STATE OF FLORIDA
DIVISION OF ADMINISTRATIVE HEARINGS
DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF SECURITIES, )
)
Petitioner, )
)
vs. ) CASE NO. 86-001336
)
STRUCTURED SHELTERS FINANCIAL ) MANAGEMENT, INC., and STRUCTURED ) SHELTERS SECURITIES, INC., )
)
Respondents. )
) STRUCTURED SHELTERS FINANCIAL )
MANAGEMENT, INC., STRUCTURED )
SHELTERS SECURITIES, INC., )
ROBERT ILES, and MONICA ILES, )
)
Petitioners, )
)
vs. ) CASE NO. 86-001553
)
DEPARTMENT OF BANKING AND ) FINANCE, DIVISION OF SECURITIES, )
)
Respondent. )
)
RECOMMENDED ORDER
Pursuant to notice, a formal hearing was conducted in these two consolidated cases on September 4, 1986, in Orlando, Florida, before Michael M. Parrish, a duly designated Hearing Officer of the Division of Administrative Hearings. At the hearing the parties were represented by the following counsel:
APPEARANCES
For the Department of Banking and Finance, Division of Securities: John B. Root, III, Esquire
Assistant General Counsel Office of the Comptroller
400 West Robinson, Suite 501 Orlando, Florida 32801
For Structured Shelters Financial Management, Inc., Structured Shelters Securities, Inc., Robert Iles, and Monica Iles:
Martin S. Friedman, Esquire MYERS, KENIN, LEVINSON & RICHARDS
2544 Blairstone Pines Drive Tallahassee, Florida 32301
Subsequent to the hearing, Robert K. Good, Esquire, was substituted as counsel for the Department of Banking and Finance.
INTRODUCTION AND STATEMENT OF ISSUES
Case No. 56-1336 commenced with the Department's Administrative Charges And Complaint with Notice of Rights, dated February 19, 1986. The Department's charges and complaint informed Structured Shelters Financial Management, Inc., ("SSFM") and Structured Shelters Securities, Inc., ("5551") of the Department's intention to revoke the registrations of these two corporations for various violations of Chapter 517, Florida Statutes, and violations of rules of the Department, which violations were alleged with specificity in the Department's charges and complaint. The two corporations filed a request for hearing in which they assert that there have been no violations, and in which they dispute both factual allegations and legal conclusions set forth in the Department's charges and complaint.
Case No. 86-1553 commenced with the Department's Cease and Desist Order and Notice of Rights dated February 19, 1986. The Department's cease and desist order has the effect of ordering Structured Shelters Financial Management, Inc., ("SSFM"), Structured Shelters Securities, Inc., ("5551"), Robert Iles, and Monica Iles to cease and desist from various activities which are alleged to be violations of Chapter 517, Florida Statutes. The two corporations and the two individuals filed a request for hearing in which they assert that there have been no violations, and in which they dispute both factual allegations and legal conclusions set forth in the Department's cease and desist order.
Following the hearing in these consolidated cases, a transcript of the proceedings at the hearing was filed on October 20, 1956, and on November 10, 1986, all parties filed proposed recommended orders containing proposed findings of fact and conclusions of law. The parties' proposed recommended orders have been carefully considered in the preparation of this Recommended Order. A specific ruling on each finding of fact proposed by each party is contained in the Appendix which is attached to and incorporated into this Recommended Order.
FINDINGS OF FACT
Based on the exhibits received in evidence and on the testimony of the witnesses at the hearing, I make the following findings of fact.
SSFM is an investment advisor holding License Number 53839, issued by the Department effective December 13, 1982. SSFM is not registered as a dealer pursuant to Section 517.12, Florida Statutes, to sell securities in Florida. Robert E. Iles, Sr., is the President and Director of SSFM and Monica Iles is the Treasurer and Director of SSFM.
Robert Iles, Sr., is a Director of 5551 and Monica Iles is the Secretary and Treasurer of 5551. The Department only reviewed the records and files of SSFM. No review was made of any records of 5551. No formal complaints
have ever been filed with the Department against SSFM or 5551. No one has requested that SSFM refund the purchase price of any of the corporate business plans.
