John P. Burke
Banking Commissioner
August 30, 1996

John P. Burke
Banking Commissioner
July 8, 1996

Dayton Family Productions, Inc. (CRD # 40499)

On September 13, 1996, the Commissioner issued an Order to Cease and Desist and Notice of Right to Hearing (Docket number CD-96-2889-S) under the Connecticut Uniform Securities Act against Dayton Family Productions, Inc., a corporation with offices at 2235 East Flamingo Road, Suite 305, Las Vegas, Nevada and 5505 South 900 East, Suite 220, Salt Lake City, Utah. The Order to Cease and Desist alleged that, from at least October 1995 to January 1996, the corporation offered investment general partnership interests in "Family Movie Partners" to Connecticut residents at a time when such interests were not registered under Section 36b-16 of the Act. Investor funds would purportedly finance the production of a film venture entitled "Last Resort." The Order to Cease and Desist also alleged that Dayton Family Productions, Inc. violated the antifraud provisions in Section 36b-4 of the Act by omitting to disclose material information on the offering. The respondent was afforded an opportunity for a hearing on the allegations in the Order to Cease and Desist.

Menocal & Co. (CRD # 31152)

On July 1, 1996, the Banking Commissioner entered a Consent Order (No. CO-96- 2968-S) with respect to Menocal & Co. ("Menocal") of 405 Lexington Avenue, New York, New York. The Consent Order, which followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act, alleged that from approximately June, 1994, the firm transacted business as a broker-dealer absent registration under Section 36b-6(a) of the Act and employed unregistered agents in alleged violation of Section 36b-6(b) of the Act. Menocal neither admitted nor denied the Commissioner's allegations.

The Consent Order directed Menocal to cease and desist from violative conduct, and required that it implement revised supervisory and compliance procedures designed to ensure enhanced monitoring of state broker-dealer and agent licensing requirements. In addition, the Consent Order required that Menocal pay $3,920 to the agency; $1,800 of that amount represented the disgorgement of commissions earned during the period of alleged unregistered activity, $620 reflected past due registration fees and $1,500 constituted an administrative fine. The Consent Order also required that the firm submit quarterly reports to the department for two years describing any securities-related complaints, actions or proceedings involving Connecticut residents.

Cadaret, Grant & Co., Inc. (CRD # 10641) and Arthur F. Grant (CRD # 227458)

On July 10, 1996, the Banking Commissioner entered a Consent Order (No. 96-2624-CO) with respect to Cadaret, Grant & Co., Inc. ("Cadaret") and its president Arthur F. Grant. Cadaret had been the subject of a December 19, 1995 Notice of Intent to Suspend Registration as a broker-dealer and a Notice of Intent to Fine which was later amended on December 21, 1995. Similarly, on December 19, 1995, the department had issued a Notice of Intent to Suspend Registration as an Agent with respect to Arthur F. Grant; Grant's Notice of Intent to Suspend was also amended on December 21, 1995. The notices focused on allegations that the firm transacted business from unregistered Connecticut branch offices and failed to establish and implement appropriate supervisory procedures.

Pursuant to the Consent Order, the firm agreed to retain an independent consultant to review its supervisory and compliance procedures as they related to the firm's Connecticut offices, and to report back to the agency on those measures taken to implement the consultant's recommendations. In addition, the Consent Order prohibited the firm from registering any additional Connecticut locations as branch offices for 120 days. The Consent Order also required that the firm pay the department $40,000; $25,000 of this amount constituted a fine and the remaining $15,000 constituted reimbursement to the agency for costs in investigating the matter and initiating the administrative hearing process. Finally, the Consent Order required that the firm file quarterly written reports with the agency for two years concerning any complaints, actions or proceedings relating to Connecticut residents.

