STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

DEPARTMENT OF BANKING AND FINANCE, ) DIVISION OF SECURITIES, )

)

Petitioner, )

)

vs. ) CASE NO. 94-6671

) BOCA INSURANCE LENDERS, INC., )

a Florida Corporation; EQUITY ) INVESTMENT CLUB, INC., a Florida )

Corporation; and ALEC SHATZ, ) Individually and as President and ) Director of BOCA INSURANCE LENDERS, ) INC., and EQUITY INVESTMENT CLUB, ) INC., )

)

Respondents. )

)

RECOMMENDED ORDER

Pursuant to Notice, this cause was heard by Linda M. Rigot, the assigned Hearing Officer of the Division of Administrative Hearings, on October 9 and 10, 1995, in Boynton Beach, Florida.

APPEARANCES

For Petitioner: John D. O'Neill, Esquire

Department of Banking and Finance Division of Securities and Investor

Protection

The Capitol, Suite 1302 Tallahassee, Florida 32399-0350

For Respondent: Arnold Y. Steinberg

6971 North Federal Highway, Suite 105 Boca Raton, Florida 33487

STATEMENT OF THE ISSUE

The issue presented is whether Respondents are guilty of the allegations contained in the Amended Administrative Complaint, and, if so, what action should be taken against them, if any.

PRELIMINARY STATEMENT

On September 27, 1994, the Department issued its Administrative Cease and Desist and Notice of Rights, alleging that Respondents were violating the Florida Securities and Investor Protection Act. Respondents timely filed an Answer containing affirmative defenses and requesting a formal hearing regarding

the Department's allegations. Thereafter, this cause was transferred to the Division of Administrative Hearings to conduct the formal proceeding.

The Department subsequently moved to amend its Administrative Cease and Desist, and leave was granted to do so. Respondents timely filed their Answer and Affirmative Defenses to the Department's Amended Administrative Complaint.

At the hearing, the Department presented the testimony of Michael Corbit, William R. Borah, Lorenzo Raffa, Larry Rosenman, Tara Stanton, Colleen E. Shryock, Eleanor Brennan, Tina Talarchyk, and Professor Marilyn Cane.

Respondents presented the testimony of William J. Joel and Ralph Scheidt. Additionally, joint exhibits numbered 1-27; Petitioner's exhibits numbered 2-4, 6, and 7; and Respondent's exhibits numbered 1, 3-10, and 12-15 were admitted in evidence.

Both Petitioner and Respondents submitted post-hearing proposed findings of fact in the form of proposed recommended orders. A specific ruling on each proposed finding of fact can be found in the Appendix to this Recommended Order.

FINDINGS OF FACT

1. At all times material hereto, Respondent Boca Insurance Lenders, Inc. (hereinafter "Boca"), has been a Florida corporation involved in the business of purchasing life insurance assignments.

   
   

2. Some beneficiaries of insurance policies are unable to pay for the funeral of the friend or relative insured by that policy, and most funeral homes require payment in full for the funeral expenses at the time the funeral is scheduled. Under the arrangement that Boca has with certain funeral homes, the beneficiary of the life insurance policy of a decedent can assign the policy to the selected funeral home. The funeral home then assigns the policy to Respondent Boca, and Boca pays the funeral home the cost of the funeral. Respondent Boca's profit results from a 6 percent discount on the monies paid.

   
   

3. Shares of preferred stock of Respondent Boca were sold for $1,000 a share. Respondent Boca ceased selling its preferred stock in March 1994, converted and/or re-acquired the outstanding shares, and began selling bonds issued by the company instead. Purchasers of preferred shares of the stock of Respondent Boca earned a return of 12 percent, 14 percent if their investment was held longer than one year. Purchasers of the bonds issued instead of the preferred shares of stock received the same return on their investment as was paid on the preferred shares.