SSFM's books, records, and financial statements were current through July 31, 1984. SSFM did not provide any investment advisor services subsequent to July 31, 1954. Since July 31, 1954, SSFM has not maintained its books and records in accordance with Department rules. SSFM also did not maintain customer files or copies of advertising materials. SSFM has failed to keep certain records required by applicable rules promulgated by the Department, and certain records that are required have not been kept current, as is also required. Specifically, the cash receipts and disbursements journal, general ledger, and trial balance have not been made current since July 31, 1984. No records have been kept in the following categories: correspondence with clients concerning recommendations, receipts, disbursements, or placing of orders, in the clients' files and advertising and promotional materials. The purpose of these requirements is to assure that the investment adviser can meet its obligations to creditors and customers.
The principal reason SSFM has not maintained up-to-date books and records since July 31, 1954, is that it has had no business activity since that date other than some efforts to collect accounts receivable. SSFM does not advertise. SSFN does not maintain customer files because it renders no investment advice. There is no evidence that SSFM has not met all of its obligations to creditors and customers.
Capital Requirement
Because SSFM did not maintain books and records since July 31, 1984, the Department could not determine whether SSFM maintained net capital of
$2,500. The purpose of the net capital requirement is to protect clients of the investment adviser. There have been no formal complaints filed by clients of SSFM. SSFM has suspended its investment adviser operations since July 31, 1984. SSFM has in fact maintained net capital of at least $2,500 since July 31, 1984.
Annual Report
SSFM did not file its annual financial report due within 90 days of July 31, 1984, as required by Department rules. The purpose of this requirement is to monitor compliance with the net capital requirements since the Department cannot audit all investment advisers each year. SSFM did not provide investment advice during the year for which it did not file the annual report. Since SSFN is inactive, the certified public accountants have given active companies a priority in filing tax returns and making other financial reports.
Registered Principal
SSFM's registered principal withdrew November 21, 1983, and no new principal has been registered. SSFM has not provided investment advice since that time.
Civil, Criminal and Administrative Actions
SSFM was incorporated as a Delaware corporation in October of 1982 and is not a successor to any other corporation. SSFM has not reported to the Department any civil, criminal, or administrative charges filed against it relating to its activities as an investment adviser. The states of Idaho,
Kansas, Missouri, and Pennsylvania had responded to SSFM's application for an investment adviser license by noticing an intent to deny such permit. None of those states served any complaint of any civil, criminal, or administrative charges against SSFM independently or in connection with those applications.
Three civil actions have named SSFM a Defendant. The alleged actions giving rise to the Tax Awareness of New Mexico, Inc., complaint occurred on June 22, 1982. The action filed by Harold J. St. Clair, et al., in Ohio involved alleged actions occurring prior to July 9, 1982. David Elsworth and James Morrison filed a complaint involving alleged actions which occurred between February and July 1982 and in fact does not name SSFM as a Defendant. All of the alleged actions giving rise to the three civil actions occurred prior to SSFM's coming into existence. Those actions do not directly or indirectly relate to SSFM's activities as an investment adviser. The legal actions appear to be frivolous as to SSFM because SSFM was not in existence at the time of the events alleged in the legal actions.
Corporate Business Plans
At one time SSFM marketed corporate business plans called Super Swirl, Inc., Random Processing Services, Inc., and Children's Classic Cassette Master Recordings. No purchaser of any of these corporate business plans has lost any money or filed any legal actions against SSFM. SSFM, which was originally domiciled in Cincinnati, Ohio, contacted the regional office of the Securities and Exchange Commission prior to marketing the corporate business plans and was told that the plans were not securities. All of the plans were prepared prior to 1984. SSFM has not sold a plan since 1984. SSFM moved to Florida in September 1984. No business plans have been formed in Florida. SSFM sold no business plans in Florida. Changes in tax laws have made the business plans obsolete and they could no longer be offered. One client was invoiced to a Florida address. That client was an Ohio resident who purchased the plan while SSFM was domiciled in Ohio and who in fact picked up the business plan and invoice from SSFM in Ohio. For the convenience of the Ohio resident, SSFM put a Florida billing address on the invoice. Neither the invoice nor the business plan was delivered in Florida by SSFM. There is no evidence that a Mr. Benjamin was a Florida resident when he purchased his business plan.
SSFM prepared its corporate business plans at the request of various professionals such as attorneys, accountants, and financial planners who would use them for their clients. No business plan is dependent upon another, although subsequent plans were an outgrowth of the first one. The type of entity to be used is up to the purchaser of the plan. The purchaser does not have to follow the plan and SSFN has no control over modifications.
