The Issue At issue in this proceeding is whether Petitioner is entitled to registration as an associated person of Brookstone Securities, Inc. ("Brookstone"), either by virtue of the default provision of Subsection 120.60(1), Florida Statutes, or by virtue of the substantive merits of his application.
Findings Of Fact Based on the oral and documentary evidence adduced at the final hearing and the entire record in this proceeding, the following findings of fact are made: The Parties The Office of Financial Regulation, a part of the Financial Services Commission, is the state agency charged with regulation of the securities industry. § 20.121(3)(a)2., Fla. Stat. Chapter 517, Florida Statutes, is the "Florida Securities and Investor Protection Act." § 517.011, Fla. Stat. Pursuant to Section 517.012, Florida Statutes, OFR is responsible for the registration of persons associated with broker-dealers. Victor Alan Lessinger is 62 years old. He has been involved in the securities industry since 1976. He was registered with the State of Florida as an associated person from April 23, 1991, until October 31, 1994. He was later registered as an associated person with the State of Florida from June 5, 1997, through April 29, 2006, with the exception of the eight-day period between January 23, 2002, and February 1, 2002. This eight-day lapse was caused by Mr. Lessinger's changing jobs, which necessitated that he re-apply for registration. An associated person must be registered through the broker-dealer that employs him. From February 2005 until April 2006, Mr. Lessinger was a broker associated with Archer Alexander Securities Corporation, and was registered as such with the State of Florida. Archer Alexander went out of business in April 2006, and Mr. Lessinger accepted an offer of employment from Brookstone, a company based in Lakeland. Mr. Lessinger was to work as an associated person in Brookstone's Coral Springs branch. The Application Process and the Notice On July 5, 2007, Mr. Lessinger submitted his application for registration as an associated person with Brookstone to OFR through Web CRD, the central licensing and registration system for the U.S. securities industry operated by the Financial Industry Regulatory Authority ("FINRA").2 Mr. Lessinger's initial application for registration as an associated person with Brookstone disclosed the following disciplinary events: a 1993 Consent Order that Mr. Lessinger entered into with the relevant authorities in the State of Maine; a 1998 "Division Order" from the State of Ohio denying Mr. Lessinger's application for a securities salesman license; a 2000 letter of acceptance, waiver and consent ("AWC") issued by the National Association of Securities Dealers ("NASD"), the predecessor to FINRA; a 2002 arbitration award issued by NASD Dispute Resolution, Inc.; and two related actions taken by the Securities and Exchange Commission ("SEC") in 2005. The 2000 AWC letter, the 2002 arbitration award, and the 2005 SEC actions all related to incidents and/or transactions that occurred in 1999. By letter dated July 18, 2007, Justin Mills, a financial analyst for OFR, notified Mr. Lessinger as follows: In order for the application to be deemed complete, it will be necessary to provide this office with a complete response to the following [sic] a copy of the complete Form U-4, as amended, and all documents pertaining to disciplinary matters, whether disclosable on the U-4 or not.[3] Documentation submitted must be certified by the issuer of such documents. Additionally, explain in detail the status of each pending action, and for each final action, summarize the action and the disposition. Specifically, but not limited to the following: * Certified copies of any regulatory actions by any state or federal regulator, or any self-regulatory organization, including but not limited to, the complaint, answer or reply, and final order or sanction. Certified documentation must be certified by the appropriate agency. Also, provide a brief narrative describing the causes that lead [sic] to the actions. Pursuant to Rule 69W-301.002(3), Florida Administrative Code, additional information shall be submitted within sixty (60) days after a request has been made by the Office. Failure to provide all the information may result in the application being denied. Mr. Lessinger responded with a package of documents and a cover letter dated July 23, 2007. OFR received the package and letter from Mr. Lessinger on July 24, 2007. On October 9, 2007, Ryan Stokes, a financial analyst supervisor for OFR, sent an e-mail to David Locy, then the executive vice president and compliance officer of Brookstone. Mr. Stokes requested the following documents in order to complete Mr. Lessinger's application: Certified copies of the complaint, Lessinger's answer/reply, and resolution for the actions taken by the SEC, State of Maine, State of Pennsylvania,[4] NASD, and State of Ohio. Certified copies of the statement of claim, Lessinger's response, settlement/arbitration panel's decision, and proof of payment of any awards/settlement for the arbitrations filed by Joseph Orlando and Muriel Hecht. Certified copy of the petition for bankruptcy and a discharge of bankruptcy. If any of the documents are unavailable due to age, a statement from the appropriate regulator/court to that effect, will suffice. At the hearing, Pamela Epting, chief of OFR's regulatory review bureau, testified that an e-mail such as that sent by Mr. Stokes is not OFR's usual method of doing business. OFR typically sends only an initial deficiency letter such as that sent by Mr. Mills on July 18, 2007. Richard White, director of OFR's division of securities, described Mr. Stokes' e-mail as a "courtesy" that provided Mr. Lessinger "with a reminder and greater detail as to what had not yet been provided." Mr. Lessinger responded with a package of documents and a cover letter dated November 5, 2007, which were received by OFR on November 6, 2007. The cover letter stated as follows, in relevant part: As requested, I am enclosing certified copies of all of the following: SEC, State of Maine (with additional prior correspondence), NASD. Joseph Orlando and Muriel Hecht (there were no payments made since Orlando was dismissed in its entirety with regard to me and Hecht was absolved as a result of my bankruptcy). Certified copy of the Petition for Bankruptcy and Discharge. I believe the State of Pennsylvania will be submitting directly to your office. I have not yet received the certification from the State of Ohio yet [sic]. I have enclosed the original Division Order which is signed and sealed by the Commissioner of Securities. If needed, I will forward the certification as soon as I receive the documents. . . . OFR did not respond in writing to Mr. Lessinger's November 5, 2007, submission. At some point in December 2007 or January 2008, Ms. Epting spoke to Mr. Locy by telephone. She told Mr. Locy that the agency intended to deny Mr. Lessinger's application and offered him an opportunity to withdraw the application in lieu of outright denial. In an e-mail to Ms. Epting dated February 4, 2008, Alan Wolper, attorney for Brookstone and Mr. Lessinger, wrote that his clients had decided not to withdraw the application, "notwithstanding the fact that you have indicated OFR's intent to deny that application." Mr. Wolper requested that Ms. Epting send a written notice of intent to deny, stating the particular grounds for the denial of Mr. Lessinger's application. At some point after writing the February 4, 2008, e-mail, Mr. Wolper wrote a letter to OFR asserting that Mr. Lessinger's registration should be deemed granted by default due to CFR's failure either to notify Mr. Lessinger of the application's incompleteness within 30 days of his November 5, 2007, submission or to act upon the completed application within 90 days of the November 5, 2007, submission, as required by Subsection 120.60(1), Florida Statutes. In a letter dated April 23, 2008, OFR assistant general counsel Jennifer Hrdlicka responded to Mr. Wolper with the assertion that the statutory default provision had not been triggered because Mr. Lessinger had yet to submit a completed application: Mr. Lessinger's application is still deficient. He has not provided to the Office the information requested in its July 18, 2007, letter to him. Still missing from his application are: Certified copies of the complaint, Lessinger's answer/reply, and resolution for the actions taken by the SEC; Certified copies of the resolution for the actions taken by the State of Ohio; and Certified copies of the statement of claim, Lessinger's response, settlement/arbitration panel's decision, and proof of payment of any awards/settlement for the arbitrations filed by Joseph Orlando. Mr. Lessinger did submit a certified copy of the Notice of Intent to Deny Application for Securities Salesman License from the State of Ohio, dated July 9, 1997. However, he did not submit any document, certified or not, regarding the resolution from that Notice of Intent of July 9, 1997, such as a Final Order. * * * Mr. Lessinger was timely notified of deficiencies in his application on July 18, 2007, thirteen days after submittal of his application and well within the thirty (30) day period set by the Administrative Procedures [sic] Act and the Office's corresponding Rule [Florida Administrative Code Rule 69W-301.002]. Your interpretation of Florida's Administrative Procedure Act and the Office's Rules contemplates an additional thirty day time period from Mr. Lessinger's November 6, 2007, submittal of additional information; this is a mistaken interpretation of Florida statutes. Mr. Lessinger's application was not considered complete on December 5, 2007. In fact, he has not yet delivered to the Office all requested information and so his application is currently not considered complete. His application will not be considered complete until such time as all requested information is received by the Office. . . . (Emphasis added.) On April 30, 2008, Mr. Lessinger submitted to Ms. Epting an affidavit attesting that the additional documents requested by Mr. Stokes on October 9, 2007, had been submitted to the agency on November 6, 2007. At the hearing, OFR continued to assert that Mr. Lessinger's November 6, 2007, submission did not contain all the information requested by Mr. Stokes. OFR submitted into evidence a sheaf of documents purporting to be Mr. Lessinger's November 6, 2007, submission. The documents had been unstapled for copying and re-stapled, and bore no consistent marks of date stamping or numbering that would allow a fact finder to conclude with confidence that the documents had been maintained in the form they were submitted by Mr. Lessinger. Ms. Epting could testify only as to OFR's general practice in maintaining its files, not as to the manner in which this particular file had been maintained. At the hearing, Mr. Lessinger stated under oath that he had provided OFR with every document it had asked for with the exception of the final order in the 1998 Ohio denial of his application. Mr. Lessinger conceded that he had only provided OFR with the notice of intent to deny in that case. Ms. Epting testified that OFR obtained the final order directly from the State of Ohio some time during the Spring of 2008. The only other item that OFR asserted was missing from the November 6, 2007, submission was a certified copy of the SEC's 2005 order barring Mr. Lessinger from association in a supervisory capacity with any broker or dealer for a period of two years. Mr. Lessinger's November 6, 2007, submission contained what appeared to be a non-certified copy of the order. The faint image of a seal is visible on the last page, with Mr. Lessinger's notation: "Raised seal unable to make darker." Ms. Epting testified that Mr. Lessinger submitted a certified copy of the order some time around May 2008. It is found that Mr. Lessinger submitted a certified copy of the SEC's 2005 order with his November 6, 2007, submission. On May 5, 2008, OFR issued the Notice to Mr. Lessinger. In the Notice, OFR identified a third "completeness" issue that Ms. Epting testified she discovered only during her inquiry to the State of