Findings Of Fact Terry G. Jewell is the sole proprietor of an unincorporated business, wherein Jewell engages in business as a real estate broker-salesman. His net worth is less than $2,000,000. In DOAH Case No. 87-2192, the Division filed an Administrative Complaint dated April 20, 1987, wherein the Division essentially alleged that Jewell was co-owner and agent for Sun Country Homes of North Florida, Inc., a corporation engaged in the business of constructing homes; that Jewell, as vice- president and agent for Sun Country Homes, entered into a contract with the Koblinskis to build their house; that Sun Country Homes received approximately $74,900.00 to build the home; that Sun Country Homes did not pay certain materialmen and contractors; and that Jewell did not pay the outstanding liens. The Division sought revocation and other penalties against Jewell's license as a real estate broker-salesman, alleging that Jewell was guilty of fraud, misrepresentation, concealment, false promises, false pretenses, dishonest dealing by trick, scheme or device, culpable negligence and breach of trust in a business transaction. After hearing, a Recommended Order was entered by the undersigned on September 25, 1987, recommending dismissal of the Administrative Complaint. The recommendation was based on findings that Jewell's contacts with the Koblinskis were solely as an officer, co-owner and agent for Sun Country Homes of North Florida, Inc.; that all sums paid by the Koblinskis were to Sun Country Homes and were deposited to its corporate account; that the president of Sun Country Homes mismanaged the corporate funds and did not pay some of the subcontractors on Koblinskis' home, that Jewell quit the corporation then he found out about this; that Jewell did all he could to assist the Koblinskis once he had resigned from the corporation; that the president of the corporation disappeared with the Koblinskis' money; and that Jewell did not benefit from the funds paid by the Koblinskis to Sun Country Homes of North Florida, Inc. The recommendation was based on conclusions of law that the contract was between the Koblinskis and Sun Country Homes of North Florida, Inc.; that Jewell had no intent to deceive the Koblinskis; that it is well settled law that disciplinary action cannot be taken against a real estate broker's license for conduct not connected with the licensee's business as a broker; and that Jewell did not violate Section 475.25(1)(b), Florida Statutes, as alleged. The Final Order of the Division, through the Florida Real Estate Commission, adopted the Findings of Fact, Conclusions of Law and Recommendation in the Recommended Order and dismissed the Administrative Complaint. The affidavit which initiated this action was filed on February 5, 1988, and was later supplemented by the Petition for Small Business Party's Attorney's Fees and Costs. The affidavit, which was an application for an award of fees and costs, was timely, having been filed within 60 days after the date on which Jewell became a prevailing small business party. In this case, the 60 days is calculated from the date on the Certificate of Service showing mailing of the Final Order to the parties. See Section 57.111(4)(b)2, Florida Statutes. According to the affidavit of William C. Andrews, and the statements of account attached thereto, Jewell incurred legal fees of $3,252.50 and costs of $957.21. These fees and costs are found to be reasonable since the Division has not filed a counter affidavit or response questioning their reasonableness. According to the Petition, the disciplinary action in DOAH Case No. 87- 2192 was substantially unjustified at the time it was initiated: because the Administrative Complaint was an attempted disciplinary action taken against Petitioner's real estate broker-salesman's license for conduct not connected with the licensee's business as a broker-salesman, and there was a complete absence of evidence to show any wrong doing on the part of the Petitioner.
The Issue The issue is whether Petitioner is entitled to certification as a minority business enterprise.
Findings Of Fact By application dated February 6, 1998, Petitioner requested certification as a minority business enterprise. Respondent received the application on May 20, 1998, and denied the application on July 31, 1998. In denying the application, Respondent cited several reasons, including various rules, for why it was denying Petitioner's request for minority business certification. The letter cites Rules 38A-20.001(8) (statutory definition of "minority business enterprise") and (15) (lack of real control); and 38A-20.005(2) (ownership tests) and (3)(a) (control subject to restrictions), (b) (determining quorum of board of directors), (c) (minorities must be sufficiently capable and responsible to maintain control), and (d) (control may not be distributed among non-minority family members so that minority lacks dominant responsibility for management and daily operations, including purchase of inventory and equipment and financial control). Respondent does not dispute that Darlene S. Maki is a minority--i.e, female--and that Petitioner is a "small business concern." The application discloses that Petitioner is a Florida corporation in business as a machine shop. The application discloses that the only minority associated with the corporation is Ms. Maki, who at all times has owned 51 percent of the stock and serves as the president and treasurer. Initially, Mr. Maki's husband owned 14 percent of the shares; Mr. Rodhe owned 12.5 percent of the shares; Ms. Maki's other son, Michael Gritton, owned 12.5 percent of the shares; and Ronald Maki owned 10 percent of the shares. The application states that the initial board of directors consisted of three persons: Ms. Maki; her husband, Mark Maki; and one of Ms. Maki's sons, Randy L. Rodhe. In fact, the original board of directors consisted of Ms. Maki, her husband, her two sons, and Ronald Maki, the brother of Ms. Maki's husband. Petitioner is a family-owned and -operated business. Originally, Ms. Maki's husband served as vice-president, and Mr. Rodhe as secretary. The owners have had varying degrees of involvement in the corporation, ranging from Ms. Maki, who has been most involved, to Ronald Maki, whose involvement has been limited to his initial investment of $25,000. The only other persons to contribute cash for their shares were Ms. Maki and her husband. According to the application, Ms. Maki contributed $18,500, and her husband contributed $8000. The application understates their cash contributions. Individually, Ms. Maki contributed $32,000 in cash, which she raised by liquidating her Section 401(k) plan ($20,000) and bonds ($12,000). Individually, Ms. Maki's husband contributed $8000 in cash. Jointly, Ms. Maki and her husband contributed another $60,000 in cash, consisting of $30,000 in loan proceeds from a mortgage on their jointly owned home and $30,000 in charges on their joint credit cards. Prior to incorporating Petitioner in August 1997, Ms. Maki, who is 56 years old, had 20 years' experience working in a machine shop operating noncomputerized drill presses. She also worked five years as an assistant vice-president of a bank, supervising mortgage loan operations. Although Ms. Maki does not know how to operate the newer computer-assisted machines, her background would permit her to learn to do so with minimal training. However, due to a progressively debilitating disease that struck her in 1989, Ms. Maki is confined to a wheelchair and lacks feeling in her hands. Thus, she cannot efficiently operate the older manual machines or newer computer-assisted machines used in machine shops. Ms. Maki's husband lacks any experience in machining tools. He has worked over 25 years as an automobile mechanic. His brother has no experience in machining tools; he is in the construction business in Miami. Ms. Maki's sons