Findings Of Fact Seaton made application to the Division under the provisions of Section 517.12, Florida Statutes, for registration as a salesman of securities. Subsequently, the Division issued its intent to refuse or deny license or registration along with administrative charges and complaint alleging that Seaton was unworthy to transact the business of a salesman. On February 22, 1977, the Securities Commissioner of the State of South Carolina issued his order to cease and desist directed to Seaton on the dual grounds that Seaton engaged in conduct inconsistent with just and equitable principles of trade in that he offered for sale limited partnerships constituting securities while failing to register them as required and that Seaton failed to register as a broker, dealer or agent in South Carolina. On June 7, 1977, the District Business Conduct Committee for District number 4 of the National Association of Securities Dealers, Inc., issued its complaint against Seaton for violations of Article III, Sections 1, 18 and 27 of the Rules of Fair Practice of the National Association of Securities Dealers, Inc.
The Issue The issue for consideration in this case is whether Petitioner should be granted registration as an associated person by the Department of Banking and Finance, or whether his application should be denied because of alleged misconduct outlined in the letter of denial.
Findings Of Fact At all times pertinent to the issues herein, the Petitioner, Richard Graibus, was either a registered associated person associated with a security firm or an applicant for registration as an associated person in Florida, and the Respondent, Department of Banking and Finance, Division of Securities and Investor Protection, (Department), was and is the state agency charged with the responsibility of regulating the sale of securities in this state. On August 19, 1988, Mr. Graibus filed an application to be an associated person of Finnet Securities, Inc., (Finnet), with the Department. On March 3, 1989, by letter, the Department notified Mr. Graibus of its intent to deny his application on the basis that prior disciplinary action taken against him by other states was prima facie evidence of his unworthiness to act as a securities dealer in Florida. Specifically, the bases for denial were: A Minnesota Cease and Desist Order in December, 1977. A Securities and Exchange commission suspension order in May, 1983. The denial of Petitioner's application for registration as an associated person with J. W. Gant and Associates by 10 states. Three judgements against Petitioner. His termination for cause from employment with American Western Securities. Petitioner was employed by American Western Securities in Denver, Colorado from November, 1977 to July 1980 when he left feeling a change would be beneficial to his career. No evidence was presented to support the Department's allegation that Petitioner was terminated for cause from that period of employment and that allegation is found to be unsupported. In December, 1977, the State of Minnesota issued a Cease and Desist Order against Petitioner alleging that he offered to sell, and did sell, unregistered securities while neither he, the firm, nor the securities were registered in that state as required by state law. Petitioner did not dispute the allegations of fact outlined in the Minnesota Order. The actual sale was made to a father and son who Petitioner had inherited as customers from his stepfather. The trades were unsolicited and were approved by petitioner's supervison who had many years experience in the securities trade. On May 23, 1983, the Securities and Exchange Commission, (SEC), found that Mr. Graibus had, at an unspecified time, wilfully violated and aided and abetted in violations of the anti-fraud and anti-manipulation provisions of the United States security law, and had failed to reasonably supervise others under his control to prevent violations of the same law. Petitioner engaged in cross trading, manipulation of stock prices, and fraudulent representations to customers regarding two stocks. These findings were incorporated in a Findings and Order Imposing Remedial Sanctions which were drafted and adopted from an offer of settlement submitted by Mr. Graibus. In its Order, the SEC took the following disciplinary action: It suspended Petitioner from association with any broker/dealer for 60 days; It barred Petitioner from acting in a supervisory capacity as a principal, officer, director or employee for 12 months; and It stipulated that Petitioner was not to act in a supervisory position without prior approval from the Commission, after the expiration of the previously mentioned 12 month period. Mr. Graibus has twice previously been granted registration as an associated person in Florida. Specifically, on May 9, 1984, he was approved as an associated person with Chesley and Dunn; and on January 28, 1985, he was approved as an associated person with J. W. Gant and Associates. In both cases, the