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Commissioner of Banking v. Johansson
COMMISSIONER OF BANKING v.
ULRIKA JOHANSSON ET AL.
(AC 47735)
Alvord, Moll and Wilson, Js.*
Syllabus
The defendants appealed from the trial court’s judgment granting the application filed by the plaintiff, the Commissioner of Banking, for the enforcement of subpoenas issued to the defendants pursuant to the Connecticut Uniform Securities Act (§ 36b-2 et seq.). The defendants claimed, inter alia, that the court improperly concluded that it had subject matter jurisdiction over the action. Held:
The trial court had subject matter jurisdiction over the action, as it has express statutory authority (§ 36b-26 (c)) to enforce subpoenas issued by the commissioner, and, contrary to the defendants’ claim, the commissioner did not lack standing to seek enforcement of the subpoenas because he failed to identify any specific alleged violation of the Connecticut Uniform Securities Act that the Department of Banking was investigating.
The trial court properly granted the commissioner’s application on the merits, as a statement on the department’s website providing that it could not become involved in matters that are in active litigation was not a regulation and had no preclusive effect on the commissioner’s investigative subpoena power, the court’s determination that the commissioner had met his burden of establishing the three prongs of the test set forth in Shulansky v. Rodriguez (44 Conn. Supp. 72) was not improper, and the defendants’ claim that the commissioner had violated the state separation of powers doctrine by becoming involved in a matter pending before the United States Bankruptcy Court was unavailing, as that doctrine does not restrain a state administrative agency vis-à-vis a branch of the federal government.
Argued May 18—officially released September 22, 2026
Procedural History
Application for the enforcement of subpoenas issued
to the defendants, brought to the Superior Court in the
judicial district of Hartford, where the court, Reed,
J., denied the defendants’ motion to dismiss, and the
defendants appealed to this court; thereafter, the court, Reed, J., granted the application for the enforcement of subpoenas and rendered judgment thereon, from which
the defendants filed an amended appeal; subsequently,
*
The listing of judges reflects their seniority status on this court as of the date of oral argument.
Commissioner of Banking v. Johansson
this court granted the plaintiff’s motion to dismiss the defendants’ original appeal. Affirmed.
Kara A. Zarchin, with whom was John F. Carberry,
for the appellants (defendants).
Ashley H. Meskill, assistant attorney general, with
whom, on the brief, was William Tong, attorney general,
for the appellee (plaintiff).
Opinion
MOLL, J. The defendants, Peter Johansson, Ulrika
Johansson, Valuex Research, LLC, Valuex Fintech,
LLC, and Valuex, Inc., appeal from the judgment of the
trial court granting an application filed by the plaintiff, the Commissioner of Banking (commissioner), for the
enforcement of subpoenas issued to the defendants pursuant to the Connecticut Uniform Securities Act (CUSA),
General Statutes § 36b-2 et seq. On appeal, the defendants’ claims distill to whether the court incorrectly (1) determined that it had subject matter jurisdiction over
this action and (2) granted the application on the merits.1 We affirm the judgment of the trial court.
The following procedural history is relevant to our
disposition of the defendants’ claims. In 2023, pursuant to General Statutes § 36b-26 (c),2 a provision of CUSA,
the commissioner filed with the Superior Court of the
judicial district of Hartford an application (application) to enforce certain subpoenas duces tecum and ad
1
Because we must address claims challenging subject matter jurisdiction first; see Townsend v. Commissioner of Correction, 226 Conn. App. 313, 326, 317 A.3d 1147 (2024); we address the defendants’ claims in a different order than they appear in the defendants’ principal appellate brief.
2
General Statutes § 36b-26 (c) provides: “In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court for the judicial district of Hartford, upon application by the commissioner, may issue to the person an order requiring him to appear before the commissioner, or the officer designated by him there to produce documentary evidence if so ordered or to give evidence concerning the matter under investigation or in question. Failure to obey the order of the court may be punished by the court as a contempt of court.”
Commissioner of Banking v. Johansson
testificandum (subpoenas) that had been issued to the
defendants in connection with an investigation into
investor losses in certain convertible promissory notes
(CPNs) issued by Valuex Research, LLC, and Valuex
Fintech, LLC.3 According to the application, consumer
complaints received by the commissioner alleged “ ‘that
Valuex Research, LLC, has accepted investor money pursuant to an agreement and failed and refused to surrender funds owed in accordance with the agreement. Specifically, investors were notified that Valuex Research, LLC, was to be dissolved as of December 30, 2022, and that
there were no funds available to be distributed to investors.’ ” In the application, the commissioner alleged
that, despite repeated attempts by the commissioner
and the Department of Banking (department) to obtain
information relevant to the consumer complaints from
Peter Johansson and Ulrika Johansson, as principals
of Valuex Research, LLC, Valuex Fintech, LLC, and
Valuex, Inc., the Johanssons failed to comply with the
commissioner’s requests in a timely manner. Thus, on
May 5, 2023, the commissioner issued to the defendants
the subpoenas at issue, with which the defendants failed to comply. Thereafter, the commissioner brought the
present action to enforce the subpoenas.
