The Department of Banking News Bulletin
Bulletin # 3071 - Week Ending December 30, 2022
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.
Section 36a-145 of the Connecticut General Statutes requires that 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 may be submitted when such applications are filed and any plans that are filed will be made 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 at (860) 240-8180.
DATE: December 28, 2022
BANK: Savings Bank of Danbury, Danbury
LOCATION: 289 Main Street, Danbury, CT 06810
ACTIVITY-BRANCH TYPE: Approved to Establish Limited Branch
PROPOSED OPENING DATE: 4th quarter 2023
New Bank Activity
On December 28, 2022, Vivek Tyagi, Matthew Hurlock, Greg Giordano, Zach Larkin and Randal Quarles filed an application to organize Currency Reserve Bank, with a main office at One Sound Shore Drive in Greenwich, Connecticut, as a Connecticut uninsured bank pursuant to Section 36a-70 of the Connecticut General Statutes. Currency Reserve Bank’s spokesperson is Matthew Hurlock, proposed Chief Administrative Office and General Counsel, who can be reached by email to firstname.lastname@example.org or by phone at (551) 220-5054. The public portion of the application is available for inspection at the Department of Banking.
CREDIT UNION ACTIVITY
On December 30, 2022, Finex Credit Union, a Connecticut credit union, and First Connecticut Credit Union, a Connecticut credit union, filed an application pursuant to Section 36a-468a of the Connecticut General Statutes seeking approval for the merger of First Connecticut with and into Finex. In connection with the application, Finex Credit Union is proposing to expand its field of membership to include the select employee groups that make up First Connecticut’s field of membership. The proposed target date for this merger is June 30, 2023.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Summit Investment Management, LLC (CRD No. 149793)
On December 23, 2022, the Banking Commissioner entered a Consent Order (No. CO-22-202225-S) with respect to Summit Investment Management, LLC, a Connecticut-registered investment adviser located at 42 Pond Hill Road, Lyme, Connecticut 06371. The Consent Order alleged that the firm violated 1) Section 36b- l 4(a)(l) of the Connecticut Uniform Securities Act and Section 36b-3 l-l 4b(a) of the Regulations under the Act by failing to maintain client billing invoices for the first quarter of 2021 for at least three clients; and 2) Section 36b-23 of the Act by inaccurately representing to the Division that client invoices furnished to Division staff had been sent to clients when this was not the case. The Consent Order acknowledged that no evidence of client harm had been detected to date and that the billing invoices clients ultimately did receive were correct.
The Consent Order directed the firm to cease and desist from regulatory violations and fined the firm $10,000.
Samuel Klein, Visual Group, LLC and KF Pecksland, LLC
On December 27, 2022, the Banking Commissioner entered individual Orders Imposing Fine (No. CDF-22-8408-S) against Samuel Klein of 131 Pecksland Road, Greenwich, Connecticut, Visual Group, LLC of 58 East Main Street, Plainville, Connecticut and KF Pecksland, LLC of 131 Pecksland Road, Greenwich, Connecticut. Respondent Klein was affiliated with the two entities and was the sole member and control person of Visual Group, LLC. Visual Group, LLC purportedly invested in distressed real estate debt. KF Pecksland, LLC purportedly invested in The Bleachers Corporation, a now-defunct stock corporation of which Klein was the president. The three Respondents had been the subject of a June 20, 2022, Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that 1) Respondents offered and sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act; 2) Respondents violated the antifraud provisions in Section 36b-4(a) of the Act; and 3) Respondent Klein violated Section 36b-6 of the Act by transacting business as an unregistered agent of issuer.
The Order to Cease and Desist, being uncontested, became permanent as to each Respondent on September 10, 2022.
Similarly, the Notice of Intent to Fine was uncontested and the Orders Imposing Fine were entered by default.
Finding that Visual Group, LLC and KF Pecksland, LLC each violated Section 36b-16 of the Act and the antifraud provisions in 36b-4(a) of the Act, the Commissioner fined each of those respondents $100,000 for a total of $200,000. Finding that Samuel Klein violated Sections 36b-16, 36b-4(a) and 36b-6(a) of the Act, the Commissioner fined Samuel Klein $100,000.
In a related matter, on May 3, 2022, following a plea of guilty in an action brought by the Department of Justice, Klein was sentenced to a 36 month term of imprisonment for violating 18 U.S.C. Section 2314 (Interstate Transportation of Property Taken by Fraud) and a 36 month term of imprisonment for violating 18 U.S. C. Section 1957 (Money Laundering) (United States of America v. Samuel Klein (D. Conn. (Case No. 3:20-CR-00243-JCH(1)). The sentences would run concurrently. The facts underlying the federal action paralleled those in the Commissioner’s June 20, 2022 action. In imposing sentence, the District Court also ordered Klein to pay $1,497,797.52 in restitution to the affected victims. In light of the District Court’s order, although the Commissioner was authorized to order restitution to the affected victims pursuant to Section 36b-27(b) of the Act, the Commissioner elected not to do so since such relief would replicate that ordered by the court.
Jorge L. Perez