DOB: Bulletin 2523 - June 29, 2012

The Department of Banking News Bulletin 

Bulletin # 2523
Week Ending June 29, 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.

Branch Activity
Date Credit Union Location Activity
Sikorsky Financial Credit Union
Stratford High School
45 N. Parade Street
Stratford, CT  06615
Check Cashing Service License Activity
Date Check Casher Location Activity
6/25/12 Brooklyn Check Cashing LLC
432 Rubber Avenue
Naugatuck, CT  06770
Buckeye Check Cashing
   of Connecticut, LLC
1050 E. Main Street
Bridgeport, CT  06608

Order to Cease and Desist; Order to Make Restitution
and Notice of Intent to Fine Issued
On June 26, 2012, the Banking Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing with respect to William Alexis Cronin, Jr. whose last known business address is 11 Woodland Road, Madison, Connecticut.  Respondent Cronin did business under the name Madison Financial Services.  The action alleged that, at various times between 2006 and 2008, the respondent sold unregistered nonexempt securities issued by FundGuard, LLC and Aliki Foods, LLC to Connecticut and non-Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act.  The action also alleged that respondent Cronin received $77,500 in compensation from FundGuard, LLC and $93,500 in compensation from Aliki Foods, LLC for introducing prospective investors to those issuers.  Respondent Cronin allegedly was not registered as an agent of issuer in Connecticut at the time.  In addition, the action alleged that 1) in failing to disclose to investors and prospective investors that he was receiving compensation from FundGuard, LLC and Aliki Foods, LLC, respondent Cronin violated the antifraud provisions in Section 36b-4(a)(2) of the Act; and 2) in failing to provide his then employing broker-dealer with prior notice of his compensated involvement in the issuer transactions, respondent Cronin violated Section 36b-31-6e(c) of the Regulations under the Act.  The action also alleged that respondent Cronin 1) transacted business as an investment adviser absent registration; and 2) improperly borrowed $10,000 from a former broker-dealer client without notifying the brokerage firm with whom he was then associated.
Respondent Cronin was 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.
Consent Order
On June 29, 2012, the Banking Commissioner entered a Consent Order with respect to Bankers Life and Casualty Company, an Illinois life insurance company, and BLC Financial Services, Inc., its wholly-owned subsidiary, both of Chicago, Illinois.  BLC Financial Services, Inc. was previously registered as a broker-dealer only in Illinois and has since terminated its federal and state registrations.  The Consent Order followed a multistate investigation, capped by a global settlement, into unregistered broker-dealer and investment advisory activity by the firms.  The multistate investigation also focused on the firmsí employment of dual agents who, although registered with UVEST Financial Services Group, Inc. and ProEquities, Inc., were not registered agents and investment adviser agents of the respondents.  The respondents received revenue sharing payments based on the dual agentsí securities transactions.  Both UVEST Financial Services Group, Inc. and ProEquities, Inc. are registered broker-dealers in Connecticut.
The Consent Order directed Bankers Life and Casualty Company and BLC Financial Services, Inc. to cease and desist from transacting business as a broker-dealer or investment adviser in Connecticut absent registration and from employing unregistered agents or investment adviser agents.  The Consent Order also fined the respondents $965,469.30, which represented Connecticutís share of the $9.9 multistate settlement, and required that they reimburse the state $5,000 for past due agent licensing fees.  The Consent Order also required that the respondents pay the expenses, not to exceed $2,000 in the aggregate, of one or more examinations to be conducted by the Securities and Business Investments Division within 24 months.
Additional remedial steps in the settlement included a requirement that the respondents 1) contract with an independent third party to review their compliance with the Consent Order; 2) not attempt to recoup their settlement payments from dual agents, UVEST Financial Services Group, Inc. ProEquities, Inc. or their customers (including through premium increases); 3) cede supervisory, compensation and other control over agent securities and investment advisory activities to the broker-dealer with whom they had a third party brokerage agreement; and 4) in the case of Bankers Life and Casualty Company, curb the securities-related activities of insurance producers who were not licensed to sell securities products or give investment advice on securities.
     Dated:  Tuesday, July 3, 2012
       Howard F. Pitkin
       Banking Commissioner