On December 18, 2023, the defendants filed a motion to
dismiss the action for lack of subject matter jurisdiction on the ground that the commissioner lacked standing to
file the application. Specifically, the defendants contended that, because the CPNs were issued to “accredited investors,” as defined in Rule 501 (a) under Regulation D of the Securities Act of 1933; see 17 C.F.R. § 230.501 (a) (2023); the CPNs were exempt from registration under
General Statutes § 36b-21 and, therefore, fell outside the scope of CUSA. On January 2, 2024, the commissioner
filed an objection to the motion to dismiss, arguing that 3
In their memorandum of law in support of the motion to dismiss, and in reliance on an averment in the sworn affidavit of Ulrika Johansson, the defendants stated that, “[a]s a vehicle for financing the operations of [Valuex] Research, [LLC] and [Valuex] Fintech, [LLC], the companies issued [CPNs] to investors.”
Commissioner of Banking v. Johansson
the defendants had characterized the CPNs as securities
and that CUSA’s definition of a “ ‘[s]ecurity’ ” under
General Statutes § 36b-3 (19) is sufficiently expansive
to qualify the CPNs as securities and to justify an investigation into the parties that participated in or were
involved with programs that issued the CPNs. Following
the completion of briefing and oral argument, on June
7, 2024, the trial court, Reed, J., denied the motion to dismiss, reasoning that the commissioner had standing
to file the application.
On June 11, 2024, the commissioner filed a motion to
grant the application, which the defendants opposed.
Following a hearing, on August 15, 2024, the court
granted the application. This amended appeal followed.4
Additional facts and procedural history will be set forth as necessary.
I
We first address the defendants’ claim that the trial
court lacked subject matter jurisdiction. In support
of this claim, the defendants make three contentions,
namely, that (1) they had a colorable claim that the commissioner’s investigation went beyond his authority,
which, according to the defendants, deprived the court of subject matter jurisdiction, (2) the commissioner lacked standing to seek enforcement of the subpoenas because he failed to identify a valid investigative purpose therefor, and (3) the commissioner lacked standing because the
4
On June 21, 2024, the defendants filed an appeal from the denial of their motion to dismiss this action (original appeal). On June 24, 2024, the commissioner filed a motion to dismiss the original appeal for lack of a final judgment. On July 3, 2024, the defendants filed an opposition to the motion. On August 30, 2024, the defendants amended the original appeal to challenge the August 15, 2024 order granting the application (amended appeal). On October 30, 2024, this court granted the commissioner’s motion to dismiss the original appeal for lack of a final judgment but ordered that the amended appeal may proceed. See Practice Book § 61-9.
In addition, on February 18, 2025, the trial court granted a motion for articulation filed by the defendants pursuant to Practice Book § 66-5 and issued an articulation of its denial of the defendants’ motion to dismiss this action and the order granting the application.
Commissioner of Banking v. Johansson
subpoenas were not properly served. We disagree and
address each contention in turn.
Before reaching the defendants’ arguments, we briefly
address the applicable standard of review. “[I]ssues of
statutory interpretation constitute questions of law
over which the court’s review is plenary. The process of statutory interpretation involves the determination of
the meaning of the statutory language as applied to the
facts of the case, including the question of whether the language does so apply. . . . When construing a statute, [the court’s] fundamental objective is to ascertain and
give effect to the apparent intent of the legislature. . . . In other words, we seek to determine, in a reasoned manner, the meaning of the statutory language as applied to the facts of [the] case, including the question of whether the language actually does apply. . . . In seeking to determine that meaning, General Statutes § 1-2z directs us
first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering such relationship, the meaning of
such text is plain and unambiguous and does not yield
absurd or unworkable results, extratextual evidence
of the meaning of the statute shall not be considered.”
(Internal quotation marks omitted.) Commissioner of
Public Health v. Colandrea, 221 Conn. App. 631, 654,
302 A.3d 370 (2023), cert. denied, 348 Conn. 932, 306
A.3d 474 (2024).
