The Issue The central issue in this case is whether Petitioner is entitled to be registered as an associated person.
Findings Of Fact Petitioner filed an uniform application for securities registration with the Department. This application sought registration as a general securities representative (5-7) and named Sheffield Securities, Inc. as the firm for whom she intended to work. The application sought information regarding Petitioner's past work experience and specifically inquired as to whether the U.S. Securities and Exchange Commission (SEC) had ever found her to have been involved in a violation of investment-related regulations or statutes. The application also asked Petitioner to disclose whether the SEC had entered an order denying, suspending or revoking her registration or disciplined here by restricting her activities. To both of these questions Petitioner answered "yes." Petitioner's association with the securities industry began in 1972 when she was employed as a secretary for a securities firm. Her work prior to that had been as a bookkeeper. Petitioner obtained her registration and purchased a securities business, Adams & Whitney Securities Corp., in late 1973 or early 1974. Adams & Whitney was registered with the SEC and operated as a broker/dealer buying and selling interests for itself and others. Petitioner was the president and sole principal for Adams & Whitney. On February 9, 1976, the SEC issued a released which claimed Adams & Whitney and Petitioner had wilfully violated and wilfully aided and abetted violations of the anti-fraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities EXCHANGE ACT of 1934, and Rule lOb-5 in connection with an offer to purchase, and sale of ITS securities and manipulation of the price of the security. The release also alleged Petitioner had violated Section 15(c)(2) of the securities EXCHANGE ACT of 1934 and Rule 15c 2-7 by submitting quotations for ITS securities to a interdealer quotation system without notification to the system of arrangements with other brokers and guarantees of profits. Without admitting or denying the allegations against her, Petitioner submitted an offer of settlement regarding the ITS charges which the SEC determined to accept. As a result, the registration as a broker-dealer of Adams & Whitney was suspended for a period of four months. Also, Petitioner was suspended from association with any broker-dealer for a period of four months. On June 27, 2977, the SEC issued a release which charged that Petitioner had wilfully violated and wilfully aided and abetted violations of the registration provisions of the Securities Act of 1933, and had willfully violated an wilfully aided and abetted violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities EXCHANGE Act of 1934 in connection with the offer and sale of the common stock of Tucker Drilling Company, Inc. Without admitting or denying the allegations against her, Petitioner submitted an offer of settlement regarding the Tucker Drilling charges which the SEC decided to accept. As a result, the SEC found that Petitioner wilfully violated and wilfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act of 1933. Further, it was found Petitioner willfully violated and willfully aided and abetted violations of Section 10(b) of the EXCHANGE act and Rule 10b-6. Based on its findings the SEC suspended Petitioner from association with any brokers, dealer or investment company for a period of twelve months and barred her from association with any broker, dealer or investment company in a supervisory or proprietary capacity. Prior to the entry of the administrative penalties imposed against Petitioner in connection with the Tucker Drilling charges, the SEC had obtained a civil injunction against Petitioner which permanently enjoined her from violating the federal securities laws in connection with the offer and sale of Tucker securities or any other securities. Petitioner maintained at hearing that the submitted of settlement were offered as an expedient means of resolving the charges since she did not have the financial resources needed to oppose the allegations. In connection with the ITS charges, Petitioner stated she did not improperly scheme to manipulate the stock prices, that she neither bought nor sold shares of ITS, and that she was charged with other broker-dealers who had "made a market" for ITS simply because of her association with them. Further, Petitioner denied she had ever received compensation for deals made with the ITS sales In connection with the Tucker Drilling charges, Petitioner admitted she actively participated in the purchase and sale of the Tucker stock but that she had not known of the improprieties of others involved in the trading. Petitioner denied she had knowingly violated the laws and alleged that by the time she determined something was improper, the investigations had begun. Petitioner found the Tucker incident a "stupid mistake. In 1976, Adams & Whitney went out of business. Petitioner subsequently devoted her energy to her own and family health problems and became a housewife. In 1985, Petitioner's family moved to Florida and she worked as a secretary for a brokerage firm called Brown & Hawk, Inc. From September, 1986 until the time of her application, Petitioner worked as a secretary for Sheffield Securities, Inc. During her employment with Sheffield, Petitioner studied for an successfully passed the examination for S-7 registration. According to Dennis Dixon, who was a financial principal and general securities associated person at Sheffield Securities, Petitioner is a very trustworthy person who is also very capable. According to Don Saxon, the determination that Petitioner had violated the anti-fraud provisions was a great concern to the Department since those violations are the most serious types perpetrated by an individual in the industry.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED: Department of Banking and Finance, Office of the Comptroller, Division of Securities and Investor Protection enter a Final Order approving Petitioner's application for registration with restrictions as may be deemed appropriate by the Department. DONE and RECOMMENDED this 25th day of July, 1988, in Tallahassee, Florida. JOYOUS D. PARRISH Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 25th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 88-0531 Rulings on Petitioner's proposed Findings of Fact: Paragraph 1 is accepted. Paragraph 2 is accepted. Paragraph 3 is rejected as argument. Paragraph 4 is rejected as argument or unsupported by the evidence. To the extent relevant see findings made in paragraphs 11 & 12. Paragraph 5 is rejected as argument. Paragraph 6 is accepted to the extent addressed in findings made in paragraphs 10, 11, 12 otherwise rejected as argument unsupported by the record, or irrelevant. The first sentence in paragraph 7 is accepted. The balance of paragraph 7 is rejected as argument. Paragraph 8 is accepted. Paragraph 9 is rejected as argument. The first 4 sentences of paragraph 10 are accepted. The balance of paragraph 10 is rejected as argument. Paragraph 11 is rejected as argument. COPIES FURNISHED: Charles E. Scarlett Assistant General Counsel Office of the Comptroller Suite 1302, The Capitol Tallahassee, Florida 32399 Michael J. Cohen, Esquire 517 S. W. First Avenue Fort Lauderdale, Florida 33301 Honorable Gerald Lewis Comptroller, State of Florida The Capitol Tallahassee, Florida 32399-0350
The Issue Whether Respondent, a bail bondsman, committed the offenses alleged in the Amended Administrative Complaint and the penalties, if any, that should be imposed.