Ohio regarding the final order in the 1998 denial. As to this issue, the Notice recited as follows under heading, "Statement of Facts": On October 3, 2007, the State of Ohio, Department of Commerce, Division of Securities, issued a Notice of Intent to Deny Application for Securities Salesperson License for Lessinger, Order No. 07-387. On April 7, 2008, the State of Ohio, Division of Securities issued a Final Order against Lessinger Denying the Application for a Securities Salesperson License, Order No. 08-052. The Final Order states that on October 15, 2007, Lessinger requested an adjudicative hearing of the Notice of Intent to Deny; the Final Order further states that such a hearing was held on December 18, 2007, and on January 23, 2008, the Hearing Examiners Report and Recommendation was issued, upholding the Division's Notice of Intent. The Final Order states that the Division found that Lessinger was not of "good business repute" as that term is used in Ohio Revised Code 1707.19(A)(1) and Ohio Administrative Code 1301:6-3-19(D)(2),(6),(7),(9), and (D)(11) . . ." Notice was not given to the Office of these administrative actions by the State of Ohio. Lessinger did not update his Form U-4 until April 23, 2008, and subsequent to the Office's inquiry as to this matter; further, his update to his Form U-4 is misleading in that it cites that the date of initiation of this matter was April 7, 2008. Under the heading "Conclusions of Law," the Notice states that Mr. Lessinger's failure to update his Form U-4 constitutes a violation of Florida Administrative Code Rule 69W-600.002(1)(c)5 and therefore a basis for denial pursuant to Subsection 517.161(1)(a), Florida Statutes, which provides that violation of any rule promulgated pursuant to Chapter 517 constitutes grounds for denial of registration. The parties agreed that Mr. Lessinger's application file at OFR was complete at the time of the hearing. The Notice cited additional grounds for denial based on Subsections 517.161(1)(h) and (m), Florida Statutes, which provide: (1) Registration under s. 517.12 may be denied or any registration granted may be revoked, restricted, or suspended by the office if the office determines that such applicant or registrant: * * * (h) Has demonstrated unworthiness to transact the business of dealer, investment adviser, or associated person; * * * (m) Has been the subject of any decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order by any court of competent jurisdiction, administrative law judge, or by any state or federal agency, national securities, commodities, or option exchange, or national securities, commodities, or option association, involving a violation of any federal or state securities or commodities law or any rule or regulation promulgated thereunder, or any rule or regulation of any national securities, commodities, or options exchange or national securities, commodities, or options association, or has been the subject of any injunction or adverse administrative order by a state or federal agency regulating banking, insurance, finance or small loan companies, real estate, mortgage brokers or lenders, money transmitters, or other related or similar industries. For purposes of this subsection, the office may not deny registration to any applicant who has been continuously registered with the office for 5 years from the entry of such decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order provided such decision, finding, injunction, suspension, prohibition, revocation, denial, judgment, or administrative order has been timely reported to the office pursuant to the commission's rules. . . . As the basis for OFR's conclusions that Mr. Lessinger had demonstrated "unworthiness" as described in Subsection 517.161(1)(h), Florida Statutes, and that Mr. Lessinger was the subject of decisions, findings, injunctions and/or prohibitions as set forth in Subsection 517.161(1)(m), Florida Statutes, the Notice cited the 1993 Maine consent order, the 1998 Ohio final order denying Mr. Lessinger's application for a securities salesman license, the 2000 AWC letter from NASD, the 2002 arbitration award issued by NASD Dispute Resolution, Inc., the 2005 SEC actions, and the April 7, 2008, Ohio final order denying Mr. Lessinger's application for a salesperson's license. Petitioner's Disciplinary History During his career, Mr. Lessinger has been employed in various capacities: as a broker/registered representative, a supervisor, and a general securities principal. He has lived and worked in Florida since 1997. From November 1976 through October 1994, Mr. Lessinger was employed by First Investors Corporation ("First Investors") in New York, working his way up to senior vice president and director of the company. On December 20, 1993, Mr. Lessinger entered into a Consent Agreement with the Attorney General of the State of Maine, "for the sole purpose of effecting a settlement of the civil action against Lessinger," First Investors and other individual defendants commenced by the Attorney General and the Maine Securities Administrator in 1991. Mr. Lessinger did not admit or deny that his conduct violated the Revised Maine Securities Act. The Consent Agreement does not provide the details of the grounds for the civil action. Mr. Lessinger testified that First Investors sold mutual funds, one of which was a junk bond fund that lost a great deal of money for investors in the late 1980s. First Investors had an office in Maine, and the Attorney General instituted a civil action against First Investors and certain supervisory personnel, including Mr. Lessinger, for failure to disclose to investors the risk inherent in these bond funds. Mr. Lessinger had no customers in Maine and did not personally sell the junk bond fund to any of his clients. Under the Consent Agreement, Mr. Lessinger agreed not to apply for a license as a sales representative in Maine for a period of one year. Mr. Lessinger also agreed to pay the sum of $50,000 to the State of Maine; First Investors paid the money for Mr. Lessinger. He eventually reapplied and was approved as a sales representative in the State of Maine. In mid-1997, Mr. Lessinger moved from New York to Boca Raton, becoming president of Preferred Securities Group, Inc. ("Preferred"). Mr. Lessinger was obliged to seek licensure in the states in which Preferred had brokers, which included Ohio. In March 1998, the State of Ohio, Department of Commerce, Division of Securities issued a "Division Order" denying Mr. Lessinger's application for securities salesman license. The Division Order found that Mr. Lessinger was not of "good business repute" under the Ohio statutory and rule provisions named in the quotation portion of Finding of Fact 20, supra. The only factual basis stated for the Division Order's "good business repute" finding was the 1993 Consent Agreement with the State of Maine. On November 16, 2000, Mr. Lessinger entered into the NASD AWC letter along with Preferred and Kenneth Hynd, Preferred's financial operations principal ("FINOP"). The recipients of the AWC letter agreed that the letter would become part of their permanent disciplinary record and may be considered in any future actions brought by NASD against them. They also agreed to the following: We may not take any action or make or permit to be made any public statement, including in regulatory filings or otherwise, denying, directly or indirectly, any allegation in this AWC or create the impression that the AWC is without factual basis. Nothing in this provision affects our testimonial obligations or right to take legal positions in litigation in which the NASD is not a party. Only one of the allegations that prompted the AWC letter directly involved Mr. Lessinger. Without admitting or denying the alleged violation, Mr. Lessinger and Preferred consented to the entry of the following finding by NASD Regulation, Inc.: During the period from about March 22, 1999, until about April 21, 1999, Respondent [Preferred], acting through Respondent Lessinger, allowed an inactive registered representative to effect three securities transactions for customers, in violation of NASD Membership and Registration Rule 1120 and Conduct Rule 2110. Mr. Lessinger and Preferred also consented to the entry of a $3,000 fine, imposed jointly and severally. Mr. Lessinger paid the fine. Mr. Lessinger testified that the representative who effected the improper transactions was in Preferred's Pompano Beach branch office, which was open only from March to June 1999. The manager on premises had not notified Mr. Lessinger that a registered representative in the office was deemed "inactive" for failure to complete mandatory continuing education. On April 30, 2002, a NASD Dispute Resolution, Inc.6 arbitration panel issued an award against Mr. Lessinger in a case that had been filed by a former Preferred customer against Preferred, Mr. Lessinger, and three other individuals associated with the firm, including the owner, Anthony Rotonde, and two brokers. The initial statement of claim in the matter was filed in 1999. The claims included misrepresentation, unsuitability, breach of fiduciary duty, failure to supervise, violations of Section 517.301, Florida Statutes, and common law fraud and negligence. Mr. Lessinger was not the broker of record for the complaining customer and never had anything directly to do with her account. He did not know her. She had been a client of the two brokers for several years. As president of the company, Mr. Lessinger was ultimately responsible for supervision of the brokers, though he was not their direct supervisor. Preferred, Mr. Rotonde, and Mr. Lessinger were found jointly and severally liable on the claims of suitability and failure to supervise and were required to pay damages of $42,294.90, plus interest, costs, and attorneys' fees. The liability for attorneys' fees was expressly based on Sections 517.301 and 517.211, Florida Statutes. Section 517.301, Florida Statutes, generally prohibits fraud and deception in connection with the rendering of investment advice or in connection with securities transactions. Section 517.211, Florida Statutes, sets forth the remedies available for unlawful sales, including those in violation of Section 517.301, Florida Statutes. Subsection 517.211(6), Florida Statutes, provides for attorneys' fees to the prevailing party unless the court finds that the award of such fees would be unjust. After the arbitration award, Preferred went out of business. Mr. Rotonde was a non-licensed owner and simply walked away from the matter. Thus, Mr. Lessinger was left on the hook for the entire arbitration award. He was unable to pay it, and was forced to declare bankruptcy. In April 2004, Mr. Lessinger was named in a civil action filed by the SEC in the United States District Court for the Southern District of Florida. The SEC alleged that Preferred's Pompano Beach office was opened in March 1999 to operate as a boiler room for a "pump and dump" operation involving a penny stock, Orex Gold Mines Corporation ("Orex"). Orex claimed to be in the business of extracting gold from iron ore by means of an environmentally safe process. The SEC alleged that Orex was in fact a shell corporation owned by a "recidivist securities law violator and disbarred attorney." Though its promotional video, literature, and website touted Orex as an active, established company with gold mines, employees, and a revolutionary gold extraction process, Orex in fact owned no mines or mining equipment and had never commercially tested its claimed extraction process. As to Mr. Lessinger, the SEC's complaint alleged as follows: According to Preferred's written supervisory procedures, the form prohibited the solicitation of "penny stocks" as defined under Exchange Act Rule 3a51-1, and restricted the purchase of penny stocks unless it received an unsolicited letter, signed by the investor, requesting to purchase a particular penny stock. Despite the firm's prohibition against soliciting transactions in penny stocks, Lessinger authorized the Pompano Beach branch office's request to solicit transactions in Orex. Prior to authorizing the firm's solicitation of Orex, Lessinger simply reviewed the Orex