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
Recommendation Based upon the finding of facts and conclusions of law recited above, it is recommended that the agency's action in denying the Petitioner's application for registration as an electronic service dealer be sustained. DONE and ENTERED this 18th day of February, 1977, in Tallahassee, Florida. JAMES E. BRADWELL, Hearing Officer Division of Administrative Hearings Room 530, Carlton Building Tallahassee, Florida 32304 (904) 488-9675 COPIES FURNISHED: Lawrence D. Winson, Esquire Department of Business Regulation Division of Beverage The Johns Building Tallahassee, Florida 32304 William C. Kimberl, Director Division of General Regulation Department of Business Regulation The Johns Building Tallahassee, Florida 32304 Mr. Arthur Resnick Pompano Beach Club Towers 111 Briny Avenue, Apt. 1105 Pompano Beach, Florida 33062
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.
Findings Of Fact At all times pertinent to the issues herein the Respondent, Linda H. Abraham, was licensed by the State of Florida as a real estate broker under license number 0323486. During the months of February and March 1983 Martha L. Tew owned a parcel of waterfront property located in Panama City Beach which was identified as being for sale by a sign on the property reflecting her husband's real estate company. Her husband was Ronald Eugene Tew and Mrs. Tew also held a salesman's license. Mr. Tew was contacted by Gregory A. Peaden, a contractor and developer in the Panama City Beach area on several occasions prior to March 1983 with offers to purchase the Tew property. The contacts with Mr. Peaden subsequently culminated in a contract dated March 8, 1983, between Greg Peaden, Inc., and the Tews in the amount of, initially, $180,000.00. During the negotiations for the property, Mr. Peaden had introduced the Respondent to the Tews as his broker. When, at the time of Use contract, Mr. Peaden advised the Tews he wanted Respondent to get a commission for the sale, Mr. Tew refused to pay any commission indicating that Respondent had performed no service for him; that he, Tew, was a broker himself; and that he had no intention of paying any commission to the Respondent or to anyone, for that matter. After some further negotiation, a second contract was prepared and agreed upon wherein the contract price was raised to $189,000.00 and the Respondent's commission was to be paid with the additional money from Mr. Peaden. The contract in question executed by the parties on March 8, 1983, reflected that the sum of $5,000.00 deposit was paid to Linda Abraham, Inc., by check. Mr. Tew contends that at this point he was led to believe that Respondent had the $5,000.00 check and, he contends, he would not have signed the contract if he had known that the check had not been delivered and placed in Respondent's escrow account. The actual signing of the contract took place in Respondent's office, a mobile home which she shared with Mr. Peaden's business. This trailer home was described as having Mr. Peaden's office on one end, and Respondent's on the other, with the living-kitchen area in the middle used as a reception area for both businesses. Mr. Peaden contends that once the contract was signed by the Tews, he gave a check drawn on one of his business accounts, that of Peaden and Guerino, a property management company he owned, to his secretary, Judy White, to deposit in Respondent's escrow account and thereafter promptly forgot about the matter until the date scheduled for closing, two months in the future. Ms. white, on the other hand, contends that Mr. Peaden at no time gave her a check for $5,000.00 to deposit to Respondent's escrow account. It is her contention that when she received the contract after it was signed, she, on her own, inserted the receipt portion on the bottom of the second page and signed as having received it merely to complete the contract. At the time, she contends, she did not know if the deposit was received from Peaden or not. She has never signed a contract like this before without a deposit and cannot give any other reason why she did it on this occasion. She is certain, however, that at no time did Mr. Peaden ever give her a $5,000.00 check or tell her to draw one for his signature on March 8, 1983, or, for that matter, at any time thereafter. What is more, neither Mr. Peaden nor the Respondent, at any time after the signing of the contract and prior to her departure under less than friendly circumstances approximately a week or so later, ever asked her whether she had made the escrow deposit or discussed it with her at all. Ms. white contends that she left Mr. Peaden's employ because he expected her to perform certain functions she was unwilling to do. When she left his employ, she did not feel there was any unfinished business that needed her immediate attention. To the best of her recollection, there were no sales contracts or deposits left in or on her desk - only bills. According to Respondent, the $5,000.00 deposit by Mr. Peaden was to stay in her escrow account. She understood Mr. Peaden was going to arrange with the bank to borrow the entire cash payment called for under the contract, including the deposit, and when that was done, it was her intention to give him back his $5,000.00 check. Under these circumstances, the amount in escrow would never be paid to the sellers but would be returned to Mr. Peaden and the Tews would receive the entire cash amount called for by the contract from the proceeds of the bank loan. Respondent also indicated that this procedure had been followed at least once, in a prior transaction. Under the circumstances, it is clear that no deposit was ever received from Mr. Peaden nor was it placed in Respondent's escrow account. Therefore, the contract, dated on March 8, 1983, was false in that it represented a $5,000.00 deposit had been received. The check for $5,000.00 dated March 8, 1983, payable