The Department of Banking News Bulletin
Bulletin # 2365
Week Ending June 19, 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.
* 12 Hope Street
Niantic, CT 06357
NEW BANK ACTIVITY
On June 19, 2009, pursuant to Section 36a-70 of the Connecticut General Statutes, a temporary certificate of authority was issued to the organizers of Sachem Bank for the purpose of conducting the business of a bank and trust company in Madison, Connecticut, with a branch office in Branford, Connecticut.
On June 19, 2009, pursuant to Section 36a-70 of the Connecticut General Statutes, a temporary certificate of authority was issued to the organizers of First Community Bank of New Haven for the purpose of conducting the business of a bank and trust company in New Haven, Connecticut with a branch office in the Fairhaven section of New Haven, Connecticut.
REORGANIZATION AS A MUTUAL HOLDING COMPANY
On June 18, 2009, the Commissioner, in connection with the application by Dime Bank, 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 Dime Mutual Holding Company, 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 Dime Bank 2, a capital stock savings bank, and subsequently merge Dime Bank with and into Dime Bank 2, the resulting bank to operate as a capital stock savings bank under the name Dime Bank.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Stipulation and Agreement
On June 9, 2009, the Banking Commissioner entered into a Stipulation and Agreement with American Capital Partners, LLC of 205 Oser Avenue, Hauppauge, New York. The firm is registered as a broker-dealer under the Connecticut Uniform Securities Act. The Stipulation and Agreement alleged that 1) from approximately 2007 forward, the firm violated Section 36b-6(b) of the Act by employing at least two unregistered agents; 2) the firm engaged in conduct proscribed by Section 36b-31-15a(b) of the Regulations under the Act and FINRA Rule 1031(a) by employing one or more unregistered “cold callers”; and 3) in violation of Section 36b-31-6f(b) of the Regulations, the firm failed to establish, enforce and maintain an adequate supervisory system.
In furtherance of its desire to resolve the matter informally with the agency, the firm furnished proof that it had extended to those Connecticut customers having potential suitability claims a rescission offer totaling approximately $12,985.
Pursuant to the Stipulation and Agreement, the firm agreed to 1) retain an independent consultant to review its internal procedures for compliance with the Act and the Regulations thereunder; 2) file quarterly reports for two years describing any complaints, actions, proceedings, reprimands, censures or warnings involving the firm and its agents and relating to Connecticut securities activity; and 3) remit $20,000 to the agency. Of that amount, $15,000 constituted an administrative fine and $5,000 would be applied to defray department investigative costs. In addition, the Stipulation and Agreement required that the firm pay the expenses associated with one or more examinations of its offices conducted by the Division within 24 months, such expenses not to exceed $3,000 in the aggregate.
On June 9, 2009, the Banking Commissioner entered a Consent Order with respect to Eric John Weiss, a broker-dealer agent of American Capital Partners, LLC. The Consent Order alleged that 1) prior to becoming registered as an agent of American Capital Partners, LLC under the Connecticut Uniform Securities Act, Weiss violated Section 36b-6(a) of the Act by transacting business in an unregistered capacity for that firm; 2) Weiss engaged in a dishonest or unethical practice by falsely reporting on firm records that the securities transactions he effected for Connecticut customers while he was unregistered were associated with a New Jersey address; and 3) Weiss engaged in conduct made actionable by Section 36b-31-15b(a)(8) of the Regulations under the Act by recommending unsuitable investments to Connecticut customers.
The Consent Order revoked Weiss’ Connecticut agent registration effective June 9, 2009 and barred him for seven years from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser, investment adviser agent or agent of issuer. During the term of the bar, Weiss was also precluded from 1) supervising any broker-dealer agents with respect to securities business transacted in or from Connecticut or with respect to Connecticut-based securities brokerage accounts; and 2) acting as a finder for compensation, receiving or splitting commissions or similar remuneration and/or receiving referral fees in connection with the offer, sale or purchase of securities in or from Connecticut. The Consent Order also directed Weiss to cease and desist from regulatory violations.
Stipulation and Agreement
On June 9, 2009, the Banking Commissioner entered into a Stipulation and Agreement with Damian Kevon Wilson, a registered broker-dealer agent of American Capital Partners, LLC since February 22, 2008. The Stipulation and Agreement alleged that, in early 2008 and immediately prior to his becoming registered as an agent of the firm, Wilson transacted business for American Capital Partners, LLC in an unregistered capacity. Pursuant to the Stipulation and Agreement, Wilson agreed to pay a $500 fine and to refrain from violative conduct.
CONSUMER CREDIT DIVISION ACTIVITY
On June 19, 2009, the Commissioner entered into a Settlement Agreement with Progressive Home Loans, LLC (“Progressive”). The Settlement Agreement was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that Progressive employed or retained, during the period of August 20, 2007 through December 31, 2007, an originator without registering such originator, in violation of Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes. Progressive agreed to pay a civil penalty of $1,000. Upon entry of the Settlement Agreement, the matter was resolved.