The Department of Banking News Bulletin
Bulletin # 2519
Week Ending June 1, 2012
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.
The Guilford Savings Bank
FROM: 634 Boston Post Road
Madison, CT 06443
TO: 589 Boston Post Road
Madison, CT 06443
CONSUMER CREDIT DIVISION ACTIVITY
Check Cashing Service License Activity
Frog Bridge Check Cashing, LLC
31 Church Street
Willimantic, CT 06226
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order to Cease and Desist, Order to Make Restitution
and Notice of Intent to Fine Issued
On May 29, 2012, the Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing against Connecticut Foreclosure Division Corp. of Glastonbury, Connecticut and Alfred R. Beauchamp of West Hartford, Connecticut. Respondent Beauchamp was the sole officer and shareholder of Connecticut Foreclosure Division Corp. which also operated under various names, including CFDC HOME. The respondents purportedly counseled people who were in financial distress and in danger of losing their homes. The respondents purportedly represented that they could halt a foreclosure and sell the affected home, after obtaining additional time from the bank and the courts.
The Commissionerís action alleged that from approximately February, 2007 forward, the respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered promissory note investments bearing a minimum return of ten percent. The respondents allegedly represented to investors that investor funds would be used for company operating expenses, to buy leads and to purchase a property if one were located. In addition, the respondents allegedly represented to investors that their principal would be guaranteed against loss. In reality, investor funds were purportedly used in part to pay the personal expenses of respondent Beauchamp and his family. The action also alleged that the respondents violated the antifraud provisions of the Act by failing to disclose any risk factors related to the investment, any financial information on the respondents or that the respondents would use part of the investorsí funds to pay for the personal, medical and household expenses of respondent Beauchamp and his family as well as the business expenses of respondent Beauchampís spouse.
The respondents were afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.
On May 29, 2012, the Commissioner entered a Consent Order with respect to Hawthorne Advisory Group, LLC of Bloomfield, Connecticut and William D. Heiden Jr., the firmís managing member. The firm had been registered as an investment adviser under the Connecticut Uniform Securities Act until December 31, 2011 when it failed to renew its registration. The Consent Order alleged that the respondents failed to make material conflict of interest disclosures to a client, and alone or through an affiliated entity, improperly borrowed money from investment advisory clients. The Consent Order also noted that William D. Heiden Jr. was currently subject to a FINRA suspension for failing to comply with an arbitration award directing that he pay the claimant $400,000 in compensatory damages plus 18% interest per annum on $300,000 from April 4, 2008 until payment of the award. Under the Connecticut Uniform Securities Act, the failure to comply with an arbitration award may give rise to administrative sanctions.
The Consent Order directed Hawthorne Advisory Group, LLC and William D. Heiden Jr. to cease and desist from regulatory violations. In addition, the Consent Order barred William D. Heiden Jr. from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent until one year had elapsed from the date the FINRA arbitration award was paid and documented proof of payment furnished to the Commissioner.
Dated: Tuesday, June 5, 2012
Howard F. Pitkin