The founder of Essex Financial Services faces new allegations that could lead to permanent suspension of his registration as an investment adviser in Connecticut.

John W. Rafal of Old Lyme, who was fired by Essex Financial after a previous 15-day suspension of his registration based on an investigation that found he had engaged in "dishonest and unethical" practices, also could face a fine of up to $100,000 from the state Department of Banking.

A hearing scheduled Oct. 25 will allow Rafal a chance to fight the allegations and retain his rights as a broker-dealer and investment agent.

State Banking Commissioner Jorge L. Perez, in a notice filed last week, said his department obtained new evidence from the U.S. Securities and Exchange Commission of unethical practices this April when it learned that Rafal had paid referral fees out of his own pocket to an attorney who had steered a major client to Essex Financial.

Rafal had originally led regulators to believe that money he had sent to the attorney, identified in another document as Peter D. Hershman of Branford, had been returned.

Instead, in April 2013, "Rafal, without the knowledge of (Essex Financial) wrote a check out of a personal account he controlled. ..." Later that same month, he sent another check in the same amount, $25,190, to Hershman's law firm, "in direct defiance of (Essex Financials') instruction that (the attorney) not receive such fees."

Rafal, according to the allegations found in online documents, had led regulators to believe that Hershman had returned all of the referral fees.

Rafal, consistently one of the nation's top independent financial advisers over the past decade or so, originally had his registration as an investment adviser suspended in November 2015. He also agreed to pay a $25,000 fine.

In a separate order, Essex Financial, a division of Essex Savings Bank, was forced to pay a $25,000 fine because of its lack of supervision over Rafal. Rafal had stepped down as president and became vice chair of the financial-services company after the violations were reported in 2013.

According to online records, Hershman paid a $3,500 fine for receiving a payout without being a registered investment adviser. He also was ordered to cease and desist from such practices.

Rafal previously said he agreed to the initial fine and suspension to avoid further legal fees. A Rafal spokesman pointed out at the time that he had been disciplined for a "single, limited violation" in which no investor money was lost.

l.howard@theday.com