have considerable experience in machining tools, including training and 14 and 20 years' experience in using the newer, more complicated computer-assisted equipment, which Petitioner owns. They received their stock in return for their agreement to work for wages well below what they could have earned elsewhere. Given the minimal cash flow and concerns about jeopardizing her Social Security disability payments, Ms. Maki did not withdraw money from Petitioner. However, her husband received a salary of an undisclosed amount until September 1998. Her sons also received a salary, but only about $100 weekly, mostly to cover their expenses. In May 1998, Mr. Rodhe terminated his involvement with Petitioner. At that time, he transferred his stock to Petitioner, apparently without any payment to him. The effect of this transfer was to increase Ms. Maki's percentage ownership of Petitioner. At the time of Mr. Rodhe's departure, his brother replaced him as secretary, and the board of directors were reduced to four members. These are the present officers and directors of Petitioner. Pursuant to the articles of incorporation, the board of directors directs the affairs of Petitioner. Nothing in the articles of incorporation overrides the provisions of Section 607.0824(1), Florida Statutes, which provides that a majority of directors constitute a quorum, or Section 607.0808(1), Florida Statutes, which provides that the shareholders may remove directors without cause. Ms. Maki and her husband are each authorized signatories of checks drawn on Petitioner's checking account. Each check requires only one signature. However, Mr. Maki does not typically sign the checks, consistent with his relatively little involvement with Petitioner. Someone at the bank suggested to Ms. Maki that Petitioner should authorize her husband to sign checks in case anything happened to Ms. Maki. Ms. Maki and her husband are the guarantors on a lease for a major piece of equipment used by Petitioner. In a later lease, the lender allowed only Ms. Maki to sign as a guarantor. Business has slowly been building. In July 1998, Petitioner hired a machinist and purchased another machine. When confronting a major decision, such as purchasing a new machine, Ms. Maki presents the issue to the board of directors, which then makes the decision. Ms. Maki solely handles hiring, firing, payroll, purchasing material, bidding, and scheduling jobs. She is present at the shop every workday from 7:30 AM to 4:30 PM and supervises all of the activities in the shop.
Recommendation It is RECOMMENDED that the Minority Business Advocacy and Assistance Office enter a final order denying Petitioner's application for certification as a minority business enterprise. DONE AND ENTERED this 25th day of January, 1999, in Tallahassee, Leon County, Florida. ROBERT E. MEALE 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 25th day of January, 1999. COPIES FURNISHED: Darlene Maki Qualified Representative RGM Precision Machine, Inc. 18923 Titus Road Hudson, Florida 34667 Joseph L. Shields Senior Attorney Department of Labor and Employment Security 2012 Capital Circle, Southeast Hartman Building, Suite 307 Tallahassee, Florida 32399-2189 Mary B. Hooks Secretary Department of Labor and Employment Security 303 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152 Edward A. Dion General Counsel Department of Labor and Employment Security 307 Hartman Building 2012 Capital Circle, Southeast Tallahassee, Florida 32399-2152
The Issue The issue presented is whether Respondents are guilty of the allegations contained in the Amended Administrative Complaint, and, if so, what action should be taken against them, if any.
Findings Of Fact At all times material hereto, Respondent Boca Insurance Lenders, Inc. (hereinafter "Boca"), has been a Florida corporation involved in the business of purchasing life insurance assignments. Some beneficiaries of insurance policies are unable to pay for the funeral of the friend or relative insured by that policy, and most funeral homes require payment in full for the funeral expenses at the time the funeral is scheduled. Under the arrangement that Boca has with certain funeral homes, the beneficiary of the life insurance policy of a decedent can assign the policy to the selected funeral home. The funeral home then assigns the policy to Respondent Boca, and Boca pays the funeral home the cost of the funeral. Respondent Boca's profit results from a 6 percent discount on the monies paid. Shares of preferred stock of Respondent Boca were sold for $1,000 a share. Respondent Boca ceased selling its preferred stock in March 1994, converted and/or re-acquired the outstanding shares, and began selling bonds issued by the company instead. Purchasers of preferred shares of the stock of Respondent Boca earned a return of 12 percent, 14 percent if their investment was held longer than one year. Purchasers of the bonds issued instead of the preferred shares of stock received the same return on their investment as was paid on the preferred shares. At all times material hereto, Respondent Equity Investment Club, Inc. (hereinafter "Equity"), has been a Florida corporation. The business purpose of Respondent Equity is to allow persons to deposit small amounts of money in a personal account akin to a Christmas Club, except that such persons can withdraw their money on 24-hours notice. Account owners earn a return of 6 percent on their deposits. The monies deposited in such accounts were "pooled" by Respondent Equity and used by Respondent Equity to purchase Respondent Boca's shares of preferred stock. At all times material hereto, Respondent Alec Shatz was the president and the director of both Respondent Boca and Respondent Equity. He was also the sole stockholder of Respondent Equity. Respondents admit that Respondent Shatz directed, controlled, supervised, managed, and participated in the acts, practices, and policies of Respondents Boca and Equity. In conjunction with commencing sales of its preferred shares, Respondent Boca filed with the United States Securities and Exchange Commission a Form D which is a Notice of Sale of Securities pursuant to Regulation D, Section 4(6), a Uniform Limited Offering Exemption. When Respondent Equity was formed, it also filed a Form D with the Securities and Exchange Commission under Rule 504. Filing a Form D notice that stock will be sold pursuant to an exemption from registration is not the same as registering a stock with the Securites and Exchange Commission. Respondents Boca and Shatz did not register the preferred shares of stock with the Department, and neither Respondent Boca nor Shatz is or has been registered with the Department to sell or offer for sale securities as a dealer, as an associated person, or as an issuer. One of the ways in which Respondent Boca marketed its preferred shares of stock was by advertising seminars which could be attended by members of the public. Advertisements appeared in newspapers and were aired on the radio. It was not necessary that a potential investor attend one of Respondent Boca's seminars in order to purchase Boca's preferred shares. Employees of Respondent Boca attended the seminars and gave presentations. They also answered questions from members of the public attending the seminars. Information about Respondent Boca, Respondent Equity, and Respondent Shatz' other companies was given out at the seminars. A prospectus for Respondent Boca was also given out. The seminar advertisement which appeared in The Palm Beach Post on February 22, 1993, on behalf of Respondent Boca represented that one could earn 12 percent interest on a "No Risk Return", that there was no penalty for withdrawal, that the investment was "liquid," and that interest was paid every 60 days. The advertisement also read: "Registered with S.E.C". (Part of the advertisement, which was admitted as Joint Exhibit numbered l, is