Findings Of Fact At all times pertinent to this proceeding, Respondent was licensed by Petitioner as a limited surety and as a professional bail bondsman. Prior to November 23, 1992, Gredys Tarazona entered into an agreement for Respondent to post a bond for James Johansen. In connection with that transaction, Ms. Tarazona delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Tarazona once the conditions of the bond had been satisfied. On November 23, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Tarazona despite demands for her to do so. Prior to August 23, 1992, Julian Maldonado purchased a bail from Respondent. In connection with that transaction, Mr. Maldonado delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Mr. Maldonado once the conditions of the bond had been satisfied. On August 23, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Mr. Maldonado despite demands for her to do so. Prior to April 1, 1993, Faye Finley entered into an agreement for Respondent to post a bond for Michael Finley. In connection with that transaction, Ms. Finley delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Finley once the conditions of the bond had been satisfied. On April 1, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Finley despite demands for her to do so. Prior to November 8, 1992, Robert Post purchased a bail from Respondent. In connection with that transaction, Mr. Post delivered to Respondent the sum of $150 that was to serve as collateral security for the bond. They agreed that the sum of $150 would be returned to Mr. Post once the conditions of the bond had been satisfied. On November 8, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $150 to Mr. Post despite demands for her to do so. Prior to December 10, 1992, Jo Anne Adams entered into an agreement for Respondent to post a bond for Wilfred Byam. In connection with that transaction, Ms. Adams delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Adams once the conditions of the bond had been satisfied. On December 10, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Adams despite demands for her to do so. Prior to December 22, 1992, Shannon Davidson purchased a bail bond from Respondent. In connection with that transaction, Mr. Davidson delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Davidson once the conditions of the bond had been satisfied. On December 22, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Davidson despite demands for her to do so. Prior to July 23, 1993, Albert Perone entered into an agreement for Respondent to post a bond for Richard Falaro. In connection with that transaction, Mr. Perone delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Perone once the conditions of the bond had been satisfied. On July 23, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Perone despite demands for her to do so. Respondent permitted her husband, Ken Jenkins, to participate in the transaction involving the bail bond purchased by Mr. Perone for Mr. Falaro. At the time she permitted him to engage in the conduct of her bail bondsman business as part of the Perone transaction, Respondent knew or should have known that her husband's license as a bail bondsman had been revoked and that he had entered a plea of guilty to a felony charge in a criminal proceeding. On or about April 27, 1993, Respondent received payments totaling $650 for placement of a bond from Angelene G. Goulos. No bond was posted by the Respondent. Respondent failed to return any part of the sum she had received from Ms. Goulos despite demands for her to do so. Prior to November 18, 1992, Ross Rankin purchased a bail bond from Respondent. In connection with that transaction, Mr. Rankin delivered to Respondent the sum of $250 that was to serve as collateral security for the bond. They agreed that the sum of $250 would be returned to Mr. Rankin once the conditions of the bond had been satisfied. On November 18, 1992, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $250 to Mr. Rankin despite demands for her to do so. Prior to May 18, 1993, Mary Pilcher entered into an agreement for Respondent to post a bond for Hassan Niksirat. In connection with that transaction, Ms. Pilcher delivered to Respondent the sum of $200 that was to serve as collateral security for the bond. They agreed that the sum of $200 would be returned to Ms. Pilcher once the conditions of the bond had been satisfied. On May 18, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $200 to Ms. Pilcher despite demands for her to do so. Prior to March 31, 1993, Tania Rodriguez, a/k/a, Tania Cuevas entered into an agreement for Respondent to post a bond for Edwin Cuevas. In connection with that transaction, Ms. Rodriguez delivered to Respondent the sum of $400 that was to serve as collateral security for the bond. They agreed that the sum of $400 would be returned to Ms. Rodriguez once the conditions of the bond had been satisfied. On March 31, 1993, the conditions of this bond were satisfied and the liability on the underlying bond was terminated. Respondent failed to return the sum of $400 to Ms. Rodriguez despite demands for her to do so. On May 4, 1993, and May 6, 1993, Respondent permitted her husband, Ken Jenkins, to conduct bail bond business in transactions with Mary Gandy, another bail bondsman. At the time she permitted him to engage in the conduct of her bail bondsman business in transactions with Ms. Gandy, Respondent knew or should have known that her husband's license as a bail bondsman had been revoked and that he had entered a plea of guilty to a felony charge in a criminal proceeding.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that the Petitioner enter a final order that adopts the findings of fact and conclusions of law contained herein. It is further recommended that Petitioner revoke Respondent's existing licensure and her eligibility for licensure under the Florida Insurance Code. DONE AND ENTERED this 7th day of June, 1996, in Tallahassee, Leon County, Florida. CLAUDE B. ARRINGTON, 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 7th day of June, 1996. COPIES FURNISHED: Bill Tharpe, Esquire Division of Legal Services 612 Larson Building Tallahassee, Florida 32399-0333 Dickson E. Kesler, Esquire Division of Agent and Agency Services 8070 N.W. 53rd Street, Suite 103 Miami, Florida 33166 Loudelle Davis Jenkins 1372 Northampton Terrace West Palm Beach, Florida 33414 Honorable Bill Nelson State Treasurer and Insurance Commissioner The Capitol, Plaza Level Tallahassee, Florida 32399-0300 Dan Sumner, General Counsel Department of Insurance and Treasurer The Capitol, Plaza Level 11 Tallahassee, Florida 32399-0300
The Issue Whether Petitioner is qualified for registration as an associated person.