Department had knowledge of the Minnesota Order and the SEC action since Petitioner disclosed both on each application. In 1984, while Petitioner was a principle of the brokerage firm of Chesley and Dunn, Inc., the Securities and Exchange Commission revoked the firm's registration for violations of various net capital and financial reporting regulations. There was no charge against the Petitioner. As a result of his association with this firm, and his having signed notes on behalf of the firm in his personal capacity, Mr. Graibus incurred a substantial liability for obligations of the firm, which are memorialized by three default judgements against him. The initial loan totaled $150,000.00. While manager of the firm's Sarasota office, Petitioner also invested approximately $175,000.00 of his own money which was lost. All his private obligations were fully disclosed to prospective creditors when he borrowed the money for the firm. In 1985, Mr. Graibus submitted applications to several states for registration as an associated person with J. W. Gant and Associates. These applications fully disclosed the entry of the Minnesota Order and the results of the SEC action. His applications were approved in twenty-two states, but as a result of the aforementioned SEC action, were denied by the states of Pennsylvania, Nebraska, Ohio, and Tennessee. He protested the denial by Tennessee and on November 22, 1985, that state entered a Final Order confirming its denial of his application for registration, finding that he had failed to disclose the adverse finality of the Minnesota Cease and Desist Order claiming Instead that the order had been resolved by corporate counsel. This comment is also made- in Mr. Graibus's Gant application in Florida which granted his application. Mr. Graibus did not protest the entry of the Final Order In Tennessee. Mr. Peter Maftieu is a registered securities dealer in four separate classifications. He has worked for J. W. Gant and Chesley and Dunn since January, 1983. Petitioner trained him when he first started in the industry. Incorporated as a fundamental part of Petitioner's training [pg was the insistence on full disclosure of material facts to clients and the need to insure that he, as a salesman, educated himself as to his client's situation by a full and detailed questioning to insure the securities recommended were suitable for and consistent with the client's needs. As a part of his training, Petitioner showed Mr. Maftieu the SEC and Minnesota orders as examples of what can happen if there is not full compliance with the rules. Due to increasing instances of misconduct within the securities industry in this state, none of which was shown to relate to Petitioner, in 1985 the Florida Comptroller created a task force to study the problem and come up with recommendations for efforts to combat fraud in the securities industry in Florida. In March, 1986, the task force submitted its report which, in part, recommended that the Department tighten up its review of applications for registration as securities dealers to eliminate or disqualify applicants with a disciplinary record within the industry. As a result of this recommendation, the Department altered its policy in exercising its discretionary approval authority. Petitioner has, for many years now, practiced full disclosure in the conduct of his business and it has been in excess of six years since the last findings of any violations of securities laws, rules or regulations by Petitioner. Nonetheless, in this case, the Department's denial of Mr. Graibus' application, which was based on his disciplinary history in other states, was consistent with its policy against granting registration to "unworthy" persons, as outlined in the Department's rules, and the intent of the Legislature as outlined in Section 517.1205, Florida Statutes.
Recommendation Based, on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that Petitioner's application for registration as an associated person with Finnet Securities, Inc., be granted. RECOMMENDED this 5th day of January, 1990, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 January, 1990. COPIES FURNISHED: Edward W. Dougherty, Jr., Esquire Mang, Rett & Collette, P.A. 660 D. Jefferson St. Post Office Box 11127 Tallahassee, Florida 32301-3127 M. Catherine Green, Esquire Paul C. Stadler, Esquire Department of Banking and Finance Suite 1302 The Capitol Tallahassee, Florida 32399-0350 Hon. Gerald Lewis Comptroller State of Florida The Capitol Tallahassee, Florida 32399-0350 Charles L. Stutts General Counsel Department of Banking and Finance Suite 1302 The Capitol Tallahassee, Florida 32399-0350
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 Whether Respondent's insurance agent licenses should be disciplined because selling a commercial note to an unqualified elderly person on February 11, 1999, demonstrates a lack of fitness or trustworthiness to engage in the business of insurance, in violation of Sections 626.611(7), Florida Statutes.
