The Department of Banking News Bulletin

Bulletin # 2026
Week Ending December 20, 2002

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.

BRANCH ACTIVITY
State Bank 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.

On December 16, 2002, pursuant to Section 36a-581 of the Connecticut General Statutes, X-Bankers Money and Mortgages, Inc. received approval to relocate its check cashing service general facility from 983 Main Street, Bridgeport, Connecticut to 1021 Main Street, Bridgeport, Connecticut.

CONVERSION

On December 20, 2002, pursuant to Section 36a-135 of the Connecticut General Statutes, as amended by P.A. 02-47, the Commissioner granted approval to Naugatuck Valley Savings and Loan Association, Naugatuck, Connecticut, to convert from a mutual savings and loan association to a mutual savings bank to be known as "Naugatuck Valley Savings and Loan, S.B.".

DE NOVO BRANCH

On December 16, 2002, pursuant to Section 36a-412(a)(2) of the Connecticut General Statutes, as amended by P.A. 01-76, and Section 36a-145(c)(1) of the Connecticut General Statutes, as amended by P.A. 01-183 and P.A. 02-47, the Commissioner granted approval to U.S. Bank National Association to establish a de novo limited branch at 225 Asylum Street, 23rd Floor, Hartford, Connecticut, to engage solely in trust services.

CONSUMER CREDIT DIVISION ACTIVITY

On December 10, 2002, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, regarding A1 Financial Management Services, Inc. The entity is located at 614 East Atlantic Boulevard, Pompano Beach, Florida. The agency's action was based on the assertion that the entity engaged in the business of debt adjustment in this state without a license, in violation of Section 36a-656 of the Connecticut General Statutes.

On December 10, 2002, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing, regarding Gibson Trust, Inc. The entity is located at 4081 North Federal Highway, Suite 110A, Pompano Beach, Florida. The agency's action was based on the assertion that the entity engaged in the business of debt adjustment in this state without a license, in violation of Section 36a-656 of the Connecticut General Statutes.

On December 11, 2002 the Commissioner issued a Findings of Fact, Conclusions of Law and Order imposing a cease and desist order along with a civil penalty of $7500 against Credit Rescue, Inc., a/k/a National Audit/Credit Rescue, Inc., a/k/a Genesis Corp/Credit Rescue, a/k/a Lynn & Debora Schmutz d/b/a Nat'l Audit/Credit Rescue, a/k/a St. Georges Credit Rescue. The entity is located at 50 East 100 South, Suite 100, St. George, Utah. The agency's action was based on the fact that the respondent violated Section 36a-656 of the Connecticut General Statutes by engaging in the business of debt adjustment without a license.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Broker-dealer Registration Revoked

On December 16, 2002, the Commissioner entered an Order Revoking Registration as Broker-dealer against Hornblower & Weeks, Inc., a securities broker-dealer having its principal office at 110 Wall Street, New York, New York. The action had been preceded by a November 5, 2002 Notice of Intent to Revoke Registration as Broker-dealer. The Commissioner's action in revoking the firm's registration was predicated on May 7, 2002 sanctions imposed by the National Association of Securities Dealers, Inc. suspending the respondent from issuing research reports for six months; fining the respondent $100,000 and censuring the respondent. The NASD sanctions had been based on findings that 1) the respondent was responsible for a research report that recommended the common stock of a securities issuer as a "strong buy" and set a target price of $55 per share, when the stock was trading at approximately $9.19 per share; 2) the research report contained material misrepresentations, unwarranted statements and exaggerations regarding the issuer's business prospects, and failed to disclose material details regarding the issuer's financial condition; 3) the research report and subsequent press release were not based on principles of fair dealing and good faith; and 4) the respondent failed to establish, maintain or enforce adequate supervisory procedures in violation of NASD rules. The respondent did not contest the revocation of its Connecticut broker-dealer registration.