   
   

4. At all times material hereto, Respondent Equity Investment Club, Inc. (hereinafter "Equity"), has been a Florida corporation. The business purpose of Respondent Equity is to allow persons to deposit small amounts of money in a personal account akin to a Christmas Club, except that such persons can withdraw their money on 24-hours notice. Account owners earn a return of 6 percent on their deposits. The monies deposited in such accounts were "pooled" by Respondent Equity and used by Respondent Equity to purchase Respondent Boca's shares of preferred stock.

   
   

5. At all times material hereto, Respondent Alec Shatz was the president and the director of both Respondent Boca and Respondent Equity. He was also the sole stockholder of Respondent Equity. Respondents admit that Respondent Shatz directed, controlled, supervised, managed, and participated in the acts, practices, and policies of Respondents Boca and Equity.

6. In conjunction with commencing sales of its preferred shares, Respondent Boca filed with the United States Securities and Exchange Commission a Form D which is a Notice of Sale of Securities pursuant to Regulation D, Section 4(6), a Uniform Limited Offering Exemption. When Respondent Equity was formed, it also filed a Form D with the Securities and Exchange Commission under Rule 504. Filing a Form D notice that stock will be sold pursuant to an exemption from registration is not the same as registering a stock with the Securites and Exchange Commission.

   
   

7. Respondents Boca and Shatz did not register the preferred shares of stock with the Department, and neither Respondent Boca nor Shatz is or has been registered with the Department to sell or offer for sale securities as a dealer, as an associated person, or as an issuer.

   
   

8. One of the ways in which Respondent Boca marketed its preferred shares of stock was by advertising seminars which could be attended by members of the public. Advertisements appeared in newspapers and were aired on the radio. It was not necessary that a potential investor attend one of Respondent Boca's seminars in order to purchase Boca's preferred shares.

   
   

9. Employees of Respondent Boca attended the seminars and gave presentations. They also answered questions from members of the public attending the seminars. Information about Respondent Boca, Respondent Equity, and Respondent Shatz' other companies was given out at the seminars. A prospectus for Respondent Boca was also given out.

   
   

10. The seminar advertisement which appeared in The Palm Beach Post on February 22, 1993, on behalf of Respondent Boca represented that one could earn

    12 percent interest on a "No Risk Return", that there was no penalty for withdrawal, that the investment was "liquid," and that interest was paid every

    60 days. The advertisement also read: "Registered with S.E.C". (Part of the advertisement, which was admitted as Joint Exhibit numbered l, is illegible.)

    
    

11. By September 27, 1993, the advertisement which appeared in The Palm Beach Post remained substantially the same except that the interest rate was 14 percent, the phrase "Your Money Guaranteed through Insurance Payments" had been added, and the ad read "Register [sic] under S.E.C. exemptions".

    
    

12. An October 25, 1993, advertisement was the same except that the word "interest" now read "dividend". However, a February 14, 1994, advertisement used the word "interest" rather than "dividend".

    
    

13. Respondent Boca's September 18, 1995, advertisement also used the word "interest", represented that "This is a Minimum Risk Return!", and stated that "Our Investment Involve [sic] Insurance Company". The advertisement contained no language as to any registration with either the S.E.C. or the Department.

    
    

14. Although some persons purchasing Respondent Boca's preferred shares were "accredited investors", no purchasers were questioned by Respondents Boca or Shatz as to their financial ability or experience to determine if they were accredited investors prior to their purchase of Boca's preferred shares.

    
    

15. At some of the seminars conducted by Respondents Boca and Shatz, attendees were also given information regarding the membership accounts offered by Respondent Equity.

16. Between May 7, 1992, and March 14, 1994, Respondent Boca made 137 sales of its preferred shares of stock.

    
    

17. In April 1993 Respondent Shatz announced the establishment of Respondent Equity as an investment club for the purpose of raising money for Respondent Boca by having the investment club purchase Respondent Boca's stock. In May 1993 five membership accounts in Respondent Equity were opened, and those members subsequently made additional deposits in their accounts. Once the accounts were opened, Respondent Equity became the sole manager of those funds. On July 2, 1993, Respondent Equity purchased five shares of Respondent Boca's stock with the combined monies from the membership accounts.

