The Department of Banking News Bulletin
Bulletin # 2351
Week Ending March 13, 2009
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 certain applications 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.
Fairfield County Bank
840-860 East Main Street
Stamford, CT 06902
CONSUMER CREDIT DIVISION ACTIVITY
On March 6, 2009, the Commissioner entered into a Settlement Agreement with Lawrence S. Dressler d/b/a DRE Mortgage (“Respondent”). The Settlement Agreement was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that Respondent employed or retained, during the period of August 2005 through December 2006, a loan originator without registering such individual, in violation of Section 36a-486(b) of the Connecticut General Statutes. Pursuant to the terms of the Settlement Agreement, Respondent agreed to make a voluntary contribution to the State Regulatory Registry LLC, a wholly-owned subsidiary of the Conference of State Bank Supervisors (“CSBS”), in the amount of $1000 to support the Nationwide Mortgage Licensing System and Registry, jointly developed by the CSBS and the American Association of Residential Mortgage Regulators. Upon entry of the Settlement Agreement, the matter was resolved.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Connecticut-registered broker-dealer Assessed $85,879 Following
Allegations of Unregistered Securities Sales;
$4.4 Million Rescission Offer Extended to Connecticut Investors
On March 9, 2009, the Commissioner entered a Consent Order with respect to Morgan Stanley & Co. Incorporated, a Connecticut-registered broker-dealer with its principal office at 1585 Broadway, New York, New York. The agency investigation culminating in the entry of the Consent Order focused on the firm's sale of unregistered non-exempt securities from approximately 1995 to May 2005, and was part of a coordinated investigation conducted by a multi-state task force of the North American Securities Administrators Association, Inc. (“NASAA”). Following discovery of the problem, Morgan Stanley & Co. Incorporated self-reported the unregistered sales to NASAA and to affected states. The global resolution capping the investigations resulted in $8.5 million allocated to the states, $85,879 of which represented Connecticut’s proportionate share.
The Consent Order acknowledged that, in furtherance of its desire to informally resolve the matter, the firm had extended a $4.4 million rescission offer to affected Connecticut residents.
The Consent Order directed the firm to cease and desist from regulatory violations and required that it pay $85,879 to the State of Connecticut. Of that amount, $50,000 would be paid directly to the State of Connecticut Department of Social Services to promote financial literacy initiatives for the benefit of low-income and/or elderly persons in Connecticut; $25,000 would be paid to the Department of Banking as an administrative fine; and $10,879 would be applied to defray the Division’s investigative costs.
Dated: Tuesday, March 17, 2009