| * * * * * * * * * * * * * * * * * *
COOPER CAPITAL, INC. * * * * * * * * * * * * * * * * * * |
*
* * * * * * * * * * * *
|
CONSENT ORDER No. CO-15-8264-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 promulgated under the Act (“Regulations”);
WHEREAS, Cooper Capital, Inc. (“Adviser”), a former Connecticut corporation with its principal place of business located at 4520 36th Street South, A2, Arlington, Virginia 22302, has been registered as an investment adviser under the Act since January 20, 2012. From August 21, 2003 to March 26, 2012, Adviser was registered as an investment adviser with the Securities and Exchange Commission (SEC No. 801-62263) and filed a notice pursuant to Section 36b-6(e) of the Act. From August 1, 2003 to September 30, 2014, Adviser’s principal place of business was located at 223 Hills Point Road, Westport, Connecticut 06880;
WHEREAS, Sara Katherine Cooper (“Cooper”) has been registered under the Act as an investment adviser agent of Adviser from November 08, 2006 to the present. Cooper is an advisory affiliate and therefore a related person of Adviser for purposes of Form ADV;
WHEREAS, at all times relevant hereto, Cooper has been Adviser’s Chief Compliance Officer and its Vice President;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation (“Investigation”) pursuant to Section 36b-26(a) of the Act into the activities of Respondents to determine if they had violated, were violating or were about to violate any provision of the Act or Regulations. Such investigation included an examination of Adviser’s books and records (“Examination) pursuant to Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations;
WHEREAS, as a result of the Investigation and Examination, the Division obtained evidence that Respondents violated certain provisions of the Act and Regulations, and that such violations would support administrative proceedings against Respondents 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 [sic] and 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, 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, 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 Respondents reached an agreement, the terms of which are reflected in this Consent Order, in full and final resolution of the matters described herein;
WHEREAS, Respondents, without admitting or denying any of the Commissioner’s allegations, expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS, 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, Respondents, through their execution of this Consent Order, specifically assure 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, 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 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 themselves of Sections 36b-15 and 36b-27 of the Act and Section 4-177c(a) of the General Statutes of Connecticut; |
| 3. | To present their position 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 or otherwise challenge or contest 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 do not admit or deny these allegations, but admit sufficient evidence exists for the Commissioner to initiate administrative proceedings seeking the entry of an order to cease and desist, an order suspending or revoking Adviser’s registration as an investment adviser in Connecticut, an order suspending or revoking Cooper’s registration as an investment adviser agent in Connecticut, and/or 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, based on the following:
| 1. | Adviser engaged in dishonest or unethical business practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act; |
| 2. | Adviser engaged in conduct described in Section 36b-31-15c(a)(10) of the Regulations by failing to disclose to a client in writing before any advice is rendered any material conflict of interest relating to the investment adviser or any of its investment adviser agents which could reasonably be expected to impair the rendering of unbiased and objective advice; |
| 3. | Adviser violated Section 206(3) of the Investment Advisers Act of 1940 by, while acting as a principal for its own account, knowingly selling any security to or purchasing any security from a client without disclosing to such client in writing before the completion of such transaction the capacity in which Adviser was acting and obtaining the consent of the client to such transaction; |
| 4. | Adviser violated Section 36b-31-14e(a) of the Regulations by filing with the Commissioner a Form ADV application and amendment that inaccurately stated that neither Adviser nor Cooper, its related person, had a proprietary interest in client transactions; |
| 5. | Adviser violated Section 36b-31-14e(a) of the Regulations by filing with the Commissioner a Form ADV Part 2A containing the inaccurate statement that Adviser did not participate in principal transactions; |
| 6. | Adviser violated Section 36b-23 of the Act by filing with the Commissioner a Form ADV and amendments stating that Adviser did not participate in principal transactions. Such statement was, at the time and in the light of the circumstances under which it was made, false or misleading in a material respect; |