Findings Of Fact Petitioner is the state agency responsible for regulating and licensing the sale of insurance in Florida, in accordance with the provisions of Chapter 626, Florida Statutes. Respondent, Kevin Ira Frye, is currently eligible for licensure and licensed in the this state as a health insurance agent, life insurance agent, life and health insurance agent, and life, including variable annuity agent, pursuant to licensure number A090874, and was so licensed at all times relevant to these proceedings. In the fall of 1998, Juanita Crouch of Spring Hill, Florida, expressed an interest in purchasing a long-term care insurance policy by responding to a solicitation she received in the mail from Respondent's agency. In response to her inquiry, Respondent came out to her home to discuss the insurance. Ms. Crouch at this time was a 75-year-old retired homemaker and widow. Her only income was $1,100 a month stipend from her deceased husband's social security and her interest income from two Certificates of Deposit (CDs). She did not graduate from high school. She had never worked outside of the home, being a homemaker all of her life; her husband handled all of the family finances prior to his death. She does not own any stocks, bonds or any other investments. Mrs. Crouch resides in a home purchased for her by her daughter, Linda Bruno-Lagos, and placed in her name through a recorded Articles of Agreement. Mrs. Crouch could not be considered a sophisticated investor. In addition, her health was poor, and her memory was some-what impaired. Mrs. Crouch possessed $25,000 deposited in two bank CDs that were coming due during the relevant time period. Mrs. Crouch was looking for a investment with a reasonable rate of interest so that she could deposit the funds in order to augment her small income. This $25,000 represented her only savings. Respondent, at this time, became aware that the CDs were coming due and during their next appointment, solicited Mrs. Crouch to take her $25,000 in savings and purchase a commercial promissory note to be issued by First American Capital Trust (FACT). FACT uses the proceeds from the issuance of the notes to fund the medium credit purchases of vehicle loans secured by perfected liens on new and used automobiles and light trucks. Respondent represented to Mrs. Crouch that, by purchasing the FACT note, she would be investing in a guaranteed financial instrument similar to a bank Certificate of Deposit. Mrs. Crouch would enjoy a 9.75 percent guaranteed interest rate on her investment over a nine-month period. Respondent gave Mrs. Crouch various brochures, including a document entitled "Disclosure Statement." The brochures purported to show that the investment was fully insured and guaranteed. No provision of this disclosure statement was ever explained by Respondent to Mrs. Crouch, including the disclosure warning by FACT that this investment was "inherently risky." Mrs. Crouch testified that she did not understand the information and was relying on Respondent's representations. This testimony is credible. Respondent testified that he purposely avoided explaining any provision of the disclosure statement. Respondent believed that it was Mrs. Crouch's sole responsibility to read the brochures and understand the details of the investment. In fact, Respondent testified that telling potential investors that they could lose all of their money was something he didn't discuss, as it might discourage sales. Respondent left the brochures explaining the investment with Mrs. Crouch to read and review, which she did not do. Respondent was aware, or should of been aware, that Mrs. Crouch, given her age and financial circumstances as a retiree, desired to place her funds only in safe, low risk, investments. Mrs. Crouch did not meet the suitability standards to purchase the FACT note, as set forth in the disclosure statement prepared by FACT. FACT required potential investors to have either a net worth of $1,000,000, or an annual income in excess of $200,000 a year, or in the alternative, no more that 20 percent of an individuals total assets could be invested. The application submitted by Respondent lists her net worth as between $150,000 and $250,000. Mrs. Crouch's actual net worth is significantly less than this sum. Respondent prepared the application, which Mrs. Crouch signed, and he determined the estimate of Mrs. Crouch's net worth. Respondent was either aware or should have been aware that Mrs. Crouch did not have such a net worth as was listed on her application, and, therefore, did not meet FACT's eligibility requirements. She should not have been sold the note. Mrs. Crouch elected to invest her $25,000 with FACT to purchase the note. On February 11, 1999, she gave the funds to Respondent, which was promptly remitted to FACT. On March 8, 1999, FACT issued a Certificate of Commercial Note, at the full redemption value of $26,961.35 in the name of Juanita Crouch, with a maturity date nine months from the date of the note. In December of 1999, Mrs. Crouch received a letter from FACT informing her that FACT had