brochure, the Orex private placement memo, and an Orex press release. He did not conduct any independent research or assessment regarding Orex's officers, assets, or prospects for success. Orex quickly accounted for a high percentage of the overall transactions conducted by Preferred's Pompano Beach branch. Although Lessinger retained responsibility for reviewing, authorizing, and approving customers' transactions in Orex stock, and although he was the senior official of Preferred and functioned as a compliance officer, he failed to exercise appropriate supervision and to take the necessary steps to ensure that Preferred, and the personnel operating out of Preferred's Pompano Beach branch in particular, complied with applicable procedures, securities laws and regulations in connection with transactions in Orex stock. The brokers in the Pompano Beach branch sold more than $3 million in Orex stock between March and July 1999 through fraudulent representations regarding the company, forgery of penny stock disclosure forms, bait and switch tactics, refusal to execute sell orders, or delaying sell orders until a buyer for the shares could be found. The stock ballooned to a value of $7.81 in late May 1999. By late July, it was trading for pennies per share. To his credit, Mr. Lessinger closed the Pompano Beach branch of Preferred after a site visit in June offered him a glimpse of the office's actual operations. However, had Mr. Lessinger showed more curiosity at the outset, or had he merely enforced the company policy against soliciting penny stock sales, the situation in Pompano Beach might never have developed. On September 7, 2005, the court entered final judgment as to Mr. Lessinger. He was permanently restrained and enjoined from: violating the fraud provisions of the Securities Exchange Act of 1934; violating the NASD Conduct Rule regarding supervision of the activities of registered representatives and associated persons; and participating in any offering involving penny stocks. He was also ordered to pay a civil penalty of $20,000. On September 23, 2005, the SEC also issued an Administrative Order making findings and imposing remedial sanctions in connection with the Orex matter. The order barred Mr. Lessinger from association in a supervisory capacity with any broker or dealer for two years, with a right to reapply at end of the two-year period. The SEC's Administrative Order left Mr. Lessinger free to continue to act as a registered representative. However, the two SEC actions rendered Mr. Lessinger statutorily disqualified from membership in the securities industry under FINRA rules. To remain active in the industry, Mr. Lessinger was required to go through the MC-400, or "Membership Continuance," process with FINRA. The Form MC-400 must be filed by a member firm on behalf of the disqualified person. In this case, Archer Alexander Securities, Mr. Lessinger's employer at the time of his disqualification, filed the MC-400 application on his behalf. However, Archer Alexander went out of business before the application could be considered. Mr. Lessinger was hired by Brookstone in April 2006. Brookstone filed a Form MC-400 with FINRA on Mr. Lessinger's behalf on May 15, 2006. Brookstone is owned by Antony Turbeville, a certified financial planner who has been licensed in the securities industry since 1987. Mr. Turbeville has never been the subject of disciplinary actions by the SEC, NASD, or the State of Florida. David Locy is currently the president of Brookstone. At the time Brookstone filed the MC-400 application for Mr. Lessinger, Mr. Locy was Brookstone's chief compliance officer. He has been a certified public accountant since 1974, licensed in the securities industry since 2003, and has never been the subject of regulatory or disciplinary action by any professional or licensing entity. Michael Classie is the branch manager and supervisor of Brookstone's Coral Springs office, where Mr. Lessinger works.7 He has been licensed to sell securities since 1995 and has never been the subject of disciplinary actions by the SEC, NASD, or the State of Florida. In its MC-400 application, Brookstone stated that Mr. Lessinger did not seek licensure as a supervisor or control person, and that Brookstone would not allow him to work in a supervisory capacity. Brookstone agreed that Mr. Lessinger would work only as a registered representative, and then only under highly controlled supervisory conditions. FINRA's Department of Member Regulation, which conducts the initial review of all MC-400 applications, recommended that Brookstone's application on behalf of Mr. Lessinger should be denied. By order dated December 13, 2006, following an evidentiary hearing, FINRA's National Adjudicatory Council ("NAC") disagreed with the recommendation of the Department of Member Regulation and granted the application, subject to approval by the SEC. The NAC's order provided as follows: After considering all of the facts, we approve Lessinger as a general securities representative with Brookstone, supervised by Classie and Locy, and subject to the following terms and conditions of employment: Classie and Locy will review, initial, and date all of Lessinger's order tickets on a daily basis; Classie will review all of Lessinger's incoming correspondence daily and will review all of Lessinger's outgoing correspondence prior to its being sent. Lessinger will print out a daily log of faxes from the fax machine for Classie to review; Classie and Locy will review every new account form for Lessinger and, if approved, sign such form; Classie will be in the office with Lessinger at least four times per week from 8:00 a.m. until 5:00 p.m. If Classie is not in the office, Lessinger will be prohibited from effecting trades on the computer and will, instead, call them in to Locy for approval; Locy will make random unannounced office visits to Lessinger's home office at least once during each calendar quarter; Brookstone will amend its written supervisory procedures to state that Classie is the primary responsible supervisor for Lessinger, and that Locy is the backup supervisor; Lessinger will provide a list of all sales contacts to Classie, including the nature of the contacts, on a daily basis; Classie will review Lessinger's written sales contacts and investigate any irregular activity; Locy will conduct five random telephone calls per quarter to Lessinger's customers to verify information or ascertain the customers' level of satisifaction; Lessinger will not participate in any manner, directly or indirectly, in the purchase, sale, recommendation, or solicitation of penny stocks (this is defined in the Court Judgment as "any equity security that has a price of less than five dollars, except as provided in Rule 3a5-1 under the Exchange Act [17 C.F.R. 240.3a51-1]"); Classie must certify quarterly (March 31st, June 30th, September 30th, and December 31st) to the Compliance Department that Lessinger and Classie are in compliance with all of the above conditions of heightened supervision; and For the duration of Lessinger's statutory disqualification, Brookstone must obtain prior approval from Member Regulation if it wishes to change Lessinger's responsible supervisor from Classie to another person. On June 29, 2007, the SEC issued a letter approving the NAC's decision to permit Mr. Lessinger to register with Brookstone as a registered representative under the heightened supervisory restrictions set out in the NAC's order. Brookstone and Mr. Lessinger have agreed that they will abide by the same list of heightened supervisory restrictions should the State of Florida approve the application at issue in this proceeding.8 As noted at Findings of Fact 20 and 21, supra, the Notice alleged that Mr. Lessinger failed to timely update his Form U-4 to disclose receipt of a Notice of Intent to Deny Application for Securities Salesperson from the State of Ohio, Department of Commerce, Division of Securities ("Ohio Notice") dated October 5, 2007. The Ohio Notice stated that on July 9, 2007, Mr. Lessinger had applied for a securities salesperson license via submission of his Form U-4, and that his application disclosed the September 23, 2005, SEC order, the April 2004 filing of the SEC complaint in the United States District Court for the Southern District of Florida, the 2000 NASD AWC letter, the NASD Dispute Resolution arbitration award, the 1998 Ohio application denial, and the Maine Consent Agreement. Based on these disclosures, the Ohio Division of Securities alleged that Mr. Lessinger was not of "good business repute" according to Ohio statutes and rules, and stated its intent to issue an order denying Mr. Lessinger's application for a salesperson's license. The Ohio Notice provided that Mr. Lessinger had 30 days in which to request an administrative hearing contesting the agency's intended denial of his application. Mr. Lessinger timely filed the appropriate documents contesting the Ohio Notice and requesting an evidentiary hearing. Immediately after receiving the Ohio Notice, Mr. Lessinger brought it to the attention of Mr. Locy, then Brookstone's chief compliance officer, in order to determine whether his Form U-4 should be amended. Only Brookstone, as the broker/dealer employing Mr. Lessinger, had authority to amend his Form U-4. Mr. Lessinger did not have independent access to the Web CRD database and thus had no ability to amend the document on his own. Mr. Locy considered the situation and decided that the Ohio Notice did not require an amendment to Mr. Lessinger's Form U-4. Because Mr. Lessinger had appealed the intended denial of his Ohio application, Mr. Locy concluded that that matter was not reportable until the Ohio action ripened into a final order. Mr. Lessinger deferred to Mr. Locy's greater expertise regarding compliance issues. Though Mr. Lessinger could not amend his Form U-4, there was no obstacle to Mr. Lessinger's directly informing OFR of the Ohio Notice. However, there was also no evidence that Mr. Lessinger attempted to conceal the existence of the Ohio Notice, or was anything other than forthright in his dealings with employers and regulatory authorities. The credible evidence established that he simply relied on the opinion of Mr. Locy. The State of Ohio issued a final order denying Mr. Lessinger's application on April 7, 2008. Upon receipt of the final order, Mr. Lessinger promptly notified his employer, and Brookstone updated Mr. Lessinger's Form U-4 on April 23, 2008, to reflect the actions of the Ohio regulators. At the hearing, Mr. Lessinger emphasized that he seeks only to act as a registered representative. Most of his clients are retirees invested in fixed-income mutual funds. They are conservative to moderate in their risk tolerance. Mr. Lessinger does not trade in their accounts on margin, and does not have discretion to make trades without express client authorization. Mr. Lessinger gets new customers through referrals. He makes no cold calls to prospective customers. Mr. Lessinger has never been the subject of a complaint by one of his own customers, and had never been disciplined for any actions he has taken as a registered representative. All of the disciplinary proceedings involving Mr. Lessinger concerned his actions in a supervisory capacity. Mr. Lessinger has forsworn any intention to ever again act in a supervisory capacity in the securities industry. Mr. Turbeville and Mr. Locy were emphatic that Mr. Lessinger would not be permitted to act in a supervisory capacity at Brookstone. Mr. Classie convincingly testified that he would closely monitor Mr. Lessinger's actions in accordance with the NAC order, and understood that failure to do so could place his own registration in jeopardy.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Office of Financial Regulation enter a final order granting Petitioner's application for registration as an associated person with Brookstone Securities, subject to such heightened supervisory restrictions as the Office of Financial Regulation shall deem prudent. DONE AND ENTERED this 15th day of December, in Tallahassee, Leon County, Florida. S LAWRENCE P. STEVENSON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 15th day of December, 2008.