Findings Of Fact On December 6, 1990, Cliff J. Guerrieri submitted a Uniform Application for Securities Industry Registration (Form U4) to the National Association of Securities Dealers (NASD) for registration as a securities dealer in Florida. A copy of this form was forwarded to the Department of Banking and Finance by NASD. On this Form U4, Petitioner answered "No" to Question 22A relating to having been convicted of or plead guilty of nolo contendere to: a felony or misdemeanor involving: fraud, false statements, or omissions, wrongful taking of property, or bribery, forgery, counterfeiting or extortion? gambling? any other felony? A check by NASD revealed that Petitioner had pleaded nolo contendere to two charges of petit theft in the County Court, Pinellas County, Criminal Division, on March 10, 1986 (Exhibits 3 and 4); pleaded nolo contendere to exposure of sexual organs in the County Court, Hillsborough County, Criminal Division, on September 7, 1989 (Exhibits 5 and 6). Petitioner's employer was notified of these omissions, and on March 7, 1991, Petitioner submitted an Amended Form U4 on which he again checked "No" to Item 22A, but checked "Yes" to Item 22B, which asks if he had ever been charged with any felony or misdemeanor specified in Questions A(1) or (2). Additionally, Petitioner submitted court records admitted here as Exhibits 3, 4, 5 and 6. Although Petitioner testified that he sent Exhibits 3, 4, 5 and 6 with his amended U4, Respondent acknowledged receipt of Exhibits 3, 4, 5 and 6, but denied receiving a copy of the amended U4 dated March 7, 1991. Petitioner testified that the petit theft charges involved license plates in or on his brother's car, which Petitioner was driving when he was stopped and charged with these violations. No further explanation was provided from which the degree of Petitioner's culpability could be ascertained. With respect to the exposure charge, Petitioner stated that he was changing clothes in an open convertible when he was apprehended. Again, no further explanation was provided from which Petitioner's culpability could be ascertained. With respect to the failure to note his criminal conviction on his initial application, Petitioner testified that his initial reading of Item 22 on the U4 led him to conclude erroneously that all of Items 22A through N involved securities violations and since he had never committed such a violation, his sworn answers to Item 22 was correct. Respondent's sole witness testified that Petitioner's application would have been denied even if he had initially submitted a correct application based solely on his convictions. The convictions plus the failure to disclose constituted the given reason for denial of Petitioner's application.
Recommendation Accordingly, it is recommended that the application of Cliff J. Guerrieri for registration as an associated person be denied. RECOMMENDED this 19th day of November, 1991, in Tallahassee, Florida. K. N. AYERS Hearing Officer Division of Administrative Hearings The Desoto Building 1230 Apalachee Parkway Tallahassee, FL 32399-1550 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 19th day of November, 1991. COPIES FURNISHED: Cliff J. Guerrieri 4201 North "A" Street Apartment 14 Tampa, FL 33609 Honorable Gerald Lewis Comptroller Department of Banking and Finance Suite 1302, The Capitol Tallahassee, FL 32399-0350 Ashley Peacock, Esquire Department of Banking and Finance Suite 1302, The Capitol Tallahassee, FL 32399-0350 William G. Reeves General Counsel Department of Banking and Finance Suite 1302, The Capitol Tallahassee, FL 32399-0350 =================================================================
Findings Of Fact Petitioner, Diane Aquino, is a 33 year old female who currently resides at 1271 North West 23rd Avenue, Pompano Beach, Florida. By application filed on February 10, 1981, Petitioner sought licensure as a real estate salesman by Respondent, Department of Professional Regulation, Board of Real Estate. (Respondent's Exhibit l) Question 7(a) on the application asked whether any judgment or decree of a court has been entered against the applicant in which the applicant was charged with any fraudulent or dishonest dealing. Question 15(a) asked whether the applicant has ever had any registration to practice a profession revoked, annulled or suspended upon grounds of fraudulent or dishonest dealing or violations of law. Question 15(b) asked whether applicant has ever surrendered her registration to practice any regulated profession or occupation. Aquino answered each of those questions affirmatively and included a written statement describing actions taken against her by the Securities and Exchange Commission (SFC) based upon fraudulent activities which occurred in 1976. The application was denied by Respondent by letter dated April 28, 1981, on the ground she had failed to demonstrate that she was "honest, truthful, trustworthy, and of good character, and ... (has) a good reputation for fair dealing." The denial precipitated the instant hearing. Between September, 1975, and April, 1976, Petitioner was employed by Colonial Securities, Inc. located in Jersey City, New Jersey, in the capacity of a registered sales assistant. Colonial was a broker-dealer registered with the SEC pursuant to Section 15A of the Securities Exchange Act of 1934. In 1977 Colonial, Petitioner and two other Colonial employees were the subject of an administrative proceeding instituted by the SEC charging that they had "willfully violated and willfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act in that they, directly and indirectly, made use of the means and instruments of transportation and communication in interstate commerce and of the mails to offer, sell and deliver after sale shares of the common stock of Tucker (Drilling Company, Inc.) when no registration statement was filed or in effect as to such securities pursuant to the Securities Act." (Respondent's Exhibit l). Because of the time and expense involved in contesting these charges, and upon advice of her counsel, Aquino consented to the entry of an order by the SEC that made findings that she had willfully violated and willfully aided and abetted violations of Sections 5(a) and 5(c) of the Securities Act of 1933. The consent order also imposed the following sanctions: that Aquino be barred from association with any broker, dealer or investment company, except in a secretarial capacity; and that, after a period of two years she be permitted to apply to become reassociated in non-supervisory and non-proprietary capacity. Aquino is now reapplying for registration with the SEC. In addition to the sanctions imposed by the SEC, Petitioner has been enjoined by a federal court in New York from violating Sections 5(a) and 5(c) of the Securities Act of 1933. Since the entry of the consent order, Petitioner has owned and operated a laundry and dry cleaner business in Pompano Beach, Florida, and been employed as a sales assistant at a stock brokerage firm in Fort Lauderdale, Florida. Since 1980 she has been the president and 50 percent stockholder of Financial Communications, Inc., a small private investment company located in Pompano Beach, Florida. In her present business, Petitioner deals with private investors who entrust her with sums of money for different securities and stock investments. One such investor described her as being honest and trustworthy, and stated he is completely satisfied with the business relationship that they enjoy. Another investor attested to Aquino's excellent reputation for honesty and truthfulness. A former employer indicated he is willing to sponsor her reapplication for licensing with the SEC as a registered securities representative. He is also willing to hire her if that application is approved. Other than the difficulties incurred in 1977, Petitioner has had no other problems that would reflect adversely upon her reputation and integrity.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that the application of Petitioner, Diane Aquino, for licensure as a real estate salesman be GRANTED. DONE and ENTERED this 29th day of September, 1981, in Tallahassee, Florida. DONALD R. ALEXANDER Hearing Officer Division of Administrative Hearings The Oakland Building 2009 Apalachee Parkway Tallahassee, Florida 32301 (904) 488-9675 Filed with the Clerk of the Division of Administrative Hearings this 29th day of September, 1981. COPIES FURNISHED: Steven L. Rishken, Esquire Suite 203, Dadeland Towers North 9700 South Dadeland Boulevard Miami, Florida 33156 Linda A. Lawson, Esquire Assistant Attorney General The Capitol LL04 Tallahassee, Florida 32301 Diane Aquino 1271 NorthEast 23rd Avenue Pompano Beach, Florida 33062
Findings Of Fact Based upon all of the evidence, the following findings of fact are determined: At all times relevant hereto, respondent, Columbus Equities International, Inc. (Columbus Equities), was registered as a broker/dealer with petitioner, Department of Banking and Finance, Division of Securities and Investor Protection (Division), having been issued broker/dealer registration number 30936. The business address of the firm was 6321 East Livingston Avenue, Reynoldsburg, Ohio. Respondent, Roger L. Parsons, was registered with the Division as an agent with Columbus Equities. He was also registered with the National Association of Securities Dealers (NASD) as the financial and operations principal, general principal and representative of Columbus Equities. As such, Parsons was responsible for supervising the employees of Columbus Equities. Similarly, under the terms of Rule 3E-600.002(4), Florida Administrative Code, Columbus Equities was also responsible for the acts of its employees. Prior to June 1990, Columbus Equities was known as Parsons Securities, Inc. The business was originally formed in 1978 by Parsons, who is majority stockholder and serves as its president, secretary and director. In June 1990, the firm's name was changed to Columbus Equities International, Inc. In January 1991, Columbus Equities filed for protection under Chapter 7 of the Federal Bankruptcy Law. When the events herein occurred, Vincent C. Lombardi was registered with the NASD as general securities principal, representative and registered options principal of Columbus Equities. Lombardi's business address was 450 Tuscarora Road, Crystal Bay, Nevada, where he managed the Nevada branch office of Columbus Equities. Except for Ohio, Lombardi was not registered to sell securities in any other state, including Florida. In the fall of 1990, a Division financial analyst, Joanne Kraynek, received a letter from the Nevada Securities Commission. Based upon that letter, Kraynek wrote a letter on November 21, 1990, to "Parsons Securities/Columbus Equities International, Inc." regarding that firm's alleged sale of unregistered securities to a Florida resident. The letter requested various items of information. On December 6, 1990, Lombardi replied to Kraynek's letter on behalf of Columbus Equities and enclosed a