DOB: Bulletin 2469 - June 17, 2011

The Department of Banking News Bulletin 

Bulletin # 2469
Week Ending June 17,  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 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
6/17/11
Rockville Bank
Rockville
*2319 Whitney Avenue
  Hamden, CT  06518
filed
*Limited Branch
 
Main Office Relocation
 
On June 17, 2011, pursuant to Section 36a-81 of the Connecticut General Statutes, ING Investment Trust Company requested approval to relocate its main office from 10 State House Square, Hartford, Connecticut, to One Orange Way, C1-N, Windsor, Connecticut.
 

CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
 
Date Check Casher Location Activity
6/17/11
World Latino Express LLC
25 South Main Street
Norwalk, CT  06854
filed
 
Temporary Orders to Cease and Desist, Notices of Intent to Issue
Order to Cease and Desist and Notices of Intent to Impose Civil Penalty
 
On May 23, 2011, 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:  1st American Law Center, Inc. (“Respondent”).  The Notice alleged that Respondent engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes, and engaged in debt negotiation services on and after October 1, 2009, with at least 8 Connecticut residents and collected fees under terms which did not comply with Section 36a 671b(b) of the Connecticut General Statutes and the Schedule of Maximum Fees established by the Commissioner pursuant to such section, in violation of Section 36a-671b(b) of the Connecticut General Statutes.  Such violations form the basis to issue a cease and desist order against Respondent pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut 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.
 
On May 23, 2011, 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:  The Lloyd Ward Group, PC d/b/a Lloyd Ward Group II a/k/a The Lloyd Ward Group PC2 (“Respondent”).  The Notice alleged that Respondent engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes, and engaged in debt negotiation services on and after October 1, 2009, with at least 50 Connecticut residents and collected fees under terms which did not comply with Section 36a 671b(b) of the Connecticut General Statutes and the Schedule of Maximum Fees established by the Commissioner pursuant to such section, in violation of Section 36a-671b(b) of the Connecticut General Statutes.  Such violations form the basis to issue a cease and desist order against Respondent pursuant to Sections 36a 671a(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut 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.
 
Notices of Intent to Issue Order to Cease and Desist
and Notices of Intent to Impose Civil Penalty
 
On May 23, 2011, the Commissioner issued a 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:  Bay View Law Group, P.C. (“Respondent”).  The Notice alleged that Respondent engaged or offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes.  Such violation forms the basis to issue a cease and desist order against Respondent pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
 
On May 27, 2011, the Commissioner issued a 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:  CreditAnswers, LLC a/k/a Debt Mediation Initiative and CreditArbitrators, LLC (collectively, “Respondents”).  The Notice alleged that Respondents offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes.  Such violation forms the basis to issue a cease and desist order against Respondents pursuant to Sections 36a-671a(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a-671a(b) and 36a-50(a) of the Connecticut General Statutes.  Respondents were afforded the opportunity to request a hearing with regard to the allegations set forth in the Notice.
 
Order of Summary Suspension, Notice of Intent to Revoke Check Cashing Service License,
Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
 
On May 27, 2011, the Commissioner issued an Order of Summary Suspension, Notice of Intent to Revoke Check Cashing Service License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Order”) in the Matter of:  Squire Industries, Inc. (“Respondent”).  The Order alleged that Respondent failed to promptly notify the Commissioner of a pending felony charge against the President and sole shareholder of Respondent, in violation of Section 36a-581(f) of the Connecticut General Statutes, and that the alleged criminal conduct by the officer and shareholder constituted sufficient grounds to revoke Respondent’s check cashing service license pursuant to Section 36a-587(a) of the Connecticut General Statutes.  In addition, violation of Section 36a-581(f) forms the basis to issue a cease and desist order against Respondent pursuant to Sections 36a-587(b) and 36a-52(a) of the Connecticut General Statutes and to impose a civil penalty pursuant to Sections 36a 587(b) and 36a-50(a) of the Connecticut General Statutes.  The Commissioner also found that the public safety and welfare required emergency action to summarily suspend Respondent’s check cashing service license in Connecticut.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Order.
 