The Issue Whether Petitioner is entitled to recover attorney's fees and costs against Respondent and, if so, in what amount.
Findings Of Fact In July 1995, Petitioner, Richard Glass, resigned as the Right-of-Way Administrator for the Florida Department of Transportation (FDOT), District VI, in Miami, Florida. He immediately opened his own consulting firm called, Glass Land Acquisition Service Specialists, Inc. (Glass Acquisition, Inc.) and employed his mother, Josephine Glass, as a principal in the company. In February or March 1996, FDOT awarded Glass Acquisition, Inc., a professional services contract (Contract), under which Petitioner's company would provide services related to the acquisition of property for FDOT. The Contract was executed in June 1996. Pursuant to the terms of the Contract, Glass Acquisition, Inc., would be assigned projects as they became available and at the discretion of FDOT, and up to a value of $500,000.00 without the necessity of any further bidding. Among the unsuccessful competitors for this contract were Kaiser Real Estate Services and Post, Buckley, Schuh and Jernigan, Inc. Bids or proposals submitted by competing consultants for the Contract were first reviewed by FDOT's technical review committee. Richard Lineberger was a member of that committee which reviewed the bids or proposals submitted by Glass Acquisition, Inc., Kaiser Real Estate Services, and Post, Buckley, Schuh and Jernigan, Inc. At the time that Lineberger served on the technical review committee, he was living with Martha Budney, but they were not married. At the time the aforementioned bids or proposals were being reviewed and considered by FDOT, Martha Budney was a real estate appraiser who shared office space with Glass Acquisition, Inc. Ms. Budney was not associated with Glass Acquisition, Inc. However, Ms. Budney owned her own company and Richard Glass was a vice-president of Ms. Budney's company. When the final decision at FDOT on the Contract award was made, Gus Pego was employed by FDOT as Director of Operations. When the FDOT was reviewing bids or proposals relevant to the Contract, Gus Pego's brother was married to Richard Glass' sister. During the first half of 1996, Richard Glass was hired by the Turnberry Group to represent them in negotiations with FDOT for the acquisition of certain properties. These negotiations required the services of an appraiser. Martha Budney was the appraiser selected or hired to represent the property owners. For providing these appraisal services, Ms. Budney was paid by FDOT. During these negotiations, Ms. Budney and Petitioner shared office space. Richard Lineberger represented FDOT in the negotiations between the Turnberry Group and FDOT. While these negotiations were taking place, Ms. Budney and Mr. Lineberger were living together. In light of Petitioner's recent employment with the FDOT, the professional relationship of Petitioner and Ms. Budney, the personal relationship of Ms. Budney and Mr. Lineberger, and the "in-law" relationship between Gus Pego and Petitioner, some former and current FDOT employees were concerned that the Contract award to Glass Acquisition, Inc., was improper. They believed that these various relationships created a conflict of interest. In July 1996, after the Contract was awarded to Glass Acquisition, Inc., Jackie Yanks Gonzalez, a former FDOT employee and an employee of Kaiser Real Estate Services, contacted Maria Lopez, an acquisitions agent for FDOT who was working on the Turnberry Group Project. Ms. Gonzalez told Ms. Lopez that her employer was concerned because of the appearance of nepotism in the award of the $500,000.00 Contract to Glass Acquisition, Inc. Moreover, after the Contract was awarded, an anonymous telephone call was made to FDOT to complain about the Contract award. An inquiry into the matter by the FDOT in Tallahassee, Florida concluded that there was no impropriety in the awarding of the Contract to Glass Acquisition, Inc. Notwithstanding the finding of the FDOT that there was no impropriety in the awarding of the Contract to Glass Acquisition, Inc., several individuals, both former and current FDOT employees (the Group) remained concerned that the award of the Contract was improper. Although some of these individuals, particularly current FDOT employees, believed or suspected that there was some impropriety in the Contract award, they declined to press forward with the matter for fear of retaliation. One member of the Group, Maria Lopez, eventually became acquainted with Respondent, Eileen Moran. At that time and at all times relevant to this proceeding, Respondent was employed as an investigator with the Real Estate Section of the Florida Department of Business and Professional Regulation (DBPR). Prior to Respondent's employment with DBPR, she had been employed by the FDOT. Respondent's employment with the FDOT terminated in March 1992, after she was fired. Subsequently, Respondent filed a civil action in federal court against FDOT. Respondent prevailed in that matter. Ms. Lopez and other members of the Group approached Respondent for assistance in filing complaints with the Ethics Commission against several former and current FDOT employees. Ms. Lopez provided Respondent with information Lopez thought was relevant to the Group's belief that the Contract award to Glass Acquisition, Inc., was improper. At the time Ms. Lopez provided this information to Respondent, Ms. Lopez believed it was true, either based on her personal knowledge of its truth or on her belief that she obtained the information from reliable sources. That information included: That Richard Lineberger was living with Martha Budney. That Martha Budney was sharing office space with Richard Glass. That Petitioner was an officer in Martha Budney's corporation. That Petitioner had hired Martha Budney to do appraisal work with the Turnberry Group. That Richard Lineberger was representing FDOT in the Turnberry Group negotiation process. That Gus Pego was an "in-law" of Richard Glass. That Gus Pego's "in-law" relationship with Petitioner made Petitioner's mother, Josephine Glass, Gus Pego's mother-in-law. (Respondent interpreted the "in-law" relationship between Gus Pego and Petitioner as meaning Gus Pego was married to Glass' sister.) That Petitioner was asked by Jose Abreu to resign from FDOT because of his actions in spreading a rumor about an alleged affair between Mr. Abreu and Ms. Lopez. Relying upon the above information provided by Maria Lopez and others, Respondent drafted and sent a letter to Bonnie Williams, the Executive Director of the Ethics Commission, requesting an investigation into these alleged conflicts of interest and nepotism. In the process, she repeated the above representations of fact made by Maria Lopez and others in the Group. In the letter dated July 31, 1996, to Ms. Williams, Respondent specifically requested that the Ethics Commission investigate the Contract award by FDOT to Glass Acquisition, Inc. Respondent noted that Richard Glass was formerly employed by FDOT as District Right-of-Way Administrator, but had been asked to resign from that position in July 1995. Respondent's letter stated that she was a former FDOT employee, having left FDOT in March 1992. According to Respondent's letter, "It is my understanding from individuals who were also employed by FDOT at the time that Petitioner was asked to resign due to malfeasance." Moreover, in the letter, Respondent stated that she believed the Contract was wrongfully awarded to Richard Glass and such award was in violation of Sections 112.3135, 112.3185(6), Florida Statutes. Section 112.3135, Florida Statutes, addresses the employment of relatives by public agencies; Section 112.3185(6), Florida Statutes, prohibits agency employees from procuring contractual services for his agency from any business entity of which a relative is an officer, partner, director or proprietor or in which such officer or employee or his or her spouse or child, or any combination of them, has a material interest. Respondent's letter to the Ethics Commission stated that her allegation that the Contract had been wrongfully awarded to Glass was based on the following facts: The principals of Glass Land Acquisition Service Specialist, Inc., include Richard Glass and his mother Josephine Glass. They employ Martha Budney, who was also formerly employed by FDOT at District VI in Miami. Richard Lineberger, who was employed by FDOT as Deputy Right-of-Way Administrator, sat on the Selection Committee which evaluated on which submitted bids on this contract. Mr. Lineberger has been romantically involved with Martha Budney for quite some time. Gustavo Pego, who is currently employed by FDOT as Director of Operations, awarded this contract to Glass Land Acquisition Service Specialist, Inc. Mr. Pego is married to Richard Glass' sister. Richard Glass is his brother-in-law and Josephine Glass is his mother-in-law. Respondent sent copies of the original Complaint regarding Richard Glass to Kaiser Real Estate Services; Post, Buckley, Schuh & Jernigan, Inc.; and, Sandra Gonzalez Levy, an Ethics Commissioner. The reason Eileen Moran provided copies to the aforementioned firms was that she considered them "interested parties." At the time Respondent sent the letters to Kaiser Real Estate Services and Post, Buckley, Schuh, and Jernigan, Inc., she was unaware that the Complaint was confidential. After receiving Respondent's letter, the Ethics Commission propounded seven written questions to Eileen Moran requesting more details about the various allegations involving Petitioner. Respondent answered each question as best she knew and based on information provided to her by Maria Lopez and others in the Group. Three of the seven questions propounded to Respondent by the Ethics Commission involved the issue of nepotism. These questions asked whether any of Richard Glass' relatives had been appointed, hired, promoted, and advanced at FDOT during the time Petitioner worked there; if such appointments, hires, promotions or advancements occurred, whether Petitioner had the authority to make such hires or promotions and whether Glass actually appointed, hired, promoted or advanced his relatives; and, if Glass had no such authority, did he have the authority to recommend such appointment, hiring, promotion, or advancement of his relatives and, if so, did he exercise the "recommending authority" in regard to his relatives. In a letter to the Ethics Commission dated October 21, 1996, Respondent answered the questions described in paragraph 20 above. In her response, Respondent indicated that both Linda Glass, Richard's sister, and Jean Polacek, Richard's mother-in- law, were promoted during his tenure at FDOT and that Richard Glass did not have the direct authority to promote these relatives, but was in a position to recommend that these relatives be promoted. Respondent wrote that, "The individual providing this information believes that [Petitioner] recommended these promotions, but