The Department of Banking News Bulletin 

Bulletin # 1878
Week Ending February 18, 2000

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 John P. Burke, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail to john.burke@ct.gov. Written comments will be considered only if they are received within ten days from the date of this bulletin.

STATE BANK ACTIVITY
Branch Activity

Section 36a-145 of the Connecticut General Statutes requires that each application for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided. Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days. Questions concerning branch activity should be directed to the Bank Examination Division, (860) 240-8180.
Note: dates are listed in month/day/year format.

Pursuant to the provisions of Section 36a-581(d) of the Connecticut General Statutes, on February 14, 2000, Check Stop Incorporated applied to relocate its licensed check cashing service general facility from 86 Beaver Street, New Britain, Connecticut to 121 Main Street, Suite 116, New Britain, Connecticut.

Pursuant to the provisions of Section 36a-581(d) of the Connecticut General Statutes, on February 15, 2000, Connecticut Finance Corp. was approved to relocate its licensed check cashing service general facility from 96 Golden Hill Street, Bridgeport, to 2336-2338 Fairfield Avenue, Bridgeport.

Pursuant to Section 36a-600 of the Connecticut General Statutes, on February 16, 2000, PayStation America, Inc. filed an application to engage in the business of receiving money for transmitting the same.

SECTION 36a-425 APPLICATION

On February 17, 2000, an application was filed by Citigroup, Inc. to establish an office of its subsidiary, Source One Mortgage Corporation, a Delaware corporation, at 100 Queen Street, Suite 5, Southington, Connecticut.

ACQUISITION AND MERGER

On February 16, 2000, pursuant to Section 36a-184 of the Connecticut General Statutes, Webster Financial Corporation, a Delaware corporation, filed an acquisition statement for the acquisition of MECH Financial, Inc., and indirectly, Mechanics Savings Bank. Immediately following the acquisition, Mechanics Savings Bank will be merged with and into Webster Bank, a wholly-owned subsidiary of Webster Financial Corporation. In connection with the acquisition, Webster Financial Corporation also filed, on behalf of Mechanics Savings Bank, Webster Bank and itself, a community reinvestment plan which is available for public inspection and comment at the Department of Banking for a period of 30 days.

SECURITIES AND BUSINESS INVESTMENTS DIVISION
Broker-dealer Assessed $15,000; Directed to Extend $40,000
Rescission Offer for Unregistered Agent Activity

On February 10, 2000, a Consent Order was entered with respect to Prime Charter, Ltd., a securities broker-dealer having its principal office at 810 Seventh Avenue, 9th Floor, New York, New York. The Consent Order was based on claims that 1) from approximately February 1998 through September 1998, the firm employed one or more unregistered agents in alleged contravention of Section 36b-6(b) of the Connecticut Uniform Securities Act; 2)the firm permitted a Connecticut registered agent to share compensation derived from Connecticut securities transactions with unregistered personnel; and 3) the firm failed to exercise adequate supervisory controls over its agents by acquiescing to such sharing of compensation.

The Consent Order directed the firm to extend to the affected Connecticut investor a written rescission offer, including interest, to cover approximately $40,000 in losses sustained in the account. In addition, the Consent Order assessed the firm $15,000. Of that amount, $10,000 constituted an administrative fine and $5,000 represented reimbursement for agency investigative costs as well as the disgorgement of commissions earned during the period of unregistered agent activity. Other terms included a requirement that the firm 1) revise its compliance procedures and submit a confirming report describing the nature and scope of the revisions; and 2) for two years, file quarterly reports concerning any securities-related complaints, actions or proceedings involving Connecticut residents.

Securities Firm Ordered to Cease and Desist
from Regulatory Violations; Notice of Intent to Fine Issued

On February 14, 2000, an Order to Cease and Desist was entered and a Notice of Intent to Fine and Notice of Right to Hearing was issued against Corlogic Corporation of 762 Boston Post Road, Madison, Connecticut and Theodore William Russell, now or formerly of 44 Middle Beach Road West, Madison, Connecticut. The Order to Cease and Desist and Notice of Intent to Fine were predicated on claims that from 1999, Corlogic Corporation and Russell sold nine month and three month promissory notes, some with common stock warrants attached, from Connecticut to multiple investors, and that the total amount sold exceeded $2 million. The notes were not registered under the Connecticut Uniform Securities Act. The Order to Cease and Desist and Notice of Intent to Fine also asserted that Corlogic Corporation violated the antifraud provisions of the Act by failing to disclose to investors that there had been a material change in the number of shares being set aside for the warrant offering that the securities were not registered under the Act and that financial projections for the future value of the Corlogic common stock had been modified. Each respondent was afforded an opportunity for a hearing on the allegations in the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for April 4, 2000.