to Linda Abraham, Inc. and drawn by Mr. Peaden on the Peaden and Guerino account with the stub admitted to show the date of issuance, does not establish that it was written on March 8, 1983, as contended. This check, number 1349, comes after two other checks, 1347 and 1348, which bear dates of April 4 and September 7, 1983 respectively. Mr. Peaden's explanation that the checks were drafted out of sequence is non-persuasive. Of greater probative value is the fact that neither Mr. Peaden nor Respondent bothered to review their bank statements on a regular basis. The check in question was drawn on an account not related to the construction and development business of Greg Peaden, Inc. Further, examination of Respondent's escrow account reflects that there were approximately eleven transactions over a three year period even though, according to her, she handled numerous other closings as well as this. Her explanation is that in most cases the attorney handling the closing served as escrow agent even though she was the sales broker. Her explanation is not credible. This appears to be a classic situation of movement of accounts to satisfy a particular end. The contract called for closing of the sale to be held on or before May 8, 1983, in the office of Panama Title Company. May 8, 1983, fell on a Sunday. As a result, the closing would not have been held that day, but it was not held the following day, Monday, May 9, 1983 either. Mr. Peaden admits that he had not checked with Panama Title prior to May 9 to see if everything was prepared for the closing. Instead, he contacted the title company for the first time at approximately noon on May 9. Apparently he received disquieting information because he thereafter called his attorney, Mr. Hutto, and asked him to check with the title company to see if and when the closing would be held. Mr. Hutto's inquiry reflected that the title insurance binder was ready but the closing statement and the package were not because the title company required a copy of the contract. At this point Mr. Peaden immediately had a copy of the contract delivered to the title company but later that day was advised that the closing still could not be held because of the failure to provide a survey. Mr. Hutto indicates that the reason given was that the release clauses called for in the contract required the survey to be furnished though he did not necessarily agree with that. In any event, closing was not held on May 9. At this time both Mr. Peaden and Respondent allegedly became concerned about the $5,000.00 deposit. Admittedly, neither had concerned themselves with it from the time of the signing of the contract. At this point, Mr. Peaden indicates that he examined his bank records which failed to show the deposit being made and his subsequent search of Ms. White's desk finally revealed the check, undeposited, still there. On May 11, 1983, a $5,000.00 deposit was made to the account on which the deposit check was drawn and on the same day, May 11, 1983 check number 1349, in the amount of $5,000.00 was presented against the account. When on May 10, 1983, Mr. Peaden and Respondent went to Mr. Hutto's office the primary reason for the visit was because Mr. Peaden had heard that the Tews were planning to sell the property in question to someone else at a price much higher than that agreed upon for the sale to Peaden. At this point Mr. Hutto indicated that if Peaden so desired, Hutto could "fix up the contract to jam up the works" until he could do something about it. His examination of the contract revealed that it was not recorded or acknowledged and under the laws of Florida, acknowledgment is required in order for a contract to be recorded. Hutto asked the Respondent if she had seen the parties sign the contract and when she said that she had, he had his secretary prepare a jurat. Unfortunately, his secretary prepared an affidavit type notary jurat rather than an acknowledgment and Hutto quickly admits that he did not look at it when it was given back to him. He says that if he had, he would have had it changed but in any event, without looking at what was given him, he gave it to the Respondent with the implication, at least, that she should notarize it and have the contract recorded. According to Hutto, Peaden, and the Respondent, the sole purpose for notarization and recordation was to preserve the status quo to protect Mr. Peaden's interest in the property so that the matter could be adjudicated in a lawsuit which was soon to be filed. Respondent contends she never intended any misconduct throughout this transaction nor did she do any of the things alleged in the Administrative Complaint. She contends she never saw the check which Mr. Peaden allegedly gave to his secretary for deposit to her escrow account. She merely assumed that it was given and never checked to insure that it had been placed in her account. She does not know why Mr. Peaden did not give her the check. When she took the contract to the Tews, she was operating under the assumption that the check had been received but did not verify this to insure that it had. She contends that since she represented the buyer, her duties were limited to insuring that he performed and this made it simple. She did not check on him because she had had so much experience with him, him being by far her largest account, if he said something, she believed him and when the contract was executed, she merely instructed the secretary, Judy White, to make the file and did not check on it again. As to the recordation and the notarization after the fact, she acted upon the advice of counsel, she states, and did what was suggested to her by Mr. Hutto. It should be noted, however, that Mr. Hutto did not represent her but instead represented Mr. Peaden and while because of her long-standing relationship with him and Mr. Hutto, she may have felt safe in relying on his advice, the fact remains that Hutto was not her attorney.
