DOB: Bulletin 2483 - Sept. 23, 2011

The Department of Banking News Bulletin 

Bulletin # 2483
Week Ending September 23,  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
9/19/11
Liberty Bank
Middletown
1300 Main Street
Newington, CT  06111
opening
date
 
Merger
 
On September 22, 2011, an application was filed, pursuant to Section 36a-125 of the Connecticut General Statutes and Section 15 of Connecticut Public Act No. 11-50, by Northern Trust Global Advisors, Inc., a Delaware corporation, and The Northern Trust Company of Connecticut, a Connecticut-chartered bank and trust company headquartered in Stamford, Connecticut and wholly-owned subsidiary of Northern Trust Global Advisors, Inc., for the merger of Northern Trust Global Advisors, Inc. with and into The Northern Trust Company of Connecticut.
 
CREDIT UNION ACTIVITY
Merger
 
On September 23, 2011, pursuant to Section 36a-468a of the Connecticut General Statutes, Northwest Hills Credit Union, Inc., Torrington, Connecticut, and C.H.H. Credit Union, Inc., Torrington, Connecticut, both Connecticut credit unions, were granted approval for the merger of C.H.H. Credit Union, Inc., with and into Northwest Hills Credit Union, Inc.

CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
 
Date Bank Location Activity
9/12/11 A1 Check Cashing LLC
476 Main Street
New Britain, CT 06051
filed
9/12/11 Gold Star Check Cashing LLC
591 Route 12
Groton, CT  06340
filed
 
Consent Orders
 
On August 24, 2011, the Commissioner entered into a Consent Order with Prysma Lending Group, LLC (“Prysma Lending”), Danbury, Connecticut.  The Consent Order was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that Prysma Lending employed or retained, during the period of April 23 through May 21, 2009, one (1) individual as a mortgage loan originator who was not licensed, in violation of Section 36a-486(b) of the Connecticut General Statutes.  As part of the Consent Order, Prysma Lending paid $1,000 as a civil penalty.
 
 
On September 8, 2011, the Commissioner entered into a Consent Order with David Karat (“Karat”).  The Consent Order 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 on January 19, 2011, that Karat acted as an unregistered originator or an unlicensed mortgage loan originator in connection with five residential mortgage loans between May and December 2008, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes.  As a result of subsequent investigation, the Commissioner further alleged that Karat acted as an unlicensed mortgage broker with respect to approximately seven (7) residential mortgage loans in the 2008 timeframe, in violation of 36a-486(a) of the then applicable Connecticut General Statutes.  As part of the Consent Order, Karat was ordered to pay $5,000 as a civil penalty.
 

SECURITIES AND BUSINESS INVESTMENTS DIVISION
Consent Orders
 
On September 19, 2011, the Banking Commissioner entered a Consent Order with respect to Portfolio Timing Service d/b/a PTS Asset Management, an investment adviser registered with the Securities and Exchange Commission.  The respondent had been the subject of a June 1, 2011 Amended and Restated Order to Cease and Desist and Notice of Intent to Fine.  Also named in the action were Wadsworth Investment Co., Inc., William F. Wadsworth, Sr. and William F. Wadsworth, Jr.  The administrative action alleged that the respondents, including Portfolio Timing Service, offered and sold unregistered securities and engaged in fraudulent, dishonest or unethical practices by using or permitting the use of pre-signed, blank client forms; calling, or allowing other employees to call, mutual funds and use false identities to gain client information that otherwise would have been denied to them; and posing, or permitting others to pose, as clients to obtain access to a third party mutual fund’s online client accounts.
 
The Consent Order rendered the Order to Cease and Desist permanent as of September 19, 2011, and fined Portfolio Timing Service $25,000.  In addition, the Consent Order directed the respondent to 1) hire an independent Compliance Officer to replace William F. Wadsworth, Sr.; 2) provide the Commissioner with access to the respondent’s books and records for three years; and 3) refrain from engaging William F. Wadsworth, Sr. as an investment adviser agent, employee, officer, director, general partner or manager for ten years.  While the Consent Order did permit William F. Wadsworth, Sr. to continue to serve on Portfolio Timing Service’s Investment Committee, Portfolio Timing Service was precluded for ten years from compensating William F. Wadsworth, Sr. for any activities performed on behalf of the respondent or its successors in interest.
 
 
On September 19, 2011, the Banking Commissioner entered a Consent Order with respect to William F. Wadsworth, Jr.  The respondent had been the subject of a June 1, 2011 Amended and Restated Order to Cease and Desist, Notice of Intent to Fine and Notice of Intent to Revoke Registration as a Broker-dealer Agent.  Also named in the action were Wadsworth Investment Co., Inc., Portfolio Timing Service d/b/a PTS Asset Management and William F. Wadsworth, Sr.  The administrative action alleged that the respondents, including William F. Wadsworth, Jr., engaged in fraudulent, dishonest or unethical practices by using or permitting the use of pre-signed, blank client forms; calling, or allowing other employees to call, mutual funds and use false identities to gain client information that otherwise would have been denied to them; and posing, or permitting others to pose, as clients to obtain access to a third party mutual fund’s online client accounts.  The action had also alleged that William F. Wadsworth, Jr. violated Section 36b-23 of the Connecticut Uniform Securities Act by making materially false or misleading statements in a department investigation.
 
The Consent Order rendered the Order to Cease and Desist permanent as of September 19, 2011 and directed William F. Wadsworth, Jr. to pay a $5,000 fine to the agency.
 
 
On September 23, 2011, the Banking Commissioner entered a Consent Order with respect to Thomas C. Hanscome of Irvine, California.  Hanscome was the president of MidAmerica Resources, Inc., the Joint Venture Manager and Joint Venture Operator of CherryHomes Joint Venture, a Texas enterprise formed for the purpose of oil and gas development.  Thomas C. Hanscome had been the subject of a February 16, 2011 Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF-11-7790-S) alleging that he sold unregistered joint venture units of CherryHomes Joint Venture to at least one elderly Connecticut investor, transacted business as an unregistered agent of issuer, engaged in dishonest or unethical practices and violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act.
 
The Consent Order acknowledged that Thomas C. Hanscome had provided documentation to the agency evidencing his financial inability to pay the fine that otherwise would have been assessed against him.
 
The Consent Order barred Hanscome from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent for ten years, and directed him to cease and desist from regulatory violations.
 

 
       Dated:  Tuesday, September 27, 2011
 
       Howard F. Pitkin
       Banking Commissioner