    
    

18. Respondent Equity has not registered its securities with the Department, and neither Respondent Equity nor Respondent Shatz is registered with the Department to sell or offer to sell its membership accounts as an issuer, as a broker/dealer, or as an associated person.

    
    

19. A pamphlet regarding Respondent Boca's offering, labeled "prospectus" but generally known as a private placement memorandum, was given to attendees who wanted one at each seminar. No prospectus was available regarding Respondent Equity's offering.

    
    

20. As the advertisements placed by Respondents Boca and Shatz changed, so did the prospectus for Respondent Boca. Boca's February 1, 1993, prospectus carried a caveat on the cover page that the securities of Boca and its prospectus were neither approved or disapproved by the Securities and Exchange Commission. The September 1, 1993, prospectus carried the same caveat.

    However, the November 1, 1993, and the April l, 1994, prospectuses added to that caveat an additional statement that the securities of Respondent Boca were not registered with the Department but the firm was registered as an issuer/dealer to sell its own securities.

    
    

21. Between June 15, 1993, and January 14, 1994, neither Respondent Boca nor Respondent Shatz had access to all of the corporate books and records for the time period prior to June 15, 1993, since those records were in the possession of Respondent Boca's accountant/escrow agent. Respondent Boca's September 1, 1993, prospectus, its September 1, 1993, revised prospectus, and its November 1, 1993, prospectus represented that any purchaser of Boca's preferred shares had the right of access upon reasonable notice to Boca's books and records. Further, the November 1, 1993, prospectus offered that right of access to potential purchasers.

    
    

22. Respondent Boca's September 1, 1993, prospectus represents that Larry Rosenman was Boca's escrow agent possessing copies of all assignments of insurance policies. That information was also provided orally to those attending Respondent Boca's September 30, 1993, seminar. On October 7, 1993, Rosenman wrote a letter to Respondents Boca and Shatz denying that he had agreed to be Boca's escrow agent, demanding that Boca and Shatz cease any representations to the contrary, and demanding that Boca and Shatz notify anyone who had received the September 1, 1993, prospectus that the representation in the prospectus that Rosenman was the escrow agent was not accurate.

    
    

23. By letter dated October 8, Respondent Shatz wrote Rosenman apologizing for the error, agreeing to remove Rosenman's name from Boca's prospectus, and agreeing to notify all persons who had received the prospectus that Rosenman's name should not have been listed. Respondents Shatz and Boca issued a revised September 1, 1993, prospectus deleting any reference to an escrow agent and,

    specifically, deleting Rosenman's name. They did not notify all persons who may have received the original September 1 prospectus. Thereafter, none of Respondent Boca's prospectuses represented that Boca had an escrow agent.

    
    

24. Attorney Tina Talarchyk was Respondent Boca's "in-house counsel" from October 1, 1993, through December 1993. She denied at hearing that she was also Boca's escrow agent during that time period and that she had ever executed the temporary escrow agent agreement written on her letterhead and admitted in evidence in this cause. She offered no explanation for the other items of correspondence admitted in evidence which reflect she was the person handling the redemption of stock certificates when investors wished to withdraw their monies invested in Respondent Boca. As she appeared to be carrying out the duties of an escrow agent on her professional letterhead and as she represented herself to an investor to be Boca's escrow agent, she acted as an escrow agent on behalf of Respondent Boca during that time period.

    
    

25. On October 7, 1994, Respondents Boca and Shatz directed a letter to all investors that incorrect statements had been made in the past. The letter specifically advised that Respondent Boca did not have an escrow agent at that time, that Respondent Boca had never been registered as an issuer/dealer to sell its own securities, and that, although any investor could examine the company's books and records, no audit had been performed at that time. The letter also offered to return any investor's money. No investor requested the return of any monies based upon the contents of that letter.

    
    

26. No investor relied upon any misrepresentation or "incorrect statement" in investing in Respondent Boca. The investors who testified at the final hearing conducted their own "due diligence" inquiry before investing in Respondent Boca and discovered, as the Department's own investigators discovered, that there were no complaints regarding Respondents made to any local or state agency.

