The Missouri Securities Division (the "Securities Division") alleges that Datatex Investment Services, Inc. ("Datatex"), while transacting business in the State of Missouri as a federal-covered investment adviser, engaged activity in violation of the Missouri Securities Act of 2003.
Datatex desires to settle the allegations and the matters raised by the staff of the Securities Division relating to Datatex's activity.
Datatex and the Securities Division consent to the issuance of this Consent Order (the "Order").
Datatex stipulates and agrees to the issuance of this Order without further proceedings in this matter, agreeing to be fully bound by the terms and conditions specified herein.
Datatex waives its right to a hearing with respect to this matter.
Datatex stipulates and agrees that they waive any rights that they may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Order. Further, Datatex specifically forever releases and holds harmless the Missouri Office of Secretary of State, Secretary of State, Commissioner of Securities and their respective representatives and agents from any and all liability and claims arising out of, pertaining to or relating to this matter.
Datatex stipulates and agrees that, should the facts contained herein prove to be false or incomplete, the Missouri Division of Securities preserves the right to pursue any and all legal or administrative remedies at its disposal.
Datatex is a federal-covered investment adviser with an address of 7800 Forsyth Ave., Seventh Floor, Clayton, MO 63105.
Datatex associated with four representatives who were not properly registered as investment adviser representative of Datatex, although each of the four representatives did pass the relevant investment adviser representative exam.
Information acquired by the Securities Division revealed Datatex, through its unregistered investment adviser representatives, provided investment advisory services to thirty-two (32) Missouri clients during the period the representatives were unregistered.
Neither Datatex nor its investment advisor representatives disclosed to Datatex's clients that the investment adviser representatives were not properly registered with the State of Missouri. However, Datatex did voluntarily disclose the registration issue to the Securities Division.
Section 409.6-601(a), RSMo. (Cum. Supp. 2008), provides that the Securities Act of 2003 shall be administered by the commissioner of securities (the "Commissioner").
Section 409.6-604(a), RSMo. (Cum. Supp. 2008), provides that if the Commissioner determines that a person is engaging in an act, practice or course of business constituting a violation of the Securities Act, the Commissioner may issue an order directing the person to take action necessary or appropriate to comply with the Securities Act.
Section 409.6-604(h), RSMo. (Cum. Supp. 2008), provides that the Commissioner is authorized to issue administrative consent orders in the settlement of any proceeding in the public interest under this act.
Datatex violated the Missouri Securities Act of 2003 when it failed to disclose to clients that its investment adviser representatives were not registered in the State of Missouri.
WHEREAS, the Commissioner, after consideration of the stipulations set forth above and on the consent of Datatex and the Securities Division, finds the following Order to be in the public interest, necessary for the protection of public investors and consistent with the provisions of Chapter 409, RSMo (Cum. Supp. 2008).
NOW, THEREFORE, it is hereby Ordered that:
Datatex is prohibited from engaging in activity in the State of Missouri which would violate the Missouri Securities Act of 2003.
Datatex shall ensure that its investment adviser representatives are registered in the state of Missouri before they engage in investment advisory activities by requiring registration personnel to, among other things:
Monitor the IARD System for notices relating to deficient applications and ensure appropriate action is taken to correct the noted deficiencies; and
Verify that the representative's registration has been approved in Missouri and correctly identified with Datatex by reviewing the representative's registration summary records maintained on the CRD System.
Datatex shall deliver to the Securities Division the total amount of fifteen thousand dollars ($15,000) in five (5) monthly payments of three thousand ($3,000) by cashier's check made payable to the Missouri Secretary of State's Investor Education and Protection Fund. The first such amount shall be immediately due and payable, and each of the four remaining payments shall be made each following month until the total of $15,000 has been paid.
Datatex shall pay its own costs and attorneys fees with respect to this matter.
WITNESS MY HAND AND OFFICIAL SEAL OF MY OFFICE AT JEFFERSON CITY, MISSOURI THIS 28TH DAY OF AUGUST, 2009.
SECRETARY OF STATE
MATTHEW D. KITZI
COMMISSIONER OF SECURITIES
Consented to by:
Nathan J. Soendker
Missouri Division of Securities
Datatex Investment Services, Inc.