number of documents in response to her request. Based upon this information and a subsequent investigation by the Division, the following facts were determined. On May 31, 1990, Charles D. Flynn conducted a transaction on behalf of his wife, Susan, for the purchase of 4,933 shares of World Videophone, an unregistered security. On June 22, 1990, Flynn purchased 2,500 shares of White Knight Resources Limited on behalf of his wife. That security was also not registered in the State of Florida. On July 9, 1990, Flynn purchased an additional 2,000 shares of White Knight Resources Limited on behalf of his wife. In each transaction, the trade was executed by Lombardi from the Nevada branch office of Columbus Equities. When the sales occurred, Flynn and his wife resided at 2045 Parkside Circle South, Boca Raton, Florida. In finding that the Flynns were Florida residents at the time of the trades, the undersigned has rejected a contention by Parsons that Flynn purchased the stocks while residing in Canada and thus the transactions were not subject to the Division's jurisdiction. Evidence of these transactions and the Flynns' Florida domicile is confirmed by the deposition testimony of Mr. Flynn, admissions by Lombardi, and copies of the order tickets from the Nevada branch office. The order tickets reflect the code "MM" (market maker), which means that Columbus Equities held the securities in its own inventory and did not have to go to an outside source to obtain the stocks. Thus, Parsons (on behalf of Columbus Equities) should have been familiar with these securities. However, at hearing he acknowledged that he was not. This in itself is an indication that Parsons was not properly supervising his employees. Finally, there was no evidence that the three transactions were exempt within the meaning of Sections 517.051 and 517.061, Florida Statutes, and thus were beyond the Division's jurisdiction. As the principal for Columbus Equities, Parsons was responsible for supervising the activities of both Lombardi and the Nevada branch office. Indeed, section 27, article III of the NASD Rules of Fair Practice requires that a NASD member such as Parsons supervise the activities of all associated persons to insure that those persons are complying with all securities laws and regulations. In order to fulfill this duty, Parsons should have reviewed on a timely basis the monthly statements generated by the Nevada office as well as that office's new account applications. For the reasons stated hereinafter, Parsons' review of Lombardi's activities was neither complete nor timely. The Flynn account was opened by Lombardi in April 1990 and Lombardi was the only employee who dealt with the Flynns. Parsons had no knowledge that the Flynn account had been opened because he did not review new account applications. This failure to review new account applications prevented Parsons from detecting whether Lombardi was selling securities in states such as Florida where he was not registered. Lombardi was required to send Parsons a monthly statement reflecting the activity of the branch office. During his review of the May statement in the second or third week of June 1990, Parsons became aware of the first Flynn transaction. Just prior to that, Parsons had learned that Lombardi had also engaged in another illicit trade. In addition, Parsons subsequently became aware of at least four other transactions (including two more with the Flynns) involving the sale of securities by Lombardi in states where he was not registered. However, except for a verbal warning given to Lombardi to discontinue that type of trade, Parsons took no disciplinary action against Lombardi until September 13, 1990, when Lombardi was terminated as an employee and the Nevada branch office closed. By failing to review the new account applications and to take prompt action against Lombardi after having learned of his indiscretions, Parsons failed to properly supervise his employees. Rule 3E-600.014(6), Florida Administrative Code, requires that each member establish, maintain and enforce written procedures governing the conduct of its employees to ensure compliance with all security laws and regulations. To this end, Parsons developed a policy (compliance) manual which was to serve as a guide in the conduct of all employees of Parsons Securities, Inc. and its successor, Columbus Equities. A copy of this manual should have been given to each employee, including Lombardi, for his or her review. However, Parsons did not know if Lombardi ever received and reviewed the manual. In addition, the manual itself was deficient in that it failed to indicate whether employees were to be given a copy for review, and it contained no provisions for taking disciplinary action against an agent if he violated a manual proscription. By failing to develop and utilize an appropriate manual, respondents violated the above cited rule.
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered by petitioner finding respondents guilty of all violations alleged in the administrative complaint, ordering respondents to cease and desist all unlawful activities, and imposing a $5,000 fine, jointly and severally, against them. DONE and ENTERED this 26th day of May, 1992, in Tallahassee, Florida. DONALD R. ALEXANDER 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 26th day of May, 1992.
The Issue Whether Respondent committed the violations alleged in the Administrative Complaint? If so, what disciplinary action should be taken against him?