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Orders

On June 14, 2011, the Banking Commissioner entered a Consent Order with respect to Spear Capital Management, Inc. of 45 Wintonbury Avenue, Bloomfield, Connecticut.  The firm had been registered as an investment adviser under the Connecticut Uniform Securities Act until December 31, 2010 when the registration was not renewed.  The Consent Order alleged that the firm engaged in dishonest or unethical practices in the securities business by 1) making recommendations concerning the purchase and/or sale of risky and speculative Exchange Traded Funds (“ETFs”) without reasonable grounds to believe the recommendations were suitable for affected clients; and 2) inducing trading in risky and speculative ETFs that was excessive in size or frequency given the financial resources, investment objectives and character of affected client accounts.  In addition, the Consent Order alleged that the firm failed to establish, enforce and maintain a system for supervising the activities of its investment adviser agents and Connecticut office operations that was reasonably designed to achieve compliance with applicable securities laws and regulations.
 
The Consent Order fined the firm $5,000 and directed it to cease and desist from regulatory violations.
 
On June 14, 2011, the Banking Commissioner issued a Consent Order with respect to ACAE, L.L.C., Michael George Sean Kondracki and Judy Bao-Shan Liu, all of 535 Hunting Ridge Road, Stamford, Connecticut.  Respondents Kondracki and Liu were the owners and managers of ACAE, L.L.C.  Respondents Kondracki and Liu were also the sole directors of Asset Consulting, Allocation and Evaluation Offshore Fund of Funds, Ltd., an entity based in the Cayman Islands.  The Consent Order resolved allegations in a November 9, 2010 Order to Cease and Desist and Notice of Intent to Fine against the respondents and a November 9, 2010 Notice of Intent to Revoke Registration as Investment Adviser Agent with respect to Michael Kondracki.
 
The November 9, 2010 action had alleged that Respondents rendered investment advice from Connecticut to the Cayman Islands fund and its investors at a time when ACAE, L.L.C. was not registered as an investment adviser under the Act and while Respondents Kondracki and Liu were not registered as investment adviser agents of ACAE, L.L.C. in Connecticut.  The action had also alleged that respondents Kondracki and Liu failed to initially honor a redemption request by a widowed investor in the Cayman Islands fund, instead offering the investor alternative investments managed by Kondracki and Liu.  When the investment was ultimately redeemed, it purportedly was at a reduced rate and did not include earned interest that Respondents Kondracki and Liu retained, claiming that the investor had not asked them to return those monies.  The action had also stated that no legitimate accounting of the Cayman Islands fund’s holdings and expenses had been provided to the investor, and that the Respondents’ conduct involved fraudulent, dishonest or unethical practices within the meaning of Section 36b-5 of the Connecticut Uniform Securities Act.
 
The Consent Order directed the Respondents to cease and desist from regulatory violations, and barred them for three years from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent and from soliciting or accepting funds for investment purposes from public or private investors in or from the state.  In addition, the Consent Order required that, for two years following expiration of the bar, respondents Kondracki and Liu and any entity under their control retain experienced securities legal counsel to advise them on compliance with state securities laws.  The Consent Order also required that, for two years following expiration of the bar, Respondents refrain from offering or selling securities in Connecticut unless the offers and sales were effected through a registered broker-dealer.
 
On June 14, 2011, the Banking Commissioner entered a Consent Order with respect to Meyers Associates, L.P., a Connecticut-registered broker-dealer located at 45 Broadway, Second Floor, New York, New York.  The firm had been the subject of a November 23, 2010 Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine alleging that Meyers Associates, L.P. violated Section 36b-6(b) of the Connecticut Uniform Securities Act by employing unregistered agents; and that the firm sold unregistered securities in contravention of Section 36b-16 of the Act.  The November 23, 2010 action had also alleged that 1) the firm engaged in fraudulent, dishonest and unethical conduct by failing to disclose to Connecticut customers that a “handling fee” charged by the firm 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; and 2) the firm failed to exercise adequate supervisory controls over its operations.
 
In resolution of the matter, the Consent Order fined the firm $12,500, and directed the firm to cease and desist from regulatory violations.  In addition, the Consent Order required that the firm 1) reimburse affected Connecticut customers the difference between the per transaction “Handling Fee” paid by the customer and the actual amount of the firm’s ticket and clearing charge and the postage fee assessed by the firm’s clearing firm; 2) retain an independent consultant to review the firm’s operations and make compliance recommendations; and 3) reimburse the department up to $3,500 to cover the cost of one or more examinations to be conducted by the Division within twelve months following the entry of the Consent Order.
 
       Dated:  Tuesday, June 21, 2011
 
       Howard F. Pitkin
       Banking Commissioner