Super Swirl Sales, Inc.
In this plan it is made clear that the incorporator (purchaser of the plan) is responsible for its implementation, and the success of the plan is contingent upon his proper administration. Under this plan, the purchaser is to purchase frozen confection machines and lease them to various retail establishments. The corporation established under the business plan would not have to purchase its machines from a particular vendor. The corporation would determine the location for the machines. The corporation would also decide how many machines to purchase. The Super Swirl machines were manufactured by a company unrelated to SSFM. The corporation determines the amount of capital to raise. It is the responsibility of the corporation to determine whether the
offering of its stock is a transaction that requires registration. The plans only recommend services of other companies, some of which may be affiliated with SSFM, but do not require them.
Random Processing Services
Under this plan the purchaser (dealer) would set up a computer based financial management system and would obtain retail clients. The in-house computer would be tied into a larger computer system operated by Random Processing Services, Inc. The purchaser does not have to use Random Processing Services, Inc., and could go to someone else for those services. The dealer determines the amount to charge his clients depending upon what the local market will bear. The efforts of the dealer determine his share of the market, with his knowledge and desire to service clients as the most important aspect for penetrating the market place. The geographical area to be served by dealer is his decision. Dealers do not depend upon leads for clients from any other entity.
Children's Classic Cassette Master Recordings
Under this plan the purchaser would establish a business to prepare a master recording of a children's classic book (stories that are no longer covered by a copyright) and to lease that recording for retail distribution. The success of the plan is contingent upon proper administration by the corporation. It is the corporation's responsibility to determine if the offering of its stock is regulated. The plan provides:
The plan is a guideline and is not intended to be a set of rules or regulations that are not subject to approved changes. Changes are at the discretion of the incorporator and his advisers. They can change or totally eliminate part of the entire plan if they deem it necessary. As such, the incorporator or elected officers are solely responsible for the implementation of the plan.
Actual cost of the properties and overhead expenses are determined by the purchaser of the plan, as is the sale price of the stock. The purchaser determines which title to make into the master cassette, picks the script writer, and picks the person to do artwork. All of the business plans require substantial efforts on behalf of the purchaser.
CONCLUSIONS OF LAW
Based on the foregoing findings of fact and on the applicable legal principles, I make the following conclusions of law.
The Division of Administrative Hearings has jurisdiction over the parties to and the subject matter of these consolidated proceedings. Sec. 120.57, Fla. Stat.
In view of the quasi-penal nature of these proceedings, both of which had their genesis in proposed actions initiated by the Department, the burden of proof is on the Department in both cases.
Conclusions relating to Case No. 86-1336
Count I of the Administrative Charges And Complaint charges SSFM with selling securities which have not been registered with the Department. In this regard it is specifically alleged that SSFM ". . . sells and offers for sale a product it calls a corporate business plan, which can take at least three different forms, all of which appear to be investment contracts, and, therefore, securities." In order to prevail on this count, the Department must establish both that there were sales in Florida or sales with a Florida nexus and that the corporate business plans are, in fact, "securities."
It is unlawful to sell securities, unless exempt, without registering the securities with the Department. Section 517.07, Florida Statutes. The threshold issue is whether the corporate business plans were offered for sale or sold to Florida residents or while SSFM was domiciled in Florida. The Department has admitted that if neither of those elements is present then the sale or offer is not subject to the jurisdiction of the Department. The Department has not carried the burden of proving those elements. To the contrary, the greater weight of the competent substantial evidence is to the effect that while SSFM was domiciled outside the state of Florida, it made no sales or offers of sales to Florida residents, and since SSFM has been domiciled in Florida, it has sold no business plans at all. Therefore the corporate business plans are not subject to the jurisdiction of the Department. And even if the corporate business plans were subject to the Department's jurisdiction, for the reasons explained below, they do not come within the definition of a security.