Gilford Securities, Inc. (CRD # 8076)

On July 10, 1996, the Banking Commissioner entered a Consent Order (No. 96-2695-CO) with respect to Gilford Securities, Inc., a registered broker-dealer. The Consent Order, which followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act, alleged that from at least October 1992 through August 1993, the firm 1) employed unregistered agents in violation of Section 36b-6(b) of the Act; 2) offered and sold unregistered non-exempt securities in violation of Section 36b-16 of the Act; 3) failed reasonably to supervise its agents; 4) failed to apply its written supervisory procedures so as to prevent and/or detect violations of state law; and 5) used excessive mark-ups in connection with the sales of securities of one issuer.

In furtherance of its desire to resolve the matter informally with the department, Gilford Securities, Inc. 1) indicated that it would offer rescission to certain Connecticut customers who had purchased unregistered non-exempt securities; 2) contributed $5,000 to the department's Investor Education Fund; and 3) had certain members of its senior management complete the Regulatory Element of the NASD's Continuing Education Program.

The Consent Order required that, for 2 years, the firm designate a Series 24 principal to act as Compliance Officer for the firm's Greenwich, Connecticut branch office. In addition, the Consent Order mandated that the firm retain an independent consultant to conduct a review of its compliance procedures relating to the firm's Connecticut operations, including procedures governing firm trading, execution, underwriting, and order room supervision; and that a report concerning implementation of the consultant's recommendations be filed with the agency. The Consent Order also precluded the firm for two years from making any Connecticut sales of new issues for which the firm acted as sole underwriter and was a market maker unless 1) the firm distributed at least 30% of the issue to one or more unaffiliated selling groups; or 2) the security or transaction was exempt from securities registration under the Act. The Consent Order also contained a provision requiring the firm to set up procedures to reasonably ensure that all trading activities for Connecticut customers be executed from the firm's main office; this obligation would extend for two years. In addition, the Consent Order assessed the firm $50,000; $20,000 of this amount constituted a fine, and the balance of $30,000 represented reimbursement for agency investigative costs. Finally, the Consent Order required that the firm file quarterly written reports with the agency for two years describing any complaints, actions or proceedings relating to Connecticut residents.

The Scarborough Group, Inc. (CRD # 40642)

On August 8, 1996, the Banking Commissioner entered a Consent Order (No. CO-96- 2985-S) with respect to The Scarborough Group, Inc. of 116 Defense Highway, Suite 201, Annapolis, Maryland. The Consent Order, which followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act, alleged that from approximately 1992 through 1995, the firm transacted business as an investment adviser absent registration under Section 36b-6(c) of the Act. The firm neither admitted nor denied the Commissioner's allegations.

The Consent Order 1) directed the firm to implement revised supervisory procedures designed to improve regulatory compliance, and 2) required that the firm pay $4,060 to the agency, $3,000 of which constituted an administrative penalty and $1,060 of which represented past due registration fees for the period of unregistered activity.

J.B. Oxford & Company (CRD # 14343)

On September 11, 1996, the Banking Commissioner entered a Consent Order (No. 96-2494-CO) with respect to J.B. Oxford & Company of 9665 Wilshire Boulevard, Suite 300, Beverly Hills, California. The Consent Order, which followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act, alleged that from at least July 1994 through September 1995, the firm, which is a registered broker-dealer, employed unregistered agents in violation of Section 36b-6(b) of the Act. The Consent Order directed the firm to 1) cease and desist from regulatory violations; 2) implement revised supervisory procedures designed to improve regulatory compliance; 3) file quarterly reports with the Division for two years providing information on complaints involving Connecticut customers; and 4) pay the agency thirty five thousand dollars, $20,000 of which constituted an administrative fine and $15,000 of which represented reimbursement for Division investigative costs.

CoreStates Securities Corp. d/b/a Directrade (CRD # 17344)

On September 13, 1996, the Banking Commissioner entered a Consent Order (No. CO-96-3025-S) with respect to CoreStates Securities Corp. of 1345 Chestnut Street, Philadelphia, Pennsylvania. The Consent Order, which followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act, alleged that from approximately 1990, the firm transacted business as a broker-dealer absent registration under Section 36b-6(a) of the Act and employed unregistered agents in alleged violation of Section 36b-6(b) of the Act. The firm neither admitted nor denied the Commissioner's allegations.

