Securities and Business Investments Division
Securities Bulletin

Vol. XXXVIII No. 1 - Spring 2024

 
Features

• Quarterly Statistical Summaries

Enforcement and Other Highlights

• Administrative Actions
• Consent Orders
• Conditional Registrations

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Administrative Actions

Morse Investment Management Company, Inc. (CRD No. 128355)

On February 28, 2024, the Banking Commissioner issued a Notice of Intent to Revoke Registration as an Investment Adviser and Notice of Right to Hearing (No. NRC-24-20245-S) with respect to Morse Investment Management Company, Inc. of 321 Main Street, Farmington, Connecticut  06032.  The firm, an inactive corporation, was registered as an investment adviser in Connecticut since June 3, 1991.

The action alleged that, since at least 2022, the firm violated Section 36b-31-14d(a) of the Regulations under the Connecticut Uniform Securities Act by failing to file a report of its financial condition with the Commissioner.  The Respondent was provided with an opportunity to request a hearing on the allegations in the Notice of Intent to Revoke Registration as an Investment Adviser.

Archer Micro Cap Value Fund, Limited Partnership and Artemis Capital Group L.L.C.

On January 19, 2024, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (No. CF-24-10824-S) against Archer Micro Cap Value Fund, a private investment fund located at 210 South Main Street, 1st Floor, Middletown. Connecticut.  Also named in the action was Artemis Capital Group L.L.C., general partner of Archer Micro Cap Value Fund. 

The action alleged that the respondents sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that, between May 2015 and January 2017, Artemis Capital Group L.L.C. transacted business as an unregistered investment adviser by rendering investment advisory services to the Archer Micro Cap Value Fund.

Since neither Respondent requested a hearing, the Order to Cease and Desist became permanent as to each on February 9, 2024.

Consent Orders

Keenan, LLC d/b/a Keenan Financial (CRD No. 285673)

On March 8, 2024, the Banking Commissioner entered a Consent Order (No. CO-24-202350-S) with respect to Keenan, LLC d/b/a Keenan Financial of 11 Beacon Street, 13th Floor, Boston, Massachusetts 02108.  The firm is currently registered as an investment adviser with the Securities and Exchange Commission.  The Consent Order alleged that, prior to becoming registered with the SEC, the firm violated Section 36b-6(c)(1) of the Connecticut Uniform Securities Act by transacting business as an unregistered investment adviser, and violated Section 36b-6(c)(3) of the Act by engaging an unregistered investment adviser agent.

The Consent Order directed the firm to cease and desist from regulatory violations and to remit $5,590 to the department.  Of that amount, $5,000 constituted an administrative fine and $590 represented registration fees not previously paid.

True Bullion, LLC and Anthony Allen Anderson (CRD No. 7416458)

On February 23, 2024, the Banking Commissioner entered a Consent Order (No. CO-24-202323-S) with respect to True Bullion, LLC d/b/a GSI Exchange and Gold Silver International Exchange.  The firm has maintained business addresses at 26635 West Agoura Road, Suite 220, Calabasas, California 91302, 3838 Oak Lawn Avenue, Suite 1000, Dallas, Texas 75219 and 4440 PGA Boulevard, Suite 600, Palm Beach Gardens, Florida 33410.   The firm was in the business of selling precious metals.  Also named in the Consent Order was Anthony Allen Anderson, managing member of the firm.

The firm had been the subject of a multistate investigation conducted by the North American Securities Administrators Association, Inc. (“NASAA”).

The Consent Order alleged that the Respondents sold precious metals to at least nine known Connecticut residents; rendered advisory services while unregistered in violation of Section 36b-6(c) of the Connecticut Uniform Securities Act and violated Section 36b-5(a) of the Act by making false or misleading statements and omissions to prospective customers.  The Consent Order directed the respondents to refrain from violative conduct and to extend a refund offer to eligible Connecticut customers who bought precious metals prior to July 22, 2021.  A fine was not imposed since the settlement was originally intended to be a multi-state settlement that did not call for a fine, and since the goal was to expeditiously achieve the maximum percent refund for eligible Connecticut Investors.

GlennCap LLC (IARD No. 290351) and Jonathan Vincent Glenn (CRD No. 2272521)

On February 6, 2024,  the Banking Commissioner entered a Consent Order (No. CO-24-202250-S) with respect to GlennCap LLC d/b/a Glenn Capital LLC, a Connecticut registered investment adviser located at 165 West Putnam Road, Greenwich, Connecticut.  Also named was Jonathan Vincent Glenn, sole member of the firm.

The Consent Order alleged that the Respondents violated the antifraud provisions in Section 36b-5 of the Connecticut Uniform Securities from January 2020 to March 2022.  Specifically,  Glenn, on behalf of and as an agent of Glenn Capital, engaged in “cherry picking” which is the practice of allocating favorable trades specifically to certain accounts, often to the benefit of the investment adviser, while allocating the less favorable trades to clients.   Respondent received $2,743,616 in ill gotten gains from the cherry picking and the resulting increase in performance fees attributable to accounts in which gains were assigned more favorably.  The Respondents were also the subject of a Securities and Exchange Commission order requiring them to disgorge $2,743,616 in ill-gotten gains to investors; and barring them from securities-related activity.

