The Department of Banking News Bulletin 

Bulletin # 2093
Week Ending April 2, 2004

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

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 Financial Institutions Division, (860) 240-8180.
Note: dates are listed in month/day/year format.

State Credit Union Activity

CONVERSION

On March 30, 2004, pursuant to Section 36a-136 of the Connecticut General Statutes, as amended by Public Act 03-196,and Section 36-142m-11(a) of the Regulations of Connecticut State Agencies, the Commissioner issued a Certificate of Authority authorizing The New Haven Savings Bank to operate as a state chartered capital stock savings bank to be known as NewAlliance Bank. In connection with the conversion to a capital stock bank, NewAlliance Bankshares, Inc., will be formed as the holding company of NewAlliance Bank.

ACQUISITION AND MERGER

On March 30, 2004, pursuant to Section 36a-185 of the Connecticut General Statutes, the Commissioner issued a notice of intent not to disapprove the acquisition by NewAlliance Bancshares, Inc., a corporation to be formed as the holding company of NewAlliance Bank, of 100 percent of the voting securities of Connecticut Bancshares, Inc., and indirectly The Savings Bank of Manchester, and 100 percent of the voting securities of Alliance Bancorp of New England, Inc., and indirectly Tolland Bank. Also on March 30,2004, pursuant to Section 36a-125 of the Connecticut General Statutes, the Commissioner approved the merger of The Savings Bank of Manchester and Tolland Bank with and into NewAlliance Bank.

APPLICATION FOR DE NOVO BRANCH WITHDRAWN

On April 1, 2004, U.S. Bank Trust National Association, a national banking association with its main office in Wilmington, Delaware, withdrew its application, filed pursuant to Sections 36a-412(a)(2) and 36a-145(c)(1) of the Connecticut General Statutes, to establish a de novo limited branch at 225 Asylum Street, 23^rd Floor, Hartford, Connecticut.

NEW BANK ACTIVITY

On March 30, 2004, pursuant to Section 36a-70(i) of the Connecticut General Statutes, the Commissioner approved the application filed by the organizers of Higher One Bank (In Organization) to extend the period for which the Temporary Certificate of Authority is valid from March 31, 2004 to April 1, 2005.

CHECK CASHING SERVICE LICENSE ACTIVITY

On March 29, 2004, pursuant to Section 36a-581 of the Connecticut General Statutes, Topstone Associates LLC filed an application to operate a check cashing service general facility at 1101 Huntingdon Avenue, Waterbury, Connecticut.

SECURITIES AND BUSINESS INVESTMENTS DIVISION
Order to Cease and Desist, Notice of Intent to Fine Issued
in Connection With Unregistered Agent of Issuer Activity,
Sales of Unregistered Promissory Notes

On March 30, 2004, the Commissioner issued an Order to Cease and Desist and Notice of Intent to Fine against Phymed Partners, Inc. of 710 Miami Springs Drive, Longwood, Florida. The action alleged that from June 1999 to January 1, 2001, the respondent violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered securities in the form of promissory notes; and that, during such time frame, the respondent employed an unregistered agent of issuer in contravention of Section 36b-6(b) of the Act. Phymed Partners, Inc. 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 set for June 15, 2004.

Steven Douglas Klein Ordered to Cease and Desist
from Regulatory Violations; Notice of Intent to Fine Issued

On March 29, 2004, the Commissioner issued an Order to Cease and Desist and Notice of Intent to Fine against Steven Douglas Klein of 1549 August Road, North Babylon, New York. From at least October 1989 to September 23, 2003, the respondent was the president and 5% owner of Ameriprop, Inc., a broker-dealer. The Order to Cease and Desist and Notice of Intent to Fine alleged that, in that capacity, respondent Klein was the authorized signatory on the Form BDW (Uniform Request for Broker-dealer Withdrawal) filed by Ameriprop, Inc. and on the Form U-5 (Uniform Termination Notice for Securities Industry Registration) filed by Ameriprop, Inc. and relating to respondent Klein’s association with that firm. The action also alleged that in October 2003, the respondent filed a Form U-4 (Uniform Application for Securities Industry Registration or Transfer) to apply for registration as a broker-dealer agent of Seidel & Shaw, LLC. Specifically, the action claimed that respondent Klein violated Section 36b-23 of the Connecticut Uniform Securities Act and Section 36b-31-14e(a) of the Regulations thereunder by failing to address in the filings a June 23, 2003 Notice of Opportunity for Hearing issued by the Georgia Commissioner of Securities against respondent Klein and Ameriprop, Inc. The Georgia Notice had informed respondent Klein and Ameriprop, Inc. that the State of Georgia intended to issue an Order of Censure and Imposition of Civil Penalty against them based upon alleged violations of the Georgia Securities Act of 1973.

Respondent Klein was afforded 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 June 1, 2004.