did not observe him making said recommendation." Wayne Maxwell was authorized to investigate the allegations in the Complaint on behalf of the Ethics Commission. Mr. Maxwell considered the issue relating to the conditions of Richard Glass' termination from FDOT to be irrelevant to his inquiry and made no inquiries on this issue. During the course of the Ethics Commission investigation, Wayne Maxwell determined that it was Gus Pego's brother, not Gus Pego, who was married to Richard Glass' sister. Wayne Maxwell was told by FDOT management that the $500,000.00 Contract had not been in existence at the time that Richard Glass was the Right-of-Way Administrator at FDOT, District VI. Moreover, it was found that Mr. Glass had not been involved in the development of the Contract during his employment with FDOT. Wayne Maxwell found no conflict of interest or violations of the anti-nepotism law because none of the relationships between Gus Pego, Richard Glass, Richard Lineberger, and Martha Budney qualified as "relatives" under Section 112.3135, Florida Statutes. Wayne Maxwell incorporated his factual findings in a report, which was forwarded to the Advocate. Based on these findings, the Commission's Advocate recommended that there was no probable cause to support any of the allegations brought by Respondent. This recommendation was accepted by the Ethics Commission. The Ethics Commission did not find conflicts of interest between Richard Glass, Gus Pego, Richard Lineberger, and Martha Budney in the award of the $500,000.00 Contract or the negotiations with the Turnberry Group. Mr. Glass contends that Respondent's Complaint contained the following four false statements: (1) Mr. Glass had been asked to resign for malfeasance; (2) Mr. Glass promoted or aided in the promotion of his sister, Susan Glass; (3) Mr. Glass' sister was married to Gus Pego, an FDOT employee; and, (4) Josephine Glass, Richard Glass' mother, was the mother-in-law of Gus Pego. Petitioner does not challenge the Respondent's statement that Gus Pego awarded this Contract to Glass Acquisition, Inc. All of the statements in paragraph (28) above, alleged to be false, were, in fact, found to be incorrect. With regard to the circumstances of Petitioner's leaving his employment with FDOT, there is no evidence that Petitioner was forced to resign for malfeasance. Rather, Petitioner's official personnel file reflects a positive employment record and excellent ratings during his twelve-year tenure with FDOT. Neither Ms. Lopez nor Respondent ever reviewed Mr. Glass' personnel file. However, based on Ms. Lopez's personal conversations with FDOT, Mr. Abreu and others, and a confidential memo written to Ms. Lopez, she believed that Petitioner had been forced to resign because of malfeasance. Ms. Lopez conveyed this belief to Respondent, who in turn, included this information in her letter to the Ethics Commission. However, in reporting this information in her Complaint, Respondent stated that she was not employed at FDOT when Petitioner resigned and that she obtained this information from other individuals. Next, although it was established that Mr. Glass' sister was employed by FDOT, it was determined that her name was Linda Glass, not Susan Glass as Respondent had stated in her Complaint. More significantly, the investigation revealed that while Linda Glass had been promoted while at FDOT, Richard Glass had not advocated her for such promotions. The other statements in Respondent's Complaint, alleged to be false relate to the in-law relationship between Petitioner and Gus Pego. In the Complaint, it was alleged that Josephine Glass was Gus Pego's mother-in-law by virtue of his being married to Richard Glass' sister. The Ethics Commission's investigation revealed that this was not the case. Instead it was Gus Pego's brother who was married to Richard Glass' sister. Thus, Josephine Glass was not Gus Pego's mother-in-law. Nonetheless, there was, in fact, a remote "in-law" relationship between the individuals. Respondent believed that the existence of any familial relationship created a potential conflict of interest in the awarding of the Contract. On the contrary, the investigator for the Ethics Commission viewed these relationships as too remote to consider them relatives under the applicable law. While each of the statements in paragraph 28 above and contained in Respondent's Complaint were determined to be incorrect, the statements were not known to be incorrect or false when made by Respondent. Rather, the statements were made in reliance on information conveyed to Respondent by Ms. Lopez and others whom Respondent deemed to be reliable. Petitioner consulted with Charles Rowe, an attorney, at his office shortly after receiving the Complaint and the amendments thereto. During this consultation, Mr. Rowe recommended that Respondent represent himself. Petitioner took Mr. Rowe's advice and during all proceedings before the Ethics Commission, Petitioner appeared pro se. No attorney filed an appearance to defend Petitioner nor did any attorney contact Wayne Maxwell or any other member of the staff of the Ethics Commission involved in the investigation in order to discuss testimony, evidence, witnesses or legal issues raised during the investigation. However, Petitioner and Mr. Rowe collaborated on a letter that Petitioner planned to send to Kaiser Real Estate Services and Post, Buckley, Schuh and Jernigan, Inc., regarding Respondent's July 31, 1996, letter to the Ethics Commission. Petitioner later decided not to send the letter. Moreover, although Petitioner was representing himself in this matter, he consulted with Mr. Rowe before each meeting with Wayne Maxwell and in regard to the hearing in Tallahassee, Florida, before the Ethics Commission. Sometime after the determination by the Ethics Commission that no probable cause existed based upon its investigation of Eileen Moran's complaints, Mr. Rowe presented Petitioner with a bill for $700.00 for legal services rendered. Richard Glass has never paid this bill. Richard Glass attended the January 22, 1998, Ethics Commission meeting in Tallahassee, Florida, which considered the Advocate's recommendation of no probable cause. Although he had been invited to attend prior to going to the meeting, Petitioner knew that a no probable cause recommendation would be made before the Ethics Commission. Nonetheless, Petitioner attended the meeting and in doing so, incurred the following costs: $240.00 for an airline ticket to Tallahassee; $12.50 for parking; $38.68 for a rental car; and, $10.49 for lunch. Mr. Glass testified that he had expended sixty-five hours of his own time to defend this matter and stated that he is entitled to be paid $83.07 per hour, his current hourly rate.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is hereby RECOMMENDED that a Final Order be entered finding that Respondent, Eileen Moran, is not liable for attorney's fees and costs and dismissing the Petition for Attorney's Fees. DONE AND ENTERED this 4th day of January, 1999, in Tallahassee, Leon County, Florida. CAROLYN S. HOLIFIELD Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 4th day of January, 1999. COPIES FURNISHED: Charles R. Rowe, Esquire 1310 North Krome Avenue Homestead, Florida 33030 Charles G. White, Esquire 2250 Southwest Third Avenue Suite 150 Miami, Florida 33129 Eric Scott, Esquire Office of the Attorney General The Capitol, Plaza Level 01 Tallahassee, Florida 32399-1050 Phil Claypool, General Counsel Commission on Ethics 2822 Remington Green Circle Post Office Drawer 15709 Tallahassee, Florida 32317-5709 Kerrie Stillman, Complaint Coordinator Commission on Ethics 2822 Remington Green Circle, Suite 101 Post Office Box 15709 Tallahassee, Florida 32317-5709
Findings Of Fact Upon consideration of the oral and documentary evidence adduced at the hearing the following facts are found: On or about November 24, 1976, the Petitioner, Department of Banking and Finance, Division of Securities, filed and served a Notice of Intent to Suspend or Revoke License and accompanying Administrative Charges and Complaint on Respondent. The Notice of Intent and Administrative Charges and Complaint were received by Respondent on November 26, 1976. Thereafter, Respondent, by and through his counsel, timely requested a Section 120.57 hearing. The Petitioner referred the Respondent's request for hearing to the Division of Administrative Hearings and the undersigned Hearing Officer was assigned to conduct the hearing. On or about March 17, 1978, Petitioner filed a Motion to Amend Administrative Charges and Complaint seeking to withdraw the prior allegations contained in the complaint and substituting paragraphs eight (8) and nine (9) which respectfully alleged that Respondent was adjudicated guilty on or about March 6, 1978, to the felony charges of two (2) counts of sale of unregistered securities, and that such adjudication of guilt is prima facie evidence of unworthiness to transact a business of a securities salesman in the State of Florida. Petitioner's Motion to Amend was granted without objection by Respondent. Counsel for Petitioner introduced into evidence certain "admissions" of Respondent to certain questions propounded to Respondent by the Petitioner's Request for Admissions filed on or about March 21, 1977. The two "admissions" admitted into evidence were number 1 and number 2, which admitted that Respondent was registered as a security salesman on or about July 30, 1971 and that he held license no. 64590 as a salesman at the time the Administrative Charges and Complaint was filed. The supervisor for the licensing and registration of securities dealers and agents testified that Respondent was registered as a securities salesman on or about July 30, 1971 and that Respondent did hold license no. 64590 as a securities salesman at the time the Administrative Complaint was filed. Counsel for Petitioner introduced into evidence a certified copy of Judgment of Guilt/Order of Probation of Respondent, which had been filed with the Hearing Officer on or about March 27, 1978, pursuant to a proper Notice of Filing. The certified copy of the Judgment of Guilt of the Respondent concerned the case of State of Florida v. Jay Aten, Jr., in the Circuit Court of Lee County Florida, Case No. 76-239 CF. According to that document on or about March 6, 1978, Respondent tendered to the court a plea of nolo contendere to the offense of sale of unregistered securities. Respondent was adjudicated guilty, and the imposition of a five (5) year prison sentence was withheld and the Respondent placed on a five (5) year period of probation. Respondent was required to pay the sum of $5,000 fine within six (6) months. Counsel for Petitioner requested the Hearing Officer to take official recognition of Section 517.16(1)(h), Florida Statutes, and Rule 3E-30.10(1), Florida Administrative Code, pursuant to Rule 221-2.25 of the Model Rules. The Hearing Officer officially recognized the statute and rule cited above.
