STATE OF FLORIDA

DIVISION OF ADMINISTRATIVE HEARINGS

PAUL ANTHONY WEBER, )

)

Petitioner, )

)

vs. ) CASE NO. 77-1058

)

DIVISION OF SECURITIES, )

DEPARTMENT OF BANKINGS AND )

FINANCE, STATE OF FLORIDA, )

)

Respondent. )

)

RECOMMENDED ORDER

A hearing was held in the above-captioned matter, after due notice, at Ft. Lauderdale, Florida, on July 21, 1977, before the undersigned Hearing Officer.

APPEARANCES

For Petitioner: Paul Anthony Weber

1745 Northeast 52nd Street Ft. Lauderdale, Florida 33308

For Respondent: Ryland Terry Rigsby, Esquire

Assistant General Counsel Office of the Comptroller Legal Annex

Tallahassee, Florida 32304 ISSUE PRESENTED

Whether Petitioner's application for registration as a securities agent should be denied pursuant to Section 517.16(1)(a) and (h), Florida Statutes.

Upon inquiry from the Hearing Officer, petitioner stated that he desired to represent himself. Thereupon he was advised as to his rights in the administrative proceeding.

FINDINGS OF FACT

1. Petitioner filed application for registration with respondent a a securities agent with First Florida Securities Inc., Pompano Beach, Florida, on March, 1977. Although he met the various statutory and regulatory procedural requirements for registration, on or about May 19, 1977, he was advised by the Director, Division of Securities, of intended denial of his application and advised of his right to petition for an administrative hearing. Petitioner did so request a hearing on June 2, 1977. The stated ground for the proposed denial of the application in accompanying "Administrative Charges and Complaint" was as follows:

   "The license application of respondent was refused or denied by the Division of Securities, Department of Banking and Finance, State of Florida, by stipulation and consent on February 18, 1976.

   
   

   Said denial constitutes prima facie of unworthiness to transact the business of a securities salesman In the State of Florida."

   
   

2. The above-mentioned "Stipulation and Consent" resulted from a prior application denial by respondent of an application by MFP Petroleum Exploration and Investment, Inc., its officers and salesman, including petitioner. The grounds for denial of petitioner's application in that instance were that he had sold unregistered securities in the form of shares in oil drilling ventures in violation of Section 517.07, F.S., while not registered as a securities salesman in further violation of Section 517.12(1), F.S. The various parties in that administrative proceeding consented to the denial of their applications by stipulation without admitting the allegations of respondent. (Exhibits 1, 2, 4, 5)

   
   

3. Petitioner has never been registered with respondent as a securities dealer, agent or salesman. He testified that when he joined MFP sometime in 1974, its president, Mark F. Preddy, led him to believe that one selling interests in oil drilling ventures need not register as a salesman in Florida. Consequently, he sold such interests to clients for several months before he learned that it was necessary for him to be so registered. Some nine months after commencing employment with MFP, he went to Shreveport, Louisiana, to take securities examinations for Florida and the NASD. After waiting approximately three months more to obtain the results of the MFP application for registration, he resigned from the firm. He admitted selling during the entire nine-month period in which he had been associated with MFP, even though he knew during a substantial portion of that period that registration was required. After his resignation, he authorized an attorney to execute the "Stipulation and Consent" which authorized respondent to deny his application for registration.

   (Testimony of Weber, Exhibits 2, 3, 5)

   
   

4. A client of petitioner testified as to the latter's honesty and conscientiousness. (Testimony of Hansis)

   
   

5. Respondent's Assistant Director, Division of Securities, stated the Division's position that although it felt justified in denying petitioner's current application, it would be amenable to reevaluate any application submitted one year from the final order in this proceeding and, if petitioner's record was clear and he otherwise met requirements for registration, it would issue the same on a supervised basis for a period of one year. (Testimony of Brandi)

   
   

   CONCLUSIONS OF LAW

   
   

6. Respondent seeks to deny petitioner's application for registration as a securities salesman based on its prior denial and cites as authority therefor, subsection 517.16(1)(h), Florida Statutes, which authorizes refusal of registration if the applicant "has demonstrated his unworthiness to transact the business of dealer or salesman. In this connection, respondent points to Rule 3E-30.10, Florida Administrative Code, which provides in part as follows:

   3E-30.10 Prima Facie Evidence of Unworthiness. Prima facie evidence of unworthiness to transact the business of a dealer, investment adviser, executive officer or salesman in the State of Florida, shall include, but shall not be limited to:

   * * *

   (2) Any injunction, suspension, prohibition, revocation, denial or administrative order by any state or federal agency, national securities exchange, or national securities Association involving a security or any aspect of the securities business, and any injunction or administrative order by a state or federal agency regulating banking, insurance finance

   or other related or similar industries, or any court of competent jurisdiction."

   
   

7. It thus can be seen that under this rule, respondent has shown prima facie evidence of unworthiness to act as a securities salesman by the mere fact that petitioner's prior application had been denied. Petitioner freely admitted at the hearing that he had sold unregistered securities at a time when he was not properly registered with respondent's agency, well-knowing for a substantial part of the sales period that such was not authorized under the law.

   
   

8. The essential question to be determined is how long petitioner's prior dereliction should be held against him. There are no provisions in the pertinent law or regulations bearing on this subject. Certainly, successive applications for registration should not be routinely denied for an extended period of time merely because of a justified denial of registration in the past. It is apparent that the original application denial was based upon grounds that could result in a characterization that petitioner had "demonstrated his unworthiness" to transact the business of salesman. Under subsection 517.12(5), respondent must register him as a salesman "upon the written application of a registered dealer and general satisfactory showing as to good character and the payment of a proper fee". Petitioner therefore had the burden of showing his present good character. To this end, he presented the testimony of a character witness in his behalf. Although this, in itself, is not necessarily sufficient to meet such a burden of proof or otherwise show his rehabilitation, it should be noted that a period of over one year elapsed from the time his previous application was denied to the time of submission of the present application. No evidence was presented that petitioner has been in any difficulties during that period. Respondent's desire to deny approval of the application and require petitioner to wait another year to re-file, and then to issue only a conditional or "supervised" registration for a restricted period is not specifically provided for by applicable law. Under the circumstances, it is concluded that petitioner has served a sufficient waiting period for his past misdeeds, and be is considered to be qualified and eligible for registration at this time.

RECOMMENDATION

That petitioner Paul Anthony Weber be issued a certificate of registration as a securities salesman pursuant to Chapter 517, Florida Statutes.

DONE and ENTERED this day of August, 1977, in Tallahassee, Florida.

THOMAS C. OLDHAM

Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304

(904) 488-9675

COPIES FURNISHED:

Ryland Terry Rigsby, Esquire Assistant General Counsel Office of the Comptroller Legal Annex

Tallahassee, Florida 32304

Paul Anthony Weber

1745 Northeast Fifty-Second Street Ft. Lauderdale, Florida 33308

Docket for Case No: 77-001058

Orders for Case No: 77-001058