The Department of Banking News Bulletin
Bulletin # 2865 - Week Ending January 18, 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.
On January 22, 2019, Governor Ned Lamont signed emergency legislation establishing a no-interest loan program to provide the federal workers in Connecticut who are affected by the federal government shutdown with necessary financial support. Loans made under the program will be guaranteed by the State of Connecticut, subject to certain limitations. In order for a bank or credit union to participate in the program, the financial institution must meet the criteria of an “eligible financial institution” and apply to the Department. Applications can be made using the form found here: Application.
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.
DATE: January 14, 2019
BANK: Eastern Connecticut Savings Bank, Norwich
LOCATION: 688 Boston Post Road, Guilford, CT 06437
ACTIVITY-BRANCH TYPE: Approved to Establish Loan Production Office
Consent OrderOn January 14, 2019, the Commissioner entered into a Consent Order with Kenneth Jones (“Jones”). The Consent Order was based on an investigation by the Financial Institutions Division. As a result of such investigation, the Commissioner alleged that Jones violated Sections 36a-53(b)(1)(C) and 36a-53(b)(1)(E) of the Connecticut General Statutes. As part of the Consent Order, Jones may not hold any position as a director, officer, employee or independent contractor with any bank, Connecticut credit union or federal credit union or with a holding company that holds a subsidiary that is a bank, or as a licensee or registrant under Title 36a or 36b of the Connecticut General Statutes, without the consent of the Commissioner, and has paid $5,884 as a civil penalty.
On January 16, 2019, Laurel Road Bank, Darien, Connecticut, filed an application to change its name to DR Bank pursuant to Section 36a-82 of the Connecticut General Statutes. Written objections to such application may be made, for a period of 30 days from the date of publication of this Bulletin, on the grounds that the name selected will tend to confuse the public.
CREDIT UNION ACTIVITY
CONSUMER CREDIT DIVISION ACTIVITYConsent Order
Vir-Sec, Inc. and Christopher Murphy - Consent Order Entered
On January 17, 2019, the Commissioner entered a Consent Order (Docket No. CRF-18-8268-S) with respect to Vir-Sec, Inc. of 2840 West Bay Drive, #212, Belleair Bluffs, Florida 33770 and Christopher Murphy, president and control person of the corporation. Vir-Sec, Inc., a currently inactive Delaware corporation, was involved in the development of Internet security software. The respondents had been the subject of a July 20, 2018 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing alleging that the respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and/or selling unregistered securities. The offering was allegedly conducted through general solicitation at a Connecticut hotel. The action had also alleged that the respondents violated the antifraud provisions in Section 36b-4(a)(2) of the Act by failing to provide investors with material information concerning the issuer's financial condition, the specific risks associated with investing in Vir-Sec, Inc. and background information on the issuer's officers, directors and their compensation.
The Consent Order noted that respondent Murphy had provided the agency with a sworn financial affidavit attesting to his financial inability to pay the restitution contemplated by the administrative action, and that he maintained that he had relied on the advice of legal counsel in connection with the securities registration issues. The Consent Order also reflected a voluntarily undertaking by Murphy not to engage in any activity requiring registration under Connecticut's securities laws for three years.
The Consent Order directed the respondents to cease and desist from regulatory violations. Based on Murphy's financial affidavit, enforcement of the July 20, 2018 Order to Make Restitution was stayed for three years unless either respondent became able to pay restitution during that period or if it was determined that Murphy's financial affidavit contained material misstatements or omissions. In the latter instances, the restitutionary amount would become immediately due and payable.