In addition, “[a] trial court’s determination of whether a plaintiff lacks standing is a conclusion of law that is subject to plenary review on appeal. . . . The question of whether a party has standing to bring an action implicates the court’s subject matter jurisdiction. . . . Standing is the legal right to set judicial machinery in motion. One cannot rightfully invoke the jurisdiction of the court unless he [or she] has, in an individual or representative capacity, some real interest in the cause of action, or a legal or equitable right, title or interest in the subject matter of the controversy. . . . When standing is put in issue, the question is whether the person whose standing
Commissioner of Banking v. Johansson
is challenged is a proper party to request an adjudication of the issue . . . . Standing requires no more than a colorable claim of injury; a [party] ordinarily establishes . . . standing by allegations of injury [that he or she has suffered or is likely to suffer]. Similarly, standing exists to attempt to vindicate arguably protected interests. . . . Standing is established by showing that the party claiming it is authorized by statute to bring suit or is classically aggrieved.” (Internal quotation marks omitted.) Civic
Mind, LLC v. Hartford, 229 Conn. App. 615, 633–34,
328 A.3d 225 (2024), cert. denied, 351 Conn. 919, 333
A.3d 103 (2025).
We begin our analysis by setting forth the relevant
statutory provisions under CUSA and related legal principles. Section 36b-26 provides in relevant part: “(a)
The commissioner may, subject to the provisions of the
Freedom of Information Act, as defined in section 1-200: (1) Make such public or private investigations within or outside of this state as the commissioner deems necessary to determine whether any person has violated, is
violating or is about to violate any provision of sections 36b-2 to 36b-34, inclusive, or any regulation or order
thereunder, or to aid in the enforcement of said sections or in the prescribing of rules and forms thereunder, (2) require or permit any person to testify, produce a record or file a statement in writing, under oath or otherwise
as the commissioner determines, as to all the facts and
circumstances concerning the matter to be investigated
or about which an action or proceeding is to be instituted, and (3) publish information concerning any violation
of said sections or any regulation or order thereunder.
“(b) For the purpose of any investigation or proceeding
under sections 36b-2 to 36b-34, inclusive, the commissioner or any officer designated by him may administer
oaths and affirmations, subpoena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, agreements, or other documents or records which the commissioner deems relevant or material to the inquiry. . . .
Commissioner of Banking v. Johansson
“(c) In case of contumacy by, or refusal to obey a subpoena issued to, any person, the superior court for the
judicial district of Hartford, upon application by the
commissioner, may issue to the person an order requiring him to appear before the commissioner, or the officer designated by him there to produce documentary evidence
if so ordered or to give evidence concerning the matter
under investigation or in question. Failure to obey the
order of the court may be punished by the court as a
contempt of court. . . .”
CUSA confers upon the commissioner “broad discretion” to investigate possible violations thereof. Shulansky v. Rodriguez, 235 Conn. 465, 466, 669 A.2d 560
(1995); see also id., 467–68 (department enjoys “substantial discretion . . . to engage in pretrial discovery to gather evidence in advance of the filing of specific charges”). “[T]he legislature, when it endows an administrative
body with responsibility for a statute’s enforcement,
may authorize that body, rather than the trial court, to determine the question of coverage in the preliminary
investigation of possibly existing violations. . . . An
administrative body so empowered may, by virtue of
such authority, develop, without interference or delay,
a factual basis for the determination of whether particular activities come within its regulatory authority.” (Citations omitted; internal quotation marks omitted.)
Heslin v. Connecticut Law Clinic of Trantolo & Trantolo, 190 Conn. 510, 514–15, 461 A.2d 938 (1983). “Unless
the administrative inquiry is plainly irrelevant, a party resisting compliance with an investigatory subpoena
may not challenge the applicability of the regulatory
statute to the conduct under investigation.” Shulansky
v. Rodriguez, supra, 468.
A
The defendants maintain that the court lacked subject matter jurisdiction to entertain this action because they asserted a colorable claim that “the commissioner
exceeded the scope of his investigatory authority under
Commissioner of Banking v. Johansson
CUSA and ignored the [so-called] matters in litigation
rule.” We disagree.
As an initial matter, we observe that the defendants
conflate the issues of (1) whether the commissioner
should have prevailed on his application on the merits
in light of the so-called matters in litigation rule, which we explain in part II A of this opinion, and/or pursuant to the three part test set forth in Shulansky v. Rodriguez, 44 Conn. Supp. 72, 77, 669 A.2d 638 (1994) (memorandum of decision adopted by Supreme Court), aff’d, 235
Conn. 465, 669 A.2d 560 (1995), which we explain in
part II B of this opinion, with (2) whether the trial court had subject matter jurisdiction over the application. As to the former, to the extent that the defendants have
analyzed their challenges to the court’s granting of the application on the merits, we address those challenges
in part II of this opinion. As to the latter, with respect to the defendants’ jurisdictional challenge, we note that they have cited no relevant authority for the notion that the court lacked subject matter jurisdiction to entertain the commissioner’s application filed pursuant to § 36b26 (c). See Amodio v. Amodio, 247 Conn. 724, 728, 724
A.2d 1084 (1999) (“[o]nce it is determined that a tribunal has authority or competence to decide the class of cases to which the action belongs, the issue of subject matter jurisdiction is resolved in favor of entertaining the action” (internal quotation marks omitted)).