The Department contends that the corporate business plans are "investment contracts" and thus securities. To prove the existence of.. an investment contract, Florida has adopted the definition as stated by the United States Supreme Court in SEC v. W.J. Harvey Co., 32B U.S. 293, 66 5. Ct. 1100,
90 LED 1244 (1946) as a contract, transaction or scheme whereby a person invests his money in a common enterprise and is led to expect profits solely from the efforts of the promoter or a third party." To prove the existence of an investment contract, the three-pronged test of Harvey requires: (1) an investment of money, (2) a common enterprise, and (3) expectations of profits to be derived solely from the efforts of another. Subsequent federal decisions also adopted in Florida have expansively construed the word "solely" to include schemes in which the investor is required to contribute minimum efforts. Adams v. State, 443 So.2d 1003 (Fla. So.2d DCA 1983), rev. den., 449 So.2d 265 (Fla. 1983).
The corporate business plans admittedly involve an investment of money to purchase the plans, so the first prong of the Harvey test is met.
The phrase "common enterprise" means that there should not only be more than one investor, but that there should be some form of interaction between the investors, or, in the alternative, if there is no such interaction between investors, then the success of the enterprise should be dependent upon obtaining a number of investors. Brown v. Rairigh, 363 So.2d 590 (Fla. 4 DCA 1978). SSFM sold the business plans to what the Respondents' expert witness termed a "middleman" who would actually implement the plan. SSFM did not secure any investors to actually finance the implementation of the plan. There being only one investor, there can be no common enterprise. It is clear from the foregoing Findings of Fact that the purchasers of the corporate business plans are required to expend substantial effort and the success of the business venture is dependent upon that effort. Therefore, neither of the last two prongs of the Harvey test are present in this case and the corporate business
plans are not "securities." Accordingly, because the evidence establishes that there were no sales or offers to sell with a Florida nexus and because the corporate business plans are not "securities," Count I of the Administrative Charges And Complaint should be dismissed.
Count II of the Administrative Charges And Complaint alleges that SSFM has failed and neglected to register itself with the Department as a broker/dealer in securities. For the reasons discussed above regarding Count I, there is no requirement that SSFM become registered as a broker/dealer in securities. Accordingly, Count II of the Administrative Charges And Complaint should be dismissed.
Count III of the Administrative Charges And Complaint alleges that SSFM ". . . has failed and neglected to maintain at least one associated person, qualified and registered as a principal, from November 21, 1983, to the present." In this regard, Rule 3E-600.04(2)(a), Florida Administrative Code, reads as follows:
In the event a registered dealer or investment adviser fails to maintain at least one person registered as principal for more than thirty (30) days, the registration of such dealer or investment adviser will be suspended until such time as a qualified principal is so registered. (emphasis added.)
SSFM admits that its qualified principal withdrew in November of 1983 and has not been replaced. Nevertheless, SSFM argues that the rule has not been violated because SSFM has not engaged in investment adviser services in Florida since the withdrawal of its qualified principal. SSFM's argument fails because the requirement to maintain a registered principal is a consequence which flows from being registered, regardless of whether the registered entity is doing business. Accordingly, the evidence establishes the violation charged in Count III of the Administrative Charges And Complaint.
Count IV of the Administrative Charges And Complaint alleges that SSFM ". . . has failed to keep certain records required by applicable rules promulgated by the Department, and certain records that are required have not been kept current, as. is also required." In this regard, Rule 3E- 600.14(3)(a) and (b), Florida Administrative Code, reads as follows:
All investment advisers shall prepare and maintain appropriate records relating to their business as described in Rule 275.204-2 of the Investment Advisers Act of 1940 as amended (17 CFR 275.204), and general rules and regulations promulgated by the Securities and Exchange Commission; and have available for the Department at least the following records:
Proof of money balances and all ledger accounts in the form of a trial balance;
Record of all customer accounts reflecting at least the name and address of such customers and any contractual agreements or correspondence pertaining to each such
customer.
SSFM admits that it has not maintained all of the records required by the above-quoted rule since July 31, 1984. By way of justification, SSFM argues that it has not been engaged in providing investment advisor services since that time. Since SSFM has voluntarily ceased providing investment advice during the time it is not in compliance with this rule, SSFM argues that it is in compliance with the intent of the rule. And, finally, SSFM argues that it simply does not have the records described in paragraph (3)(b) of the rule because it has not engaged in any activity that would generate those types of records. Obviously, an investment advisor cannot be required to keep records that do not exist, so there is no violation of paragraph (3)(b) of the rule. With regard to the remainder of the rule, even though SSFM has not been engaged in offering investment advice since July 31, 1984, it has been engaged in efforts to collect accounts receivable, and it had at least $2,500 which should have been noted in its books and records. Thus even though SSFM was not offering investment advice, as long as it is registered it has a duty to maintain the records described in paragraph (3)(a) of the rule. Accordingly, the evidence establishes the violation charged in Count IV of the Administrative Charges And Complaint.
