DOB: News Bulletin 2166 - August 26, 2005

The Department of Banking News Bulletin

Bulletin # 2166
Week Ending August 26, 2005

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, Banking Commissioner, 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
8/24/05 Rockville Bank
Rockville
1645 Ellington Road
South Windsor, CT  06074
filed

National Bank Branch Activity

Date Credit Union Location Activity
8/20/05 Commerce Bank, N.A.
Philadelphia, PA
380 Main Avenue
Norwalk, CT  06851
opening
date
8/20/05 Commerce Bank, N.A.
Philadelphia, PA
1715 Black Rock Turnpike
Fairfield, CT  06828
opening
date

SECURITIES AND BUSINESS INVESTMENTS DIVISION
Norwalk Main Permanently Barred from
Conducting Securities Business in Connecticut

On August 23, 2005, the Commissioner entered a Consent Order with respect to Kevin O. Kelley of Norwalk, Connecticut. Kelley was a former broker-dealer agent of Royal Alliance, Inc. The Consent Order alleged that 1) Kelley violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered, non-exempt securities of First Ventures Leasing, LP, e-tel, M-Power, Ausam Biotechnologies, Swift Energy and HEP to at least ten investors; 2) Kelley violated the antifraud provisions of the Act by falsely representing to investors the use to which their funds would be put, providing false valuations to investors with respect to their holdings, failing to disclose the risks associated with an investment in First Ventures Leasing LP and failing to disclose that First Ventures Leasing, LP's main customers were e-tel and Coyote Network Systems, Inc., entities in which Kelley had a controlling interest. In addition, the Consent Order claimed that Kelley engaged in dishonest or unethical practices by 1) making unauthorized, excessive purchases of Coyote Network Systems, Inc. securities for the accounts of clients and falsely stating that those transactions were unsolicited; 2) guaranteeing clients against losses in First Ventures Leasing LP and e-tel; and 3) reimbursing clients for losses incurred in their brokerage accounts without obtaining prior approval from Royal Alliance, Inc. The Consent Order also alleged that Kelley engaged in private securities transactions in violation of Section 36b-31-6e of the Regulations under the Act through his sales of First Ventures Leasing LP, e-tel, M-Power, Ausam Biotechnologies, Swift Energy and HEP. According to the Consent Order, investor losses attributable to Kelley's conduct exceeded $5.1 million.

In entering the Consent Order, the Commissioner determined that no fine would be imposed on Kelley since Kelley had been indicted by the U.S. Attorney for the Southern District of New York and since an action by the Securities and Exchange Commission had resulted in the freezing of Kelley's assets (SEC Litigation Release No. 19084).

The Consent Order permanently barred Kelley from transacting business in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer. In addition, the Consent Order directed that Kelley cease and desist from regulatory violations.

Dated: Tuesday, August 30, 2005

John P. Burke
Commissioner