The Department of Banking News Bulletin
Bulletin # 2863 - Week Ending January 4, 2019
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 business 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 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 the Department for a period of 30 days. Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.
On January 25, 2019, pursuant to Section 1-225 of the Connecticut General Statutes and Section 36a-70(i) of the Supplement to the General Statutes, a special meeting of the Banking Commissioner will be held for the purpose of considering the application of the organizers of TNB USA Inc., Norwalk, Connecticut, for an extension of their Temporary Certificate of Authority to organize an uninsured bank. The meeting is scheduled to be held on January 25, 2019, at 10:00 a.m. at the Department of Banking, Room 50, 260 Constitution Plaza, Hartford, Connecticut.
CONSUMER CREDIT DIVISION ACTIVITY
Order to Cease and Desist and Order Imposing Civil Penalty
On December 27, 2018, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the Matter of: V & R Recovery, Chicago, Illinois (“Respondent”). The basis of the Order was that Respondent acted within Connecticut as a consumer collection agency without obtaining a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes, as amended by Public Act 18-173. The Commissioner ordered Respondent to cease and desist from violating Section 36a-801(a) of the 2018 Supplement to the General Statutes, as amended, and imposed a civil penalty in the amount of $100,000 upon Respondent.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
S P Consulting, LLC and Steven A. Posa d/b/a S P Financial Services Sanctioned for Unregistered Investment Advisory Activity
On December 21, 2018, the Banking Commissioner entered a Consent Order (No. CO-18-8382-S) with respect to Steven A. Posa of Bonita Springs, Florida and S P Consulting, LLC, a dissolved Connecticut limited liability company formerly located at 20 Summer Glen, Bristol, Connecticut. Posa was a founding member of S P Consulting, LLC. The Consent Order alleged that, from approximately August 2013 through June 2015, Posa, individually and on behalf of S P Consulting, LLC provided investment advisory services while unregistered to at least one Connecticut advisory client. Such conduct allegedly violated Section 36b-6(c) of the Connecticut Uniform Securities Act.
The Consent Order acknowledged that, under the oversight of their legal counsel, Posa and S P Consulting, LLC had paid the client $72,269.32 as reimbursement for advisory fees previously remitted and losses resulting from advisory services rendered during the period of unregistered activity.
The Consent Order directed Posa and S P Consulting, LLC to cease and desist from regulatory violations and fined Posa $7,500.
First Allied Securities, Inc. (CRD No. 32444) and First Allied Advisory Services, Inc. (CRD No. 137888)
On January 2, 2019, the Banking Commissioner entered a Consent Order (No. CO-18-8399-S) with respect to First Allied Securities, Inc., a Connecticut-registered broker-dealer located at 655 West Broadway, 12th Floor, San Diego, California 92101, and the firm’s advisory affiliate First Allied Advisory Services, Inc. (collectively, “First Allied”). The Consent Order alleged that First Allied violated Section 36b-31-6f(b) of the Regulations under the Connecticut Uniform Securities Act by failing to establish, enforce and maintain an adequate supervisory system. More specifically, the Consent Order focused on the conduct of one Matthew Charles Woodard, a former broker-dealer agent of ProEquities, Inc. who was also associated with First Allied Securities, Inc. in an unregistered capacity and worked from the firm’s office at 1031 Farmington Avenue, Farmington, Connecticut. Also working from that location was First Allied agent Walter J. Dubiel (CRD No. 4234689). The Consent Order alleged that Dubiel, in contravention of First Allied policies and procedures, shared his First Allied confidential client account log-in credentials with Woodard who then used the credentials to access a First Allied client’s account without the client’s knowledge or consent. As a result, the affected investor incurred trading losses of $19,265.89.
The Consent Order required that First Allied reimburse the affected investor $19,265.89 no later than the date the Consent Order was entered by the Commissioner and provide proof of payment to the agency. In addition, the Consent Order fined First Allied $30,000 and directed it to cease and desist from regulatory violations.