Recommendation Revoke the license no. 64590 held by the Respondent as a securities salesman. DONE AND ENTERED this 22nd day of June, 1978, in Tallahassee, Florida. DELPHENE C. STRICKLAND Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Franklyn J. Wollett, Esquire Jay Aten, Jr. Office of the Comptroller 4178 Erindale Drive The Capitol North Ft. Myers, Florida Tallahassee, Florida 32304 M. W. Schryver, Esquire 600 Fifth Avenue South, Suite 306 Naples, Florida 33940
Conclusions The Office of Financial Regulation ("Office") issued a denial of Petitioner’s application to become licensed as an “associated person”. Petitioner in turn filed a Petition for Administrative Hearing, which the Office referred to the Division of Administrative Hearings ("DOAH"). The assigned Administrative Law Judge ("ALI") held a formal administrative hearing, and entered a Recommended Order thereon. That Recommended Order of November 17, 2604, is attached to this Final Order, and incorporated herein by reference.
The Issue An Administrative Complaint and Cease and Desist Order was filed by the Department of Banking and Finance on March 29, 1990, against the Respondent and thirty-one other persons, alleging various violations of Chapter 517, Florida Statutes (the "Florida Securities and Investor Protection Act"). The only allegation of wrongdoing by Eric Pepper is that he offered or sold an unregistered security in violation of Section 517.07, Florida Statutes. The issues for disposition are whether that violation was committed and if so, what discipline should be imposed. The facts are substantially uncontroverted. Respondent opposes the penalty offered by Petitioner as inappropriate.
Findings Of Fact The following facts are reflected in the parties' Prehearing Stipulation filed on March 27, 1991, and required no proof at hearing: Eric Pepper was registered with the Department as an associated person of Thomas James Associates, Inc., from on or about December 11, 1987 until the termination of his registration with Thomas James Associates, Inc., on or about January 28, 1989. During all times Eric Pepper was registered with the Department, he was simultaneously registered with the National Association of Securities Dealers. He was also registered with the Department as an associated person of Prudential-Bache Securities, Inc., from February 8, 1989 until October 18, 1990. Thomas James Associates, Inc., offered to the public, units, shares, and warrants of Electronic Assembly Services, Inc., from their offices in Florida. Electronic Assembly Services, Inc., was a "firm commitment" securities offering underwritten by Thomas James Associates, Inc. A unit of Electronic Assembly Services, Inc. consisted of four (4) shares of common stock plus two (2) common stock purchase warrants and was sold to the public for two dollars ($2.00) per unit. The units, shares, and warrants of Electronic Assembly Services, Inc., were securities as that term is defined by Section 517.021, Florida Statutes. The effective date of the offering (that is, the date at which the units could first legally be sold) was July 6, 1988. The Initial Public Offering of Electronic Assembly Services, Inc., consisted of 1.5 million (1,500,000) units which were offered to the public at two dollars ($2.00) per unit. The total number of units of Electronic Assembly Services, Inc., initially ordered by Eric Pepper for his clients was four thousand (4,000) for a total price to the customer of eight thousand dollars ($8,000.00). The total number of units of Electronic Assembly Services, Inc., received by those clients was three thousand (3,000) for a total purchase price to the customer of six thousand dollars ($6,000.00). Prior to selling the units of Electronic Assembly Services, Inc., Eric Pepper was told by Brian Thomas (President of Thomas James Associates, Inc.) and Robert Setteducati (Branch Manager of the Orlando Office) that he could sell the units. He inferred from this that the securities were properly registered. On approximately June 15, 1988, Eric Pepper contacted Loretta Horn, Keith MacIntosh, Hal Woodyard, Roxane Morgenthaler, and Willis Devier by telephone. Mr. Pepper told them that a new stock called Electronic Assembly Services (EAS) would soon be distributed. Mr. Pepper indicated these clients could place an order for EAS stock at that time, but that the entire order would probably not be filled because of the limited amount of stock which would be available. Mr. Pepper also told each of his clients that they should send a payment equal to the entire amount of the order as soon as possible, that the payment would be placed in a money market fund pending actual distribution, and that excess funds would remain in the money market for further investment or return to the customer. Loretta Horn placed an order for one thousand (1,000) units of Electronic Assembly Services, Inc., for a total price of two thousand dollars ($2,000.00). She sent Thomas James a check for two thousand dollars ($2,000.00) dated June 23, 1988. Thomas James Associates received the check on or about June 27, 1988. She received seven hundred fifty (750) units as a final price of one thousand five hundred dollars ($1,500.00). Francesca and Keith MacIntosh placed an order for five hundred (500) units of Electronic Assembly Services, Inc., for a total price of one thousand dollars ($1,000.00). They sent Thomas James a check dated June 22, 1988 in the amount of one thousand dollars ($1,000.00). The check was received by Thomas James Associates, Inc., on or about June 27, 1988. They received three hundred seventy-five (375) units at a final price of seven hundred fifty dollars ($750.00). Hal Woodyard placed an order for one thousand (1,000) units of Electronic Assembly Services, Inc., for a total price of two thousand dollars ($2,000.00). Woodyard sent Thomas James a check dated June 20, 1988 in the amount of two thousand dollars ($2,000.00). Thomas James Associates, Inc., received the check on or about June 23, 1988. He received seven hundred fifty (750) units for a final price of one thousand five hundred dollars (1,500.00). Roxane Morgenthaler placed an order for five hundred (500) units of Electronic Assembly Services, Inc., for a total price of one thousand dollars ($1,000.00). Morgenthaler sent Thomas James a check dated June 24, 1988 in the amount of one thousand dollars ($1,000.00). The check was received by Thomas James on or about June 27, 1988. She received three hundred seventy-five (375) units for a final price of seven hundred fifty dollars ($750.00). Willis and Dale Devier placed an order for one thousand (1,000) units of Electronic Assembly Services, Inc., for a total price of two thousand dollars ($2,000.00). The Deviers sent Thomas James a check dated between June 22 and 27, 1988. The check was received by Thomas James on or about June 27, 1988. They received seven hundred fifty (750) units for a final price of one thousand five hundred dollars ($1,500.00). The total commission paid to Eric Pepper for the sale of the units of Electronic Assembly Services, Inc., was three hundred and fifteen ($315.00) dollars. Eric Pepper earned these commissions during a two-week pay period which ended June 17, 1988. The Electronic Assembly Services, Inc., units were delivered to the accounts of Eric Pepper's clients on or after July 6, 1988. These facts are addressed from the evidence presented at hearing, including the weighing of credibility of the witnesses: Eric Pepper's first job in the securities industry was with First Investor's Corporation, from May 1987 through December 1987. He left there to work for Thomas James and to get more varied experience. Eric Pepper has held three jobs in the securities industry. His job at Thomas James was his second in the securities industry. Beginning in early June, 1988, registered representatives at Thomas James were informed by the Branch Manager that an IPO (Initial Public Offering) would soon be coming up. During the middle of June, 1988, another meeting was held, this time with Brian Thomas (President of Thomas James), speaking to the registered representatives on the loudspeaker. Brian Thomas told the registered representatives about Electronic Assembly Services and gave them information concerning the company. At that point, the representatives were told to go ahead and begin the sales of the units of Electronic Assembly Services. Brian Thomas specifically said that the securities were "cleared for sale". From this, Eric Pepper assumed that they were taking orders for units. They were encouraged to get the money in for the securities as soon as possible and were encouraged to use Federal Express. At the time he sold the units, Eric Pepper believed that the securities were registered. He did not believe that he was taking indications of interest, which are revocable by the customer prior to sale. It was the firm's policy at Thomas James to oversell Initial Public Offerings. That is, the firm would solicit more orders than it had securities to sell. The broker was then told to call the customer back and inform the customer that the broker could only get the customer a percentage of the units the customer ordered. The customer would then be asked to place the remainder of the money he had already sent into the secondary market. The secondary market consisted of securities being sold at a higher price for which the broker received a higher commission. Therefore, the broker had a built-in incentive to sell the Initial Public Offering to as many customers as possible so that he could later switch the customer to the secondary market and receive a higher commission. Under normal circumstances, a security is registered with the Florida Department of Banking and Finance or the Securities and Exchange Commission, or both agencies. The agency review prior to registration is to determine whether the offering is fair, just and equitable and whether there is proper disclosure of material information in the Prospectus. Unless and until the offering is registered, the statutory protection of the investor is not available. It is the policy of the Department with regard to individuals who have sold unregistered securities in violation of the law to work out an agreement with those individuals, unless there are other violations also involved at the same time. These agreements typically include restrictions on operating, a fine, and sometimes a brief suspension. The proposal offered to Eric Pepper was similar to those offered to other Respondents with similar alleged violations. The proposal included primarily a registration agreement restricting his actions as an associated person and requiring his employer, who at that time was Prudential-Bache Securities, to make certain reports and provide supervision. Eric Pepper did not accept the proposal because he felt that his only wrongdoing was being egregiously misled by his supervisors at Thomas James. Moreover, his new employer refused to sign the agreement and he was terminated from Prudential-Bache in October, 1990. He is currently unregistered and is working as an executive recruiter with International Recruiting Services.
