DOB: News Bulletin 2078 - December 19, 2003

The Department of Banking News Bulletin

Bulletin # 2078
Week Ending December 19, 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.


CHECK CASHING SERVICE LICENSE ACTIVITY

On December 2, 2003, pursuant to Section 36a-581 of the Connecticut General Statutes, City Check Cashing, Inc. received approval to operate a check cashing general facility at 575 Talcottville Road, Unit C, Vernon, Connecticut.

ORDER FOR RECONVENED HEARING

Pursuant to Section 36a-24 of the Connecticut General Statutes, the Commissioner has ordered that the hearing that commenced on December 4, 2003, on the following applications:

(1) the conversion of The New Haven Savings Bank, New Haven, Connecticut, from a mutual savings bank into a capital stock bank to be known as NewAlliance Bank, and for the formation of a holding company, NewAlliance Bancshares, Inc.;
(2) the acquisition of Connecticut Bancshares, Inc. and its subsidiary, The Savings Bank of Manchester, and the acquisition of Alliance Bancorp of New England, Inc. and its subsidiary, Tolland Bank, by NewAlliance Bancshares, Inc.; and
(3) the merger of The Savings Bank of Manchester and Tolland Bank with and into The New Haven Savings Bank, the resulting bank to operate under the name NewAlliance Bank;

be reconvened on January 5, 2004, at 5 p.m. in the Conte-West Hills Magnet School, 511 Chapel Street, New Haven, Connecticut.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Notice of Intent to Issue Stop Order Denying Effectiveness to 
Business Opportunity Registration Issued

On December 17, 2003, the Commissioner issued a Notice of Intent to Issue a Stop Order denying effectiveness to the pending business opportunity registration of Ameri P.O.S. Inc. a/k/a Ameripos Inc. of 1250 East Hallandale Beach Boulevard, Suite 505, Hallandale, Florida. The respondent purportedly is in the business of selling point of sale products and electronic point of sale terminals, including marketing support and machine location assistance, to enable purchasers to start a business servicing the machines which allegedly would transfer funds, pay bills electronically and store and sell ATM debit cards, credit cards, smart cards and prepaid cards. The Notice of Intent to Issue Stop Order alleged that the registration application was materially incomplete in that the respondent, through its president, Richard Nye, failed to submit such items as: adequate financial information, advertising materials, proof of compliance with those provisions of Title 36a of the Connecticut General Statutes governing smart cards and money transmitters, greater specificity regarding Richard Nye’s employment history, and information on who produced the electronic point of sale terminals sold by the respondent.

The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Issue Stop Order.

 California Firm Fined $20,000 for Unregistered
Business Opportunity Sales; 
Cease and Desist Order Becomes Permanent

On December 17, 2003, the Commissioner entered an Order Imposing Fine against Image Arts Etc. of 8340 Camino Santa Fe, Suite F, San Diego, California. The respondent did not contest the imposition of the $20,000 fine. Image Arts Etc. had been the subject of a related September 10, 2003 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that the company sold photographic printing business opportunities in Connecticut absent registration under the Connecticut Business Opportunity Investment Act. The Order to Cease and Desist and Notice of Intent to Fine had 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 Order to Cease and Desist, being uncontested, had become permanent on October 4, 2003

Bridgeport Man Sentenced in Connection With
Sales of Fraudulent Promissory Notes

On November 14, 2003, Gerald Georges of Bridgeport, Connecticut was sentenced in Stamford Superior Court to a total effective sentence of seven years imprisonment, suspended after three and one-half years served, to be followed by five years probation and an order of restitution totaling $700,000. Georges, who operated Georges Trading Corporation in 2000 and 2001 and sold securities in the form of promissory notes to the public, had pled guilty to four counts of securities fraud and four counts of sale of unregistered securities in violation of the Connecticut Uniform Securities Act. The matter was prosecuted by the Office of the Chief State’s Attorney, with investigative assistance provided by the Securities and Business Investments Division of the Department of Banking; the Chief State's Attorney's Office; and the Stamford Police Department. On October 15, 2002, the Commissioner had issued an Order fining Gerald Georges $30,000 for selling unregistered promissory notes and violating the antifraud provisions of the Connecticut Uniform Securities Act. Gerald Georges had also been the subject of an August 2, 2002 Order to Cease and Desist issued by the Commissioner. The Order to Cease and Desist had claimed that: 1) from at least February 2000 forward, Gerald Georges effected at least 68 transactions in securities consisting of notes issued by Georges Trading Corp. to at least 45 Connecticut investors, and, in so doing, transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act; 2) the notes were not registered under Section 36b-16 of the Act; and 3) Gerald Georges had violated the antifraud provisions of the Act by a) failing to honor a personal guarantee he had made to a Connecticut investor that the investor's funds would be returned; b) presenting subsequently dishonored checks to Connecticut investors as refunds; c) mailing an inaccurate statement of account to a Connecticut investor; and d) falsely representing that the note proceeds would be invested in the stock market, that the investments were safe, secure and insured; that investors would receive up to 70% in interest per month; and that Georges Trading Corp. would generate income to cover the cost of taxes on the investments over and above the promised monthly returns when no such taxes were paid. The Order to Cease and Desist had further alleged that, while Georges Trading Corp. had returned a fraction of investment monies to Connecticut investors, Connecticut investors never realized the promised returns, and that the bulk of investor money was spent on Gerald Georges' personal expenses, the personal expenses of Georges Trading Corp.'s vice president and on payroll and office costs.

West Hartford Firm Assessed $3,900 for
Employing Unregistered Investment Adviser Agent

On December 17, 2003, the Banking Commissioner entered into a Stipulation and Agreement with More For Less Financial Solutions, L.L.C. of 88 Van Buren Avenue, West Hartford, Connecticut. The Stipulation and Agreement alleged that the firm, which is registered as an investment adviser under the Connecticut Uniform Securities Act, employed an unregistered investment adviser agent from 1997 forward. In entering into the Stipulation and Agreement, the firm represented that it had not been aware of a statutory change in the definition of "investment adviser agent" occurring subsequent to its initial registration date, which change expanded the definition to include persons making recommendations or otherwise rendering securities-related advice to clients on a compensated basis. The investment adviser agent has since been registered under the Act. Pursuant to the Stipulation and Agreement, the firm agreed to revise its supervisory procedures to ensure compliance with all statutory requirements governing the registration of investment adviser agents, and to pay $3,900 to the department. Of that amount, $3,500 constituted an administrative fine and $400 represented past due registration fees.

Dated: Tuesday, December 23, 2003

John P. Burke
Commissioner