    
    

27. On occasion, a former employee of Respondent Boca found that an entry in Boca's accounts receivable journal had not yet been deleted when he thought it should have been.

    
    

28. From August 18 to August 25, 1993, one of Respondent Boca's bookkeepers gave Respondent Shatz a report that she prepared indicating that Respondent Boca had a negative bank balance.

    
    

29. Respondent Boca never missed making timely any interest or dividend payment to any investor who purchased Boca's preferred shares and, later, Boca's bonds. Similarly, Respondent Equity never missed making timely any interest payment to any investor having a membership account.

    
    

30. Every person who purchased preferred shares in Respondent Boca was able to redeem those certificates and receive back the money invested in Boca upon electing to do so. Similarly, every member of Respondent Equity was able to withdraw their monies upon electing to do so.

    
    

31. The Department has never received a complaint from any investor in Respondent Boca regarding Boca's or Respondent Shatz' business practices. Similarly, the Department has never received a complaint from any member of Respondent Equity regarding Equity's or Respondent Shatz' business practices.

    
    

32. Although the Department has examined and copied Respondents' business records at the corporate office on several occasions, and although the

    Department has interrogated investors in Respondent Boca and members of Respondent Equity, some of them on repeated occasions, the Department has not discovered any investor or member who has been injured by Respondents' business practices, by Respondents' failure to register with the Securities and Exchange Commission and the Department, or by any representations made by Respondent Shatz at Boca's seminars or by Respondents Shatz or Boca in any of Boca's prospectuses. Further, the Department has not discovered any investor or member who relied on any erroneous or inaccurate statement made by any Respondent in deciding to invest in Respondent Boca or open a membership account in Respondent Equity.

    
    

33. A Department investigator attended the September 30, 1993, seminar after seeing the newspaper advertisement and ascertaining that Respondents Boca and Shatz and Boca's securities were not registered with the Department. He also attended the February 17, 1994, seminar. Fifty-five of the 137 sales made by Respondents Boca and Shatz occurred after the first seminar which he attended.

    
    

    CONCLUSIONS OF LAW

    
    

34. The Division of Administrative Hearings has jurisdiction over the parties hereto and the subject matter hereof. Section 120.57(1), Florida Statutes.

    
    

35. The Amended Administrative Complaint filed in this cause contains 430 counts and is 272 pages long. Respondents' Answer and Affirmative Defenses is

    78 pages long and raises as affirmative defenses the allegation that the securities involved in this cause are not securities but if they are, then they are exempt from registration requirements.

    
    

36. Counts 20 through 430 allege that Respondents Boca and Shatz have violated Sections 517.07 and 517.12(1), Florida Statutes, by selling securities which were not registered with the Department when Respondents Boca and Shatz were not registered with the Department as securities dealers, associated persons, or issuers. Those counts identify the 137 transactions made by Boca, and each transaction forms the basis for 3 counts: one for the sale by Shatz who was not registered, one for the sale by Boca which was not registered, and one for the securities not being registered.

    
    

37. Section 517.021(17), Florida Statutes, includes stock within the definition of "security". Section 517.07 prohibits the sale of securities within this State which have not been registered with the Department unless the security is exempt under Section 517.051 or the transaction is exempt under Section 517.061, Florida Statutes. Both Sections 517.051 and 517.061 provide that any person claiming entitlement to an exemption bears the burden of proving such entitlement. See also, Section 517.171. Respondents have failed to show that they were entitled to any of the exemptions enumerated in Sections 517.051 or 517.061. Moreover, their general solicitation of investors by radio and newspaper advertising prevents them from doing so. Accordingly, the preferred shares of Respondent Boca were required to be registered with the Department, and Respondents Boca and Shatz admit the shares were not.