The Consent Order directed Respondents to cease and desist from regulatory violations, revoked the firm’s Connecticut investment adviser registration; and permanently barred the firm from transacting business in Connecticut as a broker-dealer, investment adviser or any other entity requiring a license or registration from the Commissioner.  The Consent Order also revoked Jonathan Vincent Glenn’s investment adviser agent registration and barred him for seven years from transacting business in Connecticut as a broker-dealer, agent, investment adviser or any other capacity requiring a license or registration from the Commissioner.

Based on the contents of the financial affidavit submitted by the Respondents which showed that they did not have the ability to pay the $100,000 fine that otherwise would have been imposed against them pursuant to Section 36b-27 of the Act, the Commissioner temporarily stayed such fine for three years from the date of the Consent Order.   After three years, the stay would no longer be in force and effect if the Respondents remained unable to pay the fine, and the fine would be waived.

Andrew M. Komarow (CRD No. 5838564)

On January 31, 2024, the Banking Commissioner entered a Consent Order (No. CO-24- 20233-S) with respect to Andrew M. Komarow of 75 Juniper Drive, Avon, Connecticut 06001. Respondent had been registered as a broker-dealer agent and investment adviser agent during the preceding years. The Consent Order noted that Respondent had been discharged from prior firms for attempting to put through ACH transactions when there were insufficient funds on hand; that FINRA had issued a bar against Komarow; and that, on December 8, 2023, the Securities and Exchange Commission had filed suit against Komarow alleging that he engaged in improper freeriding schemes. The Consent Order alleged that Respondent violated Section 36b-4 of the Connecticut Uniform Securities Act.

The Consent Order directed Komarow to cease and desist from regulatory violations; denied him investment adviser agent registration; and barred him indefinitely from transacting business as a broker-dealer, agent, investment adviser or investment adviser agent in the state of Connecticut. Based on the contents of the financial affidavit submitted by the Respondent which showed that he did not have the ability to pay the fine that otherwise would have been imposed against him pursuant to Section 36b-27 of the Act, the Commissioner temporarily stayed such fine for three years from the date of the Consent Order. After three years, the stay would no longer be in force and effect if the Respondent remained unable to pay the fine, and the fine would be waived.

Raymond James & Associates, Inc. (CRD No. 705) and Raymond James Financial Services, Inc. (CRD No. 6694)

On January 31, 2024, the Banking Commissioner entered a Consent Order (No. CO-24-202326-S) with Connecticut registered broker-dealers Raymond James & Associates, Inc. and Raymond James Financial Services, Inc. of 880 Carillon Parkway, St. Petersburg, Florida 33716.  The action was predicated on a coordinated multistate investigation focusing on the firm's charging of unreasonable commissions to retail customers on low principal equity transactions. The Connecticut Uniform Securities Act and its Regulations  prohibit the charging of unreasonable commissions for services performed.  The Consent Order also alleged that Respondents were remiss in supervising the activities that caused the compliance issue.

As part of the multistate settlement, Respondents agreed to provide affected customers with calculated restitution acceptable to state regulators.  The period covered by the misconduct was July 18, 2018 to July 17, 2023.

The Consent Order directed Respondents from violating Connecticut's securities laws.  In addition, the Consent Order fined Respondents $75,000, representing Connecticut’s share of the multistate settlement.

TradeStation Crypto, Inc.

On January 18, 2024, the Banking Commissioner entered a Consent Order (No. CO-24-2023-48-S) with TradeStation Crypto, Inc. of 8050 SW 10th Street, Suite 2000, Plantation, Florida 13324.  The firm offers digital asset trading accounts to clients, and holds a money transmitter license with the Commissioner.  The action followed a North American Securities Administrators Association, Inc. multistate investigation and global settlement into the firm’s activities.

The Consent Order alleged that, from approximately August 2020 until June 30, 2022, the firm offered a digital asset trading program featuring the payment of accrued interest to clients, and that, as an unregistered securities product, the offering violated Section 36b-16 of the Connecticut Uniform Securities Act.  From August 1, 2020 to June 30, 2022, the firm offered the interest feature accounts to at least 134 Connecticut investors.  On or about June 30, 2022, TradeStation Crypto, Inc. discontinued the interest feature product and ceased all lending activities of customer assets.

The Consent Order directed TradeStation Crypto, Inc. to cease and desist from regulatory violations.  The Consent Order also fined the firm $29,411.76 which represented Connecticut’s share of the multistate settlement.

Conditional Registrations

Layered Financial LLC (IARD No, 326418)

On January 3, 2024, the Banking Commissioner entered an Order (No. COND-24-202345-S) conditioning the investment adviser registration of Layered Financial LLC.  The firm is located at 160 Dockerel Road, Easton, Connecticut 06069 and planned to focus its business on financial planning.  The Order alleged that the firm did not fulfill  the experience requirements for investment advisers set forth in Section 36b-31-7b of the Regulations under the Connecticut Uniform Securities Act.

The Order restricted the firm for 3 years from having custody of client funds or securities, exercising discretionary trading authority, and charging performance based compensation.  In addition, the Order required that the firm limit its activities for three years to securities listed on national securities exchanges.  The Order also required that the firm retain the services  of a regulatory consultant within six months after the Commissioner signs the Order.

The firm became registered as an investment adviser in Connecticut on January 3, 2024.
 

Statistical Summary