The Department of Banking News Bulletin
Bulletin # 2276
Week Ending October 5, 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, as amended by Public Act 07-14, 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.
FROM: 601 Norwich-New London Tnpk
Uncasville, CT 06382
TO: 563 Norwich-New London Tnpk
Uncasville, CT 06382
SIGN UP NOW FOR SECURITIES FORUM 2007
The Securities and Business Investments Division, in conjunction with the Securities Advisory Council to the Department, is sponsoring its nineteenth annual Securities Forum
conference on Thursday, October 25, 2007 at the Crowne Plaza Hotel in Cromwell, Connecticut. A timely and outstanding agenda of panel presentations, featuring expert speakers, will help financial industry professionals keep abreast of current and evolving regulatory developments. This year’s keynote speaker is Karl J. Krapek, former President and Chief Operating Officer of United Technologies Corporation. The conference includes a luncheon and course materials. For further program and registration information, visit the Department's Web site
or call the agency at (860) 240-8176. The sign-up deadline is October 18, 2007, with late registration permitted in extenuating circumstances.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Fines Issued for Antifraud and Registration Violations
On September 18, 2007, the Commissioner entered an Order imposing a $200,000 fine against HCH Cypress, LLC, whose last known address is c/o Five Mile Group, 694 Boston Post Road, Darien, Connecticut, and a $400,000 fine against HCH Cypress, LLC’s managing member Bradley W. Kabbash of Greenwich, Connecticut. The respondents did not appear at the hearing preceding the imposition of the fine. In assessing the penalty, the Commissioner found that the respondents had violated Sections 36b 16 and 36b-4 of the Connecticut Uniform Securities Act.
The September 18, 2007 Order had been preceded by a January 11, 2007 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that, in 2002, the respondents violated Section 36b-16 of the Act by offering and selling unregistered limited liability company interests and promissory notes. In addition, the action had alleged that the respondents violated the antifraud provisions in Section 36b-4 of the Act by providing inadequate disclosures to investors. The action had claimed that respondent Kabbash falsely represented to investors that the investment proceeds would be used to finance the acquisition of hospitals and ambulatory surgical centers when, in fact, the funds were used to pay respondent Kabbash’s personal expenses.
In addition, to fining the respondents, the September 18, 2007 Order rendered the January 11, 2007 Order to Cease and Desist permanent as to both HCH Cypress, LLC and Bradley W. Kabbash.
Findings of Fact, Conclusions of Law and Order Imposing Fine Issued
On September 21, 2007, the Commissioner issued Findings of Fact, Conclusions of Law and Order Imposing Fine in the matter of The McCall Business Group, LLC d/b/a MBG Private Trading of 3047 Pinewood Hills Drive, Matthews, North Carolina, and Cauzae McCall, principal of the company. The respondents previously maintained a place of business at 23 Schoolhouse Road, Old Saybrook, Connecticut, and 222 Stonehouse Lane, Guilford, Connecticut. The respondents had been the subject of an April 19, 2007 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that from at least September 2003 forward, the respondents offered and sold unregistered promissory notes in violation of Section 36b-16 of the Connecticut Uniform Securities Act. In addition, the action had claimed that the respondents violated the antifraud provisions of the Act by (1) not disclosing to investors the risk factors underlying the investment as well as financial information on the respondents and the work history of The McCall Business Group, LLC’s managing member; and (2) guaranteeing a 100% return on the investment. Since neither respondent had requested a hearing on the Order to Cease and Desist, the Order to Cease and Desist had became permanent as to each on May 17, 2007.
The September 21, 2007 action fined The McCall Business Group $220,000 and levied a $220,000 fine against Cauzae McCall. The Commissioner found, after a hearing, that the respondents had violated Section 36b-16 of the Act as well as the antifraud prohibition in Section 36b-4(a) of the Act. Specifically, the action found that at least one Connecticut investor had been guaranteed a 100% return on her investment, and that the respondents failed to disclose any risk factors related to the note investment, any financial information on the respondents or any relevant information on Cauzae McCall’s work history. In light of respondent Cauzae McCall’s prior experience in the securities industry, the Commissioner found unpersuasive respondents’ argument that their violations of the Act were the result of ignorance of securities registration requirements.
Former Registered Broker-dealer Agent Barred from Securities Business
for Seven Years Following Claims of Unregistered Activity
On October 2, 2007, the Commissioner entered a Consent Order with respect to Charles Evan Giaimo, a former registered broker-dealer agent of Great Eastern Securities, Inc. The Consent Order alleged that from approximately October 26, 2005 through February 1, 2006, Charles Giaimo violated Section 36b-6(a) of the Connecticut Uniform Securities Act by transacting business as an agent of Great Eastern Securities, Inc., at a time when Charles Giaimo was not registered as an agent of the firm in Connecticut. The Consent Order barred Charles Giaimo from transacting business in Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer for seven years. In addition, the Consent Order directed Charles Giaimo to cease and desist from regulatory violations.
Individual Fined $500 for Alleged Unregistered Agent Activity
On October 2, 2007, the Commissioner entered a Consent Order with respect to Andrew Austin Sirvis. The Consent Order alleged that in or about March 2006, Andrew Sirvis violated Section 36b-6(a) of the Connecticut Uniform Securities Act by transacting business as a broker-dealer agent of Great Eastern Securities, Inc. at a time when Sirvis was not registered as an agent of the firm in Connecticut. The Consent Order fined Andrew Sirvis $500 and directed him to cease and desist from regulatory violations.