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M & I BROKERAGE SERVICES, INC. (CRD No. 16517) * * * * * * * * * * * * * * * |
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WHEREAS, the Banking Commissioner (the "Commissioner") is charged with the administration of 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 promulgated under the Act (the "Regulations");
WHEREAS, on March 3, 2006, M & I Brokerage Services, Inc. (“M & I”) of 770 North Water Street, Milwaukee Wisconsin, filed an application with the Commissioner for registration as a broker-dealer under the Act;
WHEREAS, in connection with such application, M & I disclosed that 1) it had effected securities transactions for certain Connecticut residents from at least February, 1998 through at least December, 2005 and at a time when the firm was not registered as a broker-dealer under the Act; and 2) such activity consisted of six (6) accounts, serviced by at least two (2) agents, resulting in commission income to M & I of approximately $942;
WHEREAS, the Commissioner, acting pursuant to Sections 36b-8 and 36b-26 of the Act and through the Securities and Business Investments Division of the State of Connecticut Department of Banking (the “Division”) conducted an investigation into the activities of M & I to assess the accuracy of the information provided by the firm in its application as well as the firm’s compliance with the Act and the Regulations thereunder;
WHEREAS, the Division ascertained, as a result of such investigation that: 1) from at least December 1995 though at least January 2006, M & I transacted business as a broker-dealer absent registration under the Act, servicing least one additional Connecticut account that had not been previously disclosed to the Division; 2) transactions in that account were effected by at least four (4) agents, resulting in commission income to M & I of approximately $22,000; and 3) the undisclosed activity rendered the firm’s application for broker-dealer registration materially incomplete;
WHEREAS, as a result of such investigation, the Division alleges that M & I violated Section 36b-6(a) of the Act by transacting business as a broker-dealer absent registration and Section 36b-6(b) of the Act by employing unregistered agents;
WHEREAS, M & I maintains that in furnishing information to the Division, a clerical oversight had caused M & I to not provide a second page which disclosed the additional account the firm had serviced at a time when it was not registered as a broker-dealer under the Act;
WHEREAS, as a result of such investigation, the Division believes that grounds exist under Sections 36b-15(a)(2)(A) and 36b-15(a)(2)(B) of the Act for restricting or imposing conditions on the securities or investment advisory activities that M & I may perform in this state;
WHEREAS, Section 36b-15(a) of the Act provides, in part, that:
WHEREAS, Section 36b-15(a) of the Act provides, in part, that:
The commissioner may, by order, deny . . . any registration or, by order, restrict or impose conditions on the securities or investment advisory activities that an applicant or registrant may perform in this state if the commissioner finds that (1) the order is in the public interest, and (2) the applicant or registrant or, in the case of a broker-dealer or investment adviser, any partner, officer, or director, any person occupying a similar status or performing similar functions, or any person directly or indirectly controlling the broker-dealer or investment adviser: (A) Has filed an application for registration which . . . as of any date after filing in the case of an order denying effectiveness, was incomplete in any material respect or contained any statement which was, in light of the circumstances under which it was made, false or misleading with respect to any material fact; [or] (B) has wilfully violated or wilfully failed to comply with any provision of sections 36b-2 to 36b-33, inclusive, or a predecessor statute or any regulation or order under said sections or a predecessor statute;
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-33, inclusive";
WHEREAS, M & I neither admits nor denies that the conduct alleged herein would support administrative proceedings under Section 36b-15 of the Act, and agrees to the entry of this Consent Order Conditioning Registration as a Broker-dealer solely for the purpose of obviating the need for formal administrative proceedings on the matters described above;
WHEREAS, M & I voluntarily agrees to waive any right to a hearing upon the entry of this Consent Order Conditioning Registration as a Broker-dealer, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Consent Order Conditioning Registration as a Broker-dealer;
WHEREAS, the Commissioner finds that the entry of this Consent Order Conditioning Registration as a Broker-dealer 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 this Act;
NOW THEREFORE, THE COMMISSIONER ORDERS AS FOLLOWS:
