DOB: News Bulletin 2023 - November 29, 2002

The Department of Banking News Bulletin

Bulletin # 2023
Week Ending November 29, 2002

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.



BANK EXAMINATION DIVISION
Notice of Intent to Impose Civil Penalty Issued
Against Bank Directors and Officer

On November 22, 2002, the Commissioner issued a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Notice") with respect to Randolph W. Lenz, majority shareholder and Chairman of the governing board of Connecticut Bank of Commerce ("CBC"). The Notice alleged that respondent (1) committed twenty-two violations of Section 36a-263 of the Connecticut General Statutes which prohibits certain insider loans; (2) made or caused to be made two false and misleading statements in documents filed with the Commissioner; (3) engaged or participated in twenty-five unsafe and unsound practices in connection with CBC; and (4) used his official position in a manner contrary to the interest of CBC and its depositors in twenty-five instances. The maximum civil penalty that may be imposed under the Notice is $555,000. The respondent was afforded an opportunity to request a hearing on the Notice. A hearing has been scheduled on the Notice for January 14, 2003.

On November 22, 2002, the Commissioner issued a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Notice") with respect to Brian A. Marks, Director of Connecticut Bank of Commerce ("CBC"). The Notice alleged that the respondent (1) engaged or participated in sixteen unsafe and unsound practices in connection with CBC; and (2) used his official position in a manner contrary to the interest of CBC and its depositors in sixteen instances. The maximum civil penalty that may be imposed under the Notice is $240,000. The respondent was afforded an opportunity to request a hearing on the Notice. A hearing has been scheduled on the Notice for January 14, 2003.

On November 22, 2002, the Commissioner issued a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Notice") with respect to Marshall C. Asche and Timothy S. Reed, Directors of Connecticut Bank of Commerce ("CBC"). The Notice alleged that the respondents (1) engaged or participated in two unsafe and unsound practices in connection with CBC; and (2) used their official position in a manner contrary to the interest of CBC and its depositors in two instances. The maximum civil penalty that may be imposed under the Notice upon each respondent is $30,000. The respondents were afforded an opportunity to request a hearing on the Notice. A hearing has been scheduled on the Notice for January 14, 2003.

On November 22, 2002, the Commissioner issued a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Notice") with respect to Marcial Cuevas, Jack W. Dunlap and Steven B. Levine, Directors of Connecticut Bank of Commerce ("CBC"). The Notice alleged that respondents Cuevas and Dunlap (1) engaged or participated in twenty-five unsafe and unsound practices in connection with CBC; and (2) used their official position in a manner contrary to the interest of CBC and its depositors in twenty-five instances. The Notice also alleged that respondent Levine (1) engaged or participated in twenty-four unsafe and unsound practices in connection with CBC; and (2) used his official position in a manner contrary to the interest of CBC and its depositors in twenty-four instances. The maximum civil penalty that may be imposed under the Notice upon respondents Cuevas and Dunlap is $375,000 each and upon respondent Levine is $360,000. The respondents were afforded an opportunity to request a hearing on the Notice. A hearing has been scheduled on the Notice for January 14, 2003.

On November 22, 2002, the Commissioner issued a Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Notice") with respect to J. Donald Weand, Jr., President and Chief Executive Officer of Connecticut Bank of Commerce ("CBC"). The Notice alleged that respondent (1) made two false and misleading statements in documents filed with the Commissioner; (2) engaged or participated in twenty-five unsafe and unsound practices in connection with CBC; and (3) used his official position in a manner contrary to the interest of CBC and its depositors in twenty-five instances. The maximum civil penalty that may be imposed under the Notice is $390,000. The respondent was afforded an opportunity to request a hearing on the Notice. A hearing has been scheduled on the Notice for January 14, 2003.

Business and Industrial Development Corporation

On November 27, 2002, Pitney Bowes Small Business Lending LLC filed an application pursuant to Section 36a-628 of the Connecticut General Statutes for a license to engage in the business of a business and industrial development corporation in this state as a participating lender under the federal Small Business Administration loan guarantee programs.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Hartford Firm Ordered to Cease and Desist from
Regulatory Violations; Notice of Intent to Fine Issued

On November 22, 2002, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Foundation Worldwide, Inc. of 151 New Park Avenue, Hartford, Connecticut. The action alleged that from at least April 2002 forward, Foundation Worldwide, Inc. conducted an unregistered common stock offering through its Internet web site at www.foundationworldwide.com in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The action also alleged that the respondent violated the antifraud provisions in Section 36b-4 of the Act by falsely representing on the respondent's web site that: 1) the respondent's directors had major portions of their net worth invested in the respondent at a time when the respondent had no directors and only one investor; 2) the respondent had long-term shareholders at a time when it had only one shareholder; 3) the respondent had undistributed earnings, when the respondent never had any earnings; 4) the respondent's common stock had a book value of $5.47 per share and a market value of $12 per share, when, in actuality, the shares had no value; 5) the respondent had income from its businesses, when in fact those businesses had never generated income; and 6) the respondent was a holding company owning subsidiaries engaged in a number of diverse business activities, when none of those subsidiaries had clients nor had they generated income. In addition, the action claimed that the respondent, through an employee, posted on an Internet message board that the respondent had a 63% return on equity for 2001 when in actuality the respondent had no earnings during that period and its return on equity was zero. The respondent was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for January 28, 2003.

Hartford Man Ordered to Cease and Desist from
Regulatory Violations; Notice of Intent to Fine Issued

On November 22, 2002, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Germaine Ryan of 22 Morris Street, #302, Hartford, Connecticut. The action alleged that from at least April 2002 forward, respondent Ryan, acting on behalf of Foundation Worldwide, Inc., created and posted a multi-paged Internet website offering unregistered common stock to the public in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The action also alleged that the respondent violated the antifraud provisions in Section 36b-4 of the Act by falsely representing on the web site that: 1) the Foundation Worldwide, Inc.'s directors had major portions of their net worth invested in the corporation at a time when the corporation had no directors and only one investor; 2) Foundation Worldwide, Inc. had long-term shareholders at a time when it had only one shareholder; 3) Foundation Worldwide, Inc. had undistributed earnings, when it never had any earnings; 4) Foundation Worldwide, Inc.'s common stock had a book value of $5.47 per share and a market value of $12 per share, when, in actuality, the shares had no value; 5) Foundation Worldwide, Inc. had income from its businesses, when in fact those businesses had never generated income; and 6) Foundation Worldwide, Inc. was a holding company owning subsidiaries engaged in a number of diverse business activities, when none of those subsidiaries had clients nor had they generated income. In addition, the action claimed that the respondent posted on an Internet message board that Foundation Worldwide, Inc. had a 63% return on equity for 2001 when in actuality the corporation had no earnings during that period and its return on equity was zero. Respondent Ryan was afforded an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for January 28, 2003.

Dated: Tuesday, December 3, 2002

John P. Burke
Commissioner