The Department of Banking News Bulletin 

Bulletin # 2119
Week Ending October 1, 2004

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 John P. Burke, Commissioner of Banking, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail to john.burke@ct.gov. Written comments will be considered only if they are received within ten days from the date of this bulletin.

BRANCH ACTIVITY
State Bank Activity

Section 36a-145 of the Connecticut General Statutes requires that each application 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 Securities and Business Investments Division is sponsoring its 16th annual Securities Forum conference on Tuesday, October 26, 2004 at the Radisson Hotel and Conference Center in Cromwell, Connecticut.

This year's event is an exceptional opportunity for broker-dealers, investment advisers, banks, financial planners, securities and corporate attorneys, insurance firms, accountants and other financial industry professionals to keep abreast of new and evolving regulatory developments.

Securities Forum 2004 features an outstanding agenda, with a choice of ten different panel presentations on timely topics such as broker-dealer and investment adviser regulation, anatomy of an examination or investigation, corporate finance, regulation of hedge funds, arbitration, business ethics and coordination across industry boundaries by securities and bank regulators.

For program and registration information, please visit the department's web site at http://www.ct.gov/dob/pages/SFsave.htm or call the department at (860) 240-8170.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Broker-dealer Fined $5,000 for Unregistered Agent Activity,
Supervisory Lapses

On September 30, 2004, the Banking Commissioner entered a Consent Order with respect to Kevin Dann & Partners, LLC, a Connecticut-registered broker-dealer located at 400 Madison Avenue, Suite 4A, New York, New York. The Consent Order alleged that 1) from approximately January 2003 to January 2004, the firm employed an unregistered agent in violation of Section 36b-6(b) of the Connecticut Uniform Securities Act; 2) failed to maintain and enforce an adequate supervisory system; 3) failed to ensure that an agent's Form U-4 was properly updated to reflect the agent's outside business activity; and 4) permitted an employee to disseminate an inaccurate e-mail message containing information that was at odds with the firm's due diligence file. The Consent Order directed the firm to refrain from regulatory violations; fined the firm $5,000; mandated that the firm implement revised supervisory and compliance procedures; and required that the firm reimburse the department for expenses incurred in connection with one or more examinations of the firm's office to be conducted by the agency within 18 months following the entry of the Consent Order.

CONSUMER CREDITI DIVISION ACTIVITY
Check Cashing Service License Activity

On August 17, 2004, pursuant to Section 36a-581 of the Connecticut General Statutes, Oasis Partners LLC d/b/a American Cash Exchange filed an application for approval to operate check cashing service general facilities at 344 Whalley Avenue, New Haven, Connecticut and 607 Campbell Avenue, West Haven, Connecticut.

Settlement Agreements

On September 28, 2004, the Commissioner entered into a Settlement Agreement with Andrew Constantinou ("Constantinou"). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of the investigation, pursuant to Sections 36a-51(a) and 36a-494(a)(2) of the Connecticut General Statutes, the Commissioner issued a Notice of Intent to Revoke Originator Registration and Notice of Right to Hearing against Constantinou. The Notice alleged that from at least October 2002 to March 2003, Constantinou, while acting as an originator for C & S Mortgage, LLC ("C&S"), misrepresented in loan files that were submitted by C&S to a lender, one or more of the following: applicant's age, applicant's employer, location of applicant's bank account, amount in the applicant's bank account, applicant's monthly income, applicant's annual income, purpose for which the applicant was purchasing the property, applicant's job title, amount of the applicant's down payment, name of the applicant's landlord, amount that the applicant was seeking to borrow, that the application was based on a face-to-face interview, and that the property the applicant was seeking to purchase with the loan proceeds was currently leased, in violation of Sections 36a-494(a)(2) of the Connecticut General Statutes. Pursuant to the Settlement Agreement, it was agreed that Constantinou would immediately be eligible to apply, through a licensed mortgage broker, for registration to act as a mortgage loan originator; and, for at least five years commencing after the Settlement Agreement was executed, Constantinou agreed that he would not (a) apply for a first or secondary mortgage broker, lender or correspondent lender license (b) seek employment with C&S as an originator or otherwise: and, (c) seek employment with or otherwise hereinafter receive a fee, commission or other valuable consideration, directly or indirectly, from any licensed first or secondary mortgage broker, lender or correspondent lender controlled by Richard A. Sabrowske, Kim Chimblo or any of their affiliates. In addition, Constantinou agreed to remit to the Department of Banking $5,000 as a civil penalty.

On September 28, 2004, the Commissioner entered into a Settlement Agreement with C&S Mortgage, LLC ("C&S"). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of the investigation, pursuant to Section 36a-51(a), 36a-494(a)(1) and 36a-517(a)(1) of the Connecticut General Statutes, the Commissioner issued a Notice of Intent to Revoke First Mortgage Broker and Secondary Mortgage Broker Licenses and Notice of Right to Hearing against C&S. The Notice alleged that from at least July 2002 to March 2003, C & S acting through its employees, submitted at least six first mortgage loan files to a lender and misrepresented one or more of the following in the respective loan files: applicant's age, applicant's employer, location of applicant's bank account, amount in the applicant's bank account, applicant's monthly income, applicant's annual income, purpose for which the applicant was purchasing the property, applicant's job title, amount of the applicant's down payment, name of the applicant's landlord, amount that the applicant was seeking to borrow, that the application was based upon a face-to-face or telephone interview, and that the property the applicant was seeking to purchase with the loan proceeds was currently leased, in violation of Sections 36a-494(a)(1) and 36a-517(a)(1) of the Connecticut General Statutes. Pursuant to the Settlement Agreement, it was agreed that C&S would retain its first and secondary mortgage broker licenses and that it would be eligible to apply for renewal of such licenses; and, for at least five years commencing after the Settlement Agreement had been executed, C&S would not employ, enter into any partnership arrangement with or otherwise pay a fee, commission or other valuable consideration to, directly or indirectly, any originator who was employed or retained by C&S prior to March 8, 2004. In addition, C&S agreed to remit to the Department of Banking $15,000 as a civil penalty.

On September 28, 2004, the Commissioner entered into a Settlement Agreement with Kim Chimblo ("Chimblo"). The Settlement Agreement was based on an investigation by the Consumer Credit Division. As a result of the investigation, pursuant to Sections 36a-51(a) and 36a-494(a)(2) of the Connecticut General Statutes, the Commissioner issued a Notice of Intent to Revoke Originator Registration and Notice of Right to Hearing against Chimblo. The Notice alleged that from at least October 2002 to March 2003, Chimblo, while acting as an originator for C&S Mortgage, LLC ("C&S"), misrepresented in loan files that were submitted by C&S to a lender, one or more of the following: applicant's age, applicant's employer, location of applicant's bank account, amount in the applicant's bank account, applicant's monthly income, applicant's annual income, purpose for which the applicant was purchasing the property, applicant's job title, amount of the applicant's down payment, name of the applicant's landlord, amount that the applicant was seeking to borrow, that the application was based on a face-to-face or telephone interview, and that the property the applicant was seeking to purchase with the loan proceeds was currently leased, in violation of Sections 36a-494(a)(2) of the Connecticut General Statutes. Pursuant to the Settlement Agreement, it was agreed that Chimblo would immediately be eligible to apply, through a licensed mortgage broker, for registration to act as a mortgage loan originator; and, for at least five years commencing after the Settlement Agreement was executed, Chimblo agreed that she would not apply for her own first or secondary mortgage broker, lender or correspondent lender license.