Findings Of Fact Based upon the evidence adduced at hearing, admissions made by Respondent, and the record as a whole, the following Findings of Fact are made: The Department is a state government licensing and regulatory agency. Respondent is now, and has been at all times material to the instant case, a licensed real estate broker in the State of Florida. He holds license number 0265883. In March of 1990, Ulrich Wingens, by and through his attorney, Charles Burns, entered into a written contract to purchase from Jupiter Bay Shoppes Ltd. (hereinafter referred to as "JBS") certain commercial property located in Palm Beach County. Respondent brokered the sale. The sale contract provided that JBS was responsible for payment of Respondent's broker's fee of $50,000.00 and that such compensation was to "[t]o be due and payable only if closing occur[red]." Respondent received a $20,000.00 earnest money deposit from Wingens in connection with the sale. The sale contract provided that the $20,000.00 was to be held in the Jim Towns Realty escrow account. The sale did not close. Litigation between Wingens and JBS ensued. During the pendency of the litigation, the parties instructed Respondent to continue to hold Wingens' $20,000.00 earnest money deposit in escrow until they advised him to do otherwise. Wingens and JBS settled their dispute before the case was scheduled to go to trial. On November 14, 1991, the judge assigned to the case, Palm Beach County Circuit Court Judge Edward H. Fine, entered an order directing Respondent "to immediately transfer to Fleming, Haile & Shaw, P.A. Trust Account the escrow deposit in the amount of $20,000.00 and any accrued interest thereon." Respondent did not comply with the order. He had appropriated the $20,000.00 for his own personal use and benefit and was not holding it in escrow. This was contrary to the instructions he had received from Wingens and JBS. At no time had Wingens or JBS authorized Respondent to take such action. Wingens' attorney, Burns, brought the matter to the attention of the Department. The Department assigned one of its investigators, Terry Giles, to the case. As part of her investigation, Giles interviewed Respondent. During the interview, Respondent admitted to Giles that he had closed his real estate office in October of 1991 and had not at any time prior to the interview notified the Department of the closure. At the time he closed his office, Respondent's real estate broker's license was still in active status.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law it is hereby recommended that the Commission enter a final order finding Respondent guilty of the violations alleged in Counts I, II, III and IV of the Administrative Complaint and revoking his real estate broker's license. DONE AND ENTERED in Tallahassee, Leon County, Florida, this 16th day of August, 1993. STUART M. LERNER 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 16th day of August, 1993. APPENDIX TO RECOMMENDED ORDER, CASE IN CASE NO. 93-1315 The following are the Hearing Officer's specific rulings on the "findings of facts" proposed by the Department in its post-hearing submittal: Accepted as true and incorporated in substance, although not necessarily repeated verbatim, in this Recommended Order. First sentence: Accepted as true and incorporated in substance; Second sentence: Accepted as true, but not incorporated because it would add only unnecessary detail to the factual findings made by the Hearing Officer. 3-13. Accepted as true and incorporated in substance. 14-15. Accepted as true, but not incorporated because they would add only unnecessary detail to the factual findings made by the Hearing Officer. Accepted as true and incorporated in substance. Accepted as true, but not incorporated because it would add only unnecessary detail to the factual findings made by the Hearing Officer. Accepted as true and incorporated in substance. COPIES FURNISHED: Janine B. Myrick, Esquire Senior Attorney Department of Business and Professional Regulation, Division of Real Estate Legal Section, Suite N 308 Hurston Building, North Tower 400 West Robinson Street Orlando, Florida 32801-1772 Mr. James C. Towns 7101 Smoke Ranch Road #1007 Las Vegas, Nevada 89128 Darlene F. Keller, Division Director Division of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802-1900 Jack McRay, Esquire General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792
Findings Of Fact On July 5, 1987, Petitioner, Harold Seligman, filed with the Respondent Office of the Comptroller an application for registration as an associated person of Huberman, Margaretten, and Strauss, a securities firm. By Letter of Denial of September 17, 1987, Respondent denied Petitioner's application. Thereafter, pursuant to Motion and Order, Respondent filed an amended denial letter. The grounds alleged for denial were: The entry of a Temporary Restraining Order dated March 30, 1982, and an Injunction dated July 9, 1982 against the Petitioner, enjoining him from the sale of securities, constituting trima facie evidence of unworthiness under Rule 3E-600.011(2), Florida Administrative Code; and An alleged material misrepresentation In Petitioner's U-4 Application since he had represented therein that the July 9, 1982 Order of Preliminary Injunction was null and void and attached a certified signed copy of the July 2, 1982, Stipulation for Preliminary Injunction and a certified copy of the July 9, 1982 Order of Preliminary Injunction which was not executed by the Circuit Judge. On March 30, 1982, a Temporary Restraining Order (TRO) was entered in State of Florida ex rel. v. First Fidelity Financial Services, et al., Case No. 82-556CT in the Circuit Court of the Seventeenth Judicial Circuit in and for Broward County, Florida, ex parte and without notice, to Petitioner and his corporation, Franklin Capital Corp., among other defendants. Petitioner was operating as a mortgage broker. The TRO contains specific preliminary findings of fraud, misrepresentation, misappropriation of funds, and false advertising by all the defendants. By the very nature of a TRO, the findings of fact therein are preliminary and subject to being revisited subsequent to its entry, at a time and place when the party or parties restrained will have an opportunity to rebut the allegations of the verified Complaint for Injunctive Relief upon which the TRO is initially issued. The pertinent language of decretal paragraph 10 of that TRO reads: This Order shall expire within ten (10) days from the date and time set forth below unless otherwise ordered by this Court. Hearing on this is . . . set before the Court in Chambers on April 6, 1982 at 2:00 p.m. The TRO was, however, not dissolved on April 6, 1982. On July 2, 1982, a Stipulation