illegible.) By September 27, 1993, the advertisement which appeared in The Palm Beach Post remained substantially the same except that the interest rate was 14 percent, the phrase "Your Money Guaranteed through Insurance Payments" had been added, and the ad read "Register [sic] under S.E.C. exemptions". An October 25, 1993, advertisement was the same except that the word "interest" now read "dividend". However, a February 14, 1994, advertisement used the word "interest" rather than "dividend". Respondent Boca's September 18, 1995, advertisement also used the word "interest", represented that "This is a Minimum Risk Return!", and stated that "Our Investment Involve [sic] Insurance Company". The advertisement contained no language as to any registration with either the S.E.C. or the Department. Although some persons purchasing Respondent Boca's preferred shares were "accredited investors", no purchasers were questioned by Respondents Boca or Shatz as to their financial ability or experience to determine if they were accredited investors prior to their purchase of Boca's preferred shares. At some of the seminars conducted by Respondents Boca and Shatz, attendees were also given information regarding the membership accounts offered by Respondent Equity. Between May 7, 1992, and March 14, 1994, Respondent Boca made 137 sales of its preferred shares of stock. In April 1993 Respondent Shatz announced the establishment of Respondent Equity as an investment club for the purpose of raising money for Respondent Boca by having the investment club purchase Respondent Boca's stock. In May 1993 five membership accounts in Respondent Equity were opened, and those members subsequently made additional deposits in their accounts. Once the accounts were opened, Respondent Equity became the sole manager of those funds. On July 2, 1993, Respondent Equity purchased five shares of Respondent Boca's stock with the combined monies from the membership accounts. Respondent Equity has not registered its securities with the Department, and neither Respondent Equity nor Respondent Shatz is registered with the Department to sell or offer to sell its membership accounts as an issuer, as a broker/dealer, or as an associated person. A pamphlet regarding Respondent Boca's offering, labeled "prospectus" but generally known as a private placement memorandum, was given to attendees who wanted one at each seminar. No prospectus was available regarding Respondent Equity's offering. As the advertisements placed by Respondents Boca and Shatz changed, so did the prospectus for Respondent Boca. Boca's February 1, 1993, prospectus carried a caveat on the cover page that the securities of Boca and its prospectus were neither approved or disapproved by the Securities and Exchange Commission. The September 1, 1993, prospectus carried the same caveat. However, the November 1, 1993, and the April l, 1994, prospectuses added to that caveat an additional statement that the securities of Respondent Boca were not registered with the Department but the firm was registered as an issuer/dealer to sell its own securities. Between June 15, 1993, and January 14, 1994, neither Respondent Boca nor Respondent Shatz had access to all of the corporate books and records for the time period prior to June 15, 1993, since those records were in the possession of Respondent Boca's accountant/escrow agent. Respondent Boca's September 1, 1993, prospectus, its September 1, 1993, revised prospectus, and its November 1, 1993, prospectus represented that any purchaser of Boca's preferred shares had the right of access upon reasonable notice to Boca's books and records. Further, the November 1, 1993, prospectus offered that right of access to potential purchasers. Respondent Boca's September 1, 1993, prospectus represents that Larry Rosenman was Boca's escrow agent possessing copies of all assignments of insurance policies. That information was also provided orally to those attending Respondent Boca's September 30, 1993, seminar. On October 7, 1993, Rosenman wrote a letter to Respondents Boca and Shatz denying that he had agreed to be Boca's escrow agent, demanding that Boca and Shatz cease any representations to the contrary, and demanding that Boca and Shatz notify anyone who had received the September 1, 1993, prospectus that the representation in the prospectus that Rosenman was the escrow agent was not accurate. By letter dated October 8, Respondent Shatz wrote Rosenman apologizing for the error, agreeing to remove Rosenman's name from Boca's prospectus, and agreeing to notify all persons who had received the prospectus that Rosenman's name should not have been listed. Respondents Shatz and Boca issued a revised September 1, 1993, prospectus deleting any reference to an escrow agent and, specifically, deleting Rosenman's name. They did not notify all persons who may have received the original September 1 prospectus. Thereafter, none of Respondent Boca's prospectuses represented that Boca had an escrow agent. Attorney Tina Talarchyk was Respondent Boca's "in-house counsel" from October 1, 1993, through December 1993. She denied at hearing that she was also Boca's escrow agent during that time period and that she had ever executed the temporary escrow agent agreement written on her letterhead and admitted in evidence in this cause. She offered no explanation for the other items of correspondence admitted in evidence which reflect she was the person handling the redemption of stock certificates when investors wished to withdraw their monies invested in Respondent Boca. As she appeared to be carrying out the duties of an escrow agent on her professional letterhead and as she represented herself to an investor to be Boca's escrow agent, she acted as an escrow agent on behalf of Respondent Boca during that time period. On October 7, 1994, Respondents Boca and Shatz directed a letter to all investors that incorrect statements had been made in the past. The letter specifically advised that Respondent Boca did not have an escrow agent at that time, that Respondent Boca had never been registered as an issuer/dealer to sell its own securities, and that, although any investor could examine the company's books and records, no audit had been performed at that time. The letter also offered to return any investor's money. No investor requested the return of any monies based upon the contents of that letter. No investor relied upon any misrepresentation or "incorrect statement" in investing in Respondent Boca. The investors who testified at the final hearing conducted their own "due diligence" inquiry before investing in Respondent Boca and discovered, as the Department's own investigators discovered, that there were no complaints regarding Respondents made to any local or state agency. On occasion, a former employee of Respondent Boca found that an entry in Boca's accounts receivable journal had not yet been deleted when he thought it should have been. From August 18 to August 25, 1993, one of Respondent Boca's bookkeepers gave Respondent Shatz a report that she prepared indicating that Respondent Boca had a negative bank balance. Respondent Boca never missed making timely any interest or dividend payment to any investor who purchased Boca's preferred shares and, later, Boca's bonds. Similarly, Respondent Equity never missed making timely any interest payment to any investor having a membership account. Every person who purchased preferred shares in Respondent Boca was able to redeem those certificates and receive back the money invested in Boca upon electing to do so. Similarly, every member of Respondent Equity was able to withdraw their monies upon electing to do so. The Department has never received a complaint from any investor in Respondent Boca regarding Boca's or Respondent Shatz' business practices. Similarly, the Department has never received a complaint from any member of Respondent Equity