Simply put, according to its express terms, § 36b-26
(c) provides the Superior Court for the judicial district of Hartford with subject matter jurisdiction over an
action to enforce a subpoena issued by the commissioner
pursuant to § 36b-26 (a) and (b) in the event of “contumacy . . . or refusal to obey a subpoena” on the part of the subpoenaed party. In such event, § 36b-26 (c) provides
the court with the statutory authority (1) to “issue to
the person an order requiring him to appear before the
commissioner, or the officer designated by him there to
produce documentary evidence if so ordered or to give
evidence concerning the matter under investigation or
Commissioner of Banking v. Johansson
in question” and (2) to punish a failure to obey such order as a contempt of court.
B
The defendants also assert that the commissioner
lacked standing to file the application because he failed to identify, to them or to the court, a valid investigative purpose underlying the issuance of the subpoenas. We
disagree.
The following additional procedural history is relevant
to our resolution of this claim. The subpoenas issued by the commissioner, along with cover letters accompanying
them, provided in relevant part that the commissioner
was conducting his investigation pursuant to § 36b-26.
In the application, the commissioner stated that he “ha[d] received complaints from consumers alleging that Valuex
Research, LLC, has accepted investor money pursuant to
an agreement and failed and refused to surrender funds
owed in accordance with the agreement. Specifically,
investors were notified that Valuex Research, LLC, was
to be dissolved as of December 30, 2022, and that there
were no funds available to be distributed to investors.” (Internal quotation marks omitted.)
In its articulation, relying on Shulansky v. CambridgeNewport Financial Services Corp., 42 Conn. Supp. 439,
623 A.2d 1078 (1992) (Cambridge-Newport), the trial
court rejected the defendants’ claim that the commissioner, in issuing the subpoenas, was required, but failed, to specify any alleged violation of CUSA. In CambridgeNewport, the defendant presented a claim that “the
commissioner should not be permitted to enforce [an
investigative] subpoena without first proving facts
and circumstances by which he claims jurisdiction over
the defendant and that a failure to do so deprives the
defendant of due process.” Id., 444. The court in Cambridge-Newport rejected this claim, reasoning that “[t]he purpose of the investigative subpoena involved in the
present case is to enable the commissioner to determine
whether there has been a violation of the law. Prior to
Commissioner of Banking v. Johansson
conducting an investigation, the commissioner is clearly not in a position to give the defendant notice of ‘the facts or conduct alleged to be in violation of the law.’ ” Id.
In the present case, as a threshold matter, the defendants again conflate a merits question (i.e., whether the commissioner must identify the statutory provision(s) at issue in his investigation) with a subject matter jurisdictional question (i.e., whether he has standing to pursue the enforcement of investigatory subpoenas). In any
event, the defendants cite to no authority for the premise of their standing claim, namely, that the commissioner
was statutorily required to identify the investigative
purpose underlying the subpoenas. Although § 36b-26
(a) provides that the commissioner may investigate, as
he deems necessary, “whether any person has violated,
is violating or is about to violate any provision of sections 36b-2 to 36b-34, inclusive,” there is no express
statutory language requiring him to identify in advance
any particular provision thereunder, and we reject the
defendants’ claim on this basis. To require the commissioner to articulate an investigative purpose, beyond the explanation that he did provide in connection with the
issuance of the subpoenas, would contravene the purpose
of the subpoenas themselves. Moreover, the defendants’
premise ignores our Supreme Court’s holding in Shulansky v. Rodriguez, supra, 235 Conn. 468, that, “[u]nless
the administrative inquiry is plainly irrelevant, a party resisting compliance with an investigatory subpoena may
not challenge the applicability of the regulatory statute to the conduct under investigation.” In sum, we conclude that the commissioner was not bound by a requirement
to alert the defendants of any specific alleged violation of CUSA being investigated by the department, and,
contrary to the defendants’ claim, the commissioner had
standing to bring the present action even in the absence of having done so.
C
Relatedly, the defendants also claim that the commissioner lacked standing to file the application because the
Commissioner of Banking v. Johansson
subpoenas were not properly served on them. This claim
warrants little discussion.