Recommendation On the basis of the foregoing Findings of Fact and Conclusions of Law, it is, therefore: RECOMMENDED that the Respondent's license as a registered real estate broker in Florida be suspended for six months and that she pay an administrative fine of $2,000.00. RECOMMENDED this 6th day of June, 1985, in Tallahassee, Florida. ARNOLD H. POLLOCK 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 6th day of June, 1985. COPIES FURNISHED: Arthur Shell, Esquire Department of Professional Regulation Division of Real Estate 400 W. Robinson Street Orlando, Florida 32801 John D. O'Brien, Esquire P. O. Box 1218 Panama City, Florida 32402 Harold Huff Executive Director Division of Real Estate P. O. Box 1900 Orlando, Florida Fred Roche Secretary Department of Professional Regulation 130 N. Monroe Street Tallahassee, Florida 32301 Salvatore A. Carpino General Counsel Department of Professional Regulation 130 N. Monroe Street Tallahassee, Florida 32301
Findings Of Fact Respondent has been employed in the securities industry since approximately 1957. He has worked for a number of broker/dealers over the years and is familiar with the procedures involved in transferring employment from one broker to another. It is the custom in the securities industry that when a securities salesperson changes employment, forms U-4 and U-5 are filed with the National Association of Securities Dealers. As registration is approved by that organization and by the various states involved, the states give that information to the National Association of Securities Dealers, which in turn gives that information to the securities firm which employs the associated person seeking registration, and that brokerage firm in turn notifies the applicant. Respondent began to work at Alison Baer Securities, Inc., in September, 1988, and remained employed there until February, 1989. When he associated himself with Alison Baer, Respondent applied for registration as an associated person with that company. As is the proper procedure, he submitted a U to the National Association of Securities Dealers. While waiting for his registration to be approved, Respondent maintained telephone and personal contact with his own clients. He did not, however, sell or offer to sell securities until after he was sure his registration was approved. Respondent's application for registration as an associated person with Alison Baer Securities, Inc., was approved by the National Association of Securities Dealers and was also approved by the states of New York, Texas, Georgia, Florida, and Oklahoma. In late October of 1988, Jeffrey Britz, the President and Chief Executive Officer of Alison Baer Securities, told Respondent that his registration as an associated person with Alison Baer Securities had been approved by the state of Florida. In fact, Respondent was not registered as an associated person by the state of Florida until December 7, 1988. Respondent did not attempt to directly confirm with the Department of Banking and Finance his registration as an associated person with Alison Baer Securities. Respondent has applied for registration with the Department as an associated person with Shamrock Partners, Ltd. The Department denied that application based solely on the allegations which are the subject matter of this proceeding.
Recommendation Based upon the foregoing Findings of Fact and Conclusions of Law, it is RECOMMENDED that a Final Order be entered finding Respondent not guilty of the allegations contained in the Administrative Complaint, dismissing the Administrative Complaint filed against him in this cause, and granting his application for registration with the Department as an associated person with Shamrock Partners, Ltd. DONE and ENTERED this 14th day of February, 1992, at Tallahassee, 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 14th day of February, 1992. APPENDIX TO RECOMMENDED ORDER Petitioner's proposed finding of fact numbered 27 has been adopted in this Recommended Order. Petitioner's proposed findings of fact numbered 1-5, 11-14, 16-18, 23- 26, 28, 29, and 31-34 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 6-10, 15, 19, and 30 have been rejected as being subordinate to the issues involved in this proceeding. Petitioner's proposed findings of fact numbered 20-22 have been rejected as not being supported by any competent evidence. COPIES FURNISHED: Deborah Guller, Esquire Assistant General Counsel Office of the Comptroller Suite 211 111 Georgia Avenue West Palm Beach, Florida 33401 Richard Doggett, Esquire 808 Northeast 3rd Avenue Fort Lauderdale, Florida 33304 Honorable Gerald Lewis Comptroller, State of Florida The Capitol, Plaza Level Tallahassee, Florida 32399-0350 William G. Reeves, General Counsel Department of Banking and Finance Room 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 There were originally three counts in the Administrative Complaint. Count II was dismissed by the Petitioner Board at the beginning of the hearing. Count I alleges that the Respondents failed to refund a fee as required by the contract and the statutes; and Count III alleges that Respondents employed unlicensed persons as sales personnel. Based upon the stipulation of the parties, the primary issue in Count I was whether the Respondents refused the refund in bad faith or under color of some right to the fee. The issue in Count III was whether the activities engaged in by the unlicensed persons were regulated activities.