| 7. | Cooper engaged in dishonest or unethical practices in the securities business within the meaning of Section 36b-15(a)(2)(H) of the Act and Section 36b-31-15d(a)(2) of the Regulations by failing to disclose to clients in writing before any advice was rendered any conflict of interest relating to the investment adviser agent which could reasonably be expected to impair the rendering of unbiased advice; and |
| 8. | Cooper violated Section 36b-23 of the Act by representing and certifying through her signature on Adviser’s Form ADV filings with the Commissioner that the information and statements made in such ADV filings were true and correct when that was not the case; and |
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 the terms of this Consent Order as described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of a Consent Order imposing the following sanctions:
| 1. | Cooper Capital, Inc. and its successors and assigns shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any person, organization or other device, including without limitation, engaging in dishonest or unethical business practices within the meaning of Section 36b-15(a)(2)(H) of the Act and Section 36b-31-15c(a)(10) of the Regulations and Section 206(3) of the Investment Advisers Act of 1940, and violating Section 36b-23 of the Act and Section 36b-31-14e(a) of the Regulations. |
| 2. | Sara Katherine Cooper shall cease and desist from engaging in conduct constituting or which would constitute a violation of the Act or any regulation or order under the Act, either directly or through any person, organization or other device, including without limitation, engaging in dishonest or unethical business practices within the meaning of Section 36b-15(a)(2)(H) of the Act and Section 36b-31-15d(a)(2) of the Regulations and violating Section 36b-23 of the Act. |
| 3. | No later than the date this Consent Order is entered by the Commissioner, Respondents shall remit to the Department by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut,” the sum of ten thousand dollars ($10,000.00), which shall constitute an administrative fine. Cooper Capital, Inc. and Sara Katherine Cooper shall be jointly and severally liable for the remittance of the administrative fine. |
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 Respondents 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 either Respondent 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; |
| 4. | Respondents shall not take any action or make or permit to be made any public statement, including in regulatory filings, any proceeding in any forum or otherwise, denying, directly or indirectly, any allegation referenced in this Consent Order or create the impression that this Consent Order is without factual basis; |
| 5. | Respondents shall not take any position in any proceeding brought by or on behalf of the Commissioner, or to which the Commissioner is a party, that is inconsistent with any part of this Consent Order. Nothing is this provision affects Respondents’ (i) testimonial obligations; or (ii) right to take a legal or factual position in litigation or other legal proceeding in which the Commissioner is not a party; and |
| 6. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | ____/s/_____________ | |
| this 24th day of November 2015. | Jorge L. Perez | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Sara Katherine Cooper, 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/_________
Sara Katherine Cooper State of: Virginia
County of: Alexandria
On this the 17 day of Nov. 2015, before me, the undersigned officer, personally appeared Sara Katherine Cooper, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that she executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand.
| ____/s/___________________________ |
| Notary Public |
| Date Commission Expires: 10/31/2019 |
CONSENT TO ENTRY OF ORDER
I, Sara Katherine Cooper, state on behalf of Cooper Capital, Inc., 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 Cooper Capital, Inc.; that Cooper Capital, Inc. agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Cooper Capital, Inc. consents to the entry of this Consent Order.
| Cooper Capital, Inc. | |
| By | ________/s/___________________________ |
| Sara Katherine Cooper | |
| Vice President and Chief Compliance Officer |
State of: Virginia
County of: Alexandria
On this the 17 day of Nov. 2015, before me, the undersigned officer, personally appeared Sara Katherine Cooper, who acknowledged herself to be the Vice President and Chief Compliance Officer of Cooper Capital, Inc., and that she, as such Vice President and Chief Compliance Officer, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of Cooper Capital, Inc. by herself as Vice President and Chief Compliance Officer.
In witness whereof I hereunto set my hand.
| _____/s/__________________________ |
| Notary Public |
| Date Commission Expires: 10/31/2019 |