Count V of the Administrative Charges And Complaint alleges that SSFM has failed and neglected to report various civil and administrative charges or actions taken against it. In this regard, Rule 3E-600.10, Florida Administrative Code, reads as follows:
An applicant or registrant shall notify the Department:
within thirty (30) calendar days of the date a complaint is served, or any civil, criminal or administrative charges filed against him which directly or indirectly relate to the registration or sale of securities, or which directly or indirectly relate to his activities as a dealer, investment adviser, principal or agent, or any other activity in which he was involved where a breach of a fiduciary trust is alleged. This shall not include minor traffic violations; but shall include any notification of investigation by any recognized regulatory agency . .
It must first be noted that the scope of what must be reported under a rule such as that quoted above is limited to the express requirements of the rule. A notice of intent to deny registration does not involve a complaint, nor does it involve the filing of any charges. Accordingly, the above-quoted rule did not require SSFM to report the notices of intent to deny registration issued by the states of Idaho, Kansas, Missouri, and Pennsylvania. The lawsuit commenced in the state of Washington does not name SSFM as a party. Therefore, SSFM was not required by the rule to report that litigation. The record in this case contains insufficient information to determine whether SSFM should have reported the civil complaint filed in Ohio. The two civil complaints filed in the united States District Courts for the District of New Mexico and for the Southern District of Ohio should have been reported to the Department. Even though they may well prove to be frivolous, they are nevertheless within the
scope of what must be reported to the Department. Accordingly, the evidence establishes in part the violation charged in Count V of the Administrative Charges And Complaint.
Count VI of the Administrative Charges And Complaint alleges that SSFM ". . . has failed and neglected to file financial statements with the Department within 90 days of the end of its fiscal year." In this regard Rule
3E-600.15(3), Florida Administrative Code, reads as follows:
(3) Every investment advisor registered pursuant to Section 517.12, F.5., and Rules thereunder shall file annually with the Department, within ninety (90) days after the conclusion of said registrants's fiscal year, financial statements as of fiscal year end, such statements prepared in accordance with the provisions of Rule 3E-300.02.
SSFM admits that it did not file its annual report as required by the rule, but contends that by maintaining a net capital of $2,500 and by voluntarily ceasing to provide investment adviser services, it has complied with the "intent" of this rule. SSFM's contention notwithstanding, the plain requirements of the letter of the rule have not been complied with.
Accordingly, the evidence establishes the violation charged in Count VI of the Administrative Charges And Complaint.
Count VII of the Administrative Charges And Complaint alleges that SSFM cannot demonstrate that it has maintained a net capital of at least $2,500 as required by Rule 3E-600.16(3)(b), Florida Administrative Code. In addition to requiring a minimum net capital of $2,500, Rule 3E-600.16 goes on to provide as follows at section (5) of the rule:
(5) any dealer or investment adviser who fails to maintain the minimum net capital as required under this Rule shall, in addition to the financial reporting requirements set forth in paragraph (2)(b) above, immediately suspend business operations, and shall not resume such operations unless and until financial statements which verify compliance with this rule have been submitted and approved by the Department in writing.
The evidence is uncontroverted that 5-SFN has net capital of at least
$2,500. Such being the case, the suspension of business requirements of subsection (5) of the rule do not come into play. It being established that SSFM meets the minimum net capital requirements of Rule 3E-600.16(3)(b), Count VII of the Administrative Charges And Complaint should be dismissed.
Count VIII of the Administrative Charges And complaint alleges that the registration of 5551 should be revoked along with the registration of SSFM on the basis of Section 517.161(4), Florida Statutes. The cited statutory provision reads as follows:
(4) It shall be sufficient cause
for . . . revocation of registration, in the case of a partnership, corporation, or
unincorporated association, if any member of the partnership or any officer or director of the corporation or association has been guilty of an act or omission which would be cause for denying or revoking the registration of an individual dealer, investment adviser, or associated person.