| 1. | For three years, commencing on the date this Consent Order Conditioning Registration as a Broker-dealer is entered by the Commissioner, M & I and/or its successors in interest shall submit to the Division Director a written report each calendar quarter 1) describing any securities-related written reprimands, censures or warnings issued by M & I to its personnel and involving Connecticut securities activity (“Reprimands”) and any securities-related complaints, actions or proceedings (including arbitrations) (such complaints, actions or proceedings referred to collectively as "Complaints") involving entities and individuals located in Connecticut and initiated against M & I, its successors in interest or any of M & I’s officers, directors, control persons, agents, employees or representatives for the quarter; 2) providing information on the disposition of any such Reprimands or Complaints, or on any Reprimands or Complaints reflected in an earlier report filed pursuant to this paragraph; and 3) attaching copies of such Complaints or Reprimands and any dispositional documents. If no securities-related Complaints or Reprimands exist for the quarter, the report shall so indicate. The first such report shall be due no later than ten business days following the close of the quarter ending September 30, 2007, and the final report shall be due no later than ten business days following the close of the quarter ending September 30, 2010; |
| 2. | M & I shall implement revised supervisory and compliance procedures designed to improve regulatory compliance, which procedures shall, at a minimum, provide for enhanced monitoring of state broker-dealer and agent licensing requirements; |
| 3. | No later than the date this Consent Order Conditioning Registration as a Broker-dealer is entered by the Commissioner, M & I shall remit to the department by certified bank check payable to “Treasurer, State of Connecticut” the sum of seven thousand five hundred fifty dollars ($7,550), five thousand dollars ($5,000) of which shall constitute an administrative fine; one thousand five hundred dollars ($1,500) of which shall defray the costs associated with the Division’s investigation of M & I; and one thousand fifty dollars ($1,050) of which shall constitute reimbursement for past due registration fees for the firm and the affected agents; |
| 4. | M & I, its officers, directors, control persons, agents, employees, representatives and successors in interest shall refrain from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act. |
| 5. | Entry of this Consent Order Conditioning Registration as a Broker-dealer by the Commissioner is without prejudice to the right of the Commissioner to take enforcement action against M & I, its officers, directors, control persons, agents, employees, representatives or successors in interest based upon a violation of this Consent Order Conditioning Registration as a Broker-dealer or the matters underlying its entry, if the Commissioner determines that compliance with the terms herein is not being observed or if any representation made by M & I and reflected herein is subsequently discovered to be untrue; |
| 6. | Entry of this Consent Order Conditioning Registration as a Broker-dealer shall not be deemed a waiver or estoppel on the part of the Commissioner from proceeding in individual actions against any person who may have violated the Act in any transaction not currently known to the Commissioner at the time this Consent Order Conditioning Registration as a Broker-dealer is entered; |
| 7. | Contemporaneously with the entry of this Consent Order Conditioning Registration as a Broker-dealer by the Commissioner, the name "M & I Brokerage Services, Inc." shall be entered on the register of broker-dealers in accordance with Section 36b-8 of the Act; and |
| 8. | This Consent Order Conditioning Registration as a Broker-dealer shall become final when issued. |
________/s/_________
Howard F. Pitkin
Banking Commissioner
So ordered at Hartford, Connecticut
this 30 day of July 2007.
this 30 day of July 2007.
CONSENT TO ENTRY OF ORDER
I, James Francis Duca, II, state on behalf of M & I Brokerage Services, Inc., that I have read the foregoing Consent Order Conditioning Registration as a Broker-dealer; that I know and fully understand its contents; that I am authorized to execute this Consent Order Conditioning Registration as a Broker-dealer on behalf of M & I Brokerage Services, Inc.; that M & I Brokerage Services, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that M & I Brokerage Services, Inc. consents to the entry of this Consent Order Conditioning Registration as a Broker-dealer, expressly waiving any right to a hearing on the matters described herein.
M & I Brokerage Services, Inc.
By
________/s/_______________
James Francis Duca, II
President
On this 26th day of July, 2007, personally appeared James Francis Duca, II, signer of the foregoing Consent Order Conditioning Registration as a Broker-dealer, who being duly sworn, did acknowledge to me that he was authorized to execute the same on behalf of M & I Brokerage Services, Inc., a corporation, and acknowledged the same to be his free act and deed, before me.
_______________/s/_____________
Notary Public
My Commission Expires: 11/25/2007