filed for bankruptcy protection on September 30, 1999. A receiver has been appointed who is attempting to recover assets. Mrs. Crouch never received any return on her purchase of the FACT note. She filed a claim in the U.S. Bankruptcy Court, but with the exception of two small payments from the receiver, she has never received any payments on the note. She has apparently suffered a loss of most, if not all, of her principal of $25,000. Mrs. Crouch, relying on Respondent's representations, thought she was purchasing a note that would pay a fixed yield with very low risk. What she unknowingly purchased was a commercial note that carried a warning from FACT that "extending credits to retail buyers with medium credit ratings is inherently risky." Mrs. Crouch was clearly unaware of this risk and Respondent made no attempt to make her aware. Despite the representations made to Mrs. Crouch by Respondent, at no time was her investment insured or guaranteed by the Federal Deposit Insurance Corporation, or any insurance company, nor any other entity. In fact, the Disclosure Statement states that the private insurance covers the vehicle loans only and not the notes directly. Respondent failed to disclose to Mrs. Crouch that her note and investment was not insured, even though he testified that he was aware of and understood that the note itself was not insured at the time of the sale. Respondent has been a licensed insurance agent since December 9, 1997, and was employed by Senior American Insurance and Financial Services. Respondent has not previously been disciplined by Petitioner.
Recommendation Based on the forgoing Findings of Fact and Conclusions of Law, it is RECOMMENDED as follows: Respondent, Kevin Ira Frye, be found guilty of violating Section 626.611(7), Florida Statutes. Pursuant to Rule 4-231.080, Florida Administrative Code, Respondent's licenses and eligibility for licensure be SUSPENDED for a period of six months, followed by a two-year period of probation upon such reasonable conditions as the Department may require. DONE AND ENTERED this 6th day of February, 2003, in Tallahassee, Leon County, Florida. DANIEL M. KILBRIDE 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 6th day of February, 2003. COPIES FURNISHED: James A. Bossart, Esquire Department of Financial Services 200 East Gaines Street, Room 612 Tallahassee, Florida 32399-0333 Sidney Werner, Esquire Piper, Ludian, Howie & Werner, P.A. 5720 Central Avenue St. Petersburg, Florida 33707 Mark Casteel, General Counsel Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300 Honorable Tom Gallagher Chief Financial Officer Department of Financial Services The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
Findings Of Fact Petitioner filed application for registration with respondent a a securities agent with First Florida Securities Inc., Pompano Beach, Florida, on March, 1977. Although he met the various statutory and regulatory procedural requirements for registration, on or about May 19, 1977, he was advised by the Director, Division of Securities, of intended denial of his application and advised of his right to petition for an administrative hearing. Petitioner did so request a hearing on June 2, 1977. The stated ground for the proposed denial of the application in accompanying "Administrative Charges and Complaint" was as follows: "The license application of respondent was refused or denied by the Division of Securities, Department of Banking and Finance, State of Florida, by stipulation and consent on February 18, 1976. Said denial constitutes prima facie of unworthiness to transact the business of a securities salesman In the State of Florida." The above-mentioned "Stipulation and Consent" resulted from a prior application denial by respondent of an application by MFP Petroleum Exploration and Investment, Inc., its officers and salesman, including petitioner. The grounds for denial of petitioner's application in that instance were that he had sold unregistered securities in the form of shares in oil drilling ventures in violation of Section 517.07, F.S., while not registered as a securities salesman in further violation of Section 517.12(1), F.S. The various parties in that administrative proceeding consented to the denial of their applications by stipulation without admitting the allegations of respondent. (Exhibits 1, 2, 4, 5) Petitioner has never been registered with respondent as a securities dealer, agent or salesman. He testified that when he joined MFP sometime in 1974, its president, Mark F. Preddy, led him to believe that one selling interests in oil drilling ventures need not register as a salesman in Florida. Consequently, he sold such interests to clients for several months before he learned that it was necessary for him to be so registered. Some nine months after commencing employment with MFP, he went to Shreveport, Louisiana, to take securities examinations for Florida and the NASD. After waiting approximately three months more to obtain the results of the MFP application for registration, he resigned from the firm. He admitted selling during the