Broker-dealer Assessed $110,000 for Penalizing Representatives
Who Moved Client Funds to Wrap Accounts

On March 29, 2004, the Commissioner entered a Consent Order with respect to American Express Financial Advisors Inc., a broker-dealer registered under the Connecticut Uniform Securities Act. The firm maintains its principal office at 707 Second Avenue South, Minneapolis, Minnesota. The Consent Order alleged that the firm had acted improperly by not disclosing to clients that representatives of the firm were being penalized $1,000 per occurrence if they moved client funds held less than 30 months from a mutual fund to a wrap account. The firm has since discontinued that policy. In addition, the Consent Order alleged that American Express Financial Advisors, Inc. had provided inaccurate information to the agency. The Consent Order fined the firm $110,000. Of that amount, $100,000 constituted an administrative fine and $10,000 represented reimbursement for agency investigative costs. In entering the Consent Order, the Commissioner acknowledged that the firm had agreed to reimburse thirty-two Connecticut representatives $42,000 in penalties assessed against them by the firm for moving certain client funds to wrap accounts.

Broker-dealer Agent Fined $5,000
for Failing to Provide Records to the Department

On March 26, 2004, the Commissioner entered a Consent Order with respect to Robert Pierce Onthank, Sr. of Fairfield, Connecticut. Robert Onthank, Sr. had been registered as a broker-dealer agent of VFinance Investments, Inc. under the Connecticut Uniform Securities Act. VFinance Investments, Inc. maintained its principal office at 3010 North Military Trail, Suite 300, Boca Raton, Florida. The Consent Order alleged that, at various times between March 2003 and December 2003, Robert Onthank failed to provide records to the Commissioner in a timely manner, conduct that, if proven, would have then supported the suspension, revocation or restriction of Robert Onthank, Sr.’s broker-dealer agent registration. The Consent Order directed Robert Onthank to cease and desist from violating those regulatory provisions relating to agency examinations; pay a $5,000 fine; and refrain from effecting securities transactions for five business days commencing on April 12, 2004.

Broker-dealer Registration Revoked

On April 2, 2004, the Commissioner entered an Order Revoking Registration as Broker-dealer against Indianapolis Securities, Inc. The firm maintains offices at 4729 North Congress Avenue, Boynton, Beach, Florida and 139 North Central Avenue, Suite 4, Valley Stream, New York. The revocation order followed a February 2, 2004 Notice of Intent to Revoke Registration as Broker-dealer alleging that : 1) on July 30, 2003, the United States District Court for the District of Columbia had entered a preliminary injunction by consent against the respondent prohibiting it from violating the antifraud provisions of the federal securities laws; 2) on October 29, 2003, the Division of Securities of the Wisconsin Department of Financial Institutions had revoked the respondent’s registration as a broker-dealer after finding that the respondent executed orders for the sale of unregistered securities, recommended that a customer engage the services of an unregistered investment adviser, broker-dealer or agent, engaged in unauthorized trading; and made material misrepresentations to, and withheld information from, the Wisconsin Division of Securities; and 3) on November 4, 2003, the NASD suspended the respondent for failing to pay arbitration fees pursuant to NASD Rule 9531. The allegations were subsequently adopted as findings in the revocation order. The respondent did not contest the revocation of its broker-dealer registration.

Consent Order Conditioning Registration as Broker-dealer Issued

On April 2, 2004, the Commissioner entered a Consent Order conditioning the broker-dealer registration of Landers & Co. LLC f/k/a Landers, Lane & Moseley Capital Partners LLC of 1177 High Ridge Road, Stamford, Connecticut. The firm had been the subject of a September 5, 2003 Notice of Intent to Deny Registration as Broker-dealer alleging that 1) Frederick Strong Moseley IV, a control person of the firm, was also a control person of Triumph Capital Group, Inc.; and 2) Frederick Strong Moseley IV wilfully violated the Connecticut Uniform Securities Act by failing to disclose in his agent application that Triumph Capital Group, Inc. had been found guilty of racketeering for state-law bribery and obstruction of justice; racketeering conspiracy for state-law bribery and obstruction of justice; bribery concerning programs receiving federal funds; wire fraud/theft of honest services; and obstruction of justice. The Consent Order Conditioning Registration as Broker-dealer prohibited the firm for five years from 1) employing or engaging Frederick Strong Moseley IV as an agent, investment adviser agent, broker-dealer or investment notwithstanding any definitional exclusion or exemption covering such activity by Moseley; 2) permitting Moseley to act as an officer, director, voting partner or employee of the firm or any of its successors; 3) permitting Moseley to hold a voting interest directly in the firm or any of its successors; 4) compensating Moseley in the form of finder’s fees, transaction fees or referral fees for activities with the firm, its successors or affiliates; 5) permitting Moseley to engage in the investment banking or securities business of the firm or its successors; and 6) permitting Moseley to supervise or train persons associated with the firm or its successors. Landers & Co. LLC f/k/a Landers, Lane & Moseley Capital Partners LLC became registered as a broker-dealer under the Connecticut Uniform Securities Act on April 2, 2004.