By way of background, before the trial court, the defendants briefly referenced the issue of service of the subpoenas in two of their filings. First, in a footnote in their memorandum of law in support of their motion to dismiss
this action, the defendants stated that “[i]ssues as to the efficacy of service [of the subpoenas] are reserved in the event this action goes forward.” Second, in a footnote
in their objection to the commissioner’s motion to grant the application, with no accompanying legal analysis, the defendants stated that “[t]he issuance of the subpoenas
also was improper because the commissioner never properly served the defendants because the commissioner
acknowledged that there was no service in hand here.”
In its articulation, the trial court stated that the defendants “did not properly raise [that] issue. A legal basis for a motion to dismiss must be formally briefed. . . .
A passing footnote without any law is insufficient for
the court to consider the claim.” (Citation omitted.)
First, we conclude that whether the commissioner
properly served the subpoenas on the defendants has
no bearing on his standing to seek enforcement of the
subpoenas pursuant to § 36b-26 (c). Second, as this claim does not implicate the commissioner’s standing, it is
subject to our rules of preservation. See Townsend v.
Commissioner of Correction, 226 Conn. App. 313, 326
n.13, 317 A.3d 1147 (2024) (“Our Supreme Court has
stated that [o]nly in [the] most exceptional circumstances can and will this court consider a claim, constitutional or otherwise, that has not been raised and decided in the trial court. . . . One such exceptional circumstance is a claim that implicates the trial court’s subject matter
jurisdiction, which may be raised at any time and, thus, is not subject to our rules of preservation.” (Internal
quotation marks omitted.)). In its articulation, the trial court declined to address this claim because the defendants had failed to raise it properly. As such, this claim was not decided by the court, and the defendants do not
Commissioner of Banking v. Johansson
challenge the court’s reasoning for declining to do so.
Accordingly, we decline to address this claim further.
In sum, we conclude that the trial court had subject
matter jurisdiction over this action.
II
We now turn to the defendants’ claims challenging the
merits of the court’s granting of the application. First, the defendants contend that the court incorrectly determined that the subpoenas were properly issued notwithstanding that, as the defendants posit, the commissioner issued the subpoenas in violation of the so-called matters in litigation rule, which the defendants claim is a regulation of the department that precluded the commissioner
from issuing the subpoenas. Second, the defendants
assert that the court improperly determined that the
commissioner had proven that the subpoenas satisfied
the test set forth in Shulansky v. Rodriguez, supra, 44
Conn. Supp. 77, to prevail on his application. Third, the defendants also contend that the commissioner violated
the separation of powers doctrine embodied in our state
constitution by impermissibly becoming involved in a
matter pending in the United States Bankruptcy Court.
We are not persuaded and address these contentions in
turn.
A
The defendants assert that the commissioner issued
the subpoenas in violation of what they refer to as the
“matters in litigation rule,” which they contend is a
department regulation by which the commissioner is
bound. That is, the defendants maintain that a statement previously located on the department’s website
providing that it could not become involved in matters
that are in active litigation (statement) (1) was a valid regulation under the Uniform Administrative Procedure
Act (UAPA), General Statutes § 4-166 et seq., that the
department was bound to follow and (2) precluded the
commissioner from issuing the subpoenas in light of
certain ongoing bankruptcy proceedings. We conclude
Commissioner of Banking v. Johansson
that the statement was not a regulation and had no preclusive effect on the commissioner’s investigative subpoena power.
The following additional facts and procedural history are relevant to our resolution of this claim. At all relevant times, the department maintained a website
with the heading “Consumer Assistance.” Under that
heading, the website set forth the statement, which
provided: “Matters in Litigation: We cannot become
involved in complaints/inquiries that are in litigation
or have been litigated, with the exception of judicial
foreclosure of a mortgage on a primary residence in Connecticut. However, the role of the [department] in such
judicial foreclosure cases remains to enforce Connecticut Banking Law. In addition, we provide information, nonlegal advice, and guidance, with contact information for appropriate community-based resources, suitable to the
defendant/borrower.”5
On December 27, 2022, an involuntary bankruptcy
petition was filed by certain investors against Valuex
Research, LLC,6 in the United States Bankruptcy Court
for the District of Connecticut. The bankruptcy court
dismissed the involuntary petition on September 12,
2023.7
5
In its articulation, the court cited a link to the department’s website, which it last visited on February 14, 2025, containing the statement. That link now leads to an updated website that does not contain the statement; instead, it reads in part: “Scope of Assistance: The [department] may also be able to provide information, non-legal advice, and guidance. We are not, however, authorized to intervene in private litigation or represent private individuals or entities in litigation. Nor are we authorized to provide legal advice to private individuals or entities.” Department of Banking, Consumer Assistance, available at https://portal.ct.gov/dob/consumer/consumer-complaints/consumerassistance (last visited September 14, 2026). On the basis of the record before us, it is apparent that the trial court and the parties relied on the statement as it appeared on the department’s website when the court last visited it on February 14, 2025, and the parties continue to rely on that particular statement on appeal.
