The Department of Banking News Bulletin
Bulletin # 2330
Week Ending October 17, 2008
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 2008 Supplement to the 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.
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
Newtown Savings Bank
477 Main Street
Monroe, CT 06468
d/b/a LOMA Financial Services, LLC
421 North Main St.
Bristol, CT 06010
NEW BANK ACTIVITY
On October 15, 2008, pursuant to the provisions of Section 36a-70 of the Connecticut General Statutes, an application was filed by the organizers of First Community Bank of New Haven for the establishment of a bank and trust company to be located in New Haven, Connecticut. The organizers are John DeStefano, Jr., William Placke, and Robert Solomon. Spokesperson: Robert M. Taylor III, Day Pitney LLP (860) 275-0368.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order Imposing Fine
On October 8, 2008, the Commissioner entered an Order Imposing Fine against Java’s Brewin Development, Inc. of 190 Turnpike Road, Suite 6, #367, Westborough, Massachusetts. The corporation had been the subject of a May 30, 2008 Order to Cease and Desist which, being uncontested, had become permanent on June 20, 2008.
In fining Java’s Brewin Development, Inc. $30,000, the Commissioner found that, from at least October 16, 2006 to January 26, 2007, the respondent sold unregistered coffee shop business opportunities to at least three Connecticut purchaser-investors in contravention of Section 36b-67 of the Connecticut Business Opportunity Investment Act. The respondent did not appear or contest the imposition of the fine.
Order Imposing Fine
On October 10, 2008, the Commissioner entered an Order Imposing Fine against 4 L.I.F.E., Inc. of 450 Stonewall Street, Suite 102, Atlanta, Georgia, and Terry Mayfield of 120 Potters Pond Drive, Phoenixville, Pennsylvania. The respondents had been the subject of a March 8, 2007 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that in 2004, the respondents sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act. Investment proceeds were to be invested in the L.I.F.E. Ventures Development Fund to fund the acquisition of multi-family properties in the Atlanta area by nonprofit developers. The March 8, 2007 action had also alleged that the respondents violated the antifraud provisions in Section 36b-4 of the Act by misrepresenting that investors would receive back their initial investment in three to six months and by failing to disclose pertinent risk factors or background information on 4 L.I.F.E., Inc. Since the respondents did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent as to respondent Mayfield on March 28, 2007 and permanent as to respondent 4 L.I.F.E., Inc. on May 3, 2007.
After finding that the respondents violated sections 36b-16 and 36b-4 of the Act, the Commissioner fined respondent 4 L.I.F.E., Inc. $150,000 and respondent Mayfield $150,000. The respondents did not appear at the hearing preceding the imposition of the fine.
On October 10, 2008, the Commissioner entered a Consent Order conditioning the registrations of Andrew Prophet as a broker-dealer agent of Summit Brokerage Services, Inc. and as an investment adviser agent of Summit Financial Group, Inc. The Consent Order alleged that, while previously associated with another securities brokerage firm as an agent, Prophet deposited into his personal account an annuity check returned by a Connecticut client to Prophet because the check was in an erroneous amount. The Consent Order also alleged that, on at least two separate occasions, Prophet accepted gratuities from clients in excess of $100 in contravention of FINRA Rule 3060. As a precondition to registration, the Consent Order restricted Prophet’s securities sales and advisory activities for two years to exchange-listed securities, investment company securities and governmental securities. The Consent Order also prohibited Prophet for two years from having custody of client funds or securities, and holding or exercising discretionary trading authority and/or a power of attorney with respect to any customer account. In addition, the Consent Order also prescribed certain supervisory controls over Prophet’s activities, and required that the affected firms provide the department with quarterly reports for two years regarding any complaints, actions or proceedings involving Prophet.
Andrew Prophet became registered as a broker-dealer agent of Summit Brokerage Services, Inc. on October 10, 2008, and as an investment adviser agent of Summit Financial Group, Inc. the same day.
Dated: Tuesday, October 21, 2008
Howard F. Pitkin