The Department of Banking News Bulletin

Bulletin # 1973
Week Ending December 14, 2001

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, Commissioner of Banking, 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 Section 36a-70 of the Connecticut General Statutes, a hearing has been scheduled for January 7, 2002 at 2:00 p.m. in Room 50 of the Department of Banking, 260 Constitution Plaza, Hartford, Connecticut, concerning the application filed on May 1, 2001 by the organizer of Customers' Bank to organize a bank and trust company in West Haven, Connecticut.

Pursuant to Section 36a-70 of the Connecticut General Statutes, on December 11, 2001, the Commissioner issued a temporary certificate of authority to the organizer of Higher One Bank for the purpose of conducting the business of a bank and trust company in New Haven, Connecticut, to operate as a community bank.

NAME CHANGE

Pursuant to Section 36a-82 of the Connecticut General Statutes, on December 10, 2001, Southington Savings Bank, Southington, filed an application for permission to change its name to SSB. Written objection to the application may be made for a period of 30 days from the date of publication of this bulletin on the grounds that the name selected will tend to confuse the public.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Marathon Financial Group, Inc. Assessed $6,950 in Conjunction With
Unregistered Broker-dealer Activity

On December 10, 2001, the Commissioner entered a Consent Order with respect to Marathon Financial Group, Inc., an applicant for broker-dealer registration under the Connecticut Uniform Securities Act. The firm maintains its principal office at 150 South Wacker Drive, Chicago, Illinois. The Consent Order alleged that, in at least two instances in 2000, the firm transacted business as a broker-dealer absent registration in violation of Section 36b-6(a) of the Act. The Commissioner acknowledged the firm's representations that the investors in question were accredited and had formerly been employed in the securities industry.

The Consent Order required that the firm furnish proof that it had advised the investors of their statutory rights and remedies under the state's securities laws, and directed the firm to implement revised supervisory and compliance procedures designed to improve regulatory compliance. The Consent Order also required that the firm provide quarterly reports for two years concerning any securities-related complaints, actions or proceedings involving Connecticut residents. In addition, the Consent Order required that the firm pay $6,950 to the department. Of that amount, $5,000 constituted an administrative fine, $1,500 constituted reimbursement for division investigative costs and $450 represented reimbursement for past due registration fees.

Marathon Financial Group, Inc. became registered as a broker-dealer under the Act on December 10, 2001.

Royal Alliance Associates, Inc. Assessed $14,500 for Violating Prior
Stipulation and Agreement;
Transacting Business from Unregistered Branch Offices

On December 10, 2001, the Commissioner entered a Consent Order with respect to Royal Alliance Associates, Inc. of 733 Third Avenue, New York, New York. The Consent Order claimed that, commencing in 1994 and 1995, respectively, the firm transacted business from two unregistered branch offices in violation of Section 36b-6(d) of the Connecticut Uniform Securities Act. The offices were located at 66 Crown Street in Trumbull and 320 West Hill Road in Stamford. Royal Alliance Associates, Inc. had been the subject of an October 14, 1992 Stipulation and Agreement that obligated the firm not to transact business from any Connecticut place of business unless that location was effectively registered as a branch office.

The Consent Order fined the firm $10,000 for violating the prior Stipulation and Agreement with the agency; imposed a $3,000 fine for failing to register the Stamford and Trumbull sites as branch offices; and required that the firm reimburse the department $1,500 for investigative costs. In addition, the Consent Order mandated that the firm engage an independent consultant to make recommendations on improving the firm's compliance and supervisory procedures as they related to state and SRO branch office registration requirements. In addition, the Consent Order directed the firm to issue to each of its Connecticut agents a written compliance notice explaining Connecticut's branch office registration requirements as well as the firm's supervisory obligations in connection with those requirements.

Albert Williams Barred from Conducting Securities Activity for Two Years
Following Sales of Unregistered Promissory Notes and Preferred Stock

On December 10, 2001, the Commissioner entered a Consent Order with respect to Albert Williams, 945 Main Street, Suite 312, Manchester, CT 06040. The Consent Order alleged that, between December 1998 and September 1999, respondent Williams sold unregistered non-exempt promissory notes of Tri-National Development Corporation and preferred stock of Palm Beach Investment Group, Inc. in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that, in so doing, respondent Williams acted as an unregistered agent of issuer in contravention of Section 36b-6(a) of the Act. In entering the Consent Order, the Commissioner acknowledged that the one Palm Beach Investment Group, Inc. investor had received back the investor's principal plus interest in full.

The Consent Order barred respondent Williams for two years from transacting business in Connecticut as a broker-dealer, investment adviser, broker-dealer agent, investment adviser agent, agent of issuer or seller of business opportunities. In addition, the Consent Order fined respondent Williams $2,000 and required that he reimburse the department $500 for agency investigative costs. The Consent Order also directed respondent Williams to cease and desist from engaging in conduct that would violate the state's securities laws.

David Hajdasz d/b/a Prodeo Financial Services -
Conditional Order of Registration Issued

On December 10, 2001, the Commissioner issued a Consent Order under the Connecticut Uniform Securities Act conditioning the investment adviser registration of David Hajdasz d/b/a Prodeo Financial Services of 45 Jimmy Lane, Meriden, Connecticut. In conditioning the registration, the Commissioner noted that David Hajdasz had not been employed previously in the securities business as an agent, investment adviser agent, broker-dealer, investment adviser or related capacity for the three-year period prescribed by the Regulations under the Act.

