The Department of Banking News Bulletin
Bulletin # 2786
Week Ending July 14, 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: July 10, 2017
BANK: Magnolia Bank, Inc., Hodgenville, KY
LOCATION: 1 Morgan Avenue, 3rd Floor, Norwalk, CT 06851
ACTIVITY-BRANCH TYPE: Filed to open branch - Loan Production Office
De Novo Branch
On June 29, 2017 (erroneously reported as July 29, 2017 in bulletin 2785), Berkshire Bank, a Massachusets-chartered bank, filed an application pursuant to Section 36a-412(a)(2) and 36a-145(b)(1) of the Connecticut General Statutes, seeking approval to establish a de novo branch at 763 Farmington Avenue, Farmington, Connecticut.
CONSUMER CREDIT DIVISION
On July 5, 2017, the Commissioner entered into a Consent Order with Rent Recovery Solutions LLC
(NMLS # 1577947) (“Rent Recovery Solutions”), Atlanta, Georgia. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Rent Recovery Solutions acted within this state as a consumer collection agency without the requisite license, in violation of Section 36a-801(a) of the Connecticut General Statutes. As part of the Consent Order, Rent Recovery Solutions was ordered to cease and desist from acting as a consumer collection agency without a license, and paid $10,000 as civil penalty.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Stipulation and Agreement
On July 10, 2017, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-17-8384) with Benjamin F. Edwards & Company, Inc.
, a broker-dealer having its principal office at One North Brentwood Boulevard, Suite 850, St. Louis, Missouri. The firm is also registered as an investment adviser with the Securities and Exchange Commission. The Stipulation and Agreement alleged that, in contravention of Section 36b-6(c)(3) of the Connecticut Uniform Securities Act, the firm engaged two unregistered investment adviser agents whose workplace had been relocated to Connecticut in 2016. The Stipulation and Agreement acknowledged that the individuals in question had since become registered as investment adviser agents under the Act. In resolution of the matter, the firm agreed to pay a $500 fine and to refrain from engaging in conduct that would constitute a violation of the Act or any regulation or order thereunder.
Findings of Fact, Conclusions of Law and Order Issued
On July 13, 2017, following a hearing, the Banking Commissioner entered Findings of Fact, Conclusions of Law and an Order (Docket No. CF-16-8301-S) against Robert Lawrence Gray
of Boca Raton, Florida. Respondent Gray did not appear at the March 8, 2017 administrative hearing regarding the matter and, as a result, the Order was entered by default. The Order had been preceded by an October 20, 2016 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that Gray persuaded a Connecticut investor to transfer the investor's brokerage account to Cantone Research Inc. where Gray had an arrangement with agent Victor Polakoff to direct trading in the account. Respondent Gray also had an arrangement with the investor to share in the gains earned as a result of Gray's investment recommendations, and that Gray would reimburse the investor for losses incurred as a result of the recommended trades. The arrangement with Cantone Research, Inc. allowed Gray to circumvent a July 15, 1977 permanent bar imposed by the NASD and to continue to be active in the securities industry without detection. Ultimately, the investor lost approximately $200,000 due to trades directed by Gray and effected through Cantone Research Inc. and agent Polakoff.
Adopting as findings the allegations in the October 20, 2016 Notice, the Commissioner determined that Gray 1) violated Section 36b-6(c)(1) of the Connecticut Uniform Securities Act by transacting business as an unregistered investment adviser; and 2) violated Section 36b-5(f) of the Act by engaging in dishonest or unethical practices in connection with the rendering of investment advice.
The July 13, 2017 Order rendered the October 20, 2016 Order to Cease and Desist permanent and fined Gray $200,000.
Dated: Tuesday, July 18, 2017
Jorge L. Perez