As amended, the action alleged that Advisors and Capital each transacted business as an unregistered broker-dealer in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act and that Discala transacted business as an unregistered broker-dealer agent.  Specifically, Respondents Advisors and Discala had been retained by Crackpot Inc., a Nevada entity, and Scanbuy, Inc., a Delaware corporation, to raise funds for those issuers on a compensated basis.  According to the amended action, Advisors and/or Capital, through Discala, sold shares of Crackpot Inc. and Scanbuy, Inc. to Connecticut investors in 2014.  The securities sold were not registered in contravention of Section 36b-16 of the Act.  In addition, the amended action alleged that the respondents violated the antifraud provisions in Section 36b-4(a) of the Act by failing to disclose to the investors the risks associated with the Crackpot Inc. and Scanbuy, Inc. investments; financial information relating to the investments; the registration status of the shares; and the fact that Advisors, Capital and Discala were not registered under the Act.  The amended action acknowledged that the Scanbuy, Inc. investors had received a $7,500 partial refund from respondent Capital.  Originally, the action had stated that the partial refund came from respondent Advisors.

Newly added respondent Capital was afforded an opportunity to request a hearing on the allegations.  The joint request for a hearing previously filed by Advisors and Discala was preserved as it related to the allegations in the amended action.