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Turbeville v. Department of Financial Services

Florida Court of Appeals, First District

May 3, 2018

Antony Lee Turbeville, Appellant,
v.
Department of Financial Services, Appellee.

         Not final until disposition of any timely and authorized motion under Fla. R. App. P. 9.330 or 9.331.

          On appeal from the Department of Financial Services. Robert C. Kneip, Chief of Staff.

          John A. Richert of Richert Quarles P.A., Clearwater, for Appellant.

          Gregory D. Venz, Deputy General Counsel, Marshawn Michael Griffin, Assistant General Counsel, Department of Financial Services, Tallahassee, for Appellee.

          B.L. Thomas, C.J.

         Appellant Antony Lee Turbeville challenges a Final Order of the Department of Financial Services revoking Appellant's insurance license, following the Department's finding that Appellant violated section 626.621(13), Florida Statutes (2015). Appellant argues that: (1) the language of section 626.621(13), Florida Statutes, and the penalty guidelines of Florida Administrative Code Rule 69B-231.090(13) (2015) are ambiguous and should be construed in his favor; (2) that the Department's application of rule 69B-231.090(13) constitutes an ex post facto violation; and (3) that the Department's application of the section 626.621(13), Florida Statutes, to licensees of the Financial Industry Regulatory Authority ("FINRA") violates a licensee's constitutional right to remain silent.

         Facts

         Appellant entered the securities industry in 1987 and registered with several FINRA[1] member firms from 1987 through 2015. Among other products, Appellant sold Collateralized Mortgage Obligations, which are complex debt securities that essentially repackage mortgage loans as bonds purchasable by investors.

         On December 30, 2009, FINRA filed a six-count complaint against Appellant, alleging violations of the Securities Exchange Act and the National Association of Securities Dealers rules. FINRA's Extended Hearing Panel conducted a sixteen-day hearing and issued its order on May 31, 2012. The Extended Hearing Panel found that Appellant intentionally or recklessly misrepresented the risks of the Collateralized Mortgage Obligations and sold them to elderly and unsophisticated investors. From July 2005 to July 2007, Appellant, his colleague, and their firm earned approximately $492, 500 in commissions from seven customers who lost approximately $1.6 million as a result of Appellant's transactions. The Extended Hearing Panel further found that Appellant, along with two colleagues, violated section 10(b) of the Securities Exchange Act and rule 10b-5 thereunder, and violated FINRA rules 2120 and 2110, and this decision barred Appellant from associating with any FINRA-regulated firm in any capacity.

         Appellant appealed this decision to the National Adjudicatory Council ("Council"), FINRA's appellate panel, on June 12, 2012. The Council affirmed the Hearing Panel's factual findings and the sanctions on April 16, 2015.

          On April 19, 2016, the Department filed a one-count complaint against Appellant, alleging a violation of section 626.621(13), Florida Statutes. An informal hearing was held pursuant to section 120.57(2), Florida Statutes, as Appellant conceded there were no material facts in dispute. The Department's hearing officer filed his Written Report and Recommended Order, stating the following conclusions: (1) the National Adjudicatory Council's decision of April 16, 2015 constituted final disciplinary action by FINRA, and final agency action under state law, pursuant to section 626.621(13), Florida Statutes; (2) Appellant violated section 626.621(13), Florida Statutes; and (3) under Florida Administrative Code Rule 69B-231.090(13), the penalty to be imposed is the highest identical penalty imposed by a national securities association upon which the statutory violation is based, which was the revocation of Appellant's insurance license. The Department issued its final order adopting the hearing officer's findings of fact, conclusions of law, and recommendation, and the Department revoked Appellant's license.

         Analysis

         1. Is the language of section 626.621(13), Florida Statutes (2015), or Florida Administrative Code Rule 69B-231.090(13) ambiguous?

         We review issues of statutory interpretation de novo. Sullivan v. Fla. Dep't of Envtl. Prot., 890 So.2d 417, 420 (Fla. 1st DCA 2004).

         Administrative agencies are afforded wide discretion in the interpretation of a statute which they administer, but appellate courts are not required to defer to an unreasonable statutory interpretation. Id. "If the agency's interpretation is within the range of possible and reasonable interpretations, it is not clearly erroneous and should be affirmed, " Florida Dep't of Education v. Cooper, 858 So.2d 394, 396 (Fla. 1st DCA 2003), but "'judicial adherence to the agency's view is not demanded when it is contrary to the statute's plain meaning.'" Werner v. Dep't of Ins. & Treasurer, 689 So.2d 1211, 1214 (Fla. 1st DCA 1997) (quoting PAC for Equality v. Dep't of State, Fla. Elections Comm'n, 542 So.2d 459, 460 (Fla. 2d DCA 1989)). Statutes providing for revocation or suspension of a license to practice "are deemed penal in nature and must be strictly construed, with any ambiguity interpreted in favor of the licensee." Beckett v. Dep't of Fin. Servs., 982 So.2d 94, 100 (Fla. 1st DCA 2008) (quoting Elmariah v. Dep't of Prof'l Reulation, Bd. of Med., 574 So.2d 164, 165 (Fla. 1st DCA 1990)). But "'[w]hen the statute is clear and unambiguous, courts will not look behind the statute's plain language for legislative intent or resort to rules of statutory construction to ascertain intent.'" Borden v. East-European Ins. Co., 921 So.2d 587, 595 (Fla. 2006) (quoting Daniels v. Fla. Dep't of Health, 898 So.2d 61, 64 (Fla. 2005)).

         Section 626.621, Florida Statutes, as it read at all times pertinent here, [2] provided:

The department may, in its discretion . . . revoke . . . the license . . . of any . . . agent . . ., and it may suspend or revoke the eligibility to hold a license . . . of any such person, if it finds that as to the . . . licensee . . . any one or more of the following applicable grounds exist under circumstances for which such . . . revocation . . . is not mandatory under s. 626.611:

. . . .

(13) [The licensee has] been the subject of or has had a license . . . or other authority to conduct business subject to any decision . . . by any . . . national securities . . . association involving . . . a violation of any rule or regulation of any national securities . . . association.

          Florida Administrative Code Rule 69B-231.090 describes specific penalties for violations of ...


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