entire nine-month period in which he had been associated with MFP, even though he knew during a substantial portion of that period that registration was required. After his resignation, he authorized an attorney to execute the "Stipulation and Consent" which authorized respondent to deny his application for registration. (Testimony of Weber, Exhibits 2, 3, 5) A client of petitioner testified as to the latter's honesty and conscientiousness. (Testimony of Hansis) Respondent's Assistant Director, Division of Securities, stated the Division's position that although it felt justified in denying petitioner's current application, it would be amenable to reevaluate any application submitted one year from the final order in this proceeding and, if petitioner's record was clear and he otherwise met requirements for registration, it would issue the same on a supervised basis for a period of one year. (Testimony of Brandi)
Recommendation That petitioner Paul Anthony Weber be issued a certificate of registration as a securities salesman pursuant to Chapter 517, Florida Statutes. DONE and ENTERED this day of August, 1977, in Tallahassee, Florida. THOMAS C. OLDHAM Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Ryland Terry Rigsby, Esquire Assistant General Counsel Office of the Comptroller Legal Annex Tallahassee, Florida 32304 Paul Anthony Weber 1745 Northeast Fifty-Second Street Ft. Lauderdale, Florida 33308
Findings Of Fact Petitioner, Richard L. Hoffman (Hoffman), applied to Respondent, Office of the Comptroller, Department of Banking and Finance, Division of Securities and Investor Protection (Department), for registration as an associated person with First Southern Investment Corporation. By letter dated November 25, 1986, the Department advised Hoffman that his application had been denied, and Hoffman filed a timely request for formal hearing. By "memorandum of understanding" dated June 10, 1986, Hoffman was employed by First Florida Securities Group, Inc. (First Florida) as the manager and compliance officer of its Fort Lauderdale branch office. Pertinent to this case, the memorandum of understandings provided: It is today agreed that Richard Hoffman, as manager of a branch office of First Florida Securities Group, Inc., and representing a certain "Group" in that office agrees to work for and manage the office for First Florida Securities Group, Inc., under the following conditions: 1/ * * * E. The "Group" will be allowed an inventory bank of $50,000.00 of cost -- no one item to exceed This will be reviewed periodically. It maybe exceeded only with written approval of two officers of First, Florida Securities Group Inc. 2/ The branch office opened on June 15, 1986, and by June 27, 1986, Serious problems in the operation of the branch office began to surface. These problems were addressed in a meeting on Monday, June 30, 1986, between Nick Christos, chief executive officer of First Florida; Jim Palmer, compliance officer for First Florida; and, Hoffman. The results of that meeting were memorialized in a memorandum to Hoffman of July 7, 1986, which provided, inter alia: This is to summarize the results of my meeting with you on Monday, June 30, 1986. In attendance, also, was Jim Palmer, Compliance Officer. The following is intended as a summary of conclusions, without benefit of detailed conversations that led to our mutual understanding Letter to be sent to Jim Palmer from you, with respect to "as of" trades and other trades Purchased by customers at prices under the market on Jocom. (Not yet received as of this date). * * * Understanding by you that your office would henceforth adhere strictly to the $25,000 limit with respect to maximum inventory levels per corpora- tion -- with a $50,000.00 maxi- mum for your office at the end of each trading day. (Note that this limit was violated on Friday, June 27 when 41,200 International Communications was in inventory, with a value of $51,500). * * * We reviewed the fact that our Bear Stearns Margin Clerk was concerned about the Sy Schwartz account (purchases of 30,000 and 110,000 shares of Jocom) of which 110,000 shares or $96,250 still remains unpaid as of this date. Review of concern about the number and total dollars involved in over-due payments of Ft. Lauderdale customers (not materially reduced as of this date). The proof established that Hoffman failed to comply with his agreement to explain the "as of" trades and other trades purchased by customers at prices under the market in Jocom, adhere to the maximum inventory levels, and address over- due payments. Since there was no improvement in the operation of the branch office, Mr. Christos advised Hoffman on Monday, July 14, 1986, that: Your Ft. Lauderdale group, as of pre-opening this morning, will have no authority to represent the firm in trading NASDAQ stocks. * * * 3. You will have one week, effec- tive with the termination of business on Friday, July 18, 1986, for your branch to find another "home" ... (associate themselves with another deal- er). The principal of First Florida, Mr. Winkler, declined to support Mr. Christos because