DOB: News Bulletin 2064 - September 12, 2003

The Department of Banking News Bulletin 

 Bulletin # 2064
Week Ending September 12, 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) 240-8185. Note: dates are listed in month/day/year format.

Date Bank Location Activity
09/10/2003 Farmington Savings Bank
Farmington
962 Farmington Avenue
West Hartford, CT  06107
approved

NEW BANK ACTIVITY

On May 12, 2003, pursuant to Section 36a-70 of the Connecticut General Statutes, a temporary certificate of authority was issued to the organizers of Connecticut Bank & Trust, for the purpose of conducting the business of a bank and trust company in Hartford, Connecticut.

SECURITIES AND BUSINESS INVESTMENTS DIVISION
Broker-Dealer Fined $7,500 for Recordkeeping Deficiency

On September 10, 2003, the Banking Commissioner entered a Consent Order with respect to Bayou Securities, LLC of 40 Signal Road, Stamford, Connecticut. The Consent Order alleged that the firm, a Connecticut-registered broker-dealer, failed to keep the records required by Section 36b-31-14a(a) of the Regulations under the Connecticut Uniform Securities Act. The Consent Order required that the firm pay $7,500 to the department as an administrative fine and provide the Securities and Business Investments Division with copies of any customer complaints on a quarterly basis for two years.

New York Firm Fined $500 for Transacting Business
from Unregistered Broker-dealer Branch Office

On September 10, 2003, the Banking Commissioner entered into a Stipulation and Agreement with American Portfolios Financial Services, Inc. of 4250 Veterans Memorial Highway, 4th Floor East, Holbrook, New York. The Stipulation and Agreement alleged that from approximately August 15, 2002 forward, the firm transacted business from 245 Brooklyn Road, Canterbury, Connecticut at a time when that location was not registered as a branch office under Section 36b-6(d) of the Connecticut Uniform Securities Act. American Portfolios Financial Services, Inc. is a broker-dealer registered under the Act. The branch office has since been registered. Pursuant to the Stipulation and Agreement, the firm agreed to pay a $500 fine and implement supervisory procedures designed to prevent violations of Connecticut's branch office registration requirements.

Broker-Dealer Fined $787,208 for Failing to
Maintain Analyst Independence

On September 12, 2003, the Banking Commissioner entered a Consent Order with respect to Credit Suisse First Boston LLC of 11 Madison Avenue, New York, New York. The firm is registered as a broker-dealer under the Connecticut Uniform Securities Act. The agency investigation culminating in the entry of the Consent Order focused on the firm's research practices for the period 1998 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 $75 million allocated to the states; $75 million representing the disgorgement of commissions and fees; and $50 million to be earmarked for the procurement of independent research by the respondent. The respondent also agreed to abide by certain undertakings designed to separate investment banking and research functions.

In entering the Consent Order, the Commissioner found that the respondent had 1) violated Section 36b-4(a)(2) of the Act by issuing false and misleading research reports; 2) violated Section 36b-4(b) of the Act by engaging in dishonest or unethical business practices; and 3) failed to establish, enforce and maintain an adequate supervisory system to detect and prevent regulatory violations. The Consent Order mandated that the respondent cease and desist from violating the Connecticut Uniform Securities Act and fined the respondent $787,208.

Order to Cease and Desist and Notice of Intent to Fine Issued
for Unregistered Business Opportunity Sales

On September 10, 2003, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Image Arts Etc. of 8340 Camino Santa Fe, Suite F, San Diego, California. The action alleged that Image Arts Etc. sold photographic printing business opportunities in Connecticut absent registration under the Connecticut Business Opportunity Investment Act. The action also claimed that Image Arts Etc., through its CEO, Bryan Burlison, had violated Section 36b-80 of the Connecticut Business Opportunity Investment Act by filing a misleading statement with the agency concerning the number of business opportunity purchasers in Connecticut. 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 November 25, 2003.

Dated: Tuesday, September 16, 2003

John P. Burke
Commissioner