of Preliminary Injunction was entered into between the Office of the Comptroller and Franklin Capital Corp. and Respondent Seligman. That Stipulation provided that it was entered into upon certain grounds and representations, in pertinent part: Without prejudice to the aforementioned appeal, and without this Stipulation constituting any evidence or admission by the Defendants with respect to any issue of law or fact arising from the allegations of the Plaintiff's Complaint and/or any other papers filed by the Plaintiff herein, FRANKLIN CAPITAL CORP. and HAROLD SELIGMAN, their agents, servants, employees and other persons in concert with them are hereby preliminarily enjoined until further order of this Court . . . The foregoing Stipulation was also conditioned upon entry by the Circuit Court of an Order approving and adopting it. This was thereafter accomplished on July 9, 1982, when Circuit Court Judge Tedder entered an Order of Preliminary Injunction prohibiting Petitioner from: Selling or offering for sale securities, specifically notes, evidence of indebtedness or investment contracts in the form of whole or fractionalized interests in promissory notes or any other securities within the State of Florida which have not been registered with the Plaintiff pursuant to Chapter 517, Florida Statutes; Selling or offering for sale securities in or from offices in this State or selling securities in this State to persons thereof from offices outside the state, by mail or otherwise, through a dealer, associated person or issuer of securities who have not been registered with Plaintiff pursuant to Section 517.12, Florida Statutes; In connection with the offer, sale or purchase of a security, violating the provisions of Section 517.301, Florida Statutes, or any other provision of Chapter 517, Florida Statutes; and, In any practice, transaction or course of business relating to the sale, purchase, negotiation, promotion, advertisement or hypothecation or mortgage transactions, violating the provisions of Section 494.093, Florida Statutes, or any other provision of Chapter 494, Florida Statutes. On January 31, 1983, Franklin Capital Corporation and Seligman appealed to the Fourth District Court of Appeal a January 5, 1983 Circuit Court Order denying their Motion requesting that the Preliminary Injunction be dissolved for lack of subject matter jurisdiction. On October 12, 1983, the Fourth District Court of Appeal in Franklin Capital Corporation, Harold Seligman v. State of Florida ex rel. Gerald Lewis, 441 So.2d 659 (Fla. 4th DCA 1983), held that subject matter jurisdiction under Chapter 517, existed to prosecute Seligman and others for violations of securities laws and per curiam affirmed the Circuit Court order denying dissolution of the Preliminary Injunction. (See Conclusions of Law). At formal hearing, Petitioner testified that he understood that final resolution of the foregoing appeal regarding the Order of Preliminary Injunction was that, "a 'mortgage' was a 'security' and you needed a securities license. On his licensure application Seligman disclosed that he had previously been enjoined by a Court from the sale of securities and that an Order had been entered against him in connection with investment related activity. However, Petitioner also submitted a copy of the July 2, 1982 Stipulation for Preliminary Injunction, and a copy of the July 9, 1982 Order of Preliminary Injunction. The latter copy of the July 9, 1982 Circuit Court Order of Preliminary Injunction submitted by Seligman was, however, an unsigned copy. Each copy submitted by Seligman bears a certification of May 2, 1987 by a Broward County Circuit Court Deputy Clerk that each is a "true and correct copy of the original as it appears on record." Seligman, in reliance on that certification, represented on his application to Respondent that "The Preliminary Injunction was not signed by the Judge as he ordered me released" and was "null and void." The date of certification by the Circuit Court Deputy Clerk and the hand- lettered page numbering on these copies submitted by Seligman with his application strongly militate against any suggestion of manipulation or alteration of these documents by Mr. Seligman and concomitantly suggest clerical error has occurred in the Office of the Circuit Court Clerk. Petitioner Seligman presented the testimony of the Receiver, Hugh Hawes Bowers, Jr., who had been appointed by Circuit Court Judge Tedder under the initial TRO. Bowers affirmatively testified that throughout his administration of the receivership, he had found no irregularities with the business of either Seligman or his corporation and that all of the findings of fact of improper, illegal, or nefarious dealings set forth in the March 30, 1982 TRO were false with regard to Petitioner and his corporation, although the allegations/facts found in the TRO had proved to be true with regard to other unconnected defendants named in the same lawsuit. Bowers opined that all funds and mortgages handled by Franklin Capital Corp. and by Petitioner had been properly administered. During the course of his receivership, which involved an accounting, Bowers discovered no misrepresentations attributable to Petitioner. His testimony, however, could best be described as "guarded" and not revelatory of what may have occurred before he assumed the receivership. Bowers' receivership was terminated and control of the corporation was returned to Petitioner without any objection by Bowers, but it is not clear exactly when the corporation was returned to Seligman's control or under what conditions, if any. Petitioner holds a real estate brokerage license active since 1964 and an inactive mortgage brokerage license. Petitioner has never had disciplinary action taken with regard to either license. Petitioner's application is for a certificate of registration as an associated person with Huberman, Margaretten and Strauss, with whom he has had a securities account for approximately four years. Michael Huberman, president of that firm, testified by deposition as to his high opinion of Petitioner with regard to honesty and Petitioner's personal dealings with Mr. Huberman. However, Mr. Huberman did not personally handle Petitioner's account, was unknowledgable about Petitioner's pending application, and had no real knowledge of Petitioner's reputation among others in the community but outside his firm for truth and veracity or honest dealing. Basically, Mr. Huberman's testimony could be summarized that Petitioner and his present wife are valued customers. Huberman's testimony is therefore neutral, and detailed discussion of the many discrepancies in his testimony, which either evidence a remarkably poor memory or lack of credibility, is unnecessary.