Recommendation Based on the foregoing, it is hereby recommended that a Final Order be entered, finding Eric Pepper guilty of violating Section 517.07, Florida Statutes; suspending his registration for one year, retroactive to October 1990, when he became no longer registered; and imposing a fine of $315.00, the amount of commissions he earned on the unregistered sales. RECOMMENDED this 5th day of June, 1991, in Tallahassee, Leon County, Florida. MARY CLARK 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 5th day of June, 1991. COPIES FURNISHED: Robert K. Good Asst. General Counsel Office of the Comptroller Hurston South Tower, Suite #S-225 400 West Robinson Street Orlando, FL 32801 Edward W. Dougherty, Jr. Mang, Rett & Collette, P.A. P.O. Box 11127 Tallahassee, FL 32302 Hon. Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, FL 32399-0350 William G. Reeves General Counsel Dept. of Banking & Finance The Capitol, Plaza Level, Rm. 1302 Tallahassee, FL 32399-0350
Findings Of Fact In 1981, Barry Kandel, an employee of Allied Publishing Group, Inc., solicited Petitioners to purchase stock in Allied, a Florida Corporation. On May 1, 1981, Petitioners purchased one share of stock in Allied for $13,500. By mid-1982, Allied had gone out of business. Petitioners made unsuccessful demands for the return of their money on Brian E. Walker, the Secretary of Allied; on Thomas W. Kuncl, the President of Allied; and on Kandel. On November 19, 1984, Petitioners filed suit against Kandel, Kuncl, Walker, and Allied. The Civil Complaint filed in Case No. 84-6932 in the Circuit Court of the Fifteenth Judicial Circuit of Florida, in and for Palm Beach County, contained general allegations of fraud. On February 20, 1985, Petitioners obtained a default judgment against Allied only. No evidence was offered in this cause regarding the disposition of the litigation as to the individual defendants. The default judgment contains no factual determinations and does not specify a violation of either section 517.07 or section 517.301, Florida Statutes. Kandel currently resides in Fort Lauderdale, Florida, and Kuncl currently resides in the Gainesville, Florida, area. Kuncl was the last known person to have custody of and control over Allied's books and records. Petitioners filed a claim with Respondent, seeking reimbursement for $10,000 from the Securities Guaranty Fund, pursuant to sections 517.131 and 517.141, Florida Statutes. Their claim was denied by letter dated July 8, 1987, for failure to meet the statutory conditions. Neither Allied nor any individual associated with Allied who dealt with Petitioners was registered or licensed by the State of Florida pursuant to chapter 517, Florida Statutes, in any capacity. Petitioners did not cause a writ of execution to be issued against Allied nor the individuals associated with Allied. Petitioners did not attempt a reasonable search as to whether Allied possessed real or personal property or other assets which may be set off against a proposed claim to the Securities Guarantee Fund. Don Saxon, Director of the Division of Securities and Former Assistant Director, has been the only individual responsible for administering the Securities Guaranty Fund since 1983. The Department's interpretation of section 517.131(2), Florida Statutes, is that it requires a claimant to demonstrate findings of a violation of section 517.07 and/or section 517.301, Florida Statutes, by a licensed dealer, a licensed investment adviser or a licensed associated person. The Department's interpretation of section 517.131(3)(a), Florida Statutes, is that it requires a claimant to provide the Department with a certified copy of a judgment demonstrating a violation of section 517.07 and/or section 517.301, Florida Statutes. The Department's interpretation of section 517.131(3)(b), Florida Statutes, is that it requires a claimant to submit a copy of the writ of execution to the Department. During Saxon's tenure in administering the Securities Guaranty Fund, the Department has not waived any of the statutory requirements for claiming monies from the Fund. Section 517.131 and section 517.141, Florida Statutes, were enacted in 1978 and have remained virtually intact. The legislature did substitute the term "associated person" in place of the term "salesman" in section 517.131(2), Florida Statutes, without comment, although the order of licensed entities in that section was altered. The legislative intent behind the establishment of section 517.131, Florida Statutes, was to eliminate the bonding requirement for "individuals registered to be broker/dealers or investment advisers ... substituting therefor, a 'Security Guaranty Fund' to be funded through an assessment imposed upon them." The legislative intent behind section 517.141, Florida Statutes, was that disbursement from the Securities Guaranty Fund would be made to any person suffering monetary damages as a result of "some violation by a registrant."
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is, RECOMMENDED that a Final Order be entered denying Petitioners' claim for payment from the Securities Guaranty Fund. DONE and RECOMMENDED this 25th day of April, 1988, at Tallahassee, Florida. LINDA M. RIGOT, 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 25th day of April, 1988. COPIES FURNISHED: Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, Florida 32399-0350 Charles E. Scarlett, Esquire Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32399-0350 Richard O. Breithart, Esquire 818 U.S. Highway One, Suite 8 North Palm Beach, Florida 33408 Charles L. Stutts, Esquire Office of the Comptroller Department of Banking and Finance The Capitol, Plaza Level Tallahassee, Florida 32399-0350
The Issue Whether Respondent committed the offenses alleged in the Administrative Complaint and the penalties, if any, that should be imposed.
Findings Of Fact Petitioner is an agency of the State of Florida charged with the responsibility and duty to administer Chapter 517, Florida Statutes, which is known as the Florida Securities and Investor Protection Act. On August 15, 1997 and September 9, 1997, Petitioner conducted an audit of the branch office of Merit Capital Associates, Inc., located in Boca Raton, Florida, and known as the H. K. Laurence Branch (the branch office). The branch office was an office of supervisory jurisdiction that required the presence of a branch manager. On April 28, 1997, Merit Capital executed a form entitled "Branch Registration Form" that registered the branch office with Petitioner and designated Respondent as the branch manager. Respondent accepted that designation on April 29, 1997. On April 30, 1997, the form was filed with Petitioner. In August and September 1997, Petitioner conducted an examination of the branch office. Michael Ward, whose job title is Senior Financial Investigator, was in charge of the examination. Annette Beresford, whose job title is Financial Specialist, assisted Mr. Ward. Both Mr. Ward and Ms. Beresford are full-time employees of Petitioner with appropriate training and experience. Respondent failed to properly register with the National Association of Securities Dealers (NASD) to act as a branch manager. Respondent was required by NASD rules to register as a principal because he had supervisory responsibilities. His only registration was as a salesperson. NASD Conduct Rule 3010, a rule adopted by NASD, sets forth standards for the supervision of branch offices. Pursuant to Rule 3E-600.013, Florida Administrative Code, Respondent, as the designated branch manager, was required to comply with the minimum supervisory standards set forth in NASD Conduct Rule 3010. Respondent did not meet those minimum supervisory standards while serving as the manager of the branch office. The following establish Respondent’s failure to supervise. Respondent did not provide NASD manuals to the registered representatives (salespersons) at the branch, he did not maintain Merit Capital's supervisory manuals at the branch, and he did not require that salespersons comply with Merit Capital's written policies and procedures. Respondent failed to maintain NASD and Florida registrations of salespersons at his branch. During the period April 29 through July 9, 1997, representatives of Merit Capital under Respondent's supervision at the branch office sold to members of the public shares of stock in a company known as Certified Diabetic Services, Inc., and shares of stock in a company known as Arcoplate Corporation. Respondent had supervisory responsibility for these transactions involving the sale of these two stocks. At the times pertinent to this proceeding, the stock of Certified Diabetic Services, Inc., and the stock of Arcoplate Corporation were not registered as required by Section 517.07(1), Florida Statutes, and they were not exempt from registration. Respondent should not have permitted the salespersons under his supervisory jurisdiction to sell unregistered stock During the period March 11 through July 9, 1997, Respondent was personally responsible for three transactions involving the sale of stock in Certified Diabetic Services, Inc., at a time when the stock was not registered as required by Section 517.07(1), Florida Statutes, and was not exempt from registration.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that Petitioner enter a final order finding Respondent guilty of failing to supervise the branch office and of selling unregistered securities. The final order should revoke Respondent’s registration under Section 517.12, Florida Statutes, and order him to cease and desist violations of Chapter 517, and the rules promulgated thereunder. The final order should also impose an Administrative Fine against Respondent in the amount of $5,000 for the failure to supervise. The final order should also impose an Administrative Fine against Respondent in the amount of $1,500 for the three transactions involving the sale of shares of unregistered stock. DONE AND ORDERED this 22nd day of January, 2002, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (850) 488-9675 SUNCOM 278-9675 Fax Filing (850) 921-6847 www.doah.state.fl.us Filed with the Clerk of the Division of Administrative Hearings this 22nd day of January, 2002.