regarding Equity's or Respondent Shatz' business practices. Although the Department has examined and copied Respondents' business records at the corporate office on several occasions, and although the Department has interrogated investors in Respondent Boca and members of Respondent Equity, some of them on repeated occasions, the Department has not discovered any investor or member who has been injured by Respondents' business practices, by Respondents' failure to register with the Securities and Exchange Commission and the Department, or by any representations made by Respondent Shatz at Boca's seminars or by Respondents Shatz or Boca in any of Boca's prospectuses. Further, the Department has not discovered any investor or member who relied on any erroneous or inaccurate statement made by any Respondent in deciding to invest in Respondent Boca or open a membership account in Respondent Equity. A Department investigator attended the September 30, 1993, seminar after seeing the newspaper advertisement and ascertaining that Respondents Boca and Shatz and Boca's securities were not registered with the Department. He also attended the February 17, 1994, seminar. Fifty-five of the 137 sales made by Respondents Boca and Shatz occurred after the first seminar which he attended.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered: Finding Respondents Boca and Shatz not guilty of the allegations contained in counts 1-4 of the Amended Administrative Complaint filed against them; Finding Respondents Equity and Shatz guilty of the allegations against them contained in counts 5-19; Finding Respondents Boca and Shatz guilty of the allegations against them contained in counts 20-430; Ordering Respondents to cease and desist from the sale of unregistered securities by unregistered persons and entities; Imposing an administrative fine in the amount of $100 for each of the 137 transactions against Respondents Boca and Shatz, jointly and severally, for a total of $13,700; Imposing an administrative fine in the amount of $100 for each of the 5 membership accounts against Respondents Equity and Shatz, jointly and severally, for a total of $500. DONE and ENTERED this 30th day of July, 1996, at Tallahassee, Leon County, Florida. LINDA M. RIGOT, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 30th day of July, 1996. APPENDIX TO RECOMMENDED ORDER DOAH CASE NO. 94-6671 Petitioner's proposed findings of fact numbered 2-6, 8, 11, 13, 14, 16- 18, 22, 24, 25, 28, 29, and 33 have been adopted either verbatim or in substance in this Recommended Order. Petitioner's proposed findings of fact numbered 1, 7, 9, 15, 19, and 20 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony. Petitioner's proposed findings of fact numbered 10, 21, 23, 27, and 31 have been rejected as not being supported by the weight of the evidence. Petitioner's proposed findings of fact numbered 12, 26, 30, 32, and 37- 40 have been rejected as being subordinate to the issues involved herein. Petitioner's proposed findings of fact numbered 34 and 36 have been rejected since they are illegible. Petitioner's proposed finding of fact numbered 35 has been rejected as being irrelevant. Respondents' proposed findings of fact numbered 1-3, 11, 13, 18, 23, 40, and 41 have been adopted either verbatim or in substance in this Recommended Order. Respondents' proposed findings of fact numbered 4, 6-10, 12, 19-21, 24, 29, 30, 32-34, 36-39, 42, and 43 have been rejected as not constituting findings of fact but rather as constituting conclusions of law, argument of counsel, or recitation of the testimony. Respondents' proposed findings of fact numbered 5, 14-17, and 35 have been rejected as being irrelevant to the issues herein. Respondents' proposed findings of fact numbered 22, 25, 28, and 31 have been rejected as being subordinate to the issues involved herein. Respondents' proposed findings of fact numbered 26 and 27 have been rejected as not being supported by the weight of the evidence. COPIES FURNISHED: John D. O'Neill, Esquire Department of Banking and Finance Division of Securities and Investor Protection The Capitol, Suite 1302 Tallahassee, Florida 32399-0350 Alec Shatz 5850 West Atlantic Avenue Suite 103 Delray Beach, Florida 33484 Hon. Robert F. Milligan Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350
Findings Of Fact The Petitioner, Parson & Associates, Inc., d/b/a Overhead Door Company of Tampa Bay (Parsons & Associates), is a Florida corporation, having been incorporated under the laws of the State of Florida in March, 1992. The principal place of business for Parsons & Associates is 5134 W. Idlewild, Tampa, Florida. The Petitioner corporation engages in the business of the sale, installation, and repair of overhead doors, both residential and commercial. The corporation has ten (10) full-time employees and one (1) part-time employee. The only stockholders of the Petitioner corporation are: Gail Parsons, the minority owner; and her son-in-law, Robert Briesacher. Gail Parsons owns eighty (80 percent) of the stock of Parsons & Associates. Robert Briesacher, who is not a minority, owns the remaining twenty (20 percent) of the Petitioner corporation. Gail Parsons was the incorporator of Parsons & Associates when it was initially incorporated. She also is its President. Robert Briesacher is the Vice-President. Prior to the incorporation of Parsons & Associates, Gail Parsons, who has a Bachelor of Business Administration degree, worked for the Better Business Bureau. Robert Briesacher had previous experience in the overhead door business, having worked for Overhead Door Company of Clearwater. Briesacher, who at the time was engaged to marry Parsons's daughter, learned from Overhead Door Corporation (the manufacturer) that the manufacturer intended to establish a distributorship in Tampa. Briesacher told Parsons about it. While Briesacher had the knowledge and experience to successfully sell, install, and repair both residential and commercial overhead doors, he had no money to invest in the business opportunity and had no experience running his own business. Thinking that she might be able to help her daughter and future/present son-in-law, and herself, by combining her capital and business and financial skills with his knowledge and technical skill in the automatic door business, Parsons suggested to Briesacher that they go into business together. He readily agreed, and the pursued the opportunity with the manufacturer. Parsons incorporated the business, registered the fictitious name, compiled the business plan, developed the cash flow projections (with Briesacher's help), found the office/warehouse space (which the manufacturer had to approve), and negotiated, executed, and personally guaranteed the lease agreement and negotiated the Distributorship Agreement with the manufacturer. Briesacher provided none of the initial start-up monies for the Petitioner. Gail Parsons is the financial interest holder in the corporation, having made all the initial contributions to capital ($38,000), as well as making all the personal loans to the corporation thereby accepting all the financial risk. Parsons personally guaranteed the promissory note, the credit agreement, contracts required to be personally guaranteed and the warehouse lease. The Distributorship Agreement is a standard Overhead Door Corporation agreement common to all distributors nationwide. It is customary for a manufacturer like Overhead Door Corporation to offer a distributor incentives-- like yellow page advertisement, signage, and telephone numbers--in order to gain market penetration. In the case of Parsons & Associates, Overhead Door supplied a telephone number (the number Overhead Door previously had bought from the prior distributor in Tampa), a year's worth (about $10,000) of yellow page advertising, and some signage. The total fair market value of the incentives to Parsons & Associates was