The Department of Banking News Bulletin
Bulletin # 2784
Week Ending June 30, 2017
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
Section 361-145 of the Connecticut General Statutes requires certain applications for a branch, of for a limited branch at which loans will be made, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage. 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: June 29, 2017
BANK: Thomaston Savings Bank, Thomaston
LOCATION: 669 Wolcott Road, Wolcott, CT 06716
ACTIVITY-BRANCH TYPE: Filed to Open Branch - Full Service Branch
CREDIT UNION ACTIVITY
DATE: June 1, 2017
CREDIT UNION: Community Healthcare Credit Union, Inc., Manchester*
LOCATION: 31 Union Street, Vernon, CT 06066
ACTIVITY-BRANCH TYPE: Effective Date of Closing - Full Service Branch
*Credit union name was listed incorrectly in Bulletin 2783
CONSUMER CREDIT DIVISION ACTIVITY
On June 22, 2017, the Commissioner entered into a Consent Order with Collect Pros, LLC
(NMLS # 1243832) (“Respondent”), Pacoima, California. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, on April 11, 2017, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) against Respondent. The Commissioner alleged that Respondent acted as a consumer collection agency in Connecticut without a license, in violation of Section 36a-801(a) of the Connecticut General Statutes. As part of the Consent Order, Respondent was ordered to cease and desist from acting as a consumer collection agency in Connecticut without a license, and Respondent’s manager, Michael Allan Ross (NMLS # 1243969) was barred from acting as a manager, owner, supervisor or any other control person for any consumer collection agency acting in Connecticut for a period of three years.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order to Cease and Desist and Notice of Intent to Fine Issued
On June 27, 2017, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-17-8254-S) against Signal Lake Side Fund, L.P., Signal Lake Side Fund II, L.P. and Signal Lake Side Fund IIA, L.P.
, all of 606 Post Road East, Westport, Connecticut 06880. Each of the investment funds was formed to invest in software and technologies companies. Also named in the action was Signal Lake Management, LLC
, investment manager of the funds, Signal Lake General Partner LLC
, the general partner of an affiliated nonrespondent, and Barton W. Stuck
of Norwalk, Connecticut, a managing member of the funds' investment manager as well as a control person of the funds.
The action alleged that, at various times between 2007 and 2014, Stuck and the fund respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and/or selling unregistered fund securities to investors. The action also alleged that, from approximately 2008 to 2014, in providing investment advice to the funds on a compensated basis, Signal Lake Management, LLC transacted business as an unregistered investment adviser in contravention of Section 36b-6(c)(1) of the Act and engaged Stuck as an unregistered investment adviser agent in violation of Section 36b-6(c)(3) of the Act. Stuck was also charged with violating Section 36b-6(c)(2) of the Act by transacting business as an unregistered investment adviser agent.
In addition, the action alleged that Stuck and Signal Lake Management, LLC violated the antifraud provisions in Section 36b-4(a) of the Act by falsely representing to an investor in Signal Lake Side Fund II, L.P. that millions of dollars in additional investor capital had been provided to finance the partnership's operations when no such monies had, in fact, been received.
Barton W. Stuck was also a managing director and majority owner of Signal Lake General Partner LLC, an exempt reporting adviser required to make a Form ADV filing with the Commissioner. Signal Lake General Partner LLC was the general partner of nonrespondent Signal Lake Operations LLC. The Order to Cease and Desist and Notice of Intent to Fine alleged that Stuck and Signal Lake General Partner LLC violated Section 36b-23 of the Act by making a misleading Form ADV filing with the agency. More specifically, the action alleged that Stuck and Signal Lake General Partner LLC repeatedly overstated the gross asset value of Signal Lake Operations LLC on Form ADV; falsely represented that Signal Lake General Partner LLC's books and records were located at a Stamford, Connecticut accounting firm; and falsely stated that Signal Lake Operations LLC's financial statements were subject to an annual audit by that accounting firm.
Such allegations form the basis to issue orders to cease and desist against Signal Lake Side Fund, L.P, Signal Lake Side Fund II, L.P., Signal Lake Side Fund IIA, L.P., Signal Lake Management, LLC, Signal Lake General Partner LLC and Barton W. Stuck and impose a fine not to exceed $100,000 per violation on each of the respondents.
Each of the respondents was afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist and Notice of Intent to Fine.
Dated: Wednesday, July 5, 2017
Jorge L. Perez