The Issue The issue in this case is whether Respondent violated Section 475.25(1)(b), Florida Statutes (1995) (hereinafter, "Florida Statues"), by engaging in dishonest dealing by trick, scheme or device, culpable negligence, or breach of trust in any business transaction.
Findings Of Fact Petitioner is the state agency responsible for regulating the practice of real estate. Respondent is licensed as a real estate sales person pursuant to license number 0590475. Respondent was last licensed as an inactive sales person located at 6752 Longmeade Lane, Orlando, Florida 32822. In 1993, Mr. Efrain and Mrs. Luz Rivera (the "Riveras") approached Respondent to represent them in purchasing a house. Respondent agreed to represent the Riveras as a buyer's agent. The Riveras are not related to Respondent. While Respondent was representing the Riveras as a buyer's agent, Respondent asked the Riveras for a loan. Respondent wanted the loan to assist him in the establishment and publication of a real estate magazine entitled, La Casa. Respondent had gained the Riveras' trust while representing them as their real estate agent. The Riveras loaned Respondent $2,500 from the money they needed for a down payment on the house they sought to purchase. Respondent published La Casa for a brief period. Then the business closed. Respondent paid the Riveras $250 as a partial payment on the loan. Respondent has not paid the Riveras any other amounts. The Riveras were unable to purchase a house without the $2,500 they loaned to Respondent. In January 1995, the Riveras filed suit to recover the money they loaned Respondent. The court entered a final judgment of $3,598.98. Respondent has not satisfied any portion of the final judgment against him.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Commission enter a Final Order finding Respondent guilty of violating Section 475.25(1)(b) and suspending Respondent's license for three years from the date of this Recommended Order.RECOMMENDED this 5th day of May, 1997, in Tallahassee, Florida. COPIES FURNISHED: Henry M. Solares, Director Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 DANIEL MANRY Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 5th day of May, 1997. Lynda Goodgame, General Counsel Department of Business and Professional Regulation Northwood Center 1940 North Monroe Street Tallahassee, Florida 32399-0792 Daniel Villazon, Esquire Department of Business and Professional Regulation Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Jorge Rivera, Jr., pro se 6752 Longmeade Lane Orlando, Florida 32822
The Issue Whether the Petitioner, Nancy L. DeGayner, demonstrated that she is qualified to be licensed as a real estate salesperson in the state of Florida.
Findings Of Fact On or about October 7, 1996, the Petitioner, Nancy L. DeGayner, filed an application for licensure as a real estate salesperson with the Division of Real Estate. The Petitioner responded in the affirmative to question nine (9) in the application which inquired whether the applicant had been convicted of a crime. The Petitioner enclosed a written statement which stated as follows: My Real Estate License was suspended July 26, 1991, due to many allegations made against me. I was placed on probation while an intensive, thorough investigation was administered by many governmental agencies. The allegations were not substantiated. There were no convictions. I was discharged from probation. The proceedings in this case were terminated pursuant to Florida Statutes August 18, 1994; Instrument #941250; Book: 3944; Page: 1025; R. Michael Hutcheson, Judge Circuit Court Volusia County, Florida. DUI 12/14/84. Question thirteen (13) of the application inquired whether the applicant had had any license to practice a regulated profession revoked in this state upon grounds of fraudulent or dishonest dealing or violation of law. The Petitioner answered no to this question. On December 14, 1990, the Department of Professional Regulation, now the Department of Business and Professional Regulation, Division of Real Estate, filed an Administrative Complaint against the Petitioner. The Administrative Complaint alleged that: The Petitioner was guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest by trick, scheme or device, comparable negligence, and breach of trust in a business transaction in violation of Section 475.25(1)(b), Florida Statutes. The Petitioner failed to account for delivered trust funds in violation of Section 475.25(1)(d), Florida Statutes. The Petitioner failed to prepare and sign the required written monthly escrow reconciliation statements in violation of Rule 21V-14012(1)(2), Florida Administrative Code, and thereby violated Section 475.25(1)(e), Florida Statutes. The Petitioner failed to maintain trust funds in a brokerage escrow bank account or in some other proper depository until disbursement was properly authorized in violation of Section 475.25(1)(k), Florida Statutes. The Petitioner was guilty of a course of conduct or practice which showed that she was so incompetent, negligent, dishonest or untruthful that the money, property, transactions, and the rights of investors, or those with whom she may sustain a confidential relationship, may not safely be entrusted to her in violation of Section 475.25(1)(o), Florida Statutes. On July 16, 1991, the Florida Real Estate Commission held a hearing and issued a Final Order on the Administrative Complaint filed against the Petitioner. The Petitioner failed to appear, although she had been duly served with notice of the hearing. The Commission entered its Final Order which found that the Petitioner had been served with the Administrative Complaint, that she had failed to request a hearing, that she was in default, and that a prima facie case had been established against the Petitioner in the proceedings. The facts and legal conclusions contained in the complaint were adopted as true and the Petitioner’s license was revoked. The Administrative Complaint filed by the Department of Business and Professional Regulation against the Petitioner had arisen out of acts which were the basis for criminal charges brought in the Circuit Court of Volusia County, Florida, on or about February 20, 1991, in Case No. 90-7033. These criminal charges arose out of allegations of misfeasance by the Petitioner in the management of her real estate brokerage concerns. As a result of these charges, the business records of these concerns were seized by the law enforcement officials, and the Petitioner was charged with multiple counts of grand theft. Based upon the evidence presented at the hearing, it is clear that the Petitioner entered a plea of convenience to two (2) counts of grand theft, a third degree felony. As a result of the Petitioner's plea, the Circuit Court entered its Order withholding adjudication and placing the Petitioner on probation for a period of five (5) years. A special condition of the probation was that the Petitioner should make restitution of the funds which she had allegedly taken from accounts placed in her trust. The funds and all of the Petitioner’s business accounts were placed in the registry of the court and from those funds restitution was made to all of the Petitioner’s clients. The circumstances indicate that the Petitioner had the money on hand in her business accounts to meet all of the obligations to her clients at the time the charges were brought, and she had not taken any of the money entrusted to her. At the conclusion of the accounting and reimbursement of the clients, the court discharged the Petitioner’s probation and entered an Order to that effect on August 2, 1994. (See transcript, at page 30, et seq.) Since her conviction, the Petitioner has been continually employed. She was employed with Perkins Family Restaurant from November 1991 until November 1996. She was employed as a salesperson of advertising for WROD from December 1996 to May 1997. She was employed at the Daytona Beach Regency from May 1997 until July 1997 and has been employed with Winston/James Development since July 1997 in a non-real estate capacity. The Petitioner has been responsible for the money of her employers and the monies of others entrusted to her in all of the jobs at which she has been employed. Following her plea and the entry of the Order of Probation, the Petitioner sought the permission of her probation officer to leave the state and moved to her mother's home in Wisconsin in early 1991. She was employed thereafter in businesses unrelated to real estate.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law set forth herein, it is, RECOMMENDED: That the Florida Real Estate Commission enter its Final Order approving the Petitioner’s Application for Licensure as a real estate salesperson; however, because of the previous problems related to the Petitioner’s management of professional accounts, it is recommended that an entry be made to her licensure file that she may not be granted a license as a real estate broker without the Commission’s reconsideration of her qualifications to manage such accounts. DONE AND ENTERED this 13th day of November, 1997, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN Administrative Law Judge Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-3060 (904) 488-9675 SUNCOM 278-9675 Fax Filing (904) 921-6847 Filed with the Clerk of the Division of Administrative Hearings this 13th day of November, 1997. COPIES FURNISHED: Michael Teal, Esquire William R. Alexander, Esquire 114 West Rich Avenue DeLand, Florida 32720 Manuel E. Oliver, Esquire Suite 107 South Tower 400 West Robinson Street Orlando, Florida 32801 Henry Solares, Division Director Department of Business and Professional Regulation 400 West Robinson Street Orlando, Florida 32302 Lynda L. Goodgame, Esquire Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Richard T. Ferrell, Secretary Department of Business and Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
