DOB: News Bulletin 2415 - June 4, 2010

The Department of Banking News Bulletin 

Bulletin # 2415
Week Ending June 4, 2010

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
Branch 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.

 

Date Bank Location Activity
6/01/10
The Milford Bank
Milford
250 Barnum Avenue
Stratford, CT  06614
notice of intent
not to disapprove
branch establishment
 
CONSUMER CREDIT DIVISION ACTIVITY
Settlement Agreement
 
On May 28, 2010, the Commissioner entered into a Settlement Agreement with Generation Mortgage, LLC (“Generation Mortgage”).  The Settlement Agreement was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that Generation Mortgage, during the period of January 12, 2009 through October 16, 2009, employed or retained one (1) individual as a mortgage loan originator without licensing such individual, in violation of Section 36a 486(b) of the Connecticut General Statutes.  As part of the Settlement Agreement, Generation Mortgage agreed to pay $1,000 as a civil penalty.  A copy of the Settlement Agreement can be obtained from the Department’s website.
 
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order to Cease and Desist; Notice of Intent to Revoke Registration
as Broker-dealer and Notice of Intent to Fine Issued

On June 3, 2010, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine with respect to Itradedirect.com Corp., a broker-dealer having its principal office at 1600 NW Boca Raton Boulevard, Suite 22, Boca Raton, Florida.  The action alleged that the firm violated the antifraud provisions in the Connecticut Uniform Securities Act and engaged in dishonest and unethical practices by not disclosing to Connecticut customers that a $65 per transaction “Handling Fee” was not based on actual handling costs but included a profit to the firm.  The action also alleged that the firm 1) violated Section 36b-6(b) of the Act by employing at least five unregistered agents; and 2) violated Section 36b-31-6f of the Regulations under the Act by allowing its agents to use unapproved sales scripts in their communications with the public.  The firm was provided with an opportunity to request a hearing on the Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine.
 
Order Imposing Fine Issued
 
On June 3, 2010, the Banking Commissioner entered an Order Imposing Fine with respect to Nicholas Alexander Smirnow a/k/a Nick Smirnow of 2635 Hwy. #117, P.O. Box 66, Baysville, Ontario, Canada POB 1AO and 1013 Fairy Falls Road, Baysville, Ontario, Canada POB 1AO.  Respondent Smirnow purportedly did business under the names P-2-P Network and Pathway-2-Prosperity.  The respondent had been the subject of a February 26, 2010 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that, from at least 2008, the respondent offered and sold unregistered membership interests in the Pathway-2-Prosperity high yield investment program in contravention of Section 36b-16 of the Connecticut Uniform Securities Act.  The February 26, 2010 action had also alleged that respondent Smirnow violated the antifraud provisions in Section 36b-4(a) of the Act in that no meaningful explanation was offered to investors concerning how the Pathway-2-Prosperity program achieved its represented high returns; no meaningful explanation was offered to investors concerning the basis for the program’s claim that investor principal was guaranteed against loss; no disclosures were made to program members concerning exactly how member funds would be invested; and no disclosures were made concerning the identities of those persons managing program funds or any background information on the P-2-P Network.  Since Respondent Smirnow had not requested a hearing on the Order to Cease and Desist, the Order to Cease and Desist had become permanent on April 28, 2010.
 
Respondent Smirnow likewise did not request a hearing on the Notice of Intent to Fine.  Under Section 36a-1-31(a) of the Regulations of Connecticut State Agencies, the allegations against a party may be deemed admitted where the party fails to request a hearing on the matters alleged.  Adopting the allegations in the Order to Cease and Desist and Notice of Intent to Fine as findings, the Commissioner concluded that Respondent Smirnow violated Sections 36b-16 and 36b-4(a) of the Act.  The Order Imposing Fine directed Respondent Smirnow to pay a fine of $85,000 to the agency.

       Dated:  Tuesday, June 8, 2010
 
 
       Howard F. Pitkin
       Banking Commissioner