Pursuant to the Consent Order, David Hajdasz agreed to 1) refrain from having custody or control of client funds or securities for three years; 2) refrain for three years from exercising discretionary authority over client accounts; 3) limit his investment advisory business for three years to fee-only financial planning and not receive any securities sales-related remuneration; 4) limit his investment advice for three years to securities listed on the New York Stock Exchange, the American Stock Exchange and/or NASDAQ-NMS; certificates of deposit; corporate debt; municipal securities; investment company securities; and United States Government securities; 5) complete at least 16 hours of professional training relating to the fiduciary, ethical and blue sky compliance obligations of securities industry personnel within 18 months; and 6) for three years, provide quarterly reports to the department concerning any securities-related complaints, actions or proceedings.

David Hajdasz d/b/a Prodeo Financial Services became registered as an investment adviser in Connecticut on December 10, 2001.

Anthony Brooks Fined $30,000 for Selling Bogus Investments

On December 12, 2001, the Commissioner entered an Order Imposing Fine against Anthony Brooks of Stamford, Connecticut. The respondent had been the subject of a July 25, 2001 Order to Cease and Desist which, being uncontested, became permanent on September 6, 2001.

In fining the respondent $30,000, the Commissioner found that from at least 1998 forward, respondent Brooks, acting on behalf of Integrated Financial Solutions, solicited investors to purchase non-existent shares of Venture Investments - Aggressive Growth A and of Decatur Daniels Investments; that the respondent used investor funds to benefit himself and his spouse, and that the respondent misrepresented to investors on their individual account summaries that their funds were invested in Venture Investments - Aggressive Growth A and Decatur Daniels Investments. The Commissioner determined that such conduct violated the antifraud provisions of the Connecticut Uniform Securities Act, that the respondent had transacted business as an unregistered broker-dealer agent of Integrated Financial Solutions, and that the bogus investments were not registered under the Connecticut Uniform Securities Act. Respondent Brooks did not contest the agency's action.

Integrated Financial Solutions Fined $40,000 for Selling Bogus Investments

On December 12, 2001, the Commissioner entered an Order Imposing Fine against Integrated Financial Solutions of 1450 Washington Boulevard, Stamford, Connecticut. Integrated Financial Solutions had been the subject of a July 25, 2001 Order to Cease and Desist based upon the same conduct; the Order to Cease and Desist, being uncontested, had become permanent on September 6, 2001.

In fining the respondent $40,000,the Commissioner found that, from at least 1998 forward, the respondent, acting through one or more unregistered agents, solicited investors to purchase non-existent shares of Venture Investments - Aggressive Growth A and of Decatur Daniels Investments; that the respondent participated in a scheme whereby its agent used investor funds to benefit himself and his spouse, and that the respondent misrepresented to investors on their individual account summaries that their funds were invested in Venture Investments - Aggressive Growth A and Decatur Daniels Investments. The Commissioner determined that such conduct violated the antifraud provisions of the Connecticut Uniform Securities Act; that the respondent transacted business as an unregistered broker-dealer and employed unregistered agents, and that the bogus investments were not registered under the Connecticut Uniform Securities Act. The respondent did not contest the agency's action.

Harry D. Finley, IV a/k/a H.D. Finley Company Ordered to Cease and Desist
from Regulatory Violations; Notice of Intent to Fine Issued

On December 10, 2001, the Commissioner entered an Order to Cease and Desist and Notice of Intent to Fine against Harry D. Finley, IV a/k/a H.D. Finley Company of 105 Guernseytown Road, Watertown, Connecticut. The Order to Cease and Desist and Notice of Intent to Fine alleged that, from at least April 1998 to February 1999, the respondent sold unregistered non-exempt promissory notes of Pacific Air Transport, Inc., Redbank Petroleum, Inc., Caffe Diva Group, Ltd., World Vision Entertainment, Inc. and Technical Support Services, Inc. in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that, in so doing, the respondent transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act.

The respondent was provided with an opportunity to request a hearing on the Order to Cease and Desist. A hearing on the Notice of Intent to Fine has been scheduled for January 29, 2002.

Tri-National Development Corp. Fined $20,000 for
Unregistered Promissory Note Sales

On December 10, 2001, the Commissioner entered an Order Imposing Fine against Tri-National Development Corp. of 480 Camino Del Rio South, Suite 140, San Diego, California. The respondent had been the subject of a July 16, 2001 Order to Make Restitution and Notice of Right to Hearing and a July 16, 2001 Restated Order to Cease and Desist and Restated Notice of Intent to Fine that superseded an April 17, 2001 Order to Cease and Desist and Notice of Intent to Fine based upon the same conduct. Both the Restated Order to Cease and Desist and the Order to Make Restitution, being uncontested, had become permanent on October 9, 2001.

In fining the firm $20,000, the Commissioner found that, from at least April 1999 forward, the respondent sold unregistered non-exempt promissory notes to at least seventeen Connecticut investors through at least four unregistered agents of issuer in violation of Sections 36b-16 and 36b-6(b) of the Connecticut Uniform Securities Act.

The respondent did not contest the Commissioner's imposition of the $20,000 fine.