DOB: News Bulletin 2099 - May 14, 2004

The Department of Banking News Bulletin 

 Bulletin # 2099
Week Ending May 14, 2004

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

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 Financial Institutions Division, (860) 240-8180.
Note: dates are listed in month/day/year format.

State Bank Activity

Date Bank Location Activity
5/17/04 Newtown Savings Bank
Newtown
815-819 Bridgeport Avenue
Shelton, CT  06484
approved
5/17/04 Imperial Capital Bank
LaJolla, California
* One Stamford Plaza
   263 Tersser Blvd., 9th Floor
   Stamford, CT  06901
filed
* Limited

CONVERSION & ACQUISITION

On May 11, 2004, Putnam Savings Bank, a Connecticut bank with its main office located in Putnam, filed an application pursuant to Section 36a-137 of the Connecticut General Statutes, as amended by Public Act 03-259, to convert to a federal savings bank. Also on May 11, 2004, an acquisition statement was filed on behalf of Putnam Bancorp, MHC, a federal mutual holding company in organization, and PSB Holdings, Inc., its wholly-owned subsidiary, pursuant to Section 36a-184 of the Connecticut General Statutes, for the acquisition of all of the voting securities of Putnam Savings Bank immediately following the conversion.

CREDIT UNION ACTIVITY
Field of Membership

On May 3, 2004, pursuant to a July 10, 2002 Settlement Agreement with the Connecticut Department of Banking, Corporate America Family Credit Union, Elgin, Illinois, filed an application to expand its field of membership to include employees of The Coffee Pot, New Haven, Connecticut, and Westfalia North America, Inc., Bristol, Connecticut.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
California Firm Assessed $1,500 for Acting as "Finder" Absent
Broker-dealer Registration

On May 10, 2004, the Commissioner entered into a Stipulation and Agreement with D.F. Hadley & Co., Inc. of 2321 Rosecrans Avenue, Suite 3255, El Segundo, California. The Stipulation and Agreement alleged that, at a time when the firm was not registered as a broker-dealer under the Connecticut Uniform Securities Act, the firm received sales commissions in conjunction with a 2003 private placement; contacted potential investors; and assisted in negotiating and structuring the investment and conducted sales. D.F. Hadley & Co., Inc. has since become registered as a broker-dealer in Connecticut. In entering into the Stipulation and Agreement, the Commissioner acknowledged that the firm had cooperated in providing requested information and had extended a $4 million rescission offer to affected Connecticut investors whom the firm represented were "accredited." The Stipulation and Agreement required that the firm review, revise and implement supervisory and compliance procedures designed to prevent and detect any future violations of the Act. In addition, the Stipulation and Agreement required that the firm pay $1,500 to the department. Of that amount, $1,000 constituted an administrative fine, and $500 represented reimbursement for agency investigative costs.

Broker-dealer Assessed $1,500 for Splitting "Finderís Fee"
With Unregistered Broker-dealer Agent

On May 10, 2004, the Commissioner entered into a Stipulation and Agreement with InCap Securities, Inc. of 630A Fitzwatertown Road, Willow Grove, Pennsylvania. The firm is registered as a broker-dealer under the Connecticut Uniform Securities Act. The Stipulation alleged that InCap Securities, Inc. received a "finderís fee" in conjunction with a private placement of American Biophysics Corp. stock and warrants, and paid a portion of that fee, attributable to an investment made by a Connecticut resident, to an individual who was not then registered as a broker-dealer agent under the Act and who had a familial relationship with the Connecticut investor. The individual has since become registered as a broker-dealer agent of InCap Securities, Inc. in Connecticut. Pursuant to the Stipulation and Agreement, InCap Securities, Inc. agreed to review, revise and implement supervisory and compliance procedures designed to prevent and detect violations of Connecticut agent registration requirements. In addition, the firm agreed to pay an administrative fine of $1,500.

Florida Firm Ordered to Cease and Desist From Selling
Unregistered Securities Through Unregistered Agents;
Notice of Intent to Fine Issued

On May 11, 2004, the Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine against Vegas International Players.com, LLP of 4701 North Federal Highway, Suite 380, Lighthouse Point, Florida. The action alleged that, commencing in March 2003, the respondent sold unregistered non-exempt limited liability partnership units in violation of Section 36b-16 of the Connecticut Uniform Securities Act and, in so doing, employed one or more unregistered agents in violation of Section 36b-6(b) of the Act. 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 June 29, 2004.