Findings Of Fact Count I Sav-On Rentals, Inc. (Sav-On), is a licensed corporate real estate broker located in Orlando, Florida, holding License #211231. Carl Stuart Courtney is the active broker for Sav-On and holds Licenses #0211232 and #0017643. Both Respondents were licensed at all times pertinent to the allegations in the Administrative Complaint. Susan Young and A. J. Stephens went to Sav-On on July 18, 1980, seeking information on renting a house. They executed a contract with Sav-On, paid the required $40 fee, and were given data on houses for rent. The contract contains the following pertinent language: . . .Notice: Pursuant to Florida Law: If the rental information provided under this contract is not current or accurate in any material aspect, you may demand within 30 days of this contract date a return of your full fee paid. If you do not obtain rental information you are entitled to receive a return of 75 percent of the fee paid, if you make demand within 30 days of this contract date. . . That night Young and Stephens changed their minds about renting a house. The next day they called Sav-On and requested a refund of their fee. Young rented an apartment from an apartment complex. On August 14, 1980, Stephens prepared the written refund request at Sav-On. Sav-On had a listing for the sublease of an apartment in the same complex in which Young rented her apartment. There is no evidence that Sav-On gave Young or Stephens any information on that sublease, or that Young rented her apartment based on her contact with Sav-On. Sav-On denied the refund on the basis that Young had leased a property available through Sav-On. As of the date of the hearing, Young and Stephens had not received a refund. Count II Christopher LaFrance, a licensed real estate salesman, was one of the first licensees hired by Sav-On Rentals, Inc., after its incorporation in July of 1979. He was employed until January, 1980. When LaFrance was first hired, there were several unlicensed clinical staff employed by Sav-On. These employees were holdovers from Sav-On's non- licensed business. One of the unlicensed persons, Dawn (last name not stated), was responsible for telephone service to persons already registered. She provided additional listings to persons already registered with Sav-On. Another of the unlicensed persons was Stephanie (last name not stated), who was a verifier. She called listings to determine if they were unrented and still available. Stephanie and Dawn were not licensed at the times in question. Between July of 1979, and January, 1980, these unlicensed personnel were gradually replaced by licensed persons.
Recommendation Based on the foregoing Findings of Fact and Conclusions of Law, and considering the facts in mitigation, the Hearing Officer recommends that the Respondent, Carl Stuart Courtney, receive a letter of reprimand for violation of Section 475.25(1)(d), Florida Statutes; and that the Respondent, Sav-On Rentals, Inc., be placed on probation for a period of six months for the violation of Section 475.25(1)(d), Florida Statutes. DONE and ORDERED this 15th day of March, 1982, in Tallahassee, Leon County, Florida. STEPHEN F. DEAN, 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 15th day of March, 1982. COPIES FURNISHED: Salvatore A. Carpino, Esquire Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301 Ronald W. Brooks, Esquire 338-D North Magnolia Avenue Orlando, Florida 32801 C. B. Stafford, Executive Director Board of Real Estate 400 West Robinson Street Post Office Box 1900 Orlando, Florida 32802 Samuel Shorstein, Secretary Department of Professional Regulation 130 North Monroe Street Tallahassee, Florida 32301
Findings Of Fact On March 19, 1985 petitioner, Michael Scott Symons, became employed as a financial manager with the brokerage firm of Easter Guthmann & Kramer Securities, Inc. (EGK) at 7200 West Camino Real Street, Suite 200, Boca Raton, Florida. In connection with his employment Symons filed an application for registration as an associated person of EGK with respondent, Department of Banking & Finance, Division of Securities (Division). The application was received by the Division on or about March 19, 1985 and was deemed to be complete on April 18, 1985. On that portion of the application entitled "Personal History" Symons gave 5700 Grillet Place, S.W., Fort Myers, Florida 33907 as his home address. He identified EGK's address as being 7200 West Camino Real, Suite 200, Boca Raton, Florida 33433. Although Symons signed the application he stated that EGK had actually submitted the application on his behalf since it was a common practice for brokerage firms to do administrative work on behalf of their employees. This is consistent with an agency rule (3E-600.02(3), F.A.C.) which requires that a securities dealer file and countersign the application for registration on behalf of an associated person. On March 24, 1985, or shortly after he began employment with EGK, Symons moved into an apartment at 6091 Boca Colony Drive, Boca Raton, Florida 33427. Approximately one month later, he began renting Post Office Box 3299 in Boca Raton. Symons did not inform the Division of these changes in address, or otherwise amend his application. On or about July 12, 1985 a Division bureau chief spoke by telephone with the chief financial officer of EGK and asked if EGK