The Consent Order directed the firm to cease and desist from violative conduct, and required that it implement revised supervisory and compliance procedures designed to ensure enhanced monitoring of state broker-dealer and agent licensing requirements. In addition, the Consent Order required that the firm pay $13,385 to the agency; $6,885 of that amount represented the partial disgorgement of commissions earned during the period of alleged unregistered activity, $5,500 reflected past due registration fees and $1,000 constituted an administrative fine.

Citicorp Securities, Inc. (CRD # 7474)

On August 6, 1996, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-96-3002-S) with Citicorp Securities, Inc., a securities broker-dealer located at 399 Park Avenue, New York, New York. The Stipulation and Agreement followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act. That investigation uncovered indications that from approximately January 1996, the firm allegedly transacted business as a broker-dealer absent registration under Section 36b-6(a) of the Act.

Pursuant to the Stipulation and Agreement, the firm agreed to implement revised procedures designed to ensure regulatory compliance; to refrain from engaging in violative conduct; and, for two years, to report to the department on a quarterly basis concerning any securities-related complaints, actions or proceedings involving Connecticut residents. In addition, the firm agreed to pay $1,000 to the department; $500 of that amount reflected reimbursement of uncollected registration fees during the period of unregistered activity, and $500 constituted reimbursement for agency investigative costs.

Connecticut Association Securities, Inc. (CRD # 35371)

On April 1, 1996, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-96-2897-S) with respect to Connecticut Association Securities, Inc. ("CTAS") of 450 Church Street, Hartford, Connecticut. The Stipulation and Agreement followed a Securities and Business Investments Division review which alleged that from approximately January 1994, the firm transacted securities business from one or more Connecticut locations without registering those locations as branch offices pursuant to Section 36b-6(d) of the Connecticut Uniform Securities Act.

Pursuant to the Stipulation and Agreement, CTAS agreed to retain an independent consultant experienced in securities law to review the firm's supervisory procedures and prepare a written report. The Stipulation and Agreement also required that CTAS file an implementation schedule with the department regarding the consultant's recommendations and, if applicable, explain why any recommended procedures were not followed. Also included was a provision mandating that Robert Francis Brawders (CRD number 1091922) and Lawrence Thomas McHugh (CRD number 1086477), principals of the firm, complete the Regulatory Element of the NASD's Continuing Education Program within ninety days.

CTAS also agreed that 1) the firm's supervisory procedures guard against agents effecting securities transactions in products concerning which they had not passed the appropriate NASD examination; 2) firm managers pass a principal's exam within 90 days of appointment; and 3) pending a manager's passage of the principal's examination, CTAS designate an interim backup manager to perform supervisory functions. The Stipulation and Agreement also contemplated that Roger Helal (CRD number 1080346) not supervise other agents absent the department's written consent, and that the CTAS Compliance Director be responsible for Helal's supervision. CTAS was also required to provide the department with periodic reports concerning securities-related complaints, actions or proceedings involving it or any of its employees, agents or representatives. Finally, the Stipulation and Agreement required that CTAS pay $1,000 to the department, $500 of which constituted a fine, and $500 of which represented reimbursement for investigative costs.

Computer Business Services, Inc.

On August 21, 1996, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-96-722-B) with Computer Business Services, Inc. ("CBSI") of CBSI Plaza, Sheridan, Indiana. CBSI, which markets a program enabling purchasers to start a home business using computer technology, was the subject of an April 1, 1996 Order to Cease and Desist which alleged that the concern offered unregistered business opportunities in violation of Section 36b-67(1) of the Connecticut Business Opportunity Investment Act.

