DOB: News Bulletin 2045 - May 2, 2003

The Department of Banking News Bulletin 

Bulletin # 2045
Week Ending May 2, 2003

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.


BRANCH ACTIVITY
State Bank Activity

Section 36a-145 of the Connecticut General Statutes requires that each application for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided. Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days. Questions concerning branch activity should be directed to the Bank Examination Division, (860) 240-8180.
Note: dates are listed in month/day/year format.

Date Bank Location Activity
04/28/2003 Bank of Westport
Westport
1312 Post Road
Fairfield, CT  06824
approved
04/28/2003 People's Bank
Bridgeport
*5 River Road
Wilton, CT  06897
approved to convert
to a limited branch

*Limited Branch

CHECK CASHING SERVICE LICENSE ACTIVITY

On April 28, 2003, pursuant to Section 36a-581 of the Connecticut General Statutes, Connecticut State Check Cashing Services, Inc. received approval to operate a check cashing service general facility at 208 East Main Street, New Britain, Connecticut.

On April 14, 2003, pursuant to Section 36a-581(d) of the Connecticut General Statutes, Connecticut Finance Corporation filed an application to relocate its licensed check cashing service general facility from 300 Boston Avenue, Bridgeport, to 522 Boston Avenue, Bridgeport.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
UBS Warburg LLC and UBS PaineWebber Inc. Fined for Failing
to Maintain Analyst Independence

On April 28, 2003, the Commissioner entered a Consent Order with respect to UBS Warburg LLC of 677 Washington Boulevard, Stamford, Connecticut and its affiliate, UBS PaineWebber Inc. of 1285 Avenue of the Americas, New York, New York. Both entities are registered as broker-dealers under the Connecticut Uniform Securities Act. The agency investigation leading up to the Consent Order focused on the firms' research practices for the period 1999 through 2001, and was part of similar investigations conducted by a multi-state task force and a joint task force of the SEC, the New York Stock Exchange and the National Association of Securities Dealers. The global resolution capping the investigations resulted in; $25 million allocated to the states; $25 million representing the disgorgement of commissions and fees; $25 million to be earmarked for the procurement of independent research by the respondents; and $5 million to be used for investor education. The respondents also agreed to abide by certain undertakings designed to separate their investment banking and research functions.

In entering the Consent Order, the Commissioner found that the respondents had 1) engaged in dishonest or unethical practices in violation of Section 36b-4(b) of the Connecticut Uniform Securities Act by enabling their investment banking departments to exert improper influence over firm research analysts, thus creating an inherent conflict of interest; issuing research reports that were affected by such conflict of interest; making payments for research to other broker-dealers who were not involved in underwriting transactions; and receiving payments in connection with underwriting transactions from outside entities for research issued without making public disclosure of those payments as required by Section 17(b) of the Securities Act of 1933; and 2) failed to establish, enforce and maintain adequate supervisory controls to prevent and detect the allegedly violative conduct.

The Consent Order directed the respondents to cease and desist from regulatory violations and mandated that they collectively pay $262,402 to the department. Of that amount, $150,000 constituted a fine and $112,402 represented reimbursement for the agency's legal and investigative costs.

Dated: Tuesday, May 6, 2003

John P. Burke
Commissioner