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ANDRE PAUL YOUNG
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ORDER TO CEASE AND DESIST AND NOTICE OF RIGHT TO HEARING DOCKET NO. CD-14-8081-S |
I. PRELIMINARY STATEMENT
| 1. | 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. |
| 2. | Pursuant to Section 36b-26(a) of the Act, the Commissioner, through the Securities and Business Investments Division (“Division”) of the Department of Banking, has conducted an investigation into the activities of Andre Paul Young (“Respondent”) to determine if he has violated, is violating or is about to violate provisions of the Act or Regulations (“Investigation”). |
| 3. |
As a result of the Investigation, the Commissioner has reason to believe that Respondent has violated certain provisions of the Act. |
| 4. | As a result of the Investigation, the Commissioner has the authority to issue a cease and desist order against Respondent pursuant to Section 36b-27(a) of the Act. |
II. RESPONDENT
| 5. | Respondent is an individual whose address last known to the Commissioner is 9 Maryanne Lane, Stamford, Connecticut 06905. Respondent was registered as a broker-dealer agent under the Act at various times from August 12, 1997 to April 29, 2013, and as an investment adviser agent under the Act at various times from January 12, 1998 to April 29, 2013. |
III. STATEMENT OF FACTS
| 6. | MetLife Securities Inc. (CRD No. 14251) (“MetLife”) is a Connecticut-registered broker-dealer and investment adviser, with its principal office located at 1095 Avenue of the Americas, New York, New York 10036. MetLife maintains a branch office located at 6 Corporate Drive, Shelton, Connecticut 06484 (“Shelton Branch Office”). Respondent was registered as a broker-dealer agent and investment adviser agent of MetLife from November 16, 2009 to August 15, 2012, and November 20, 2009 to August 15, 2012, respectively, and was assigned to MetLife’s Shelton Branch Office. |
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Client A | |
| 7. | On or about September 13, 2010, while Respondent was associated with MetLife, Respondent was contacted by one of his MetLife investment advisory clients (“Client A”), a Connecticut resident, who asked for Respondent’s help because Client A needed cash. The same day, in response to Client A’s request, Respondent, without notice to or consent from MetLife, gave Client A $4,000 in cash from Respondent’s personal account. Respondent’s action amounted to a de facto loan to Client A. Shortly thereafter, Client A repaid Respondent from Client A’s MetLife account, and Respondent deposited the repaid sum into his personal bank account. Respondent did not disclose his transaction with Client A to Metlife. |
| 8. | Section 36b-31-15d(a)(3) of the Regulations provides that engaging in any of practices specified in subdivision (7) of section 36b-31-15c(a) of the Regulations shall be deemed a dishonest or unethical practice in the securities business by investment adviser agents. |
| 9. | Section 36b-31-15c(a)(7) of the Regulations provides that “[l]ending money to a client unless the investment adviser is a financial institution engaged in the business of lending funds or the client is an affiliate of the investment adviser” is deemed a dishonest or unethical practice in the securities business. Respondent was not a financial institution engaged in the business of lending funds and Client A was not an affiliate of Respondent. |
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Clients B and C | |
| 10. | Respondent was the subject of a complaint filed with MetLife in October 2012 by a Connecticut couple (“Clients B and C”) who held a joint brokerage account at MetLife (“MetLife Account”). |
| 11. | Clients B and C’s complaint, which Respondent disputed, alleged that: (a) in 2010, Respondent recommended to Clients B and C that they invest in a stock fund through TD Bank; (b) at Respondent’s recommendation, and from approximately June 2010 to June 2012, Clients B and C issued checks totaling $208,400 (“MetLife Checks”) from their MetLife Account; (c) such checks, at Respondent’s direction, were made payable to a TD Bank account number rather than to a specific individual; (d) Respondent led Clients B and C to believe that their monies were invested in a stock fund through TD Bank; and (e) in or about September 2012, Clients B and C learned that their funds were not invested as represented but rather deposited into Respondent’s personal account at TD Bank. |
| 12. | In or about October 2012, Respondent repaid Clients B and C $45,000 of the $208,400 Clients B and C had tendered to Respondent. |
| 13. | On April 22, 2013, MetLife and Clients B and C entered into a $163,400 settlement, which amount reflected the unpaid balance of the funds tendered to Respondent by Clients B and C. |
| 14. | On September 24, 2013, the State of Connecticut Insurance Department entered a Stipulation and Consent Order (Docket No.: FC 13-136) revoking Respondent’s insurance licenses based on allegations that Respondent inappropriately solicited and received funds from an existing insurance client. |
| 15. | On October 16, 2013, Respondent admitted to the Division during on the record testimony that he had instructed Clients B and C to make the MetLife Checks payable to the account number associated with Respondent’s TD Bank account, omitting Respondent’s name, in order to avoid detection by MetLife. |
