DOB: Bulletin 2490 - Nov. 11, 2011

The Department of Banking News Bulletin 

Bulletin # 2490
Week Ending November 11,  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
11/08/11
Liberty Bank
Middletown
747 Farmington Avenue
New Britain, CT  06053
intent not to
disapprove
 
Application for Business and Industrial Development
Corporation License Withdrawn
 
On November 7, 2011, Connecticut Business Banc, Inc. withdrew its application for a license to transact business as a business and industrial development corporation.
 
CREDIT UNION ACTIVITY
Main Office Relocation
 
On November 10, 2011, pursuant to Section 36a-463b of the Connecticut General Statutes, approval was granted to State Police Credit Union, Inc. to relocate its main office from 300 Research Parkway, Meriden, Connecticut to 321 Research Parkway, Meriden, Connecticut.
 
CONSUMER CREDIT DIVISION ACTIVITY
Withdrawal of Notice of Intent to Issue Order to Cease and Desist, Withdrawal of Notice
of Intent to Impose Civil Penalty and Withdrawal of Notice of Right to Hearing
 
On October 11, 2011, the Commissioner issued a Withdrawal of Notice of Intent to Issue Order to Cease and Desist, Withdrawal of Notice of Intent to Impose Civil Penalty and Withdrawal of Notice of Right to Hearing (“Withdrawal”) in the Matter of:  Kenneth Michael Page (NMLS # 134504).
 
Temporary Order to Cease and Desist and Notice of Intent
to Issue Order to Cease and Desist
 
On November 8, 2011, the Commissioner issued a Temporary Order to Cease and Desist, Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) in the Matter of:  Allied Home Mortgage Corporation (NMLS # 2268) (“Respondent”), Houston, Texas, with branch offices located in Waterbury, Connecticut, and Cranston, Rhode Island.  The Notice alleged that Respondent’s lack of funds due to actions taken against it by federal agencies renders it incapable of performing agreements with borrowers as provided in Section 36a-494(b) of the Connecticut General Statutes.  The Commissioner also found that public welfare required immediate action to issue a Temporary Order to Cease and Desist requiring Respondent to take and refrain from taking such actions as, in the opinion of the Commissioner, will effectuate the purposes of Section 36a-52(b) to mitigate potential harm to Connecticut consumers due to Respondent’s acts or conduct that would lead to its failure to perform any agreements with borrowers.  Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
 
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Order
 
On November 10, 2011, the Commissioner entered a Consent Order with respect to Daniel Quentin Humphrey, currently of 108 Bordeaux Lane, Alpine, Utah, and Finity Financial Group, LLC of 708 South Avenue, New Canaan, Connecticut, an entity of which Humphrey was a member.  The respondents had been the subject of a March 4, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing.  The March 2011 action had 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 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 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; and 4) from at least 2006 forward, both Humphrey (alone and doing business as Finity Financial Group, sole proprietorship) as well as Finity Financial Group, LLC transacted business as an investment adviser in Connecticut absent registration.
 
The Consent Order recited that respondent Humphrey had provided documentation to the department evidencing his financial inability to pay the fine that otherwise would have been imposed against him.
 
The Consent Order barred Humphrey for five years from transacting securities business in Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent.  In addition, the Consent Order directed Humphrey and Finity Financial Group, LLC to cease and desist from regulatory violations.
 

Consent Order
 
On November 10, 2011, the Commissioner entered a Consent Order with respect to Oasis Properties I, LLC, a securities issuer located at 1055 West Red Cliff Drive, C-517, Washington, Utah and its manager, Scott L. Wilson.  The Consent Order had been preceded by a March 4, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against the respondents.  The March 4, 2011 action had alleged that 1) Oasis Properties I, LLC violated Section 36b-6(b) of the Connecticut Uniform Securities Act by employing Daniel Quentin Humphrey as an unregistered agent of issuer in connection with an offering of Series C notes; and 2) Oasis Properties I, LLC and Scott L. Wilson violated Section 36b-16 of the Act by selling unregistered Series F secured promissory notes.
 
The Consent Order directed the respondents to cease and desist from regulatory violations and to jointly and severally remit $1,500 to the department.  Of that amount, $1,400 constituted an administrative fine and $100 represented reimbursement for past due agent of issuer registration fees.
 
Consent Order
 
On November 10, 2011, the Commissioner entered a Consent Order with respect to Waterford Loan Fund, LLC, a securities issuer located at 215 South State Street, Suite 550, Salt Lake City, Utah. The Consent Order had been preceded by a March 4, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that Waterford Loan Fund, LLC violated Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act by selling unregistered securities and employing Daniel Quentin Humphrey as an unregistered agent of issuer.  The Consent Order acknowledged that Waterford Loan Fund, LLC and its affiliate, Waterford Funding, LLC, were currently under the supervision of a Chapter 11 trustee and that the assets of those entities were being liquidated for the benefit of creditors (In re: Waterford Funding LLC and Waterford Loan Fund, LLC, Case Number 09-22584 (D. Utah)).  In light of that fact, the Consent Order stated that no fine would be imposed against the respondent.
 
The Consent Order directed the respondent to cease and desist from regulatory violations.
 
 Consent Order
 
On November 10, 2011, the Commissioner entered a Consent Order resolving the matters alleged in an April 15, 2011 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Revoke Registration as a Broker-dealer and Notice of Intent to Fine against Newbridge Securities Corporation, a Connecticut-registered broker-dealer having its main office at 1451 Cypress Creek Road, Suite 204, Fort Lauderdale, Florida.  The April 15, 2011 action had alleged that the firm charged its customers a transactional “Handling Fee” that was unrelated to actual transaction costs, and that the firm failed to inform customers that the fee included a profit to the firm, that certain customers paid lower fees and that the fee was not based on the actual cost of handling a particular transaction.  Such conduct allegedly violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act and constituted a dishonest and unethical practice.
 
The Consent Order directed the firm to 1) cease and desist from regulatory violations; and 2) with respect to transactions effected from January 1, 2008 forward, reimburse each Connecticut customer the difference between the "Handling Fee" paid per transaction and the actual amount of the firm's ticket and clearing charge and the postage fee assessed by the clearing firm.  The Consent Order also fined Newbridge Securities Corporation $10,000.
 
 

       Dated:  Tuesday, November 15, 2011
 
       Howard F. Pitkin
       Banking Commissioner