The Department argues that the acts and omissions of SSFM are the acts and omissions of the officers and directors of SSFM and that, therefore, because those officers and directors are also officers and directors of 5551, the registration of 5551 should be revoked. This argument fails for several reasons. First, for reasons discussed below, it appears that a suspension of SSFM's registration is more appropriate than a revocation. Accordingly, if the evidence in this case only warrants a suspension of SSFM's registration, it would be illogical to revoke the registration of 5551, especially where, as here, the record contains no evidence of any irregularity in 5551's compliance with any statute or rule. Second, the last-quoted statutory provision authorizes revocation of a corporate registration when any officer or director of the corporation has been guilty of an act or omission. . . ." The term "has been guilty" appears to presuppose some form of adjudicatory determination of guilt on the part of an officer or director. At a minimum such a determination would appear to envision the successful prosecution of an administrative complaint against one of the officers or directors of a corporation. Here none of the officers or directors have been named as respondents in the Administrative Charges And Complaint. Accordingly, Count VIII of the Administrative Charges And Complaint should be dismissed.
Conclusions relating to Case No. 86-1553
Case No. 86-1553 involves a cease and desist order, pursuant to which the Department seeks to order SSFM, 5551, Robert Iles, and Monica Iles to cease and desist from violating certain specified provisions of Chapter 517, Florida Statutes. The alleged grounds for the issuance of the cease and desist order are essentially the same as the allegations contained in Counts I, II, and VIII of the Administrative Charges And Complaint in Case No. 86-1336. As previously noted in the discussion of issues regarding Case No. 86-1336, the evidence in this case fails to establish that the corporate business plans were securities and also fails to establish any Florida nexus in the sale or offers to sell of such corporate business plans.
Section 517.221(1) and (2), Florida Statutes, reads as follows:
The department may issue and serve upon a person a cease and desist order whenever the department has reason to believe that such person is violating, has violated, or is about to violate any provision of this chapter, any rule or order promulgated by the department, or any written agreement entered into with the department.
The cease and desist order shall contain a statement of facts and a notice for a hearing pursuant to s. 120.57
The violations alleged in the cease and desist order have not been proved. Accordingly, the cease and desist order should be dismissed.
Based on all of the foregoing, it is recommended that the Department enter final orders in these cases to the following effect:
In Case No. 86-1336, the final order should dismiss the allegations alleged in Counts I, II, VII, and VIII of the Administrative Charges And Complaint; should find SSFM guilty of the violations alleged in Counts III, IV, V, and VI of the Administrative Charges And Complaint; and should suspend the registration of SSFM until such time as SSFM has corrected the deficiencies of which it has been found guilty. In recommending suspension in lieu of revocation, 1 have given great weight to the fact that there is no evidence that any harm has been suffered by any client or customer of SSFM as a result of the violations proved in this case.
In Case No. 86-1553, the final order should dismiss the cease and desist order.
DONE AND ENTERED this 18th day of December, 1986, at Tallahassee, Florida.
MICHAEL M. PARRISH
Hearing Officer
Division of Administrative Hearings The Oakland Building
2009 Apalachee Parkway
Tallahassee, Florida 32301
(904) 488-9675
Filed with the Clerk of the Division of Administrative Hearings this 18th day of December, 1986.
APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-1336, 86-1553
The following are my specific rulings on each of the proposed findings of fact submitted by each of the parties.
Rulings on findings proposed by the Department in Case No. 56-1336 Paragraph 1, including its subparagraphs (a), (b), (c), (d), and (e):
Rejected because not supported by competent substantial evidence. As noted in
Section 120.57(1)(b)7, Florida Statutes, "Findings of fact shall be based exclusively on the evidence of record and on matters officially recognized." The pleadings in this case were not offered in evidence.
Paragraph 2: Accepted.
Paragraph 3: Accepted.
Paragraph 4: Rejected. The statements in this para- graph are conclusions of law and not proposed findings of fact.
Paragraph 5: An essentially true statement, but subordinate and unnecessary as a finding of fact.
Paragraph 6: Rejected on several grounds. First, it is a summary of testimony rather than proposed findings. Second, it is a conclusion of law
rather than proposed findings of fact. Finally, the conclusion is not warranted by the evidence.
Paragraph 7: Rejected as constituting a conclusion of law rather than a proposed finding of fact. Also, to the extent this paragraph might be considered to be an opinion-type ultimate fact, it is rejected as contrary to the greater weight of the evidence.
