The Department of Banking News Bulletin
Bulletin # 2741
Week Ending September 2, 2016
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 Jorge L. Perez, Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten days from the date of this bulletin.
STATE BANK ACTIVITY
Bank Holding Company Application
On August 31, 2016, the Commissioner approved the application of Bankers’ Bank Northeast, a Connecticut bankers’ bank, to organize a bank holding company pursuant to Section 36a-181 of the Connecticut General Statutes that will be known as BBN Financial Corporation and will acquire all the issued and outstanding shares of Bankers’ Bank Northeast.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
On August 29, 2016, the Banking Commissioner entered a Consent Order (No. CO-16-8302-S) with respect to Entertainment Only, LLC
, an inactive Florida limited liability company formerly of Bradenton, Florida. The respondent had been the subject of an April 20, 2016 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-16-8302-S) alleging that in 2013 the respondent violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered securities and had employed an unregistered agent of issuer in violation of Section 36b-6(b) of the Act. The Consent Order acknowledged that, of the $154,000 in sales proceeds the respondent received from Connecticut investors, the respondent had repaid $11,000; $99,000 had been repaid by Respondent’s agent in a related action; and the $44,000 balance would be repaid from the sales proceeds of the agent’s residence.
The Consent Order fined the respondent $2,500 and directed it to cease and desist from regulatory violations.
Stipulation and Agreement
On August 29, 2016, the Banking Commissioner entered into a Stipulation and Agreement (Docket No. CF-13-8320-S) with Hunton Oil Partners LP, Giddings Oil and Gas LP and Asym Energy Fund III LP
. Each of the parties is an inactive investment fund whose last known address was in Stamford, Connecticut. The funds were previously controlled by one Gregory Richard Imbruce (CRD No. 4392235). On December 17, 2013, the Commissioner had issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-13-8064-S) against Imbruce, the funds and their then general partners alleging, among other things, that 1) Hunton Oil Partners LP and Giddings Oil and Gas LP sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act; and 2) Asym Energy Fund III made a delinquent Rule 506 notice filing in connection with a prior private placement. The allegations against Imbruce and the funds’ general partners were resolved separately.
As the result of an arbitration ruling, later affirmed by the Connecticut Superior Court (Henry v. Imbruce, Superior Court, Judicial District of Stamford, Docket No. (X08) FST-CV-125013927-S (April 11, 2016)), Imbruce no longer performed a management role vis a vis the funds.
The August 29, 2016 Stipulation and Agreement, which was executed by the funds’ new general partner, obligated the funds to refrain from regulatory violations. In addition, the Stipulation and Agreement required that the funds jointly and severally remit $1,000 to the department to cover past due notice filing fees as well as partial reimbursement for agency investigative costs.
Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine Issued
On August 29, 2016, 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 (Docket No. CRF-16-8171-S) against Tyrol Group, LLC
of Westbrook, Connecticut, Native American Tyrol Energy, LLC
of Essex, Connecticut and Lee Tyrol
, control person of each entity (the “Tyrol Entities”). The action alleged that from approximately January 2009 to September 2013, Tyrol, individually and/or on behalf of the Tyrol Entities sold approximately $587,000 of securities consisting of ownership interests in the Tyrol Entities, and that the securities were not registered under the Connecticut Uniform Securities Act. The action also alleged that, to induce investors to invest, Tyrol represented that investor monies would be used to finance projects earning upwards of $100 to $300 million dollars per year. Tyrol allegedly did not provide investors with information relating to the operating history and finances of the Tyrol Entities; the risks associated with the investment; the fact that Tyrol ultimately used investor funds for his personal expenses; or the unregistered status of the securities. Such conduct allegedly violated the antifraud provisions in Section 36b-4(a) of the Act. In addition, the action alleged that Tyrol transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act and that the Tyrol Entities employed him in an unregistered capacity in contravention of Section 36b-6(b) of the Act. The respondents were the subject of a December 14, 2015 Connecticut Superior Court judgment in the amount of $260,209.17 based on allegations that the respondents fraudulently solicited investments by making false and misleading statements, failing to disclose associated risks and concealing information about the various business ventures pursued by the Tyrol Entities (Strategic Aegis, LLC v. Lee Tyrol, Tyrol Group, LLC and Native American Tyrol Energy, Docket No. MMX-CV-14-6011117-S).
The respondents were afforded an opportunity to request a hearing on the allegations in the August 29, 2016 action.
Dated: Wednesday, September 7, 2016
Jorge L. Perez