approximately $31,000, but the marginal cost to the manufacturer was less. In the initial months of operation of the business, Gail Parsons had to rely on Briesacher and the first employee they hired, Charles Martin, who worked under Briesacher at Overhead Door of Clearwater, to teach her what she had to know about the technical aspects of the business. She had to learn about the Overhead Door products and the basics of how to install them. This knowledge, which she quickly acquired, soon enabled her to take service orders, schedule the orders, supervise the day-to-day activities, perform trouble-shooting over the telephone and handle all of the sales calls. Meanwhile, Robert Briesacher was in the field with Martin installing and servicing Overhead Doors. Briesacher currently corresponds with the factories on product orders, schedules and supervises the installers, and takes the physical inventory. Commercial bidding is only one portion of the total corporate sales, which includes residential new construction, residential service and residential retrofit. Over ninety-five (95 percent) percent of the business of Parsons and Associates is handled over the telephone from the office where Parsons spends virtually one hundred (100 percent) percent of her time. Parsons is personally responsible for the majority of the residential sales, including negotiating and contracting with contractors, and negotiating and entering into the agreement to provide installation services for Home Depot door sales. Business from negotiating, estimating, and bidding on contracts in the field is a relatively small portion of the company's overall revenues. Gail Parson is involved in the interviewing of prospective employees, including Martin and Charles Jarvis. She confers with Briesacher, but she alone controls hiring and firing. She possesses the knowledge to evaluate employee performance and has demonstrated her supervisory authority and evaluation skills in exercising her authority to fire an employee. Actually, it is not difficult to evaluate the performance of installers: service calls on warranty work and customer complaints generally tell her all she needs to know. The Petitioner/corporation has both commercial and residential outside sales persons who prepare bids for the Petitioner. The minority owner, Gail Parsons, establishes the geographic and profit margin parameters, which ultimately control the bidding process. She inspects all bids prior to executing the contracts, thereby further controlling who, where and under what terms the Petitioner corporation does business. In fact, Parsons recently rejected an accepted bid and cancelled the job because it was too far from Tampa. While both Gail Parsons and Robert Briesacher are authorized to sign checks for Parsons & Associates, Briesacher has signed less than five checks, out of the thousands of checks written. Parsons and Briesacher draw the same salary. However, their salaries are commensurate with the work they perform for the company. Parsons has chosen the salary levels; Briesacher does not even know what Parsons's salary is. Parsons also is entitled to an 80/20 split of any future distributions as a result of the operation of the company. Briesacher has the use of a company truck, while Parsons does not. However, Briesacher is a part-time installer and service man, while Parsons is not. All installers/service technicians at Parsons and Associates have the use of company trucks, not just Briesacher. Currently, in addition to controlling the entire corporation and making all of the business decisions, Gail Parsons sets inventory parameters, purchases the inventory, sells doors in the showroom, knows the purchased products, is responsible for accounts receivable, handles the payroll, and assists in the scheduling and supervising of the installers.
Recommendation On the basis of the foregoing Findings of Fact and Conclusions of Law, it is recommended that the Department of Management Services enter a final order granting Petitioner's application for certification as a minority business enterprise (MBE). RECOMMENDED this 14th day of July, 1994, in Tallahassee, Florida. J. LAWRENCE JOHNSTON 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 14th day of July, 1994. APPENDIX TO RECOMMENDED ORDER, CASE NO. 94-1268 To comply with the requirements of Section 120.59(2), Fla. Stat. (1991), the following rulings are made on the parties' proposed findings of fact: Petitioner's Proposed Findings of Fact. 1.-3. Accepted and incorporated. First sentence, rejected as contrary to facts found; the rest is accepted and incorporated. Second sentence, rejected to the extent that it implies that Briesacher has no financial interest. Otherwise, accepted and incorporated. Accepted and incorporated. Rejected, as contrary to facts found, to the extent that it implies Parsons knew it all from the start and that Parsons "supervised" Briesacher and Martin installing and servicing doors; in fact, there was a learning curve. Otherwise, accepted and incorporated. 8.-11. Accepted and incorporated. Respondent's Proposed Findings of Fact. 1.-2. Accepted and incorporated to the extent not subordinate or unnecessary. 3.-4. Accepted and incorporated to the extent not subordinate or unnecessary. Last sentence, rejected in part as contrary to facts found and as contrary to the greater weight of the evidence. (She makes sales and trouble- shoots, and is no longer just learning those aspects of the business.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. Accepted and incorporated to the extent not subordinate or unnecessary. However, except for actually installing and servicing doors, Parsons also does the same jobs as Briesacher to some extent, and some of Briesacher's functions are ministerial in light of Parsons's management decisions. Penultimate sentence, rejected as contrary to facts found and as contrary to the greater weight of the evidence; he proposed "piece-work" but Parsons participated in the final decision. (Since it is standard in Florida, it was not a difficult or controversial decision.) Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. (However, "joint responsibility" should not be construed to mean "equal authority." Parsons has the final say.) Accepted and incorporated to the extent not subordinate or unnecessary. However, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, she has enough knowledge to control the business. The characterization "very broad" in the last sentence is rejected as contrary to facts found and as contrary to the greater weight of the evidence. Otherwise, accepted and incorporated to the extent not subordinate or unnecessary. However, again, while Parsons's knowledge and skill does not exceed the others' in the area of installing and servicing doors, and while she does not personally install and service doors, she has enough knowledge to control the business. 10.-14. Accepted and incorporated to the extent not subordinate or unnecessary. Again, while Parsons and Briesacher, and other employees, share responsibilities, Parsons has the knowledge necessary to control the business and has dominant control over the business. COPIES FURNISHED: Jonathan D. Kaplan, Esquire 6617 Memorial Highway Tampa, Florida 33615 Wayne H. Mitchell, Esquire Department of Management Services Office of the General Counsel Suite 312, Ninth Building 2737 Centerview Drive Tallahassee, Florida 32399-0950 William H. Lindner, Secretary Department of Management Services Knight Building, Suite 307 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950 Paul A. Rowell, General Counsel Department of Management Services Knight Building, Suite 312 Koger Executive Center 2737 Centerview Drive Tallahassee, Florida 32399-0950
The Issue Whether Respondent, Marcella Wyatt Bolt, committed the violations alleged in Petitioner’s Administrative Complaint; and, if so, what penalties should be imposed.
