The Department of Banking News Bulletin 

 Bulletin # 2111
Week Ending August 6, 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
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 Financial Institutions Division, (860) 240-8180.

On August 2, 2004, pursuant to Section 36a-70 of the Connecticut General Statutes, as amended by Public Acts 03-19 and 03-259, a temporary certificate of authority was issued to the organizers of Darien Rowayton Bank for the purpose of conducting the business of a bank and trust company in Darien, Connecticut.

CONVERSION & ACQUISITION

On August 6, 2004, pursuant to Section 36a-137 of the Connecticut General Statutes, as amended by Public Act 03-259, approval was granted to Putnam Savings Bank to convert from a capital stock Connecticut bank to a federal savings bank. Also on August 6, 2004, pursuant to Section 36a-185 of the Connecticut General Statutes, as amended by Public Act 03-259, the Commissioner issued a notice of intent not to disapprove the direct and indirect acquisition by PSB Holdings, Inc., and Putnam Bancorp, MHC of 100 percent of the voting securities of Putnam Savings Bank immediately following the conversion.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Phymed Partners, Inc. Fined $20,000 for Selling Unregistered Promissory Notes,
Employing Unregistered Agent of Issuer

On July 29, 2004, the Commissioner entered an Order Imposing Fine (Docket No. CF-2004-6761-S) against Phymed Partners, Inc. of 710 Miami Springs Drive, Longwood, Florida. The Order had been preceded by a March 30, 2004 Order to Cease and Desist and Notice of Intent to Fine (Docket No. CF 2004-6761-S) alleging 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 employed an unregistered agent of issuer in contravention of Section 36b 6(b) of the Act. Phymed Partners, Inc. did not contest the Order to Cease and Desist which became permanent on April 20, 2004. Similarly, the Respondent did not contest the imposition of a $20,000 fine based upon findings that the respondent violated Sections 36b-16 and 36b-6(b) of the Act.

Criterion Investment Capital LLC - Hedge Fund Manager Fined $130,000
for Engaging in Securities Fraud

On July 29, 2004, the Commissioner entered an Order Imposing Fine (Docket No. CF-2004-6420-S) against Criterion Investment Capital LLC of One Lafayette Place, Greenwich, Connecticut. The respondent, which was run by Eddie Papic and Wilder Douglas Carnes, is the general partner of Criterion Investment Fund I L.P., a Connecticut-based hedge fund. The Respondent had been the subject of a February 5, 2004 Order to Cease and Desist (Docket No. CF-2004-6420-S) which, being uncontested, became permanent on February 27, 2004.

In fining the Respondent $130,000, the Commissioner found that, in connection with offers and sales of hedge fund interests effected from at least January 2001 to January 2002, the Respondent violated the antifraud provisions in Section 36b-4 of the Connecticut Uniform Securities Act by (1) not disclosing that, contrary to representations made to prospective investors, hedge fund interests were being sold for less than $500,000 to non-accredited investors; (2) not disclosing that, although the offering circular represented that the hedge fund's objective was to achieve long term appreciation, the average investment was only 19 days in duration; (3) not disclosing that, contrary to representations made in the offering circular, hedge fund trading focused on options; (4) misrepresenting the hedge fund's performance; (5) misrepresenting the fund's total deposits; and (6) failing to disclose the past bankruptcies of Eddie Papic and Wilder Douglas Carnes. In addition, the Commissioner found that the Respondent violated Section 36b-6(c) of the Act by transacting business as an unregistered investment adviser and by employing Eddie Papic and Wilder Douglas Carnes as unregistered investment adviser agents. The Respondent did not contest the imposition of the fine.