Recommendation Upon the foregoing findings of fact and conclusions of law, it is recommended that the Comptroller enter a final order denying Petitioner's application for a certificate as an associated person. DONE and RECOMMENDED this 28th day of July, 1988, at Tallahassee, Florida. ELLA JANE P. DAVIS, 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 28th day of July, 1988. APPENDIX TO RECOMMENDED ORDER, CASE NO. 87-4623 The following constitutes specific rulings upon Petitioner's Proposed Findings of Fact (PFOF) pursuant to Section 120.59(2), Florida Statutes. Petitioner's PFOF 1-5 Accepted, although it is noted none have the mandatory references to exhibits or transcript citations and some are not adopted as either not FOF or because they are subordinate and" unnecessary. 6 Accepted in FOF 3. 7-10 Accepted in FOF 10. 11-13 Except as not supported by the record or as a mere characterization of counsel, covered in FOF 4-5. 14 Accepted in FOF 9. 15-16 Except as conclusions of law contained therein, accepted in FOF 9. 17-18 Accepted in FOF 11. 19-21 Rejected as not PFOF but PCOL. See COL. 1-3 Are deemed to be proposed decretal paragraphs and as such require no ruling as would a PFOF. Respondent's PFOF 1-4 Accepted. 5-9 Rejected as not representative either of the exhibits, the testimony, or the state of the law re TROs or the burden of proof in the instant case. See FOF 3, COL. 10-11 Accepted in FOF 4. 12-13 Accepted in FOF 5. 14-16 Accepted in FOF 6-7. Accepted in FOF 8. Accepted in FOF 9. Except as subordinate and unnecessary, accepted in FOF 12. COPIES FURNISHED: Gerald Lewis, Comptroller Department of Banking and Finance The Capitol Tallahassee, FL 32399-0810 Kenneth S. Sandler, Esquire 4700 B Sheridan Street Hollywood, FL 33021 Charles E Scarlett, Esquire Office of the Comptroller Department of Banking and Finance The Capitol Tallahassee, FL 32399-0350 =================================================================
Findings Of Fact At all times pertinent to the allegations contained herein, the Florida Real Estate Commission was the state agency responsible for the licensing and regulation of real estate professionals in this state. Respondent was licensed by the Commission as a real estate broker under licenses Numbers 0117117 and 0257450-1. His licenses were effective at all times under consideration herein. On December 19, 1988, Richard and Charleen Mercier, owners of the Sherwood Lounge in Delray Beach, Florida, entered into a 6 month exclusive right to sell agreement with Richard Scott Realty for the sale of their property. At that time, Respondent was listed as the broker of record for Richard Scott Realty. The licensed sales person obtaining the listing was Walter P. Van Oostrum. The agreement called for the payment of a 10% commission upon sale. Thereafter, on April 4, 1989, the Merciers entered into another listing agreement with WMB Management, a different realty company with whom Respondent had become affiliated after his resignation from Richard Scott Realty on March 17, 1989. On April 18, 1989, Steven Yoo signed a contract to purchase the Sherwood Lounge for $60,000.00 Thereafter, the sale was closed and the closing statement reflects a brokerage commission of $7,500 to be paid from the proceeds of the sale. On May 2, 1989, Mrs. Mercier paid Respondent the additional sum of $2,500.00, by check number 219, drawn on the Carney Bank in Delray Beach, Florida. This check represented the balance due of the commission earned on the sale though there was no explanation as to how a commission of $10,000.00 could be earned on a $60,000.00 sale when the contract called for a commission of 10%. The check was cashed. Sometime thereafter, Respondent paid the sum of $500.00 to Mr. Van Oostrum in partial payment of his share of the commission on the sale of the Sherwood Lounge. According to their agreement, Mr. Van Oostrum was to receive 30% of the commission received by the brokerage on the sale. When Mr. Van Oostrum asked Respondent for the remaining $2,500.00 he was due, it was not paid. Thereafter, Mr. Van Oostrum filed suit in County Court in Broward County for the $2,500.00 due him. Respondent failed to appear or file a response and on December 29, 1989, the Court entered a Default and Final Judgement against Respondent in favor of Mr. Van Oostrum in the amount of $2,500.00 plus $80.00 costs. Though Mr. Van Oostrum thereafter made demand upon the Respondent for payment the judgement has not been satisfied. Respondent offered, in compromise and satisfaction, a payment of $100.00 plus a promise to pay an additional $100.00 "when he got it." This offer was not accepted by Mr. Van Oostrum. The balance due has not been paid.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that a Final Order be entered revoking all real estate licenses, as broker or salesman, held by the Respondent, Dominic Scacci. RECOMMENDED in Tallahassee, Florida this 24 day of August, 1992. ARNOLD H. POLLOCK, Hearing Officer Division of Administrative Hearings The DeSoto Building 1230 Apalachee Parkway Tallahassee, Florida 32399-1550 (904) 488-9675 COPIES FURNISHED: Filed with the Clerk of the Division of Administrative Hearings this 24 day of August, 1992. James H. Gillis, Esquire DPR - Division of Real Estate Suite N - 308, Hurston Building 400 W. Robinson Street Orlando, Florida 32801-1772 Dominic Scacci 1880 N. Congress Avenue, #405 West Palm Beach, Florida 33401 Jack McRay General Counsel Department of Professional Regulation 1940 North Monroe Street Tallahassee, Florida 32399-0792 Darlene F. Keller Division Director Division of Real Estate 400 W. Robinson Street P.O. Box 1900 Orlando, Florida 32802-1900
