State Codes and Statutes
Statutes > Connecticut > Title3 > Chap032 > Sec3-13lSec. 3-13l. Finder's fees in state investments prohibited. Penalties. (a) No person may, directly or indirectly, pay a finder's fee to any person in connection with any investment transaction involving the state, any quasi-public agency, as defined in section 1-120, or any political subdivision of the state. No person may, directly or indirectly, receive a finder's fee in connection with any investment transaction involving the state, any quasi-public agency, as defined in section 1-120, or any political subdivision of the state.
(b) For purposes of this section:
(1) "Finder's fee" means compensation in the form of cash, cash equivalents or other things of value paid to or received by a third party in connection with an investment transaction to which the state, any political subdivision of the state or any quasi-public agency, as defined in section 1-120, is a party for any services, and includes, but is not limited to, any fee paid for lobbying, as defined in subsection (k) of section 1-91, and as defined by the Citizen's Ethics Advisory Board, in consultation with the Treasurer, in the regulations adopted under subparagraph (C)(ii) of subdivision (3) of this subsection or as prescribed by the Treasurer until such regulations are adopted.
(2) "Finder's fee" does not mean (A)(i) compensation earned for the rendering of investment services, as defined in subsection (f) of section 9-612, or for acting as a licensed real estate broker or real estate sales person under the provisions of section 20-312, or under a comparable statute of the jurisdiction in which the subject property is located, or (ii) marketing fees or due diligence fees earned by the payee in connection with the offer, sale or purchase of any security or investment interest, in accordance with criteria prescribed under subparagraph (C)(ii) of subdivision (3) of this subsection, (B) compensation paid to (i) persons who are investment professionals engaged in the ongoing business of representing investment services providers, or (ii) third parties for services connected to the issuance of debt by the state, any political subdivision of the state or any quasi-public agency, as defined in section 1-120, and (C) any compensation which is so defined by the regulations adopted under subparagraph (C)(ii) of subdivision (3) of this subsection, or any compensation which meets criteria prescribed by the Treasurer until such regulations are adopted. As used in this section, "offer" and "sale" have the meaning provided in section 36b-3.
(3) "Investment professional" means an individual or firm whose primary business is bringing together institutional funds and investment opportunities and who (A) is a broker-dealer or investment adviser agent licensed or registered (i) under the Connecticut Uniform Securities Act; (ii) in the case of an investment adviser agent, with the Securities and Exchange Commission, in accordance with the Investment Advisors' Act of 1940; or (iii) in the case of a broker-dealer, with the National Association of Securities Dealers in accordance with the Securities Exchange Act of 1934, or (B) is licensed under section 20-312, or under a comparable statute of the jurisdiction in which the subject property is located, or (C) (i) furnishes an investment manager with marketing services including, but not limited to, developing an overall marketing strategy focusing on more than one institutional fund, designing or publishing marketing brochures or other presentation material such as logos and brands for investment products, responding to requests for proposals, completing due diligence questionnaires, identifying a range of potential investors, or such other services as may be identified in regulations adopted under clause (ii) of this subparagraph; and (ii) meets criteria prescribed (I) by the Treasurer until regulations are adopted under this subparagraph, or (II) by the Citizen's Ethics Advisory Board, in consultation with the Treasurer, in regulations adopted in accordance with the provisions of chapter 54. Prior to adopting such regulations, the Citizen's Ethics Advisory Board shall transmit the proposed regulations to the Treasurer not later than one hundred twenty days before any period for public comment on such regulations commences and shall consider any comments or recommendations the Treasurer may have regarding such regulations. In developing such regulations, the Citizen's Ethics Advisory Board shall ensure that the state will not be competitively disadvantaged by such regulations relative to any legitimate financial market.
(c) Any person who violates any provision of this section shall be liable for a civil penalty of not less than the amount of the fee paid or received in violation of this section and not more than three times said amount.
(1) The Attorney General, upon complaint of the Treasurer or the Citizen's Ethics Advisory Board, may bring an action in the superior court for the judicial district of Hartford to recover such penalty for a violation of this section which affects a fund of the state. Any penalty imposed under this section for a violation which affects any such fund shall be paid to the Treasurer who shall deposit such moneys in such fund.
(2) Any political subdivision of the state may bring an action in the superior court to recover such penalty for a violation of this section which affects any fund under the control of such subdivision. Any penalty imposed under this section for a violation which affects any such fund shall be paid to such subdivision which shall deposit such moneys in such fund.
(3) Any quasi-public agency, as defined in section 1-120, may bring an action in the superior court to recover such penalty for a violation of this section which affects any fund under the control of such agency. Any penalty imposed under this section for a violation which affects any such fund shall be paid to such agency which shall deposit such moneys in such fund.
(P.A. 00-43, S. 7, 19; P.A. 02-103, S. 42; P.A. 05-183, S. 33; P.A. 06-196, S. 22.)
History: P.A. 00-43 effective May 3, 2000; P.A. 02-103 made technical changes in Subsec. (b)(2); P.A. 05-183 amended Subsecs. (b) and (c) to replace "Ethics Commission" with "Citizen's Ethics Advisory Board" and make technical changes, effective July 1, 2005; P.A. 06-196 made technical changes in Subsec. (b)(3), effective June 7, 2006.
