The Department of Banking News Bulletin
Bulletin # 2932 - Week Ending May 1, 2020
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
Interstate Loan Production Office
On April 29, 2020, the Commissioner approved the application of Evolve Bank & Trust, an Arkansas state-chartered bank, to establish a loan production office in Connecticut pursuant to Section 36a-412(d) of the Connecticut General Statutes. The office will be located at 970 Farmington Avenue, 3rd Floor, West Hartford, Connecticut.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Great Heritage Investments, LLC (CRD No. 288521) and George Henry Messier (CRD No. 1005894) – Consent Order Entered
On April 27, 2020, the Banking Commissioner entered a Consent Order (Docket No. CO-20-8436-S) with respect to Great Heritage Investments, LLC of 14 Main Street South Woodbury, Connecticut and George Henry Messier, Chief Compliance Officer of the firm. Great Heritage Investments, LLC is registered as an investment adviser under the Connecticut Uniform Securities Act and George Messier is registered as an investment adviser agent of the firm in Connecticut. The Respondents had been the subject of a December 19, 2019 Order to Cease and Desist, Notice of Intent to Restrict or Impose Conditions on Securities or Investment Advisory Activities and Notice of Intent to Fine (Docket No. CRNDF-19-8436-S).
The December 19, 2019 action had alleged that, contrary to Section 36b-5(b)(1) of the Act, the firm failed to enter into signed investment advisory agreements with its clients; that the firm violated Section 36b-5 of the Act and Section 36b-31-5a of the Regulations by disseminating misleading advertising and performance representations; that the firm failed to maintain the records required by Section 36b-14(a)(1) of the Act and Section 36b-31-14b of the Regulations; that, in violation of Section 36b-23 of the Act, respondents made materially misleading statements in filings made with the Commissioner; and that respondents failed to update their regulatory filings as required by Section 36b-31-14e of the Regulations.
The Consent Order directed the Respondents to cease and desist from regulatory violations and required that they jointly and severally pay a $20,000 fine to the department. $10,000 of that fine would be paid upfront, with the balance payable in installments of $2,000 on the first of every month, commencing on June 1, 2020 and concluding on October 1, 2020.
The Consent Order also required that the firm retain a regulatory consultant to perform on-site compliance reviews for a three year period. In addition, the Consent Order 1) prohibited Respondents from having custody or control of client funds or securities for three years; 2) required that Respondents submit all advertising to the department for prior review for a three year period; and 3) restricted Respondents' investment advisory activity for three years to securities listed on the New York Stock Exchange, the NYSE MKT, the NASDAQ Global Select Market or the NASDAQ Global Market, securities issued by investment companies regulated under the Investment Company Act of 1940, commercial paper, certificates of deposit, corporate debt securities, municipal securities, United States government securities, and insurance products subject to regulation by the Connecticut Insurance Commissioner.
Bankers Life and Casualty Company - Order Modifying Consent Order Entered
On April 29, 2020, the Banking Commissioner entered an Order Modifying Consent Order (No. CO-2020-8018-S) with respect to Bankers Life and Casualty Company. The firm, together with its affiliate, BLC Financial Services, Inc., had been the subject of a June 29, 2012 Consent Order resulting from a multi-state investigation into unregistered broker-dealer activity. BLC Financial Services, Inc. voluntarily dissolved on December 27, 2012.
The Order Modifying Consent Order acknowledged that certain provisions in the 2012 Consent Order could be construed to unduly impair the ability of insurance industry personnel to fully assess whether insurance products were suitable for their customers.
The 2012 Consent Order had prohibited Insurance Producers from obtaining a copy of consumer statements for securities products; discussing any other aspect of the securities products; or arranging for consumers to meet with persons who were registered to give advice on securities products. Among other things, the modified Consent Order permitted Insurance Producers to obtain a copy of the consumer’s statements for securities products as part of the insurance factfinding process to the extent that the information was used to give the Insurance Producer reasonable grounds to believe recommendations for insurance-only products were suitable for the consumer. In addition, the modified Consent Order permitted Insurance Producers to have general discussions concerning diversification of assets, financial objectives, and general market risk differences between insurance and securities products. However, Insurance Producers could not make recommendations or provide advice concerning the consumer’s specific securities products, compare the consumer’s specific securities or investment performance with other financial products (including annuities or life insurance) or recommend that specific securities be liquidated or used to fund an annuity or life insurance product. In addition, Insurance Producers would still be required to disclose to consumers that they were not registered to sell securities.
Dated: Tuesday, May 5, 2020