Findings Of Fact The Division is the state agency charged with regulating the practice of real estate in Florida pursuant to section 20.165, Florida Statutes, and chapters 120, 455, and 475, Florida Statutes. At all relevant times, Ms. Bolt was a Florida-licensed real estate broker holding license number BK 3104456. Since February 2, 2007, Ms. Bolt has been the qualifying broker for MWB Real Estate Venture, Inc. (“MWB”), a licensed real estate corporation holding license number CQ 1028208. MWB does business as Tropic Coast Realty. On approximately February 1, 2017, Ms. Bolt hired Laura Mayer to work as an inside sales associate soliciting sales leads for MWB. Ms. Mayer did not hold a real estate license at that time. On approximately August 9, 2017, Ms. Bolt and Ms. Mayer entered into an “Inside Sales Agent Offer and Agreement of Employment” outlining Ms. Mayer’s employment duties and compensation structure. Ms. Bolt agreed to pay Ms. Mayer a base salary and bonuses based on active listings taken and sold. Ms. Mayer was to receive $100.00 per lead that resulted in a sales listing and a structured bonus2 for leads resulting in commissions for Ms. Bolt. Ms. Mayer’s duties included, but were not limited to, the following tasks: (a) calling owners of Florida real estate who were potential sellers; (b) following approved scripts and dialogues provided to her; (c) working to compel each prospect to agree to a face-to-face agent presentation; (d) making follow-up calls as assigned; (e) achieving a minimum goal of five listing presentations per week; and (f) continuously contacting potential sellers until making contact. Ms. Bolt paid Ms. Mayer for performing work associated with the following real estate transactions: $750.00 on May 11, 2017, for the sale of Wading Bird; $400.00 on September 26, 2017, for the sale of Fernandina; $650.00 on September 28, 2017, for the sale of Woodfield; $1,750.00 on October 19, 2017, for the sale of Willoughby; $475.00 on October 27, 2017, for the sale of Darrow; $500.00 on October 27, 2017, for the sale of Rayfield; $375.00 on December 21, 2017, for the sale of Sugar Creek; 2 The structured bonus was a graduated amount based on the sales price. $450.00 on April 18, 2018 for the sale of Achilles; $250.00 on April 18, 2018, for the sale of Hyacinth; $100.00 on September 14, 2018 for the listing of Birdland, Brown; $100.00 on September 14, 2018, for the listing of Goldenrod, Kennedy; $300.00 on September 25, 2018, for the sale of Creel; $100.00 on September 26, 2018, for the listing of Venetian, Nall; $100.00 on October 2, 2018, for the listing of Colorado, Luidmela; $100.00 on October 15, 2018, for the listing of Kerry Downs, DeGraaf; $100.00 on October 15, 2018, for the listing of Emerson, Board; and $250.00 on October 19, 2018, for the sale of Amaryllis. Ms. Mayer did not hold a real estate license when any of the aforementioned payments and/or sales were completed. The Division and Ms. Bolt submitted a “proposed disposition” that is adopted by the undersigned and set forth below.
The Issue Whether Petitioner, Dr. Herbert R. Slavin, is entitled to an award of attorney's fees and costs in an amount not exceeding $50,000 pursuant to section 57.111, Florida Statutes (2011).
Findings Of Fact Dr. Slavin, a licensed physician who specializes in internal medicine, has practiced in the state of Florida since 1981. In or around 2008, Dr. Slavin formed, and is the sole shareholder of, "Ageless Medicine Associates," a subchapter S corporation1/ under which he practices medicine. On October 31, 2011, the Department filed an Administrative Complaint that charged Dr. Slavin with two statutory violations, both of which were ultimately dismissed by the Board of Medicine. In connection with that proceeding, Dr. Slavin now seeks an award of attorney's fees and costs pursuant to section 57.111. As explained later in this Final Order, a party seeking fees and costs pursuant to section 57.111 must demonstrate that he or she was a "small business party" at the time the underlying action was initiated by the state——in this instance, October 31, 2011. Section 57.111(3)(d) contemplates that a small business party can take four alternative forms, only two of which require discussion here: a partnership or corporation, including a professional practice, that, during the relevant timeframe, had 25 or fewer full-time employees or a net worth of not more than $2,000,000 (section 57.111(3)(d)1.b.); or an individual whose net worth did not exceed $2,000,000 during the relevant period (section 57.111(3)(d)1.c.). The evidence establishes that, as of October 2011, Ageless Medicine Associates had fewer than 25 employees and a net worth that did not exceed $2,000,000. The problem, though, and as discussed elsewhere in this Order, is that section 57.111(3)(d)1.b. has no application where, as in this case, the underlying complaint was filed against a licensee individually, rather than the partnership or corporation under which the licensee conducts business. As for Dr. Slavin's personal finances, his 2011 tax return reflects income of $171,810, virtually all of which comprises wages and business income derived from Ageless Medicine Associates, and an adjusted gross income of $161,400. The remainder of Dr. Slavin's financial picture (including, for example, any assets on hand that did not generate taxable income) during October 2011 is nebulous, however, for nearly all of his testimony focused incorrectly on his finances at the time of the final hearing: Q. Are you, doctor, currently worth $2,000,000? A. No. * * * Q. Dr. Slavin, do you own a home? A. Yes. Q. How much, if you know, is that home worth? A. Probably around $300,000 to $350,000. Q. And do you have a mortgage on that home? A. Yes. Q. How much is the mortgage; do you know? A. $145,000. Q. And do you have any cash in the bank? A. Yes. Q. How much? A. Around $10,000 . . . . * * * Q. Do you own any boats? A. No. Q. Do you own any vacation homes? A. No. Q. Do you own any interest in any other businesses? A. No. Q. Do you have a lot of stock accounts? A. No. * * * Q. Okay. Is there any other asset that you have that has not been mentioned; your home, your business? Do you own your vehicles? A. No, they're leased. Q. Do you own any other stocks or bonds that provide you with an income or that are worth money, that you know of? A. No. * * * Q. Dr. Slavin, you testified that -- You were asked by counsel whether or not you had a lot of stocks or bonds as assets and you stated no. Do you -- what does a lot mean? A. Well, I have -- I don't have any direct ownership of stocks or bonds. There are some annuities I have that have, I guess, investments and mutual funds or something. You know, I'm not -– * * * Q. Dr. Slavin, have you presented any information or any documentation as to what items are within your home? A. Not that I'm aware of. I have a television, -- Q. Do you have -- A. -- a refrigerator and -- Q. Do you have furniture in your home? A. Yeah. I have furniture, a refrigerator, stove, microwave. I have -- Q. Do you have computer equipment in your home? A. I have laptop computers in the home. Q. Do you have any personal items; jewelry, watches in your home? A. I have -– Yes, I have watches. Final Hearing Transcript, pp. 23; 25-28; 30-31 (emphasis added). Even assuming, arguendo, that Dr. Slavin's testimony had been properly oriented to the relevant time period (which it was not, in nearly all instances), his overall evidentiary presentation was simply too fragmentary to permit the undersigned to independently determine the value of his net worth——a figure derived2/ by subtracting total liabilities from total assets. For example, Dr. Slavin provided: no information concerning his annuities and mutual funds, the value of which could be non- trivial due to the remunerative nature his profession and his length of time in practice; no details regarding the value of his household assets; and no credible evidence regarding the value of his home.3/ In light of these gaping holes in the evidence, which preclude anything more than rank speculation concerning the value of Dr. Slavin's personal net worth, it is determined that status as a small business party has not been proven.4/ Because Dr. Slavin's failure to establish his status as a small business party is fatal to his application for attorney's fees, it is unnecessary to determine whether the underlying proceeding was substantially justified.