    
    

38. Section 517.12(1), Florida Statutes, requires any dealer, associated person, or issuer of securities in this State to be registered with the Department. Respondents Boca and Shatz admit that they were not registered with the Department to sell Boca's preferred shares as a dealer, associated person, or issuer of securities. Since Respondents Boca and Shatz were not registered

    with the Department but they engaged in 137 sales of unregistered stock in Boca, the evidence is clear and convincing that Respondents Boca and Shatz violated Sections 517.07 and 517.12(1), Florida Statutes, as alleged in counts 20 through

    430 in the Amended Administrative Complaint filed in this cause.

    
    

39. Counts 5 through 19 allege that Respondents Equity and Shatz have violated Sections 517.07 and 517.12(1), Florida Statutes, by selling securities which were not registered with the Department when Respondents Shatz and Equity were not registered with the Department as securities dealers, associated persons, or issuers. Those counts identify the 5 membership accounts in Equity, and each transaction forms the basis for 3 counts: one for Shatz who was not registered, one for Equity which was not registered, and one for the securities not being registered.

    
    

40. Section 517.021(17), Florida Statutes, includes within the definition of "security" a note or an investment contract or any other instrument commonly known as a security. The uncontroverted evidence in this cause is that the membership accounts were opened by investors, and the monies in those accounts were then "pooled" by Respondents Equity and Shatz and used by them to purchase stock in Respondent Boca. The uncontroverted expert testimony in this cause is that the membership accounts in Equity constituted either investment contracts or notes, depending upon which federal case law is applied.

    
    

41. Respondents' argument that the membership accounts were not securities is not persuasive. It ignores the fact that Respondents apparently believed the membership accounts were securities when they filed their Form D Notice of Sale of Securities pursuant to Regulation D, Section 4(6), a Uniform Limited Offering Exemption with the Securities and Exchange Commission, as Respondents Shatz and Boca did for Respondent Boca's stock. Similarly, Respondents' argument that the membership accounts in Equity were akin to a bank account is not persuasive since none of the regulations applying to banks were applicable to Equity.

    
    

42. Respondents have failed to show that they were entitled to any of the exemptions enumerated in Sections 517.051 or 517.061, Florida Statutes. Further, since Respondents Equity and Shatz admit that the membership accounts in Equity were not registered with the Department and that Respondents Equity and Shatz were not registered with the Department as a dealer, associated person, or issuer of securities in this State, the evidence is clear and convincing that Respondents Equity and Shatz violated Sections 517.07 and 517.12(1), Florida Statutes, as alleged in counts 5 through 19 in the Amended Administrative Complaint.

    
    

43. Section 517.301(1)(a), Florida Statutes, makes it a violation for a person in connection with the sale or offer to sell a security, even an exempt security,

    
    

    1. To employ any device, scheme, or artifice to defraud;

    2. To obtain money or property by means of any untrue statement of a material fact or

       any omission to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading. . . .

44. Counts 1 and 2 of the Amended Administrative Complaint allege that Respondent Boca and Respondent Shatz, respectively, have violated Section 517.301(1)(a)l by employing a scheme to defraud as evidenced by the general solicitation of investors and through material misrepresentations as to the registration of Respondents Boca and Shatz, as to the existence of an independent escrow agent, and as to the withholding of material financial information from potential investors. Although some of the provisions in Chapter 517, Florida Statutes, do not require intent in order to support a finding that there was a violation, Section 517.301 is entitled "Fraudulent transactions". It is axiomatic that fraud generally requires intent on the part of the person making the material misstatement and always requires reliance on that misrepresentation by the other party. The cases cited by the Department do not abrogate the requirement of reliance.

    
    

45. Although the Department offered testimony, including expert testimony, as to the types of statements that would be considered material by investors, the Department offered no evidence that any of the specific misrepresentations made by Respondents Boca or Shatz were material to any investor in Respondent Boca or that any investor relied on any of the representations in determining to invest money in Respondent Boca. Rather, the record reflects that immediately after the Department issued its original Administrative Complaint in this cause, Respondents Boca and Shatz wrote to its investors advising that "inaccurate statements" had been made and offering to refund any money invested. No investor accepted that offer. The record also reflects that investors are waiting for this litigation to terminate so they can invest more money in Respondent Boca and that investors had withdrawn their investment, not as a result of the actions of Respondents Boca or Shatz but as a result of how the investors have been treated by the Department's employees investigating and prosecuting this case. The record also reflects that Respondents have attempted to register with the Department but the Department has refused to allow them to do so. The Department's evidence as to counts l and 2 of the Amended Administrative Complaint falls short of the Department's burden of clear and convincing evidence.

