DOB: News Bulletin 2121 - October 15, 2004

The Department of Banking News Bulletin

Bulletin # 2121
Week Ending October 15, 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
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 Financial Institutions Division, (860) 240-8180.

Date Bank Location Activity
8/06/04
Liberty Bank
Middletown
FROM: 220 Routes 12 & 184
          Groton, CT  06340
TO:     597 Long Hill Road
          Groton, CT  06340
relocation
effective
date
9/20/04
Liberty Bank
Middletown
FROM: 170 Flanders Road
          East Lyme, CT  06333
TO:     314 Flanders Road
          East Lyme, CT  06333
relocation
effective
date

ACQUISITION

On October 14, 2004, pursuant to Section 36a-184 of the Connecticut General Statutes, Webster Financial Corporation, a Delaware corporation, filed an acquisition statement for the acquisition of First City Bank, a Connecticut bank.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Broker-dealer Agent Registration Suspended for Ten Business Days
Following Sales of Hedge Fund Interests

On October 7, 2004, the Commissioner entered a Consent Order with respect to Wilder Douglas Carnes of 150 A Hanover Road, Newtown, Connecticut. The respondent co-managed Criterion Investment Capital LLC, an entity that acted as the general partner of the Criterion Investment Fund I L.P., a Connecticut-based hedge fund. The respondent had been the subject of a February 5, 2004 Order to Cease and Desist, Notice of Intent to Revoke Registrations as Agent and Investment Adviser Agent and Notice of Intent to Fine alleging that, in connection with offers and sales of hedge fund interests effected from at least January 2001 to January 2002, the respondent violated the antifraud provisions in Section 36b-4 of the Connecticut Uniform Securities Act by 1) not disclosing that, contrary to representations made to prospective investors, hedge fund interests were being sold for less than $500,000 to non-accredited investors; 2) not disclosing that, although the offering circular represented that the hedge fund's objective was to achieve long term appreciation, the average investment was only 19 days in duration; 3) not disclosing that, contrary to representations made in the offering circular, hedge fund trading focused on options; and 4) failing to disclose the respondent's 1999 bankruptcy. In addition, the action had claimed that the respondent 1) violated Section 36b-31-14e(a) of the Regulations under the Act by failing to update his Form U-4 to disclose the department's pending investigation; and 2) contravened Section 36b-6(c) of the Act by transacting business as an unregistered investment adviser agent in conjunction with his hedge fund activities.

The Consent Order resolved the allegations in the February 5, 2004 Order to Cease and Desist, Notice of Intent to Revoke Registrations as Agent and Investment Adviser Agent and Notice of Intent to Fine. In entering into the Consent Order, the Commissioner acknowledged that the respondent had demonstrated economic hardship such that the respondent was financially incapable of paying a fine, and that the respondent had not been employed in the securities industry since June 30, 2004. Although the respondent applied for registration as a broker-dealer agent of Source Capital, Inc. on July 20, 2004, that registration had not been made effective as of the date the Consent Order was entered. In entering the Consent Order, the Commissioner also found that the respondent 1) violated Section 36b-31-14e(a) of the Regulations under the Connecticut Uniform Securities Act by failing to promptly file a correcting amendment to his Form U-4; and 2) violated Section 36b-6(c) of the Act by transacting business as an investment adviser agent while unregistered.

Pursuant to the Consent Order, the respondent's agent registration, which became effective on October 8, 2004, was suspended for ten business days. The Consent Order also obligated the respondent to cooperate with the Division in its investigation of Criterion Investment Fund I L.P. and Criterion Investment Capital LLC.

CREDIT UNION ACTIVITY 
Field of Membership

On October 8, 2004, pursuant to Section 36a-462b(d) of the Connecticut General Statutes, Corporate America Family Credit Union, Elgin, Illinois, received approval to expand its field of membership in the State of Connecticut to employees of Bristol Grill, Bristol, Connecticut.

Dated: Tuesday, October 19, 2004

John P. Burke
Commissioner