The Issue The issue for determination in this proceeding is whether Petitioner is entitled to reasonable attorney fees and costs in accordance with Section 57.111, Florida Statutes.
Findings Of Fact Petitioner filed an application for a real estate sales license on January 22, 1991. Respondent denied Petitioner's application on April 25, 1991, thereby initiating agency action. The sole basis for the denial of Petitioner's application was the fact that Petitioner was named as a defendant in multiple civil lawsuits filed in United States District Court. The law suits arose from the failure of Centrust Savings Bank ("Centrust"). Petitioner was President of Centrust from February, 1988, to sometime in July, 1989. He served on the Board of Directors of Centrust from August, 1987, until sometime in July, 1989. Prevailing Party Petitioner was the prevailing party in the underlying proceeding. A Recommended Order was entered on January 23, 1992, recommending that Respondent grant Petitioner's application. Shealy v. Florida Real Estate Commission, DOAH Case No. 91-3147. Respondent entered a Final Order on February 21, 1992, adopting ". . . all Findings of Fact, Conclusions of Law and Recommendation . . ." Respondent granted Petitioner's application for license upon successful completion of the written examination. Petitioner successfully completed the written examination and was licensed as a real estate sales agent on March 27, 1992. Since October 7, 1992, Petitioner has been employed as an independent real estate agent with the firm of Real Estate Transactions, Inc., in Miami, Florida ("RET"). Small Business Party Petitioner became self-employed as a financial consultant in January, 1991. From January 17, 1991, through October 6, 1992, Petitioner conducted his financial consulting business in corporate form through WDS Investment, Inc. ("WDS"). WDS was a small business corporation wholly owned by Petitioner and his wife. 1/ Petitioner intended to utilize his real estate license, and a mortgage broker's license he obtained in the Summer of 1991, as an integral part of the financial consulting business he conducted through WDS. In response to a question asking Petitioner to explain his use of the term "self employed," Petitioner stated: I had started WDS Investments. . . . I was unemployed in the tradition[al] sense having been employed for years more as a professional in the financial services field In essence, I was going to try to build a consulting practice. I wanted to get my real estate license and my mortgage brokers license. Transcript at 20. Petitioner and WDS were one and the same entity. Petitioner was the sole managing shareholder and officer in WDS. Petitioner was the only person active in WDS and had exclusive management control of the corporation. Petitioner regarded WDS as his corporation, regarded himself as self employed, and operated WDS as his corporation. Petitioner is the party claiming fees and costs and the prevailing party in the underlying proceeding. After Respondent initiated agency action on April 25, 1991, Petitioner had other business activities in addition to his financial consulting business. Petitioner obtained his mortgage broker license in the Summer of 1991. From that time through October 6, 1992, Petitioner worked as an independent mortgage broker and loan consultant with Financial Monitors, Inc. ("Monitors"). Petitioner was an independent contractor and not an employee of Monitors. Petitioner had no ownership interest in Monitors. Petitioner was employed by Securnet Financial Corporation ("Securnet") from August 1, 1991, to the end of 1991. Petitioner was employed as a manager and had no ownership interest in Securnet. Petitioner's employment with Securnet did not begin until after Respondent initiated agency action on April 25, 1991. His employment with Securnet terminated prior to the commencement of this proceeding on May 26, 1992. Petitioner became employed as an independent sales agent with RET on October 7, 1992. Petitioner's status as an employee with RET began after agency action was initiated on April 25, 1991, and after this proceeding was initiated on May 26, 1992. Petitioner is a small business party within the meaning of Section 57.111(3)(d)1., Florida Statutes. Petitioner is domiciled in Florida and has been so domiciled since before this proceeding began on May 26, 1992. The principal office of WDS has been located in the state since January 17, 1991. Petitioner conducted his financial consulting business in corporate form on April 25, 1991. Since January, 1991, Petitioner has had no more than 25 employees and a net worth of no more than $2 million, including both personal and business investments, either directly or by attribution from his wife, WDS, and his other business activities. Not Substantially Justified Respondent was not substantially justified in denying Petitioner's license application. Respondent had no reasonable basis in law or fact to deny Petitioner's application. Respondent cited no legal authority to support its denial of Petitioner's application solely on the basis of Petitioner's status as a defendant in civil litigation. Respondent presented no evidence that it undertook an independent determination of the truthfulness or credibility of the allegations in the litigation, no independent evidence to support such allegations, and no evidence to support any other factual basis for Respondent's denial of Petitioner's application. Respondent presented no evidence of Petitioner's lack of qualification to be licensed as a real estate sales agent. Petitioner made a full and timely disclosure on his application that he was a defendant in civil litigation. Respondent presented no evidence that the allegations in the civil lawsuits were anything other than allegations against numerous officers and directors of Centrust. Respondent presented no evidence of an adjudication of Petitioner's guilt. Respondent presented no evidence to rebut or refute Petitioner's showing that Petitioner is honest, truthful, trustworthy, of good moral character, and has an impeccable reputation for honesty and fair dealing in the business community. Fees And Costs The attorney fees and costs claimed by Petitioner are reasonable and necessary. Petitioner presented credible and persuasive expert evidence that the attorney fees and costs are reasonable and necessary.
The Issue The basic issue in this case is whether the Petitioner's application for registration as an associated person in the state of Florida with Value Equities Corporation should be granted or denied. The Department proposes to deny the application on the basis of Section 517.161(1)(h) and (k), Florida Statutes, contending that the Petitioner has demonstrated his unworthiness to transact the business of an associated person and is of bad business repute. The Petitioner has little, if any dispute with the facts relied upon by the Department, but offered evidence in mitigation and asserts that, on the facts in this case, he is entitled to registration. Subsequent to the hearing in this case, a transcript was filed on March 4, 1987, and, pursuant to ruling at the close of the hearing, the parties were allowed until March 16, 1987, within which to file their proposed recommended orders. Both parties filed timely post-hearing documents, containing proposed findings of fact. A specific ruling on all proposed findings of fact is contained in the Appendix attached to and incorporated into this recommended order.
