DOB: News Bulletin 1953 - July 27, 2001

The Department of Banking News Bulletin

Bulletin # 1953
Week Ending July 27, 2001

This bulletin constitutes the only official notification you will receive from this office concerning any of the following applications. Any observations you may have are solicited. Any comments should be in writing to John P. Burke, Commissioner of Banking, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail to john.burke@ct.gov. Written comments will be considered only if they are received within ten days from the date of this bulletin.


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CHECK CASHING SERVICE LICENSE ACTIVITY

Pursuant to Section 36a-581 of the Connecticut General Statutes, on July 25, 2001, Check Stop of Connecticut, LLC filed an application to operate a check cashing service general facility at 200-202 West Main Street, Meriden, Connecticut.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Brooklyn, Connecticut Man Fined $20,000 for
Unregistered Promissory Note Sales

On July 24, 2001, the Commissioner entered an Order Imposing Fine against John A. Thompson of Brooklyn, Connecticut. In imposing a $20,000 fine on the respondent, the Commissioner found that, from at least July 1998 forward, John A. Thompson sold unregistered non-exempt promissory notes of Pacific Air Transport, Inc., Redbank Petroleum, Inc., Taormina Omne SRL, Tri-National Development Corp. and Caffe Diva Group, Ltd. to Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The Commissioner also found that, in selling the promissory notes, the respondent acted as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act. Respondent Thompson did not contest the imposition of the $20,000 fine.

John A. Thompson had also been the subject of an April 17, 2001 Order to Cease and Desist based upon the same conduct. The Order to Cease and Desist, being uncontested by the respondent, became permanent on June 29, 2001.

Consent Order Conditioning Registration as an Investment Adviser
and as an Investment Adviser Agent Issued

On July 25, 2001, the Commissioner issued a Consent Order under the Connecticut Uniform Securities Act conditioning the registration of Benchmark Asset Management, LLC as an investment adviser, and the registration of John Andrew Kinney as an investment adviser agent of that firm. Benchmark Asset Management, LLC is wholly owned by John Andrew Kinney and maintains an office at 2614 Boston Post Road, Carriage House, Suite 3812 in Guilford, Connecticut. In conditioning the registrations, the Commissioner observed that Kinney had been the subject of a prior six-week bar imposed by the New York Stock Exchange in conjunction with allegations that Kinney had inequitably reallocated securities executions among customers.

Pursuant to the Consent Order, Benchmark Asset Management, LLC and John Andrew Kinney agreed to 1) refrain from having custody of client funds or securities for two years; 2) refrain for two years from exercising discretionary trading authority or control over client funds or securities unless prior written approval from the Division Director were obtained; 3) for two years, limit the investment advice rendered to securities listed on the New York Stock Exchange, the American Stock Exchange and/or the National Market System of NASDAQ; covered options and warrants relating to exchange-listed or NASDAQ-NMS securities; commercial paper; certificates of deposit; corporate debt securities; municipal securities; securities issued by investment companies subject to regulation under the Investment Company Act of 1940; United States government securities and insurance products subject to regulation by the Connecticut Insurance Commissioner; and 4) for two years, report to the division on a quarterly basis concerning any securities-related complaints, actions or proceedings involving either Benchmark Asset Management, LLC or John Andrew Kinney.

On July 25, 2001, Benchmark Asset Management, LLC became registered as an investment adviser under the Connecticut Uniform Securities Act, and the registration of John Andrew Kinney as an investment adviser agent of Benchmark Asset Management, LLC was made effective.

Montgomery Sterling Corporation Fined
$10,000 for Unregistered Stock Sales

On July 25, 2001, the Commissioner entered an Order Imposing Fine against Montgomery Sterling Corporation of 651 Willowbrook Road, Staten Island, New York. The Order, which fined the corporation $10,000, was based on findings that, on or about June 12, 2000, the respondent sold unregistered non-exempt units of its common stock to at least one Connecticut resident in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The respondent did not contest the imposition of the fine.

Montgomery Sterling Corporation had also been the subject of a March 27, 2001 Order to Cease and Desist based upon the same conduct. That order was uncontested by the respondent and became permanent on April 12, 2001. The Order to Cease and Desist had also claimed that the respondent could not rely on the exemption for Rule 504 offerings under Connecticut law since Ernest Cappone, an executive officer, director and beneficial owner of the respondent, had been the subject of an April 9, 1999 Consent Order issued by the State of Delaware prohibiting Cappone from pursuing registration as a broker-dealer agent in that state for three years.

Dated: Tuesday, July 31, 2001

John P. Burke
Banking Commissioner