| 16. | On October 16, 2013, Respondent admitted to the Division during on the record testimony that he used the monies tendered by Clients B and C to pay his mortgage. |
| 17. | Respondent did not disclose to MetLife the purported investments involving Clients B and C or Respondent’s personal use of the funds of Clients B and C. |
| 18. | Section 36b-31-15b(c) of the Regulations provides in part that “[i]n construing the term ‘dishonest or unethical practices in the securities . . . business’ as used in this section . . . the commissioner may consider whether the conduct in question is proscribed by any rule of a national securities exchange or self-regulatory organization registered under federal securities laws administered by the United States Securities and Exchange Commission.” |
| 19. | FINRA Rule 2150 prohibits broker-dealer agents from making improper use of a customer’s funds or securities. |
IV. STATUTORY AND REGULATORY BASIS
FOR ORDER TO CEASE AND DESIST
a. Engaging in Dishonest or Unethical Business Practices
Within the Meaning of Sections 36b-31-15d(a)(3) and
36b-31-15c(a)(7) of the Regulations
| 20. | Paragraphs 1 through 19, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 21. |
While registered as an investment adviser agent of Metlife under the Act, Respondent made a de facto loan to a client, as more fully described in paragraph 7. Such conduct constitutes a dishonest or unethical practice by an investment adviser agent within the meaning of Sections 36b-31-15d(a)(3) and 36b-31-15c(a)(7) of the Regulations, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the Act. |
b. Engaging in Dishonest or Unethical Business Practices
Within the Meaning of Section 36b-31-15b(c) of the Regulations
| 22. | Paragraphs 1 through 21, inclusive, are incorporated and made a part hereof as if more fully set forth herein. |
| 24. [sic] |
While registered as a broker-dealer agent of Metlife under the Act, Respondent made improper use of a customer’s funds, as more fully described in paragraphs 10 through 19, inclusive. Such conduct constitutes a dishonest or unethical practice by an agent within the meaning of Section 36b-31-15b(c) of the Regulations, which forms a basis for an order to cease and desist to be issued against Respondent under Section 36b-27(a) of the Act. |
AND NOTICE OF RIGHT TO HEARING
WHEREAS, as a result of the Investigation, the Commissioner finds that, with respect to the activity described herein, Respondent engaged in dishonest or unethical business practices within the meaning of Sections 36b-31-15d(a)(3), 36b-31-15c(a)(7) and 36b-31-15b(c) of the Regulations;
WHEREAS, the Commissioner further finds that the issuance of an Order to Cease and Desist against Respondent is necessary or appropriate in the public interest or for the protection of investors and consistent with the purposes fairly intended by the policies and provisions of the Act;
WHEREAS, the Commissioner ORDERS that ANDRE PAUL YOUNG CEASE AND DESIST from directly or indirectly violating the Regulations, including engaging in dishonest or unethical practices in the securities business within the meaning of Sections 36b-31-15d(a)(3), 36b-31-15c(a)(7) and 36b-31-15b(c) of the Regulations;
THE COMMISSIONER FURTHER ORDERS THAT, pursuant to Section 36b-27(a) of the Act, Respondent will be afforded an opportunity for a hearing on the allegations set forth above if a written request for a hearing is received by the Department of Banking, Securities and Business Investments Division, 260 Constitution Plaza, Hartford, Connecticut 06103-1800 within fourteen (14) days following Respondent’s receipt of this Order. The enclosed Appearance and Request for Hearing Form must be completed and mailed to the above address. If Respondent will not be represented by an attorney at the hearing, please complete the Appearance and Request for Hearing Form as “pro se”. Once a written request for a hearing is received, the Commissioner may issue a notification of hearing and designation of hearing officer that acknowledges receipt of a request for a hearing, designates a presiding officer and sets the date of the hearing in accordance with Section 4-177 of the General Statutes of Connecticut and Section 36a-1-21 of the Regulations. If a hearing is requested, the hearing will be held on January 14, 2015, at 10 a.m., at the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut.
The hearing will be held in accordance with the provisions of Chapter 54 of the General Statutes of Connecticut. At such hearing, Respondent will have the right to appear and present evidence, rebuttal evidence and argument on all issues of fact and law to be considered by the Commissioner.
This Order to Cease and Desist shall remain in effect and become permanent against Respondent if Respondent fails to request a hearing within the prescribed time period or fails to appear at any such hearing.
| Dated at Hartford, Connecticut, | ______/s/__________ | |
| this 26th day of November 2014. | Howard F. Pitkin | |
| Banking Commissioner |
CERTIFICATION
I hereby certify that on this 26th day of November 2014, the foregoing Order to Cease and Desist and Notice of Right to Hearing was sent by certified mail, return receipt requested, to Andre Paul Young, 9 Maryanne Lane, Stamford, Connecticut 06905, certified mail no. 7012 3050 0002 1692 6699.
| ____/s/___________ | |
| Elena Zweifler | |
| Prosecuting Attorney |