The Department of Banking News Bulletin
Bulletin # 2266
Week Ending July 27, 2007
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.
114 Federal Road
Danbury, CT 06810
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
||Top Cash Inc.
827 North Avenue
Bridgeport, CT 06606
NEW BANK ACTIVITY
On July 23, 2007, pursuant to Section 36a-70(i) of the Connecticut General Statutes, Higher One Bank (In Organization) received approval for an extension of the period of its Temporary Certificate of Authority from July 31, 2007 to November 30, 2007.
CREDIT UNION ACTIVITY
On July 20, 2007, pursuant to Section 36a-468a(a)2 of the Connecticut General Statutes, New Britain Municipal Employees Credit Union, Inc., New Britain, Connecticut, a Connecticut credit union, filed an application to merge with Achieve Financial Credit Union, Inc., Berlin, Connecticut, a Connecticut credit union, with Achieve Financial Credit Union, Inc. as the “Resulting Credit Union”.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Brokerage Firms Fined $400,000 in the Aggregate for Failing to
Supervise Agent Convicted of Misappropriating Client Funds
On July 23, 2007, the Commissioner entered a Consent Order with respect to Tower Square Securities, Inc. (“TSSI”), a registered broker-dealer located at One Cityplace, 18th Floor, Hartford, Connecticut; USAllianz Securities, Inc. (“USAS”) of 5701 Golden Hills Drive, Minneapolis, Minnesota; and Advantage Capital Corporation (“ACC”), a registered broker-dealer located at 2300 Windy Ridge Parkway, Suite 1100, Atlanta, Georgia, In December, 2006, USAS merged with and assumed the name of Questar Capital Corporation, a Connecticut-registered broker-dealer and affiliate of USAS. The Consent Order alleged that, at various times from 1994 through 2005, the firms engaged David M. Faubert (CRD number 2150188) (“Faubert”) as a broker-dealer agent; that the firms failed to discover that Faubert had been preparing fraudulent monthly statements that improperly inflated the value of client holdings and had been forwarding those statements to clients; that Faubert was depositing client funds into the account of Faubert Financial Group, Inc. and misappropriating those funds for his personal use; and that the firms, as a result, had failed to establish, enforce and maintain an adequate supervisory system. On May 3, 2007, Faubert had been sentenced in New Haven federal court to 7 years in prison for stealing client funds. Faubert's broker-dealer agent registration had been revoked by the Commissioner on May 19, 2005. In furtherance of their desire to resolve the matter informally with the department, the firms represented to the Commissioner that they had either monetarily settled the claims of affected investors or offered restitution of the net losses allegedly incurred. Investor losses in the matter were estimated to exceed $5 million.
The Consent Order imposed fines of $300,000 against TSSI, $75,000 against USAS and $25,000 against ACC. The Consent Order also directed the firms to conduct branch office audits within 24 months following the entry of the Consent Order and report their findings to the agency.
Dated: Tuesday, July 31, 2007
Howard F. Pitkin