DOB: Bulletin 2448 - Jan. 21, 2011

The Department of Banking News Bulletin 

Bulletin # 2448
Week Ending January 21, 2011

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 2010 Supplement to the 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
01/19/11
Farmington Bank
Farmington
176 L Newington Road
West Hartford, CT  06110
approved
01/20/11
 
Liberty Bank
Middletown
1300 Main Street
Newington, CT  06111
notice of intent
not to disapprove
01/20/11
 
Naugatuck Savings Bank
Naugatuck
* Naugatuck High School
   543 Rubber Avenue
   Naugatuck, CT  06770
filed
 
 
*Limited branch
 
CREDIT UNION ACTIVITY
Branch Activity
 
Date Credit Union Location Activity
01/20/11
Sikorsky Financial Credit
  Union, Inc., Stratford
Seymour High School
2 Botsford Road
Seymour, CT  06483
approved
 
CONSUMER CREDIT DIVISION ACTIVITY
Notice of Automatic Suspension, Temporary Order to Cease and Desist,
Notice of Intent to Revoke Mortgage Broker License,
Notice of Intent to Issue Order to Cease and Desist
and Notice of Intent to Impose Civil Penalty
 
On December 14, 2010, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Mortgage Broker License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  Mortgage Express LLC d/b/a The Loan Domain LLC (“Respondent”).  The Notice alleged that Respondent (1) failed to file the new form of surety bond in an appropriate amount by July 31, 2010,in violation of Section 36a-492 of the 2010 Supplement to the General Statutes and (2) failed to maintain a surety bond that ran concurrent with its license for 3 Wing Drive, Suite 200, Cedar Knolls, New Jersey, in violation of Section 36a 492 of the 2010 Supplement to the General Statutes.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
 
Temporary Order to Cease and Desist, Notice of Intent to Issue
Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
 
On December 21, 2010, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of:  U.S. Mortgage Funding Incorporated (“Respondent”).  The Notice alleged that Respondent engaged and offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the 2010 Supplement to the General Statutes, and imposed a fee upon debtors in connection with its debt negotiation activity in Connecticut in excess of $500, in violation of Section 36a-671b(b) of the 2010 Supplement to the General Statutes.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
 

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Stipulation and Agreement

On January 11, 2011, the Banking Commissioner entered into a Stipulation and Agreement with David Lerner Associates, Inc., a Connecticut-registered broker-dealer located at 477 Jericho Turnpike, P.O. Box 9006, Syosset, New York.  The Stipulation and Agreement alleged that, from 2005 through 2010, the firm permitted two sales assistants who were not registered as agents in Connecticut to be paid a percentage of agent commissions receivable in connection with Connecticut securities sales.  Pursuant to the Stipulation and Agreement, the firm agreed to refrain from violative conduct and to pay $2,800 to the department.  Of that amount, $2,000 constituted an administrative fine and $800 represented reimbursement for past due registration fees.
 
 Order to Cease and Desist and Notice of Intent to Fine Issued
 
On January 19, 2011, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Cynergy Advance Services, LLC of 1128 Royal Palm Beach Boulevard, Suite 145, Royal Palm Beach, Florida and 615 West Johnson Avenue, Suite 202, Cheshire, Connecticut.  Also named as a respondent was Shelly A. Richard of 98 Waverly Street, Cheshire, Connecticut and 745 Main Street, Newington, Connecticut.  The action alleged that in 2008, respondent Richard, acting on behalf of Cynergy Advance Services, LLC, sold unregistered securities of Cynergy Advance Services, LLC from Connecticut, promising a 10% annual return.  The action also alleged that 1) the respondents failed to pay investors any principal or interest on the securities, and 2) that the respondents did not apprise investors of the investment risks involved or provide information on Cynergy Advance Service, LLC or the company’s ability to meet its obligations in connection with the securities offered.  The action alleged that the respondents’ conduct violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act; and that respondent Richard transacted business as an unregistered agent of issuer in violation of Section 36b-6 of the Act.  The respondents were afforded an opportunity to request a hearing on the Order to Cease and Desist and Notice of Intent to Fine.
 

Broker-dealer Registration Revoked; Firm Fined $250,000
 
On January 20, 2011, the Banking Commissioner entered an Order revoking the broker-dealer registration of Westrock Advisors, Inc. and fining the firm $250,000.  The firm maintains its principal office at 230 Park Avenue, New York, New York.  The action had been preceded by a December 8, 2010 Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine alleging that Westrock Advisors, Inc. violated a September 4, 2008 Consent Order to which it was subject by selling unregistered Pink Sheet securities, opening options accounts for Connecticut customers who did not qualify as “accredited investors”; and failing to reimburse the Division for the costs associated with
an examination of the firm’s Melville, New York office.  The December 8, 2010 action had also alleged that the firm failed to provide Division staff with material records; failed to comply with minimum net capital requirements; and failed to enforce and maintain adequate supervisory procedures with respect to the usage of sales scripts and with respect to compliance with the terms of the 2008 Consent Order.  The Order to Cease and Desist, being uncontested, had become permanent on January 6, 2011.
 
The firm likewise failed to appear or contest the Notice of Intent to Revoke Registration as Broker-dealer and the Notice of Intent to Fine.  Section 36a-1-31(a) of the Regulations of Connecticut State Agencies states that a party’s failure to timely request a hearing may result in the allegations against that party being deemed admitted.  In ordering that the firm’s broker-dealer registration be revoked and that the firm be fined $250,000, the Commissioner found that Westrock Advisors, Inc. violated the 2008 Consent Order as well as Sections 36b-16 and 36b-14(d) of the Connecticut Uniform Securities Act and Sections 36b-31-14f, 36b-31-9b(a), 36b-31-9b(b), 36b-31-9b(c) and 36b-31-6f of the Regulations under the Act.
 

       Dated:  Tuesday, January 25, 2011
 
       Howard F. Pitkin
       Banking Commissioner