The Department of Banking News Bulletin
Bulletin # 2226
Week Ending October 20, 2006
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 Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.
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.
The Guilford Savings Bank
494 Old Toll Road
Madison, CT 06443
BRANCH APPLICATION POLICY CHANGE
Currently, bank and credit union branch approvals are issued for a period of one year once approved by the Banking Commissioner. Effective immediately, we will issue branch approvals for a period of time of 18 months. This policy change should reduce the number of requests the Department of Banking receives for extensions of the one year approval period due to zoning, construction or other development and/or planning changes. This policy change will also reduce the administrative burden for the banks & credit unions, as well as the Department of Banking staff responsible for processing branch applications.
REORGANIZATION AS A MUTUAL HOLDING COMPANY AND ACQUISITION
On October 19, 2006, the Commissioner, in connection with the application by Fairfield County Bank Corp., a mutual savings bank, to reorganize so as to form a mutual holding company, issued a notice of intent not to disapprove the formation of a proposed mutual holding company to be known as Farfield County Bank III MHC, Inc., pursuant to Section 36a-192(h) of the Connecticut General Statutes. Also in connection with the application, approval was granted, pursuant to Sections 36a-193 and 36a-192(b)(2) of the Connecticut General Statutes, to form a reorganized savings institution to be known as Fairfield County Bank II and subsequently merge Fairfield County Bank Corp., with and into Fairfield County Bank II, the resulting bank to operate as a capital stock savings bank under the name Fairfield County Bank. Also, on October 19, 2006, pursuant to Section 36a-185 of the Connecticut General Statutes, the Commissioner issued a notice of intent not to disapprove the acquisition by Fairfield County Bank, MHC of 100% of the voting securities of Fairfield County Bank.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
On October 16, 2006, the Commissioner entered into a Stipulation and Agreement with Shimoda Capital Advisors Limited, an investment adviser registered with the Securities and Exchange Commission. Although the firmís principal address is c/o Caledonian House, Jennet Street, George Town, Cayman Islands, the firm maintains or has also maintained a place of business at 15 River Road, Suite 230, Wilton, Connecticut. The Stipulation and Agreement alleged that from July 6, 2001 forward, the firm transacted business as an investment adviser in or from Connecticut at a time when no notice filing or fee had been remitted pursuant to Section 36b-6(e) of the Connecticut Uniform Securities Act. The Stipulation and Agreement acknowledged that David J. Mapley, director of the firm, had represented to the Division that 1) the firm currently did not conduct, and would not conduct, business in the United States; 2) the firm did not currently have U.S. clients nor would it have U.S. clients in the future; and 3) the firm had
not serviced any U.S. clients in the past. Pursuant to the Stipulation and Agreement, Shimoda Capital Advisors Limited agreed to review, revise and implement supervisory and compliance procedures necessary to ensure compliance with state investment advisory notice filing and registration requirements, as the case might be. In addition, the firm agreed to pay $2,500 to the department. Of that amount, $1,500 constituted an administrative fine and $1,000 constituted reimbursement for past due notice filing fees.
Order to Cease and Desist, Notice of Intent to
Fine and Notice of Right to Hearing Issued
On October 18, 2006, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Roll-A-Cover, LLC of 674 Amity Road, Bethany, Connecticut and 36 Sargent Drive, Bethany, Connecticut and its managing partner, Michael P. Morris. The action alleged that in January 2004, the respondents offered and sold an unregistered business opportunity from Connecticut in contravention of the Connecticut Business Opportunity Investment Act. Roll-A-Cover, LLC is in the business of marketing retractable pool covers and other outdoor enclosures. The action also alleged that the respondents failed to provide prospective purchaser-investors with a disclosure document in violation of Section 36b-63(a) of the Act. The respondents were 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 December 5, 2006.
On October 19, 2006, the Commissioner entered into a Stipulation and Agreement with Carrington Capital Management, LLC of 7 Greenwich Office Park, Greenwich, Connecticut. The firm is registered as an investment adviser with the Securities and Exchange Commission. The Stipulation and Agreement alleged that, from approximately May 2004 until March 2006, the firm transacted advisory business in Connecticut without making the requisite notice filing under Section 36b-6(e) of the Connecticut Uniform Securities Act. The firm has since complied with the stateís notice filing requirement for calendar year 2006. In addition, the Stipulation and Agreement claimed that, at various times commencing in 2004, interests in Carrington Investment Partners (US) LP and Carrington Investment Partners (Cayman) LP were sold in or from Connecticut at a time when no registration, exemption or claim of covered security status had been filed with the department.
Pursuant to the Stipulation and Agreement, the firm agreed to pay $3,800 to the department. Of that amount, $1,000 constituted an administrative penalty for failing to timely file the notice required by Section 36b-6(e) of the Act; $2,500 constituted an administrative penalty for failing to comply with applicable securities registration, exemption and notice filing requirements; and $300 represented reimbursement for past due investment adviser notice filing fees.
On September 21, 2006, the Commissioner entered a Consent Order with respect to Steven Hadley Haynes. The Consent Order had been preceded by an April 6, 2006 Notice of Intent to Deny Registration as a broker-dealer agent and an investment adviser agent. Although respondent Haynes had withdrawn his application for registration as an agent of Bannon, Ohanesian & Lecours, Inc., Connecticut law permits the Commissioner to initiate denial proceedings within one year following the withdrawal. The Notice of Intent to Deny had alleged that, between September 2003 and March 2005, respondent Haynes engaged in a dishonest or unethical practice by improperly splitting commissions with one David Faubert and Faubert Financial Group, Inc. while respondent Haynes was employed by the brokerage firm of Tower Square Securities, Inc. The Notice of Intent to Deny had also alleged that the respondent had been the subject of a November 2, 2005 NASD bar from association predicated on the respondentís failure to appear for an on-the-record interview in connection with an NASD investigation.
The Consent Order barred respondent Haynes from applying for registration in Connecticut as an agent or an investment adviser for five years, with leave to reapply after two years had elapsed from the entry of the Consent Order. In addition, the Consent Order directed respondent Haynes to reimburse the agency $2,500 for its investigative costs.