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CONSENT ORDER NO. CO-16-8196-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, Rockingham Capital Advisors LLC (“Rockingham”) is a Delaware limited liability company with its principal place of business located at 141 Founders Road, Glastonbury, Connecticut 06033. Rockingham was an investment adviser registered under the Act from April 26, 2004 through December 31, 2011, at which time Rockingham failed to renew its investment adviser registration;
WHEREAS, Scott Little Frew (“Frew”) is an individual whose address last known to the Commissioner is 141 Founders Road, Glastonbury, Connecticut 06033. Frew was registered under the [A]ct as an investment adviser agent of Rockingham from April 26, 2004 to December 31, 2011, at which time Frew failed to renew his investment adviser agent registration. Frew is the managing member and sole owner and control person of Rockingham;
WHEREAS, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, conducted an investigation pursuant to Section 36b-26(a) of the Act to determine whether Respondents violated, were violating or were about to violate provisions of the Act or Regulations or any order thereunder (“Investigation”);
WHEREAS, as a result of the Investigation, the Division obtained evidence that although Rockingham failed to renew its investment adviser registration when it lapsed on December 31, 2011, from January 1, 2012 to the present, Rockingham continued to (a) transact business as an investment adviser by giving securities-related investment advice for compensation, and (b) engage Frew as an unregistered investment adviser agent;
WHEREAS, as a result of the Investigation, the Division obtained evidence that although Frew failed to renew his investment adviser agent registration when it lapsed on December 31, 2011, from January 1, 2012 to the present, Frew, on behalf of Rockingham, continued to transact business as an investment adviser agent by giving securities-related investment advice for compensation;
WHEREAS, the Commissioner has reason to believe that the foregoing conduct violates certain provisions of the Act and Regulations, and would support administrative proceedings against Respondents under Section 36b-27 of the Act;
WHEREAS, an administrative proceeding initiated under Section 36b-27 of the Act would constitute a “contested case” within the meaning of Section 4-166(4) of the General Statutes of Connecticut, as amended by Public Act 15-61;
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, 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, 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 expressly consent to the Commissioner’s jurisdiction under the Act and to the terms of this Consent Order;
WHEREAS, the Commissioner finds that the entry 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 represent and agree 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 Section 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 Section 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 of, or otherwise challenge or contest the matters described herein, including 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, without admitting or denying them:
| 1. | Rockingham violated Section 36b-6(c)(1) of the Act by transacting business as an unregistered investment adviser and Section 36b-6(c)(3) of the Act by engaging an unregistered investment adviser agent; and |
| 2. | Frew violated Section 36b-6(c)(2) of the Act by transacting business as an unregistered investment adviser agent; |
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 consent to the entry of the sanctions described below.
IV. CONSENT TO ENTRY OF SANCTIONS
WHEREAS, Respondents, through their execution of this Consent Order, consent to the Commissioner’s entry of an order imposing on them the following sanctions:
| 1. | Rockingham, its representatives, agents, employees, affiliates, assigns, subsidiaries, 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) transacting business as an unregistered investment adviser, and (b) engaging an unregistered investment adviser agent; |
| 2. | Frew shall cease and desist from directly or indirectly violating the provisions of the Act and the Regulations, including, without limitation, transacting business as an unregistered investment adviser agent; and |
| 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 five thousand one hundred sixty dollars, four thousand dollars of which shall constitute an administrative fine and one thousand one hundred sixty dollars of which shall constitute reimbursement for past due registration fees for Rockingham and Frew. Rockingham and Frew shall be jointly and severally liable for the remittance of the administrative fine and past due 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 Respondents and/or their affiliates and successors in interest 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 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; |
| 4. | Respondents 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 Consent Order or create the impression that this Consent Order is without factual basis. However, nothing in this Consent Order affects Respondents’ testimonial obligations or right to take any legal or factual position in litigation, arbitration, or other legal proceedings in which the Commissioner is not a party; |
| 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; and |
| 6. | This Consent Order shall become final when entered. |
| So ordered at Hartford, Connecticut, | ____/s/_____________ | |
| this 16th day of May 2016. | Jorge L. Perez | |
| Banking Commissioner |
CONSENT TO ENTRY OF ORDER
I, Scott Little Frew, state on behalf of Rockingham Capital Advisors LLC (“Rockingham”), 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 Rockingham; that Rockingham agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Rockingham consents to the entry of this Consent Order.
| Rockingham Capital Advisors LLC | |
| By: | ______/s/___________________ |
| Scott Little Frew | |
| Managing Member |
State of: CT
County of: Hartford
On this the 12 day of May 2016, before me, the undersigned officer, personally appeared Scott Little Frew, who acknowledged himself to be the Managing Member of Rockingham Capital Advisors LLC, a limited liability company, and that he, as such Managing Member, 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 Managing Member.
In witness whereof I hereunto set my hand.
| _____/s/_______________________ |
| Notary Public |
| Date Commission Expires: 11/30/18 |
CONSENT TO ENTRY OF ORDER
I, Scott Little Frew, 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/_________ |
| Scott Little Frew |
State of: CT
County of: Hartford
On this the 12 day of May 2016, before me, the undersigned officer, personally appeared Scott Little Frew, known to me (or satisfactorily proven) to be the person whose name is subscribed to the within instrument and acknowledged that he executed the same for the purposes therein contained.
In witness whereof I hereunto set my hand.
| ____/s/________________________ |
| Notary Public |
| Date Commission Expires: 11/30/18 |