    
    

46. Counts 3 and 4 allege that Respondents Boca and Shatz, respectively, have violated Section 517.301(1)(a)2 by obtaining money through the use of untrue statements of material facts and/or omission of material facts. As the Department's proof of violations of Subsection (1) failed, so also does the Department's proof of violations of Subsection (2) for the same reasons.

    
    

47. In its Proposed Recommended Order the Department suggests that the appropriate penalty is the entry of a cease and desist order against each of the three Respondents, the maximum fine of $5,000 as to each count, and the Department's permission for rescission of every sale, due to each Respondent's violation of the statutes administered by the Department and of the Department's rules. The Respondents were not charged with violating any Department rule, and no such violation has been found. As to a cease and desist order, Respondents Boca and Shatz ceased selling the stock which is the subject of this proceeding six months before the Department issued its original administrative complaint, and Respondents Equity and Shatz ceased the membership accounts more than a year before the Department issued its original administrative complaint. Yet, a cease and desist order is appropriate.

    
    

48. As to the Department's final order providing for rescission, Section 517.211, Florida Statutes, grants an automatic right to purchasers to file an action for rescission in the circuit court if there has been a determination that violations of Sections 517.07, 517.12, or 517.301 have occurred. Whether a

    purchaser chooses to do so is not within the Department's jurisdiction, and the Department's recommendation in its Proposed Recommended Order that the Department authorize such a remedy is without basis in the law. The Department's permission is not required.

    
    

49. The Department's recommendation that the maximum fine be assessed as to each count, although authorized by Section 517.221, Florida Statutes, is unduly harsh. Section 517.221(3) only establishes a maximum fine; it does not establish a minimum or any guidelines for determining the appropriate amount of a fine. The maximum fine should be assessed in cases where violations of Chapter 517, Florida Statutes, have resulted in injury to investors or a danger to the public.

    
    

50. Here, the violations found are the failure of Respondents to register themselves and their securities with the Department. Respondents did file a notice with the Securities and Exchange Commission advising that they would be selling securities pursuant to a limited offering exemption from registration. In this proceeding, Respondents claimed an exemption from the requirement of registering with the Department and fulfilled some but not all of the conditions for entitlement to at least one such exemption.

    
    

51. The evidence is uncontroverted that no investor in either Respondent Boca or Respondent Equity has complained to the Department, and the Department has not uncovered any harm or injury to any investor or member of the public caused by Respondents' failure to register although the Department has extensively interviewed Respondents' investors. Further, the record reveals that although Respondents Boca and Shatz engaged in 137 sales of Boca's stock, many of the sales were made to the same investors, who assumedly were satisfied with their investment sufficiently to continue to invest more of their monies in Boca's stock, and one of the sales was to Respondent Equity. Similarly, of the

    5 membership accounts opened with Respondent Equity, one of the accounts was that of Respondent Shatz' wife and the others appear to be persons who had already invested in Boca or their relatives.

    
    

52. Finally, the evidence is uncontroverted that all investors in either Respondent Boca or Respondent Equity received timely interest payments on their investment and also received their investment when they decided to withdraw it. Although it is clear that all investors made a profit, no evidence was offered to show that any of the Respondents did. Thus, any fine assessed may very well jeopardize the monies of Respondents' current investors, with the Department itself causing them harm. It is also noted that 55 of the 137 transactions occurred after the Department knew Respondents Boca and Shatz and their securities were not registered with the Department. Yet, the Department did not issue an emergency cease and desist order as it is authorized to do by Section 517.221(2), Florida Statutes, when it believes that violations of Chapter 517 present an immediate danger to the public.