CONSUMER CREDIT DIVISION ACTIVITY
Settlement Agreements

On April 23, 2004, the Commissioner entered into a settlement agreement with Mortgage Trust Group, Inc. ("Respondent"), of 364 Boston Turnpike, Shrewsbury, Massachusetts. The Respondent had been the subject of a March 18, 2004, Notice of Intent to Revoke First Mortgage Lender/Broker License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing which alleged that an employee of Respondent altered the address on its first mortgage lender/broker license in order to broker a first mortgage loan from a location that was not licensed, which constitutes the commission of fraud and a violation of Section 36a-490(a) of the Connecticut General Statutes. Such assertion constituted grounds for the revocation of Respondentís license, pursuant to Sections 36a-494(a)(1)(B), 36a-494(a)(1)(C) and 36a-494(a)(1) of the Connecticut General Statutes and the imposition of a civil penalty, pursuant to Section 36a-50 of the Connecticut General Statutes, as amended by Public Act 03-259. Pursuant to the Settlement Agreement, Respondent remitted to the Department of Banking $4,000 as a civil penalty.

On April 29, 2004, the Commissioner entered into a Settlement Agreement with Marc Schulman and Alex DePase d/b/a Absolute Mortgage Solutions ("Respondents") of 990 Silas Deane Highway, Wethersfield, Connecticut. The Respondents had been the subjects of a January 15, 2004, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing which alleged that Respondents: advertised a rate of finance charge without advertising the corresponding annual percentage rate; failed to advertise the fact that the annual percentage rate may increase after consummation; failed to disclose the number and amount of payments and the down payment or percentage of down payment of the advertised loan, in violation of 12 C.F.R. ß226.24 (2003) of Regulation Z and 36a-678(a) of the Connecticut General Statutes; and, failed to include in first mortgage loan advertisements a statement that clearly and conspicuously stated the fact that Respondents were a "BROKER ONLY, NOT A LENDER", in violation of Section 36a-497 of the Connecticut General Statutes. Pursuant to the Settlement Agreement, Respondents remitted to the Department of Banking $15,000 as a civil penalty, and assured the Commissioner that none of the violations alleged in the Notice would occur in the future.

On May 7, 2004, the Commissioner entered into a Settlement Agreement with RMBC Corp., f/k/a The Realtors Mortgage Banking Corporation ("Respondent") of 497 Main Street, Ansonia, Connecticut. The Respondent had been the subject of a January 8, 2004, Notice of Intent to Revoke First Mortgage Correspondent Lender/Broker License, Notice of Intent to Revoke Secondary Mortgage Lender/Broker License, Notice of Intent to Impose Civil Penalty, and Notice of Right to Hearing, which alleged that: (1) Respondent made material misstatements in applications it filed with the Commissioner for the renewal of its first mortgage correspondent lender/broker license, renewal of its secondary mortgage lender/broker license and an application for a new location for a first mortgage lender/broker license in violation of Sections 36a-494(a)(1)(A) and 36a-517(a)(1)(A) of the Connecticut General Statutes ("CGS"); (2) employed or retained originators without registering them with the Department in violation of Sections 36a-486(b) and 36a-511(b) of the CGS; (3) an employee of the Respondent provided an altered loan document to the Department in violation of Sections 36a-494(a)(1)(B) and 36a-517(a)(1)(B) of the CGS; and, (4) employed Gary Konstantin ("Konstantin") as a Vice President and filed applications for its licenses stating that Konstantin had not been a defendant in any litigation of any type (including suits under the State or Federal Truth in Lending Acts), while in 1998 Konstantin was named as a defendant in a civil action in the United States District Court for the Eastern District of New York filed in connection with the consumer credit business and, more specifically, the granting or brokering of mortgage loans. Such allegations constituted grounds for revocation of Respondentís licenses pursuant to Sections 36a-494(a)(1)(A)&(B) and 36a-517(a)(1)(A)&(B) of the CGS and issuance of an order imposing civil penalties pursuant to section 36a-50 of the CGS for violations of section 36a-53a. Pursuant to the Settlement Agreement, Respondent surrendered its first mortgage correspondent lender/broker license and its secondary mortgage lender/broker license to the Department and remitted $9,500 as a civil penalty.

Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty, Notice of Right to Hearing and
Temporary Order to Cease and Desist Issued

On May 12, 2004, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty, Notice of Right to Hearing and Temporary Order to Cease and Desist against Muhelkumar R. Patel d/b/a Quick Stop Mini Mart ("Respondent"), whose principal place of business is located at 61 Walden Avenue, New London, Connecticut. The agencyís action was based on the assertion that the Respondent engaged in the business of issuing Connecticut payment instruments without licensure in violation of Section 36a-597 of the Connecticut General Statutes. The Respondent was afforded the opportunity to request a hearing on the assertions which, if requested, has been scheduled for July 14, 2004.

Dated: Tuesday, May 18, 2004

John P. Burke
Commissioner