Findings Of Fact Based on the stipulations of the parties, on the testimony of the witnesses at the hearing, and on the exhibits received in evidence, I make the following findings of fact. Petitioner, Kenneth Joseph Whitehead, ("Whitehead") filed a Form U-4 application to be registered as an associated person in the state of Florida with Value Equities Corporation, located at 216 South Fairway Drive, Belleview, Illinois. Said application was received at the Department of Banking and Finance ("Department") in due course on June 21, 1986. By letter dated September 3, 1986, the Department advised the Petitioner that it intended to deny his application for registration for the reasons set forth at length in the letter. Thereafter, the Petitioner filed a timely request for hearing. The National Association of Securities Dealers ("NASD") District Business Conduct Committee, District #4, on July 11, 1978, accepted a "Letter of Admission, Waiver and Consent" against Weinrich, Zitzman & Whitehead, Inc., Kenneth J. Whitehead and others. In said agreement, Whitehead personally consented to a censure, a fine in the amount of $2000, and a ten day suspension from NASD membership. The sanctions imposed by the NASD resulted from violations of Regulation T imposed against Whitehead individually. The State of Missouri issued an order entitled "ORDER TO CEASE AND DESIST" in the matter of: Weinrich, Zitzman and Whitehead, Inc., Kenneth Whitehead, et al., on February 24, 1982, and found Whitehead to have personally made sales of unregistered securities, to have effected Unauthorized transactions, to have distributed promotional materials while not providing a prospectus and to have omitted to purchasers the fact that said securities were unregistered. Further, all respondents in that proceeding, including Whitehead, were found by the State of Missouri to have omitted the fact that unsuccessful attempts were made to register certain stocks, the fact that certain stocks could not justify their offering price, and the fact that the promoter's equity position could not be justified with respect to certain stock. All of the aforementioned were found to have constituted violations of Missouri law. As a result, Whitehead and others were ordered to cease and desist from violating Missouri law. Petitioner was afforded his due process rights to contest said order which was subsequently upheld. On May 31, 1983, the NASD District Business Conduct Committee #4 ("Committee"), entered a "Decision in Complaint No. KC-261" as to Whitehead and others. The Committee found that Whitehead failed to maintain minimum margin equity on certain accounts and failed to deliver securities as required by Article III, Sections 1 and 30, of the NASD Rules of Fair Practice. As a result of said violations, Whitehead was censured, fined $2500 and suspended by the NASD for three days. On September 19, 1985, the Committee issued a second complaint (KC-339) against Whitehead and others alleging violations of Article III of the NASD Rules of Fair Practice by failing to maintain required net capital, proper books, and records. As a result of an offer of settlement, Whitehead was censured and fined $1500. On December 20, 1985, the Committee issued a third Complaint (KC-343) against Whitehead and others for failure to maintain required net capital in violation of SEC Rule 15C3-1 and Article III, Section 1, of the NASD Rules of Fair Practice. The complaint remains pending. In 1982, eleven suits were filed by individual plaintiffs against WZW Financial Services, Inc., Whitehead, and others in the Circuit Court of the City of St. Louis to effect rescission of the sale of unregistered securities in the state of Missouri. The suits were settled for an aggregate of $240,000. The Petitioner was not directly involved in the sales that led to these suits, but he was vicariously liable as an officer of the corporation. In 1984, a suit was filed in the U.S. District Court for the Southern District of Illinois by certain individual plaintiffs against WZW, Inc., Kenneth Whitehead, and others in the sale of limited partnership interests wherein the allegations included violations of Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C 78j(b), Rule 10b-5, involving securities fraud; violations of Section 1964c of the Racketeer Influence and Corrupt Organizations Act ("RICO") of 18 U.S.C. 1962C, 1964c, involving racketeering activity; and violations of 18 U.S.C. 1341, involving mail fraud. The case is currently pending. On January 30, 1986, O. R. Securities, Inc., filed a Form U-5 termination notice in which Whitehead was terminated for violating the firm's policy concerning margin accounts. The termination was investigated by the NASD. Following the investigation, the NASD determined that no further action was warranted.
Recommendation Based on all of the foregoing, it is recommended that the Department of Banking and Finance issue a final order in this case which denies the Petitioner's application for registration as an associated person with Value Equities Corporation. DONE AND ENTERED this 19th day of March 1987, at Tallahassee, Florida. M. M. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of March, 1987. APPENDIX TO RECOMMENDED ORDER, CASE NO. 86-4055 The following are my specific rulings on each of the proposed findings of fact submitted by both parties. Findings submitted by Petitioner First unnumbered paragraph: Accepted in substance with unnecessary details omitted. Second unnumbered paragraph: First sentence accepted in substance. Second sentence covered in introductory portion of this recommended order. Paragraph 1: All but last sentence is accepted in substance. Last sentence is rejected as irrelevant because there is no persuasive competent substantial evidence that customers were not hurt or jeopardized. Paragraph 2: First sentence accepted. Second sentence rejected as incomplete. Third sentence rejected as irrelevant in light of other evidence. Fourth and fifth sentences rejected as contrary to the greater weight of the evidence. Sixth sentence accepted. Seventh sentence rejected as contrary to the greater weight of the evidence and as not supported by persuasive competent substantial evidence. Paragraph 3: Accepted in substance. Unnumbered paragraph following paragraph 3: First sentence is rejected as irrelevant in light of other evidence. Second and third sentences are rejected as in part contrary to the greater weight of the evidence and in part not supported by persuasive competent substantial evidence. Paragraph 4: Accepted in substance. Paragraph 5: Accepted in substance. Paragraph 6: The first four sentences are rejected as constituting irrelevant and unnecessary details. The fifth sixth, and seventh sentences are rejected as contrary to the greater weight of the evidence and as not supported by credible competent substantial evidence. Paragraph 7: Accepted in substance with unnecessary details omitted. Findings submitted by Respondent Paragraph 1: Accepted. Paragraph 2: Accepted in substance. Paragraph 3: Accepted. Paragraph 4: Accepted. Paragraph 5: Accepted. Paragraph 6: Accepted. Paragraph 7: Accepted. Paragraph 8: Accepted. Paragraph 9: Accepted. Paragraph 10: Accepted with additional facts for clarity and accuracy. Paragraph 11: Rejected as constituting proposed conclusions of law or legal argument regarding what was not proved, and not constituting findings of fact based on evidence. COPIES FURNISHED: James S. McClellan, Esquire 314 North Broadway, Suite 1930 St. Louis, Missouri 63102 Charles E Scarlett, Esquire Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32399 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0305
