STATE BANK ACTIVITY
The Department of Banking News Bulletin
Bulletin # 2422
Week Ending July 23, 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.
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.
UPS Capital Business
*Oficina de Representacion ad junta
City of Monterrey State of Nuevo Leon
United Mexican States
Av. Ricardo Margain 444
Torre Norte, Piso 7, of 728
Col. Valle del Campestre
San Pedro Garza Garcia C.P.
66265 Nuevo Leon, Mexico
UPS Capital Business
*Oficina de Representacion en Peru
Los Tucanes 198
Lima 27, Peru, South America
Acquisition and Merger
On July 21, 2010, in connection with the second step conversion of Naugatuck Valley Mutual Holding Company from the mutual holding company to the stock holding company form of organization, an acquisition statement was filed, pursuant to Section 36a-184 of the Connecticut General Statutes, by Naugatuck Valley Financial Corporation, a newly formed Maryland corporation, to acquire 100% of the issued and outstanding common stock of Naugatuck Valley Savings and Loan, a federal savings association headquartered in Naugatuck, Connecticut. Also on July 21, 2010, pursuant to Section 36a-184, the newly formed Naugatuck Valley Financial Corporation filed an acquisition statement to acquire 100% of the issued and outstanding stock of Southern Connecticut Bancorp, Inc., New Haven, Connecticut, a Connecticut holding company, and indirectly, its wholly-owned subsidiary, The Bank of Southern Connecticut, a Connecticut bank and trust company through the merger of Southern Connecticut Bancorp, Inc. with and into Naugatuck Valley Financial Corporation. Immediately following the acquisition, The Bank of Southern Connecticut will be merged with and into Naugatuck Valley Savings and Loan.
CREDIT UNION ACTIVITY
Field of Membership
On July 13, 2010, pursuant to Section 36a-437a(h) and Section 36a-438a(d) of the Connecticut General Statutes, Connex Credit Union, Inc., North Haven, Connecticut, filed an application to expand its field of membership in the State of Connecticut to include members of their immediate families and organizations of such persons.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Permanent Injunction Entered Following Claims of Unregistered
Business Opportunity Sales
On July 15, 2010, the Superior Court for the Judicial District of Hartford granted the Banking Commissionerís motion for Judgment in Accordance With Stipulation against defendants Blue Coast Financial Group, Inc.; Shawn Hull, Chief Executive Officer of Blue Coast Financial Group, Inc.; Lindsay Hull, President of the company; and Brian Felderstein, the firmís Vice President of Business Development. The Commissionerís October 13, 2009 civil complaint seeking injunctive relief had alleged that, from at least 2007 to 2008, the defendants offered and sold unregistered business opportunities in violation of the Connecticut Business Opportunity Investment Act.
The defendants consented to the entry of a judgment permanently enjoining them from violating the stateís business opportunity law. In addition, under the terms of the stipulated judgment, 1) Blue Coast Financial Group, Inc., Shawn Hull and Lindsay Hull agreed to jointly and severally pay a $25,000 fine no later than 30 business days following the entry of judgment by the court; 2) Blue Coast Financial Group, Inc., Shawn Hull and Lindsay Hull were barred for six years from acting in Connecticut in any capacity that would require registration or licensure by the Commissioner and from offering or selling any business opportunity or security to or from Connecticut; 3) for seven years, Blue Coast Financial Group, Inc., Shawn Hull and Lindsay Hull would file a sworn affidavit with the Commissioner each calendar year verifying that the respective defendant was in compliance with the terms of the Stipulation for Judgment; and 4) Brian Felderstein was barred for one year from acting in Connecticut in any capacity requiring registration or licensure by the Commissioner and from offering or selling any business opportunity or security to or from Connecticut. After one year, Brian Felderstein could conduct business regulated by the Department of Banking in Connecticut, but only if he did not act as an agent for, or in connection with, Blue Coast Financial Group, Inc. or any business opportunity in which Shawn Hull and/or Lindsay Hull had an interest, financial or otherwise. The bar against Brian Felderstein relating to the activities of Blue Coast Financial Group, Inc., Shawn Hull and Lindsay Hull would last only so long as the bar against the other defendants remained in place.
Blue Coast Financial Group, Inc. had been the subject of a November 5, 2008 Notice of Intent to Issue Stop Order denying the companyís business opportunity registration, Order to Cease and Desist and Notice of Intent to Fine. Also on November 5, 2008, the Commissioner had issued an Order to Cease and Desist and Notice of Intent to Fine against Shawn Hull and Lindsay Hull. A previous business opportunity registration by Blue Coast Financial Group, Inc. had been denied by the Commissioner on May 5, 2008 following a hearing.
On July 19, 2010, the Banking Commissioner issued a Consent Order Conditioning Effectiveness of Withdrawal of Application for Registration as a Broker-dealer with respect to Verition Securities LLC. The firm, which filed for registration as a broker-dealer under the Connecticut Uniform Securities Act, maintains its principal office at One American Lane, Greenwich, Connecticut. The action alleged that 1) in filing a Form U-4 for a control person, the firm had not disclosed that the control person had been a defendant in two civil suits filed in 2007; and 2) in signing the Form U-4, the firm had represented that it had taken appropriate steps to verify the accuracy and completeness of the information on the form. Following a discussion with the Division, the Form U-4 in question was subsequently amended to make the proper disclosure. Citing changes in its business plan, Verition Securities LLC filed an application to withdraw its Connecticut broker-dealer registration application on April 21, 2010.
The Consent Order rendered the withdrawal effective on July 19, 2010, subject to certain conditions. First, Verition Securities LLC consented not to reapply for registration as a broker-dealer in Connecticut until such time as it had employed, and identified in writing to the Division Director, a full time Chief Compliance Officer, a full time Chief Financial Officer and a full time Chief Operating Officer each of whom had passed the appropriate principalís examination. Second, in the event the firm reapplied for broker-dealer registration in Connecticut, the firm agreed to notify the Division Director in writing at least fourteen days prior to any proposed change in its Chief Compliance Officer, Chief Financial Officer and/or Chief Operating Officer and to identify the individual(s) succeeding to those positions. Finally, Verition Securities LLC agreed to remit $2,500 to the department. Of that amount, $1,500 constituted an administrative fine and $1,000 would be applied to defray the Divisionís investigative costs.
Dated: Tuesday, July 27, 2010
Howard F. Pitkin