6
The involuntary petition listed, inter alia, Valuex Fintech, LLC, and Valuex, Inc., as aliases of Valuex Research, LLC.
7
The bankruptcy court’s judgment of dismissal was affirmed by the United States District Court for the District of Connecticut in 2024,
Commissioner of Banking v. Johansson
In its articulation of its decision granting the application, the court explained that a regulation issued by
a state agency under CUSA must be adopted in accordance with the UAPA. It further reasoned that “[General Statutes] § 36b-31 does not require or even permit
the commissioner to make rules solely through posting
them on the [department’s] website.” Additionally, the
court determined that “the defendants’ interpretation
of the statement would significantly limit the commissioner’s broad authority to investigate under § 36b-26.
To conclude that the department purposefully limited
its primary purpose, when it simply is warning consumers it cannot become their personal counsel, would be to yield the ‘absurd or unworkable results,’ which § 1-2z
cautions against.” Therefore, the court concluded that
the statement was not enforceable upon the commissioner, such that it would prevent the investigation of
the defendants.
Before addressing the merits of the defendants’ claim,
we set forth the following relevant legal principles and standard of review. Our review of whether the statement
constitutes a valid regulation, which raises a question of law, is plenary. See Weber v. Pascarella Mason Street,
LLC, 103 Conn. App. 710, 715, 930 A.2d 779 (2007)
(“[q]uestions of law are subject to de novo review” (internal quotation marks omitted)). Additionally, insofar
as our analysis of the defendants’ claim requires us to
interpret various statutory provisions, “[the court’s]
fundamental objective is to ascertain and give effect to the apparent intent of the legislature. . . . In other words, [the court] seek[s] to determine, in a reasoned manner,
the meaning of the statutory language as applied to the
facts of [the] case, including the question of whether the language actually does apply. . . . In seeking to determine that meaning . . . § 1-2z directs [the court] first to consider the text of the statute itself and its relationship to other statutes. If, after examining such text and considering
which decision was affirmed by the United States Court of Appeals for the Second Circuit in 2025. See In re Valuex Research, LLC, Docket No. 24-2726-bk, 2025 WL 2327172, *6 (2d Cir. August 13, 2025).
Commissioner of Banking v. Johansson
such relationship, the meaning of such text is plain and unambiguous and does not yield absurd or unworkable
results, extratextual evidence of the meaning of the statute shall not be considered.” (Internal quotation marks
omitted.) Allen v. Commissioner of Revenue Services,
324 Conn. 292, 307–308, 152 A.3d 488 (2016), cert.
denied, 581 U.S. 1018, 137 S. Ct. 2217, 198 L. Ed. 2d
659 (2017). Moreover, “[a]dministrative regulations
have the full force and effect of statutory law and are
interpreted using the same process as statutory construction . . . . Accordingly, [i]n conducting this analysis, we are guided by the well established principle that [i]ssues of statutory construction raise questions of law, over
which we exercise plenary review.” (Citations omitted;
internal quotation marks omitted.) Id., 307.
Section 36b-31 (a)8 provides the commissioner with the
authority to “make, amend, and rescind” regulations.
Section 36b-31 (e) provides that “[a]ny regulations issued pursuant to the provisions of sections 36b-2 to 36b-34,
inclusive, shall be adopted in accordance with the provisions of [the UAPA],” which applies to state agencies
such as the department. See Gianetti v. Dunsby, 182
Conn. App. 855, 864, 191 A.3d 260 (2018) (“[t]he UAPA
applies only to state agencies” (internal quotation marks omitted)).
Pursuant to the clear and unambiguous language of
§ 36b-31 (e), the commissioner is required to comply
with the UAPA when creating regulations. Any other
interpretation of the statute would “yield absurd or
unworkable results” under § 1-2z. Consequently, the commissioner’s power to create regulations is not unlimited
8
General Statutes § 36b-31 (a) provides: “The commissioner may from time to time make, amend and rescind such regulations, forms and orders as are necessary to carry out the provisions of sections 36b-2 to 36b-34, inclusive, including regulations, forms and orders governing registration statements, notice filings, applications, and reports, and defining any terms, whether or not used in said sections, insofar as the definitions are not inconsistent with the provisions of said sections. For the purpose of regulations, forms and orders, the commissioner may classify securities, persons and matters within his or her jurisdiction, and prescribe different requirements for different classes.”
