Bulletin # 2940 - Week Ending June 26, 2020

STATE BANK ACTIVITY

Branch 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: June 25, 2020
BANK: Salisbury Bank and Trust Company, Lakeville
LOCATION: FROM: 11 Garden Street, Poughkeepsie, NY 12601
          TO: 278 Mill Street #100, Poughkeepsie, NY 12601
ACTIVITY-BRANCH TYPE: Filed to Relocate - Full Service Branch

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD No.7691) – Consent Order Entered

On June 23, 2020, the Banking Commissioner entered a Consent Order (Docket No. CO-20-8249-S) with respect to Merrill Lynch, Pierce, Fenner & Smith Incorporated ("Merrill Lynch"), a Connecticut-registered broker-dealer. The Consent Order alleged that the firm violated Section 36b-31-6f of the Regulations under the Connecticut Uniform Securities Act by failing to enforce its established procedures for supervising the activities of its agents, investment adviser agents and Connecticut office operations. More specifically, the firm allegedly failed to supervise a former agent who, during his tenure with the firm, engaged in unauthorized trading; used the firm's e-mail system in connection with an unapproved private securities transaction; and incorrectly marked trade tickets as unsolicited. The Consent Order acknowledged that, in 2015, the firm paid $450,000 in restitution to the Connecticut investor adversely affected by the former agent's unauthorized trading. The Consent Order also alleged that Merrill Lynch violated Section 36b-14 of the Connecticut Uniform Securities Act by maintaining inaccurate books and records regarding solicited trades.

The Consent Order directed the firm to cease and desist from regulatory violations and pay a $150,000 fine to the department within thirty days. In addition, the Consent Order required that Merrill Lynch remit an additional $250,000 to the agency to be applied, at the discretion of the Commissioner, to investor education, staff training and education material.


Monica Hoyos-Farfan (CRD No. 2757331)

On June 24, 2020, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-20-202010-S) with Monica Hoyos-Farfan of Miami, Florida. The Stipulation and Agreement alleged that, from August 17, 2015 through December 1, 2016, Hoyos-Farfan violated Section 36b-6(c)(2) of the Connecticut Uniform Securities Act by transacting business as an unregistered investment adviser agent of P-Square Investments LLC and accepting $15,133.50 in post-engagement referral fees, consisting of a portion of the management fee charged to clients, the last fee being paid on February 6, 2020. Hoyos-Farfan is not currently registered under the securities laws of any jurisdiction.

Pursuant to the Stipulation and Agreement Hoyos-Farfan agreed to cease and desist from regulatory violations and to pay a $500 fine to the department.


Erin Lynn Verespy (CRD No. 2727866)

On June 25, 2020, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine, Notice of Intent to Revoke Registrations as a Broker-dealer Agent and an Investment Adviser Agent and Notice of Right to Hearing (Docket No. NRCDF-20-8507-S) against Erin Lynn Verespy of Trumbull, Connecticut. Respondent Verespy was previously registered as a broker-dealer agent and investment adviser agent of HD Vest Investment Services and HD Vest Advisory Services, Inc., respectively, until June 2019 when filings to withdraw her registrations in all jurisdictions became effective. Connecticut law permits the Commissioner to initiate revocation proceedings within one year after a withdrawal becomes effective.

The action acknowledged that following the initiation of litigation by the affected Connecticut customer, respondent Vesespy and the CT customer agreed to a settlement.

Respondent Verespy was afforded an opportunity to request a hearing on the allegations in the action.


Solace Investments, LLC and Rafael Alves Muzzi

On June 25, 2020, the Banking Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-20-8411-S) against Solace Investments, LLC of 90 Church Street, Naugatuck, Connecticut 06770 and Rafael Alves Muzzi, the sole member of Solace Investments, LLC.

The action alleged that from at least January 2017 to June 2018, Muzzi, individually and through Solace Investments, LLC, raised approximately $800,000 from at least 25 investors primarily located in Connecticut for the purpose of pooling investor funds to invest in FOREX accounts managed by Muzzi to trade currency. The action also alleged that, from at least January 2017, in connection with offers and sales of the FOREX investments, Muzzi, directly and through Solace Investments, LLC 1) represented to investors that their money would be invested in FOREX investments when, in reality, only a portion of such investments were ever made; 2) failed to disclose to investors the amount of investor monies that Muzzi failed to invest and that he kept for himself; and 3) mailed monthly account statements to investors that did not accurately reflect the true status and transactional history of such accounts. The respondents also failed to disclose to prospective investors any risk factors related to the FOREX investments, including financial information on Muzzi or Solace Investments, LLC; the fact that respondents would use a portion of investor monies for personal expenses and to pay off earlier investors or that the FOREX investments were not registered under the Connecticut Uniform Securities Act.

The Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine alleged that respondents violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act; engaged in dishonest or unethical practices in violation of Section 36b-4(b) of the Act; and sold unregistered securities in violation of Section 36b-16 of the Act. 

The respondents were afforded an opportunity to request a hearing on the allegations in the action.

      Dated: Wednesday, July 1, 2020