    
    

53. Overall, this case involves less serious conduct than situations where harm has been caused to investors or members of the public. Accordingly, a less severe fine is appropriate. Respondents Boca and Shatz, jointly and severally, should be assessed a fine in the amount of $100 for each of the 137 transactions involved in this proceeding, and Respondents Equity and Shatz, jointly and severally, should be assessed a fine in the amount of $100 for each of the 5 membership accounts.

RECOMMENDATION

Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered:

1. Finding Respondents Boca and Shatz not guilty of the allegations contained in counts 1-4 of the Amended Administrative Complaint filed against them;

   
   

2. Finding Respondents Equity and Shatz guilty of the allegations against them contained in counts 5-19;

   
   

3. Finding Respondents Boca and Shatz guilty of the allegations against them contained in counts 20-430;

   
   

4. Ordering Respondents to cease and desist from the sale of unregistered securities by unregistered persons and entities;

   
   

5. Imposing an administrative fine in the amount of $100 for each of the

   137 transactions against Respondents Boca and Shatz, jointly and severally, for a total of $13,700;

   
   

6. Imposing an administrative fine in the amount of $100 for each of the 5 membership accounts against Respondents Equity and Shatz, jointly and severally, for a total of $500.

   
   

   DONE and ENTERED this 30th day of July, 1996, at Tallahassee, Leon County, Florida.

   
   

   
   

   LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The DeSoto Building

   1230 Apalachee Parkway

   Tallahassee, Florida 32399-1550

   (904) 488-9675

   
   

   Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1996.

   
   

   APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 94-6671

   
   

   1. Petitioner's proposed findings of fact numbered 2-6, 8, 11, 13, 14, 16- 18, 22, 24, 25, 28, 29, and 33 have been adopted either verbatim or in substance in this Recommended Order.

   2. Petitioner's proposed findings of fact numbered 1, 7, 9, 15, 19, and 20 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony.

   3. Petitioner's proposed findings of fact numbered 10, 21, 23, 27, and 31 have been rejected as not being supported by the weight of the evidence.

   4. Petitioner's proposed findings of fact numbered 12, 26, 30, 32, and 37-

      40 have been rejected as being subordinate to the issues involved herein.

   5. Petitioner's proposed findings of fact numbered 34 and 36 have been rejected since they are illegible.

   6. Petitioner's proposed finding of fact numbered 35 has been rejected as being irrelevant.

   7. Respondents' proposed findings of fact numbered 1-3, 11, 13, 18, 23, 40, and 41 have been adopted either verbatim or in substance in this Recommended Order.

   8. Respondents' proposed findings of fact numbered 4, 6-10, 12, 19-21, 24, 29, 30, 32-34, 36-39, 42, and 43 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony.

   9. Respondents' proposed findings of fact numbered 5, 14-17, and 35 have been rejected as being irrelevant to the issues herein.

   10. Respondents' proposed findings of fact numbered 22, 25, 28, and 31 have been rejected as being subordinate to the issues involved herein.

   11. Respondents' proposed findings of fact numbered 26 and 27 have been rejected as not being supported by the weight of the evidence.

COPIES FURNISHED:

John D. O'Neill, Esquire Department of Banking and Finance Division of Securities and

Investor Protection The Capitol, Suite 1302

Tallahassee, Florida 32399-0350

Alec Shatz

5850 West Atlantic Avenue Suite 103

Delray Beach, Florida 33484

Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350

NOTICE OF RIGHT TO SUBMIT EXCEPTIONS

All parties have the right to submit written exceptions to this Recommended Order. All agencies allow each party at least 10 days in which to submit written exceptions. Some agencies allow a larger period within which to submit written exceptions. You should contact the agency that will issue the final order in this case concerning agency rules on the deadline for filing exceptions to this Recommended Order. Any exceptions to this Recommended Order should be filed with the agency that will issue the final order in this case.

Docket for Case No: 94-006671

Orders for Case No: 94-006671