Commissioner of Banking v. Johansson
under § 36b-31 (a), as he must comply with the provisions of the UAPA pursuant to § 36b-31 (e). Merely posting the statement on the department’s website is not
a method of promulgating regulations pursuant to the
UAPA. “To adopt a regulation under the UAPA, an
agency must comply with extensive procedural requirements, which include, among other things, legislative
review and approval. See General Statutes § 4-168.”
Gawlik v. Semple, Superior Court, judicial district of
New Haven, Docket No. CV-XX-XXXXXXX-S (September
4, 2018) (reprinted at 197 Conn. App. 86, 125, 231 A.3d
326) (memorandum of decision adopted by this court),
aff’d, 197 Conn. App. 83, 231 A.3d 326, cert. denied, 335 Conn. 953, 238 A.3d 730 (2020), cert. denied, 592 U.S.
1326, 141 S. Ct. 1713, 209 L. Ed. 2d 479 (2021). “Where
rules were not adopted and promulgated pursuant to the
applicable provisions of the UAPA, they are considered
invalid and of no effect.” Breiner v. State Dental Commission, 57 Conn. App. 700, 710, 750 A.2d 1111 (2000).
We therefore conclude that the statement is not a valid
regulation by which the commissioner is bound.
Moreover, the statement, if given the preclusive effect
posited by the defendants, would be inconsistent with the commissioner’s broad statutory authority pursuant to
CUSA. See part I of this opinion. Because the statement
is inconsistent with the commissioner’s broad authority
under CUSA, we conclude that the statement, even if
it otherwise satisfied the requirements to constitute a
valid regulation, had no force or effect on the commissioner’s authority to investigate or issue the subpoenas to the defendants in the present action.9 See Med-Trans
9
In maintaining that the commissioner was bound by the statement, the defendants also argue that the department impermissibly was acting as a private attorney for Eric Ross, one of the creditors who filed the involuntary bankruptcy petition against Valuex Research, LLC, in investigating the defendants while the bankruptcy matter was being litigated. This argument has no bearing on our conclusion that the statement was not legally binding on the commissioner, and, therefore, we need not address it further.
Moreover, we note that adopting the defendants’ interpretation of the statement would enable any individual to commence litigation in
Commissioner of Banking v. Johansson
of Connecticut, Inc. v. Dept. of Public Health & Addiction Services, 242 Conn. 152, 168, 699 A.2d 142 (1997)
(“[w]hen a statute and a regulation conflict, the statute must prevail”).
In sum, we conclude that the court correctly determined that the subpoenas issued by the commissioner
were proper notwithstanding the statement, which had
no binding legal effect on him.
B
The defendants also assert that, in granting the commissioner’s application, the court improperly determined that he had met his burden of establishing the prongs of the test set forth in Shulansky v. Rodriguez, supra, 44
Conn. Supp. 77 (Shulansky test). We disagree.
“To prevail on any application for an order requiring
compliance with an investigative subpoena issued under
the authority of § [36b-26], the commissioner must prove that the subpoena satisfies the following three part test: first, that it was issued in the course of an investigation that he is legally authorized to conduct; second, that it seeks the production of documents, records and/or materials that are relevant to that investigation; and third, that it is specific and otherwise not unduly burdensome. . . . If the commissioner can make this showing, then the
subpoenaed party must comply unless that party can
prove by ‘independent evidence that the purpose behind
the issuance of the [subpoena] was improper, i.e., that
the [subpoena was] issued in order to harass or punish,
rather than to gain information relevant to the investigation.’ ” (Citation omitted.) Id.
order to pause any related investigation into the activities of that individual or others involved in such investigation, which would hinder the department, and other similar governmental bodies, from performing a crucial function, such as issuing a subpoena where there is a basis to do so. As we have explained, the commissioner has broad authority in this regard, and concluding otherwise would lead to an absurd and unworkable result.
Commissioner of Banking v. Johansson
In its order denying the defendants’ motion to dismiss
this action,10 the court stated: “The court concludes that the [commissioner’s] investigatory requests meet all
three requirements of the [Shulansky] test. The defendants appear to admit that the CPNs were securities. The investigation of securities is clearly within the scope of the [commissioner’s] investigatory authority related to
CUSA. The materials sought are in furtherance of the
investigation that the [commissioner] is authorized to
conduct. The court does not credit the defendants’ claims that the subpoenas were issued for any improper purpose. Moreover, the [commissioner’s] subpoenas ‘carr[y] with
[them] a presumption that [they were] issued legally,
in good faith, and under proper authority for a proper
purpose.’ . . . Given the breadth of the [commissioner’s] investigatory authority . . . [under] § 36b-26 (a) (2) . . . it bears observing that, ‘[u]nless the administrative
inquiry is plainly irrelevant, a party resisting compliance with an investigatory subpoena may not challenge
the applicability of the regulatory statute to the conduct under investigation.’ ” (Citation omitted.)
