Bulletin # 3080 - Week Ending March 3, 2023

This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications.  Any observations you may have are solicited.  Any comments should be in writing to Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800.  Written comments will be considered only if they are received within ten business days from the date of this bulletin.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

J.A.G. Capital, LLC and Joseph Richard Bozzi (CRD No. 6140946)

On February 27, 2023, the Banking Commissioner entered a Consent Order (No. CRF-23-8398-S) with respect to J.A.G. Capital, LLC and its founding member and manager, Joseph Richard Bozzi. J.A.G. Capital, LLC, a Connecticut limited liability company, maintains its principal offices at 33 South Cherry Street, Wallingford, Connecticut and 43 Bayberry Drive, Wallingford, Connecticut.

The Consent Order had been preceded by a February 18, 2022 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing. That action alleged that, beginning in April 2016, Bozzi, individually and on behalf of J.A.G. Capital, LLC, sold interests in an investment vehicle to at least seven Connecticut residents, promising that investor funds would be pooled and that Bozzi would make all investment decisions. Rather than benefiting investors, Bozzi purportedly commingled investor funds with his own money, diverted investor funds for his personal use and provided at least one Connecticut investor with a falsified brokerage statement. The action also alleged that the Respondents violated the Connecticut Uniform Securities Act by 1) selling unregistered securities in contravention of Section 36b-16 of the Act; 2) engaging in conduct prohibited by the antifraud provisions in Section 36b-4(a) of the Act; 3) engaging in dishonest or unethical practices in violation of Sections 36b-4(b) and 36b-5(f) of the Act; 4) engaging in fraudulent investment advisory activity in contravention of Section 36b-5(a) of the Act; and 5) violating Section 36b-23 of the Act by filing materially false or misleading documents with the Commissioner. The action further alleged that Bozzi, individually and under the auspices of J.A.G. Capital, LLC, transacted business as an investment adviser while unregistered in violation of Section 36b-6(c)(1) of the Act.

Respondents agreed to the entry of the Consent Order in lieu of an adjudicative hearing. The Consent Order acknowledged that, while the Respondents had repaid a portion of the $12,800 in investment proceeds remitted to them for the purported purpose of investing in an account that Bozzi managed, Respondents still owed three investors an aggregate remaining balance of $7,500. The Consent Order also acknowledged that the Respondents had provided the agency with documentation demonstrating that they were financially unable to pay the administrative fine that otherwise would have been imposed against them. Accordingly, the Consent Order stayed for three years the $20,000 fine that would have been imposed against the Respondents. If, after three years, Respondents remained unable to pay the fine, the fine would be waived.

Finding that the Respondents violated Sections 36b-16, 36b-4(a), 36b-4(b), 36b-5(a), 36b-5(f), 36b-6(c)(1) and 36b-23 of the Act, the Consent Order directed the Respondents to cease and desist from regulatory violations. In addition, the Consent Order barred Bozzi for ten years from transacting business in or from Connecticut as an agent, broker-dealer, investment adviser or investment adviser agent; maintaining a direct or indirect ownership interest in a broker-dealer or investment adviser registered or required to be registered in Connecticut; and acting in any other capacity requiring a license or registration under laws administered by the Commissioner.

The Consent Order also directed the Respondents, through the department, to pay the remaining $7,500 restitutionary amount to the affected investors on a monthly schedule, concluding on September 1, 2023. A failure to make the monthly restitutionary payments to the investors would result in the imposition of a $40,000 fine against the Respondents, which would not be waived, and the Order to Cease and Desist and Order to Make Restitution being made permanent.