The Department of Banking News Bulletin
Bulletin # 2454
Week Ending March 4, 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
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.
Thomaston Savings Bank
* 22 Pine Street, Suite 218
Bristol, CT 06787
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
Ace's Smoke and Cell Shop LLC
518 Park Street
Nartford, CT 06106
Order Revoking Consumer Collection Agency License
and Order to Cease and Desist
On February 22, 2011, the Commissioner issued an Order Revoking Consumer Collection Agency License and Order to Cease and Desist (“Order”) in the Matter of: Aidex Recovery Group, Inc. (“Respondent”). The Order revokes Respondent’s license to act as a consumer collection agency in Connecticut from 5210 Belfort Road, Suite 230, Jacksonville, Florida, and orders Respondent to cease and desist from violating Section 36a-802(a) of the 2010 Supplement to the General Statutes. The Order was based on Respondent’s failure to maintain a surety bond in violation of Section 36a-802(a) of the 2010 Supplement to the General Statutes.
On February 22, 2011, the Commissioner entered into a Settlement Agreement with Une Travel LLC (“Une Travel”). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged in a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing issued against Une Travel on November 2, 2010, that Une Travel engaged in the business of cashing checks, drafts and money orders for consideration without licensure for a general facility or limited facility and continued to engage in such unlicensed activity after informing the Commissioner, in writing, that it had ceased such activity. As part of the Settlement Agreement, Une Travel was agreed to pay a civil penalty in the amount of $3,000.
On February 24, 2011, the Commissioner entered into a Settlement Agreement with M&G Mortgage Services Inc. (“M&G Mortgage”). The Settlement Agreement was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that M&G Mortgage employed or retained, during the period of August 31, 2009 through March 29, 2010, six (6) individuals as mortgage loan originators without licensing them, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes. As part of the Settlement Agreement, M&G Mortgage agreed to pay $6,000 as a civil penalty.
On February 24, 2011, the Commissioner entered into a Consent Order with Copiague Funding Corp. d/b/a South Shore Mortgage Company (“South Shore Mortgage”). The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that South Shore Mortgage employed or retained, during the period of February 7, 2006 through July 29, 2009, ten (10) individuals as originators or mortgage loan originators without registering or licensing them, in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes. As part of the Consent Order, South Shore Mortgage was ordered to pay $10,000 as a civil penalty.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
On March 4, 2011, the Banking Commissioner entered a Consent Order with respect to Salomon Whitney LLC of 15 Deer Park Avenue, Suite 1, Babylon Village, New York. The Consent had been preceded by a September 23, 2010 Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. RCF-10-7792-S) alleging 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 transactional “Handling Fee” charged to Connecticut customers included a profit to the firm, that certain customers paid lower fees and that the fee was not based on the costs of handling a particular transaction. The September 23, 2010 action had also alleged that the firm 1) violated Section 36b-14(a) of the Connecticut Uniform Securities Act by failing to maintain required books and records; 2) failed to provide agency staff with copies or computer printouts of records when so requested in contravention of Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations; and 3) failed to enforce and maintain adequate supervisory procedures.
In resolution of the matter, the Consent Order directed the firm to cease and desist from regulatory violations and to pay a $12,500 fine. In addition, the Consent Order required that the firm furnish the Division with proof within 45 days that the firm had reimbursed each affected Connecticut customer the difference between the “Handling Fee” paid by the customer for each transaction, and the actual amount of the firm’s ticket and clearing charge and the postage fee assessed by Salomon Whitney LLC’s clearing firm.
Order to Cease and Desist, Notice of Intent to Fine
and Notice of Right to Hearing
On March 4, 2011, the Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against Daniel Quentin Humphrey, currently of 108 Bordeaux Lane, Alpine, Utah; Finity Financial Group, LLC of 708 South Avenue, New Canaan, Connecticut, an entity of which Humphrey was a member; Waterford Loan Fund, LLC, a securities issuer located at 215 South State Street, Suite 550, Salt Lake City, Utah; Oasis Properties I, LLC, an issuer of securities located at 1055 West Red Cliff Drive, C-517, Washington, Utah; and Scott L. Wilson, manager of Oasis Properties I, LLC.
The action alleged that: 1) between 2002 and 2005, respondent Humphrey engaged in private securities transactions without notice to his employing broker-dealer by selling unregistered promissory notes issued by respondent Waterford Loan Fund, LLC; 2) respondent Humphrey violated Section 36b-6(a) of the Connecticut Uniform Securities Act by acting as an unregistered agent of issuer of Waterford Loan Fund, LLC; 3) respondent Waterford Loan Fund, LLC violated Sections 36b-16 and 36b-6(b) of the Act by selling unregistered securities and employing respondent Humphrey as an unregistered agent of issuer; 4) respondent Humphrey transacted business as an unregistered agent of issuer of Oasis Properties I, LLC in conjunction with an offering of that entity’s Series C notes; 5) Oasis Properties I, LLC violated Section 36b-6(b) of the Act by employing respondent Humphrey as an unregistered agent of issuer; 6) Oasis Properties I, LLC and respondent Wilson violated Section 36b-16 of the Act by selling unregistered Series F secured promissory notes; and 7) from at least 2006 forward, respondent Humphrey, alone and doing business as Finity Financial Group (a sole proprietorship) and Finity Financial Group, LLC, transacted business as an investment adviser in Connecticut absent registration.
The respondents were afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist and Notice of Intent to Fine.
On March 3, 2011, the Commissioner entered a Consent Order with respect to Banco Espírito Santo S.A. (“BES”), a commercial bank headquartered in Lisbon, Portugal, and Espírito Santo e Comercial de Lisboa, Inc. (“ESCLINC”), a wholly-owned subsidiary of BES having an office at 1118 Madison Avenue, Bridgeport, Connecticut. The Consent Order recited that, in 2009, BES had notified the Division that certain employees and employees of its affiliates offered and sold certain unregistered securities and provided investment advice to Connecticut residents absent compliance with applicable securities registration and licensing requirements. The Consent Order added that BES had represented to the Division that it would offer rescission to Connecticut customers for losses sustained as a result of the self-reported violations. The Consent Order found that 1) BES and its affiliates violated Section 36b-6(a) of the Connecticut Uniform Securities Act by effecting securities transactions for Connecticut residents absent registration as a broker-dealer; 2) BES and its affiliates violated Section 36b-6(a)(1) of the Act by employing unregistered agents; 3) BES and/or its affiliates violated Section 36b-6(d) of the Act by transacting business from an unregistered broker-dealer branch office located at 1118 Madison Avenue, Bridgeport, Connecticut; 4) ESCLINC violated Section 36b-6(c) of the Act by rendering investment advice for compensation absent registration as an investment adviser in Connecticut; and 5) BES and its affiliates violated Section 36b-16 of the Act by offering and selling unregistered securities to Connecticut customers.
The Consent Order directed BES and ESCLINC to cease and desist from regulatory violations, and required that BES pay a $2,500 fine to the agency. In addition, the Consent Order required that BES offer rescission to all eligible Connecticut customers in accordance with procedures described in the Consent Order.
Dated: Tuesday, March 8, 2011
Howard F. Pitkin