of his belief that the branch office had generated substantial revenues and that it would work out its problems. Accordingly, since Hoffman and the "Group" were not to be terminated, Mr. Christos and Mr. Palmer resigned as chief executive officer and compliance officer, respectively, for First Florida. On July 15, 1986, Hoffman, who held a principal's license, was elected president of First Florida, although he continued to operate as branch manager. The confidence Mr. Winkler placed in the branch office and Hoffman was short lived. Between July 19, 1986, and July 31, 1986, First Florida received complaints from over thirty customers of the branch office regarding unauthorized transactions, the failure to report or process trades, and the failure to provide confirmations or proceeds of sale. As a consequence of these complaints, Hoffman was terminated on July 31, 1986. First Florida's loss from the operation of the branch totaled approximately $657,000. Of this sum, $357,000 was expended to cover the debit balance with its correspondent Bear Stearns for unpaid securities accounts, and $300,000 for settlements with customers who alleged that purchases in their accounts were unauthorized. While First Florida's association with the "Group" may have been unprofitable, Hoffman benefited quite well. During the period of June 15-July 15, 1986, Hoffman earned over $60,000 in commissions through First Florida. While Hoffman concedes that trades he received from customers were not processed, he asserts that the blame for such failure rests on Mr. Brazel, the "trader" for the branch office. According to Hoffman, Mr. Brazel frequently traded at home, rather than at the office, and during the week of July 21- 25, 1986, traded exclusively at home. Because of Brazel's absence, Hoffman asserted that trades were not executed or they were "lost" because of some motivation of Brazel not to process them. Hoffman concludes: "I didn't have any idea what was going on" and there was "no way (I) could control the trades." Hoffman's attempt to "pass-the-buck" to Brazel is unpersuasive. While Brazel may be culpable, Hoffman also knew by mid-July 1986, if not by early July, that serious trading problems existed at the branch office, and that Brazel, if Hoffman is to be believed, was no small part of those problems. Yet Hoffman, who had been in the business for over 30 years, was the manager of the small branch office for First Florida, was president of the firm, was the firm's trader in Brazel's absence, and was a salesman for his own accounts, denies any responsibility for his failure to assure that trades were executed on behalf of his clients or the firm. Hoffman's testimony is inherently improbable and unworthy of belief. Hoffman's failure to diligently exercise his responsibilities as branch manager, president, trader, and salesman resulted in losses to his clients, as well as to other clients of the firm, since he failed to assure that their requests to sell securities were properly processed. 3/ In addition to Hoffman's failure to properly manage the branch office and his clients accounts, several other irregularities surfaced during his tenure with First Florida. Inexplicably, while employed by First Florida, Hoffman provided a customer, Sy Schwartz, with a written guarantee against loss. That guarantee provided: Sy Schwartz: This is to inform you, I agree that if Jocom is not up by July 7, 1986 you do not have to pay for it and I will take the trade back into my trading account. /s/ Richard L. Hoffman Also unexplained by Hoffman, was his personal payment of over $119,000 to his customer, Bruce Ross, between June 19, 1986, and July 15, 1986. These monies were variously described by Ross as involving the repayment of loans or his dealings in stocks. The substance of these transactions was not, however, further explained by either Mr. Ross or Hoffman. Following his termination with First Florida, Hoffman associated himself with First Southern Investment Corporation (First Southern). During his tenure at First Southern, although not registered, Hoffman held himself out as a senior account executive, and attempted to sell securities to customers he had previously serviced at First Florida. Both Hoffman and the Department offered the testimony of various witnesses concerning their opinion of Hoffman's reputation in the business community. Not surprisingly, those who had a good experience with Hoffman found him reputable, and those who felt they had suffered adversely under his representation found him to be of bad repute. The proof of Hoffman's reputation, offered through these witnesses, was not persuasive.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED: That the application of petitioner, Richard L. Hoffman, for registration as an associated person with First Southern Investment Corporation be DENIED. DONE AND ORDERED this 15th day of July, 1987, in Tallahassee, Florida. WILLIAM J. KENDRICK Hearing Officer Division of Administrative Hearings The Oakland Building 2900 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 15th day of July, 1987.