Without admitting or denying the department's allegations, the corporation agreed to refrain from engaging in further offers or sales of business opportunities absent compliance with the state's business opportunity law. In addition, CBSI agreed to file a business opportunity application with the Securities and Business Investments Division and to honor refund requests from Connecticut purchasers within one year of the date of purchase.

Berkshire Equity Sales, Inc. (CRD # 87)

On September 3, 1996, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-96-2974-S) with Berkshire Equity Sales, Inc., a securities broker-dealer located at 700 South Street, Pittsfield, Massachusetts. The Stipulation and Agreement followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act. That investigation uncovered indications that from at least 1995, the firm allegedly transacted business from an unregistered branch office in contravention of Section 36b-6(d) of the Act.

Pursuant to the Stipulation and Agreement, the firm agreed to 1) complete an internal review of its supervisory and compliance procedures within 120 days; 2) review, revise and implement supervisory procedures designed to ensure compliance with regulatory requirements; 3) refrain from engaging in violative conduct; 4) unless otherwise waived by the Commissioner, designate a manager who has passed a principal's examination to oversee branch office operations; 5) for two years, provide quarterly reports to the Division concerning any complaints, actions or proceedings involving Connecticut residents; and 6) pay $1,000 to the department, $500 of which constituted an administrative penalty and $500 of which represented reimbursement for Division investigative costs.

First of America Securities, Inc. (CRD # 36568)

On September 25, 1996, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-96-3016-S) with First of America Securities, Inc., a securities broker- dealer located at 157 South Kalamazoo Mall, Kalamazoo, Michigan. The Stipulation and Agreement followed a Securities and Business Investments Division investigation under the Connecticut Uniform Securities Act. That investigation uncovered indications that from approximately 1994 to 1996, the firm allegedly transacted business as a broker- dealer absent registration under Section 36b-6(a) of the Act and employed unregistered agents.

Pursuant to the Stipulation and Agreement, the firm agreed to implement revised procedures designed to ensure regulatory compliance; to refrain from engaging in violative conduct; and to pay $1,310 to the department. Of that amount, $810 represented reimbursement of uncollected registration fees during the period of unregistered activity, and $500 constituted an administrative penalty.

Paramount Investments International, Inc. (CRD # 30898) - Broker-dealer Registration Revoked

On September 18, 1996, the Banking Commissioner entered an order revoking the broker-dealer registration of Paramount Investments International, Inc. (Docket No. NR-96-3000-S). The corporation is located at 5348 Champa Street, Denver, Colorado. The Commissioner's action, which was preceded by an August 8, 1996 Notice of Intent to Revoke Registration, was based on an October 20, 1995 suspension of the firm by the National Association of Securities Dealers (the "NASD") and by the NASD's subsequent expulsion of the firm from membership for failing to pay a $15,000 fine levied against it by the NASD. The matter was uncontested by the firm.

A.R. Baron & Co., Inc. (CRD # 29285) - Notice of Intent to Revoke Broker-dealer Registration Issued

On September 25, 1996, the Banking Commissioner issued a Notice of Intent to Revoke the broker-dealer registration of A.R. Baron & Co., Inc. (Docket No. NR-96-3008-S) of Citicorp Center, 153 East 53rd Street, New York, New York. The Notice of Intent to Revoke alleged that 1) the firm was subject to several National Association of Securities Dealers, Inc. sanctions, to wit, a July 17, 1995 censure and $400,000 fine for excessive markups, a May 13, 1996 censure and $11,000 fine for failing to fully respond to NASD requests for information, and a July 27, 1996 censure and $20,000 fine for failing to observe net capital requirements, among other things; 2) the firm 's broker-dealer registration was revoked by the State of Alabama on December 19, 1995 for failing to disclose disciplinary events against several of the firm's officers; and 3) A.R. Baron & Co., Inc. was subject to an August 5, 1996 cease and desist ordered issued by the Securities and Exchange Commission. The firm was provided with an opportunity to contest the allegations in the Notice of Intent to Revoke.