would voluntarily withdraw Symons' application. Later that same day, an EGK vice-president telephoned the bureau chief and advised him the firm would not withdraw the application. On July 16, 1985, the Division prepared and dated an Order Denying Application for Registration as an Associated Person. The next day a Division attorney sent a copy by certified mail to Symons' at 5700 Grillett Place, S.W., Fort Myers, Florida. Because Symons' wife had previously provided the post office with a change of address form the envelope containing the order was forwarded from Fort Myers to Post Office Box 3229 in Boca Raton. Certified mail notices were thereafter placed in the box on July 24 and July 31. However, the mail was never claimed. On August 8, 1985 the envelope was returned to the Division. It was received in Tallahassee on August 12, 1985. There is no evidence that Symons was aware the order had been mailed or that he deliberately failed to claim the letter. The agency attorney similarly assumed that Symons had not received a copy. Accordingly, it is found that at this point in time Symon had no knowledge that the July 16 order-was entered, and had been mailed to him in Fort Myers and Boca Raton. On August 19, 1985 the Division attorney again sent a copy of the July 16 order by certified mail to 7200 West Camino Real, Suite 200, Boca Raton. This was the address of EGK. According to the attorney, it was her intention to mail the order to Symons, and not his employer. The order contained the following pertinent language on page 5: Respondent is advised that Respondent may request a hearing to be conducted in accordance with the provisions of Section 120.57, Florida Statutes. A request for such hearing must comply with the provisions of Rule 28-5.201, Florida Administrative Code, and must be filed within twenty-one (21) days after receipt of this order. Otherwise, Respondent will be deemed to have waived all rights to such hearing. The certified mail receipt for the envelope containing the order was apparently signed for by Charlie Shields, an EGK employee. 1/ It eventually reached the desk of EGK's chief financial officer, James Weber, in an unopened envelope on August 23, 1985. Weber opened the envelope and read the enclosed order. He noticed on page five of the order that there was a twenty-one day time frame in which an appeal of the agency denial could be made. Believing that the twenty-one day time frame began on July 16, Weber erroneously concluded that the time to request a hearing had already expired. This was probably because he had never before seen a denial order, and was not familiar with the procedures under Chapter 120, F.S. Weber then showed the order to Edward Guthmann, a principal and vice- president of EGK. Guthmann telephoned an out- of-state attorney seeking advice on how to proceed, and sent a copy of the order to the attorney on August 23. The attorney did not take any action, and returned the order to Guthmann on an undisclosed dated between late August and the middle of September. On September 17 Weber "came to the realization" that under any interpretation of the order the time frame in which to request a hearing had run. He then contacted petitioner's present counsel on September 17 to discuss obtaining legal representation for Symons. Symons has continued using that counsel since that time. A petition for hearing was eventually filed with respondent on October 1, 1985. This petition was denied by agency order entered on October 16, 1985 on the ground Symons had "constructive receipt and notice of the Denial Order at the time of its delivery by U.S. Certified Mail to Respondent's personal address on July 24 1985, and furthermore, deems Respondent to have received actual notice. . . on August 25, 1985, when the Denial Order was claimed and signed for at EGK's address as listed on the application." Neither Weber or Guthmann informed Symons prior to September 15 that they had received the Division order, or that the document even existed. They also did not advise him that they had contacted an out-of-state attorney in August in an effort to obtain advice. In this regard, petitioner had not authorized them to take any action with respect to the denial order, or to seek the advice of an attorney. Symons was unaware of the existence of the denial order prior to September 20, 1985 when he was shown a copy of the order by his employer. Had he been aware of the order prior to September 15, he would have filed a request for a hearing. Even though he did not specifically voice an objection to his employer opening his mail, Symons did not expressly authorize his employer to accept the order or any other notices from respondent. Indeed, Symons considered certified mail to be "a personal thing," and something that "an employer has (no) right to open."
Recommendation Based on the foregoing findings of fact and conclusions of law, it is RECOMMENDED that a final order be entered finding that petitioner timely requested an administrative hearing to contest respondent's denial of his application for registration as an associated person. DONE and ORDERED this 4th day of December, 1986 in Tallahassee, Leon County, Florida. DONALD R. ALEXANDER 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 4th day of December, 1986.
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