In its articulation, the court concluded that the first
prong of the Shulansky test was satisfied because the
commissioner had “authority to investigate whether the
issuances [of the CPNs] the defendants made are within
CUSA’s definition of security, and whether the issuances were properly exempted or registered.” Additionally,
the court stated that the second and third prongs of the Shulansky test were not adequately contested by the
defendants.
The defendants challenge the court’s analysis of the
Shulansky test as follows. With respect to the first
prong, the defendants contend that “the commissioner’s
10
Although the court addressed the Shulansky test in the context of considering the defendants’ claim that the commissioner lacked standing, and the defendants have briefed the Shulansky test in the context of their claim that the court lacked subject matter jurisdiction, we highlight that the Shulansky test is not jurisdictional in nature; rather, it delineates the standard that the commissioner must meet for the court to grant an application to enforce a subpoena on the merits.
Commissioner of Banking v. Johansson
investigation is impermissible under CUSA because the
[statement] prevents the commission[er] from investigating [the defendants] on the basis of the complaints
that the department received because those complaints
already were the basis of matters in litigation.” For the reasons set forth in part II A of this opinion, this contention is without merit.
With respect to the second prong of the Shulansky test,
the defendants assert that “the commissioner has not met his burden of establishing that the documents, records
and/or materials requested are relevant to the investigation. This is an investigation into certain complaints regarding Valuex Research, [LLC]. All documents and
communications concerning [Valuex] Fintech, [LLC], Valuex, Inc., and [Peter Johansson and Ulrika Johansson],
therefore, are not relevant.” With respect to the third
prong of the Shulansky test, the defendants maintain that “[t]he documents requested are overly broad and unduly
burdensome and call for privileged information, including all documents concerning various litigations. . . .
[T]he subpoenas seek eight plus years’ worth of documents and communications across five individuals and entities, including all financial documents. The subpoenas,
therefore, are overbroad and unduly burdensome . . . .”
In its articulation, the trial court stated that the defendants “did not adequately contest the second or third
[prongs],” which determination the defendants do not
challenge on appeal. In any event, the defendants’ assertions regarding the second and third prongs span several sentences with no substantive legal analysis or citations to the record. As such, we deem these assertions to be
abandoned as inadequately briefed. See Robb v. Connecticut Board of Veterinary Medicine, 204 Conn. App.
595, 611, 254 A.3d 915 (“We repeatedly have stated that
[w]e are not required to review issues that have been
improperly presented to this court through an inadequate brief. . . . Analysis, rather than mere abstract assertion, is required in order to avoid abandoning an issue by
failure to brief the issue properly. . . . [F]or this court judiciously and efficiently to consider claims of error
Commissioner of Banking v. Johansson
raised on appeal . . . the parties must clearly and fully set forth their arguments in their briefs. . . . The parties may not merely cite a legal principle without analyzing
the relationship between the facts of the case and the
law cited.” (Internal quotation marks omitted.)), cert.
denied, 338 Conn. 911, 259 A.3d 654 (2021).
In sum, we find no error in the court’s granting of the
commissioner’s application for the enforcement of the
subpoenas pursuant to the Shulansky test.
C
Finally, we address the defendants’ claim that the
commissioner violated the state separation of powers
doctrine, which is embodied in article second of the Connecticut constitution, as amended by article eighteen of the amendments, by impermissibly becoming involved
in a matter pending in the United States Bankruptcy
Court. The defendants have not cited any authority,
and we are not aware of any, standing for the proposition that the state constitutional separation of powers
doctrine restrains a state administrative agency vis-à-vis a branch of the federal government. Rather, the state
constitutional separation of powers doctrine affects the three branches of state government, one as to another.
University of Connecticut Chapter, AAUP v. Governor,
200 Conn. 386, 394, 512 A.2d 152 (1986) (“The [c]onstitution of this state provides for the separation of the
[state’s] governmental functions into three basic departments, legislative, executive and judicial, and it is inherent in this separation, since the law-making function is vested exclusively in the legislative department, that
the [l]egislature cannot delegate the law-making power
to any other department or agency. In the establishment
of three distinct departments of [state] government the
[c]onstitution, by necessary implication, prescribes those limitations and imposes those duties which are essential to the independence of each and to the performance by
each of the powers of which it is made the depository.”
Commissioner of Banking v. Johansson
(Internal quotation marks omitted.)). Thus, we give
short shrift to this claim.
The judgment is affirmed.
In this opinion the other judges concurred.