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To Her Excellency M. Jodi Rell, Governor - page 20 / 25





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Subject to the general supervision of the Banking Commissioner, the Securities and Business Investments Division is charged with administering Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act; Chapter 672c of the Connecticut General Statutes, the Connecticut Business Opportunity Investment Act; and Chapter 672b of the Connecticut General Statutes, the Connecticut Tender Offer Act.

The division is responsible for 1) the registration of securities and business opportunity offerings for sale in Connecticut; 2) the registration of broker-dealers, agents, investment advisers and investment adviser agents as well as the registration of broker-dealer and investment adviser branch offices; 3) the examination of broker-dealer, investment adviser and branch office registrants; and 4) enforcement of the state's securities, business opportunity and tender offer laws.


During calendar year 2008, Securities and Business Investments Division intervention resulted in restitution and rescission offers to the investing public totaling $625,474. In addition, the division imposed $7,465,100 in fines for violations of the state's securities and business opportunity laws, up approximately 37% from the preceding year.

Greater public interest in energy issues lead to a resurgence in oil and gas scams. In one case, the department imposed fines totaling $6,675,000 against a Kansas issuer for fraudulently selling oil and gas interests to Connecticut residents. In imposing the fine, the Commissioner noted that the Respondents’ conduct was egregious inasmuch as the investments were sold to inexperienced investors; no risks were disclosed; the sales agents received as much as 50% of the investment as a commission; and all of the investors lost money.

Supervisory and recordkeeping lapses related to frequent trading in investment company securities prompted the agency to levy a $50,000 assessment against the issuer. In addition, the issuer agreed to contribute $300,000 to the State of Connecticut Department of Education to promote financial literacy in Connecticut public middle schools.

Additional settlements involved licensing, securities registration and sales practice violations by brokerage firms and investment advisers. One such case, which included allegations of misleading sales scripts, resulted in the imposition of a $50,000 fine against the affected brokerage firm, and a requirement that the firm pay $50,000 to the National White Collar Crime Center for the purpose of training Connecticut regulatory and law enforcement personnel in prosecuting financial fraud perpetrated on Connecticut senior citizens.

The division also provided assistance to federal prosecutors in a matter involving a

former Waterbury resident who pled related to a fraudulent investment prosecutors in a matter involving an

guilty in Bridgeport federal court to one count of mail fraud

scheme. Alabama

The man

division also provided assistance to state who, after pleading guilty to Larceny in the

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