The Issue Whether the Respondent committed the violations alleged in the Amended Administrative Complaint and Notice of Rights dated June 16, 2009, and, if so, the penalty that should be imposed.
Findings Of Fact Based on the oral and documentary evidence presented at the final hearing and on the entire record of this proceeding, the following findings of fact are made: The OFR is the state agency responsible for regulating mortgage brokerage and mortgage lending in the State of Florida and for licensing and regulating mortgage brokers. §§ 494.0011(1); 494.0033(2), Fla. Stat. At the time of the final hearing, Mr. Razor held an inactive mortgage broker's license. The license was inactive because Mr. Razor did not apply for a renewal of his license when it expired on August 31, 2009. His license could be reactivated should he submit an application for renewal. Mr. Razor was a member of the Florida Bar and a practicing attorney in Florida until, in an opinion issued September 11, 2007, the Florida Supreme Court ordered Mr. Razor suspended from the practice of law for a period of 18 months. See Florida Bar v. Razor, 973 So. 2d 1125 (Fla. 2007). In its opinion, the court approved the findings of fact contained in the Report of the Referee; approved the Referee's findings that Mr. Razor had violated Rules Regulating the Florida Bar 3-4.2, 3-4.3, 4-5.3(b), and 4-8.4(a); and approved the Referee's recommendation that Mr. Razor's license to practice law be suspended for a period of 18 months. Pertinent to this proceeding, Rules Regulating the Florida Bar 3.4-3 provides: The standards of professional conduct to be observed by members of the bar are not limited to the observance of rules and avoidance of prohibited acts, and the enumeration herein of certain categories of misconduct as constituting grounds for discipline shall not be deemed to be all- inclusive nor shall the failure to specify any particular act of misconduct be construed as tolerance thereof. The commission by a lawyer of any act that is unlawful or contrary to honesty and justice, whether the act is committed in the course of the attorney's relations as an attorney or otherwise, whether committed within or outside the state of Florida, and whether or not the act is a felony or misdemeanor, may constitute a cause for discipline. The Referee based his recommendation that Mr. Razor's license to practice law be suspended for 18 months on "Respondent's [Mr. Razor's] conduct in allowing his collaborator (a suspended attorney) to practice law in an attempt to extort money; his ratification of the misconduct by failing to take immediate remedial action; his attempts to cover for the suspended attorney by defending the letter during the Bar investigation; and his inconsistent defense (lack of knowledge) at the live and final hearings." These acts constitute dishonest dealing. Mr. Razor's license to practice law was suspended 30 days after September 11, 2007, or on October 11, 2007. Mr. Razor did not report the suspension to the OFR because he did not believe it to be a reportable offense.
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 finding that Arthur Nathan Razor violated Section 494.0041(2)(i) and (p), Florida Statutes, and revoking his Florida mortgage broker's license. DONE AND ENTERED this 9th day of June, 2010, in Tallahassee, Leon County, Florida. PATRICIA M. HART 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 9th day of June, 2010.
