The Department of Banking News Bulletin
Bulletin # 2737
Week Ending August 5, 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
Section 36a-145 of the Connecticut General Statutes requires certain applications for a branch, or 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.
Guilford Savings Bank
88 Notch Hill Road
North Branford, CT 06471
Closing Date - Limited
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Order; Fine of $35,000
On August 3, 2016, the Banking Commissioner entered a Consent Order (No. CO-16-8056-S) with respect to Silver Oak Securities, Incorporated, a broker-dealer and investment adviser with its main office in Jackson, Tennessee. The firm also maintains a branch office in Wethersfield, Connecticut. Sharing office space at the Wethersfield location is JP Capital LLC, headed by Joel Mark Johnson. Registered agents of Silver Oak Securities, Incorporated conduct investment-related activities under the name “Johnson Brunetti.”
The Consent Order was the outgrowth of an examination and investigation that cited certain firm irregularities and deficiencies involving 1) recordkeeping relating to the sale of alternative investments; 2) the firm’s supervisory system; 3) the use of signature stamps by Silver Oak, Incorporated and its agents; and 4) the firm’s employment of an unregistered investment adviser agent. The alternative investment recordkeeping issue prompted Division concerns regarding concentration levels and product suitability.
In furtherance of its desire to settle the matter informally with the department, the firm represented and undertook that 1) the firm had implemented supervisory and compliance procedures responsive to the issues raised in the Consent Order; 2) securities personnel at the Wethersfield branch would be placed on heightened supervision for twelve months; 3) within ninety days, the Wethersfield branch would hire a Series 24 principal to review and approve all new accounts at that branch; 4) within ninety days, the firm would hire an independent consultant to perform a compliance review of the Wethersfield branch’s securities and advisory operations; 5) within 120 days, the firm would hold a branch compliance conference for Wethersfield branch securities personnel; and 6) for two years, the firm would conduct annual audits of the Wethersfield branch.
The Consent Order fined the firm $35,000 and directed it to cease and desist from regulatory violations.
On August 3, 2016, the Banking Commissioner entered a Consent Order (No. CO-16-8161-S) with respect to Bridgewater Communications Group LLC, a dissolved entity last located at 635 Danbury Road, Ridgefield, Connecticut; The Exchange, LLC of the same address; and Peter Adam Schur, the sole managing member, owner and control person of both entities.
The Consent Order alleged that, from approximately October 2013 to December 2014, Bridgewater Communications Group LLC 1) transacted business as an unregistered investment adviser and engaged one or more unregistered investment adviser agents; 2) made materially misleading investment recommendations; and 3) engaged in dishonest or unethical practices by not disclosing to a client in writing before advice was rendered any material conflict of interest relating to the investment adviser or any of the adviser's agents, representatives or employees that could reasonably be expected to impair the rendering of unbiased and objective advice. The Consent Order also alleged that, during the same time frame, 1) The Exchange LLC transacted business as an unregistered broker-dealer and employed one or more unregistered broker-dealer agents; and 2) Peter Adam Schur transacted business as an unregistered investment adviser agent of Bridgewater Communications Group LLC and as an unregistered broker-dealer agent of The Exchange, LLC.
The Consent Order directed the respondents to refrain from violative conduct and fined them $7,500, jointly and severally. In addition, the Consent Order required that, for a five year period, respondents consult with experienced legal counsel prior to engaging in capital raising related activities involving securities.
Dated: Tuesday, August 9, 2016
Jorge L. Perez