The Department of Banking News Bulletin
Bulletin # 3115 - Week Ending November 3, 2023
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.
OTHER FINANCIAL INSTITUTION ACTIVITY
Out-Of-State Trust Company
On October 31, 2023, Argentum Peak, LLC, a Wyoming-chartered nondepository trust company with a principal office in Jackson, Wyoming, filed an application pursuant to Connecticut General Statutes Section 36a-434a to establish a trust office at 600 Washington Blvd., 7th floor, in Stamford Connecticut.
CREDIT UNION ACTIVITY
On November 2, 2023, America’s First Network Credit Union, a Connecticut credit union, and Northeastern Connecticut Healthcare 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 Northeastern Connecticut Healthcare Credit Union with and into America’s First Network Credit Union. In connection with the application, America’s First Network Credit Union is proposing to expand its field of membership to include the select employee group field of membership of Northeastern Connecticut Healthcare Credit Union. The proposed target date for this merger is February 1, 2024.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Safeguard Metals LLC and Jeffrey Ikahn
On November 3, 2023, the Banking Commissioner entered an Order Pursuant to Judicial Consent Order (No. 23-2021-34-S) against Safeguard Metals LLC and Jeffrey Ikahn. Safeguard Metals LLC, located at 30 N Gould Street, Suite R, Sheridan, Wyoming and 21550 Oxnard Street, 3rd Floor, Woodland Hills, California, is a precious metals promoter focusing on gold and silver coin sales. Jeffrey Ikahn, also known as Jeffrey S. Santulan and Jeff Hill, is the sole owner and control person of Safeguard Metals LLC. The Commissioner’s Order, entered pursuant to the Connecticut Uniform Securities Act, permanently barred both Safeguard Metals LLC and Ikahn from 1) transacting business in or from Connecticut as an agent, broker-dealer, broker-dealer agent, investment adviser or investment adviser agent; 2) maintaining a direct or indirect ownership interest in a broker-dealer or an investment adviser registered or required to be registered in Connecticut; and 3) acting in any other capacity that requires a license or registration under laws administered by the Commissioner. The Commissioner’s Order was consistent with a court-ordered Consent Order of Permanent Injunction and Other Statutory and Equitable Relief entered in the related civil action described below.
The Commissioner’s action followed a federal lawsuit initiated on February 1, 2022 and brought by the federal Commodity Futures Trading Commission, in conjunction with numerous states, including the State of Connecticut Department of Banking. The suit was filed in the United States District Court for the Central District of California (Commodity Futures Trading Commission et al. v. Safeguard Metals LLC and Jeffrey Ikahn, C.D. Cal. Civil No.: 2:22-cv-00691-JFW-SKx). On October 20, 2023, the District Court ordered that defendants Safeguard Metals LLC and Ikahn comply with certain undertakings and requirements in a Consent Order of Permanent Injunction and Other Statutory and Equitable Relief entered by the District Court against the defendants. The judicial Consent Order obviated the need for a trial on the merits. Customer restitution and civil monetary penalties were slated to be considered in the next phase of the federal action.
The judicial Consent Order found that, between October 2017 and July 2021, the defendants deceived more than 450 customers nationwide into purchasing precious metals through false and misleading statements. Most of the defendants’ customers were elderly. More specifically, the defendants defrauded customers into establishing self-directed retirement accounts, with Safeguard Metals LLC as depository, to buy precious metals; charged exorbitant price markups on silver coins purchased by customers; misrepresented to customers how defendants earned profits; and lulled customers into a false sense of security by making misrepresentations about the value of the customers' precious metals or their safety as an investment. The Consent Order also found that the defendants violated the antifraud provisions in Section 6(c)(1) of the Commodity Exchange Act, 7 U.S.C. § 9(1), and CFTC Regulation 180.1(a)(1)-(3), 17 C.F.R. § 180.1(a)(1)-(3) (2022).
Significantly, the judicial Consent Order also found that the defendants violated the antifraud provisions in the participating state jurisdictions’ securities laws and transacted business as an investment adviser and investment adviser agent while unregistered with the states.
The judicial Consent Order permanently enjoined the defendants from engaging in violative conduct. By agreeing to the Consent Order, the defendants also consented to the entry of an administrative order by the states banning or barring the defendants from participating in the commodities or securities industries, including, without limitation, any position of employment, management, or control of any broker dealer, investment advisor, or commodity advisor.
Jorge L. Perez