dillon has violated certain provisions of the Act and Regulations, and that such violations would support administrative proceedings under Sections 36b-15 and 36b-27 of the Act;
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 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, 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, 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 Dillon reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, Dillon expressly consents to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS, the Commissioner finds that the issuance 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;
AND WHEREAS, Dillon, through its execution of this Consent Order, specifically assures the Commissioner that none of the violations alleged in this Consent Order shall occur in the future.
II. CONSENT TO WAIVER OF PROCEDURAL RIGHTS
WHEREAS, Dillon, through its 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 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 itself of Sections 36b-15 and 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. | To present its position in a hearing in which it 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 or otherwise challenge or contest the validity of this Consent Order. |
III. ACKNOWLEDGEMENT OF THE COMMISSIONER'S ALLEGATIONS
WHEREAS, Dillon, through its execution of this Consent Order, acknowledges the following allegations of the Commissioner, without admitting or denying them:
| 1. | From early 2009 until April 2015, Dillon violated Section 36b-6(b) of the Act by employing multiple unregistered agents; and |
| 2. | Dillon failed to establish, enforce and maintain a system for supervising the activities of its agents that was reasonably designed to achieve compliance with applicable securities laws and regulations in violation of Section 36b-31-6f of the Regulations. |
WHEREAS, the Commissioner would have the authority to enter findings of fact and conclusions of law after granting Dillon an opportunity for a hearing;
AND WHEREAS, Dillon acknowledges the possible consequences of an administrative hearing and voluntarily agrees to the terms of this Consent Order as described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Dillon, through its execution of this Consent Order, consents to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Dillon, its representatives, agents, employees, affiliates, assigns, and successors in interest shall cease and desist 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: (a) employing unregistered agents, and (b) failing to establish, enforce and maintain a system for supervising the activities of its agents that is reasonably designed to achieve compliance with applicable securities laws and regulations; |
| 2. | Dillon shall establish, implement and maintain revised written supervisory procedures and update its supervisory systems as required under Section 36b-31-6f of the Regulations to ensure that all persons who require agent registration are properly registered; and |
| 3. | No later than the date this Consent Order is entered by the Commissioner, Dillon shall remit to the Department by cashier’s check, certified check or money order, made payable to “Treasurer, State of Connecticut”, the sum of four thousand fifty dollars ($4,050), two thousand seven hundred dollars ($2,700) of which shall constitute an administrative fine and one thousand three hundred fifty dollars ($1,350) of which shall represent payment for past due agent registration fees. |
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 Dillon 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 Dillon 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 19th day of May 2015. | Jorge L. Perez | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Michiel C. McCarty, state on behalf of M. M. Dillon & Co. 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 M. M. Dillon & Co. LLC; that M. M. Dillon & Co. LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that M. M. Dillon & Co. LLC consents to the entry of this Consent Order.
| M.M. Dillon & Co. LLC | |
| By: | _____/s/________________ |
| Michiel C. McCarty | |
| Chief Executive Officer |
State of: Connecticut
County of: Fairfield
On this the 14th day of May 2015, before me, Anita L. Griffin, the undersigned officer, personally appeared Michiel C. McCarty, who acknowledged himself to be the Chief Executive Officer of M. M. Dillon & Co. LLC, and that he, as such Chief Executive Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained by signing the name of the limited liability company by himself as Chief Executive Officer.
In witness whereof I hereunto set my hand.
| ____/s/____________________________________ |
| Anita L. Griffin |
| Notary Public / Commissioner of the Superior Court |
| Date Commission Expires: 10/31/2019 |