Broker-dealer Agent Registration Revoked

On December 16, 2002, the Commissioner issued an Order Revoking Registration as Agent against John Ryan Rooney of New York, New York. The Order Revoking Registration as Agent had been preceded by a November 5, 2002 Notice of Intent to Revoke Registration as Agent. Respondent Rooney had been registered as a broker-dealer agent of Hornblower & Weeks, Inc. under the Connecticut Uniform Securities Act from November 17, 1994 to October 22, 2002. The revocation order was based on May 7, 2002 sanctions imposed by the National Association of Securities Dealers, Inc. against respondent Rooney and Hornblower & Weeks, Inc. Specifically, the NASD had 1) suspended respondent Rooney for three months from associating with any NASD member in any capacity; 2) suspended respondent Rooney for four months from acting in a principal or supervisory capacity; and 3) imposed an $85,000 fine against respondent Rooney and Hornblower & Weeks, Inc. jointly and severally. The NASD had found that 1) respondent Rooney was responsible for preparing a research report issued by Hornblower & Weeks, Inc. that recommended the common stock of a securities issuer as a "strong buy" and set a target price of $55 per share, when the stock was trading at approximately $9.19 per share; 2) the research report contained material misrepresentations, unwarranted statements and exaggerations regarding the issuer's business prospects, and failed to disclose material details regarding the issuer's financial condition; 3) the research report and subsequent press release were not based on principles of fair dealing and good faith; and 4) respondent Rooney was reckless in not knowing that the research report contained exaggerated, unwarranted and misleading statements regarding the issuer's business prospects and market value. Respondent Rooney did not contest the revocation order.

Broker-dealer Fined $1,000 for Unregistered Branch Office Activity

On December 17, 2002, the Commissioner entered into a Stipulation and Agreement with H&R Block Financial Advisors, Inc., a Connecticut-registered broker-dealer having its principal office at 719 Griswold Street, Detroit, Michigan. The Stipulation and Agreement alleged that, from approximately November 2001 until June 7, 2002, when the firm applied for branch office registration under the Connecticut Uniform Securities Act, the firm transacted business from 90 Providence Street, Putnam, Connecticut and 30 Bank Street, New Milford, Connecticut prior to those locations being registered as branch offices under the Act.

Pursuant to the Stipulation and Agreement, the firm agreed to pay a $1,000 fine to the agency and to implement revised supervisory and compliance procedures designed to prevent and detect violations of Connecticut branch office registration requirements.

Notice of Intent to Revoke Registration as Broker-dealer Issued

On December 18, 2002, the Commissioner issued a Notice of Intent to Revoke the broker-dealer registration of Discovery Capital Group, Inc. The firm maintains its principal office at 2768 North University Drive, Coral Springs, Florida. The action was predicated in part on the October 24, 2002 entry of a permanent injunction against the firm by the United States District Court for the Southern District of Florida (Securities and Exchange Commission v. Discovery Capital Group, Inc. et al., Case No. 02-60363 CIV-HUCK, 3/14/2002) prohibiting the firm from violating the antifraud provisions in Section 17(a) of the Securities Act of 1933 as well as Sections 10(b), 15(c) and 17(a) of the Securities Exchange Act of 1934. The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Broker-dealer.

Notice of Intent to Revoke Registration as Agent Issued

On December 18, 2002, the Commissioner issued a Notice of Intent to Revoke the agent registration of John Patrick Abresch of 6261 NW 125th Avenue, Coral Springs, Florida. The action was based in part on the October 24, 2002 entry of a permanent injunction against the respondent by the United States District Court for the Southern District of Florida (Securities and Exchange Commission v. Discovery Capital Group, Inc., Erik Walsh and John Abresch, Case No. 02-60363 CIV-HUCK, 3/14/2002) prohibiting the respondent from violating the antifraud provisions in Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Agent.

Notice of Intent to Revoke Registration as Agent Issued

On December 18, 2002, the Commissioner issued a Notice of Intent to Revoke the agent registration of Erik Baxter Walsh, president of Discovery Capital Group, Inc. The respondent's last known address is 4450 NW 95th Avenue, Coral Springs, Florida. The action was based in part on the October 24, 2002 entry of a permanent injunction against the respondent by the United States District Court for the Southern District of Florida (Securities and Exchange Commission v. Discovery Capital Group, Inc., Erik Walsh and John Abresch, Case No. 02-60363 CIV-HUCK, 3/14/2002) prohibiting the respondent from violating the antifraud provisions in Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934. The respondent was afforded an opportunity to request a hearing on the Notice of Intent to Revoke Registration as Agent.