Paragraph 5: The first sentence of this paragraph is rejected as constituting a conclusion of law and not a proposed finding of fact. The second sentence of this paragraph is accepted.
Paragraph 9: Accepted.
Paragraph 10: Accepted.
Paragraph 11: The first sentence is accepted in substance up to the first comma in the sentence. (More extensive findings about litigation involving Structured Shelters Financial Management, Inc., have been made.) The portion of the first sentence following the first comma is rejected as constituting a conclusion of law. The second sentence in this paragraph is rejected as constituting commentary about the nature of the record and not constituting proposed findings of fact.
Paragraph 12: Accepted.
Paragraph 13: Accepted in substance, with modifi-cations in the interest of accuracy.
Paragraph 14: Accepted.
Paragraph 15: Rejected in part because it is more in the nature of a conclusion of law than in the nature of a finding of fact and rejected in part because it is based on inference not fully supported by the evidence.
Paragraph 16: Rejected in part because it is more in the nature of a conclusion of law than in the nature of a finding of fact and rejected in part because not supported by persuasive competent substantial evidence.
Rulings on findings proposed by the Department in Case No. 56-1553 Paragraph 1, including its subparagraphs (a), (b), and (c): Rejected
because not supported by competent substantial evidence. The pleadings in this
case were not offered in evidence.
Paragraph 2: Accepted.
Paragraph 3: Accepted.
Paragraph 4: Rejected. The statements in this paragraph are conclusions of law and not proposed findings of fact.
Paragraph 5: An essentially true statement, but sub- ordinate and unnecessary as a finding of fact.
Paragraph 6: Rejected on several grounds. First, it is a summary of testimony rather than proposed findings. Second, it is a conclusion of law rather than proposed findings of fact. Finally, the conclusion is not warranted by the evidence.
Paragraph 7: Rejected as constituting a conclusion of law rather than a proposed finding of fact. Also, to the extent this paragraph might be considered to be an opinion-type ultimate fact, it is rejected as contrary to the greater weight of the evidence.
Paragraph 8: The first sentence of this paragraph is rejected as constituting a conclusion of law and not a proposed finding of fact. The second sentence of this paragraph is accepted.
Paragraph 9: Accepted.
Paragraph 10: Rejected in part because it is more in the nature of a conclusion of law than in the nature of a finding of fact and rejected in part because it is based on inference not fully supported by the evidence.
Paragraph 11: Rejected in part because it is more in the nature of a conclusion of law than in the nature of a finding of fact and rejected in part because not supported by persuasive competent substantial evidence.
Rulings on findings proposed by the corporate and individual parties
The vast majority of the findings of fact proposed by the corporate and individual parties have been accepted, some with a few minor editorial changes in the interest of clarity and accuracy. The few that have been rejected are listed below along with the reasons for rejection.
Proposal 4: Rejected as irrelevant and unnecessary details. Proposal 5: Rejected as irrelevant and unnecessary details.
Proposal 75: Rejected as contrary to the greater weight of the evidence; twenty of the plans were sold.
COPIES FURNISHED:
Martin S. Friedman, Esquire MYERS, KEVIN, LEVINSON & RICHARDS
2544 Blairstone Pines Drive Tallahassee, Florida 32301
Robert K. Good, Esquire Senior Attorney
Office of Comptroller Suite 501
400 West Robinson Street Orlando, Florida 32501
Hon. Gerald Lewis Comptroller, State of Florida The Capitol
Tallahassee, Florida 32301
| Issue Date | Proceedings |
|---|---|
| Dec. 18, 1986 | Recommended Order (hearing held , 2013). CASE CLOSED. |
| Issue Date | Document | Summary |
|---|---|---|
| Feb. 04, 1987 | Agency Final Order | |
| Dec. 18, 1986 | Recommended Order | For various violations of securities laws, registration of investment advisor should be suspended until all deficiencies are corrected |
PATRICIA LEWIS vs. DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 86-001336 (1986)
LISA LLOYD vs CAREFREE RV RESORTS CORPORATE OFFICE, 86-001336 (1986)
NINA DIAMOND vs DEPARTMENT OF HEALTH AND REHABILITATIVE SERVICES, 86-001336 (1986)
MICHAEL WALENDZUK vs ST. CLOUD VILLAGE ASSOCIATES, LTD, 86-001336 (1986)
