On April 16, 2007, the Commissioner entered a Consent Order with respect to UBS Financial Services, Inc., a broker-dealer registered under the Connecticut Uniform Securities Act.  The Consent Order alleged that from 2000 through 2002, the firm failed to implement adequate supervisory controls over market timing activity involving mutual funds, variable annuities or any other products having mutual funds as the underlying investment vehicle.  The Consent Order also alleged that the firm failed to maintain certain books and records in violation of Section 36b-31-14a of the Regulations under the Act.  The Consent Order acknowledged that the firm had taken recent steps to improve its oversight of marketing timing activity, and had cooperated with the agency’s investigative efforts.  The Consent Order fined the firm $1,500,000.  In addition, the Consent Order directed the firm to pay 1) $1,250,000 to the State of Connecticut Department of Education to promote financial literacy initiatives in Connecticut public schools and state-funded adult education programs; 2) $1 million over three years to the State of Connecticut Department of Higher Education to promote financial literacy initiatives in Connecticut colleges and universities; 3) $1.5 million over three years to the State of Connecticut Department of Social Services to promote financial literacy initiatives benefiting low-income and elderly persons in Connecticut;  and 4) $250,000 over two years to the National White Collar Crime Center to train Connecticut regulatory and law enforcement personnel in investigating, preventing and prosecuting financial fraud perpetrated on Connecticut senior citizens.

On April 25, 2007, the Commissioner issued a Consent Order Conditioning Registration as a Broker-dealer with respect to MLP Real Estate Securities, Inc., a newly formed entity and applicant for broker-dealer registration located at 555 Capitol Mall, Suite 766, Sacramento, California.  The action alleged that the applicant’s sole officer did not satisfy the securities-related experience requirements prescribed by Section 36b-31-7a of the Regulations under the Connecticut Uniform Securities Act.   As a condition to registering the firm, the Consent Order required, among other things, that the firm 1) restrict its business for two years to institutional investors and to “accredited” investors as defined in Rule 501(a) of federal Regulation D; 2) restrict its business to the sale of private placements that were either registered under the Act or the subject of an exemptive claim or claim of covered security status; and 3) provide the agency with quarterly written reports for two years concerning any securities-related complaints, actions or proceedings involving Connecticut residents.  The firm became registered as a broker-dealer in Connecticut on April 25, 2007.

On April 26, 2007, the Commissioner entered a Consent Order with respect to L & L Financial Holdings, Inc., a securities issuer located at 720 Third Avenue, Suite 1611, Seattle, Washington.  The Consent Order alleged that L & L Financial Holdings, Inc. employed Stephen Patrick Johnston of California as an Investor Relations Executive; that Johnston would receive a 35% commission, paid in cash upon the closing of investor subscriptions and based on the total investment funds generated through Johnston’s efforts; that in 2004, Johnston made at least one sale of the issuer’s Class A common stock to a Connecticut investor and received $1,750 in commissions for that activity; that, at no time, was Johnston registered as an agent of issuer or as a broker-dealer or broker-dealer agent under the Connecticut Uniform Securities Act; and that the Class A common stock was not registered under the Act nor was it the subject of a perfected exemption claim or claim of covered security status.  The Consent Order further recited that, on May 16, 2006, the State of California Department of Corporations had entered a Desist and Refrain Order against the issuer, Johnston and International Market Group, Inc., a Nevada corporation of which Johnston was president, based on claims that from May 2003 through at least October 2004, they sold unregistered common stock and warrants through unsolicited telephone calls and engaged in fraudulent conduct by not telling investors that Johnston was receiving a 35% commission.  The Consent Order also noted that the issuer had represented to the agency that 1) in April 2005, it had extended a $5,000 offer of rescission to the affected Connecticut investor; 2) since August 2004, it had not made any securities offerings in Connecticut; 3) it had severed its relationship with Johnston and not engaged any unregistered person since; and 4) it would comply with Connecticut agent registration requirements prior to offering securities in Connecticut.

The Consent Order directed the issuer to refrain from engaging in violative conduct, and barred the issuer for 10 years from selling securities in or from Connecticut notwithstanding any claim of exemption or covered security status that it could otherwise assert.  In addition, the Consent Order required that the issuer pay $2,500 to the department.  Of that amount, $1,500 constituted an administrative fine and $1,000 represented reimbursement for division investigative costs.

On April 25, 2007, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Revoke Sales Finance Company License, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) with respect to Condor Capital Corp. (“Condor”) located at 800 South Oyster Bay Road, Hicksville, New York.  The Notice was based on the allegations that Condor: failed to respond to correspondence sent by the department which constitutes a failure to otherwise cooperate with the Commissioner in violation of Section 36a-17(d) of the Connecticut General Statutes (“General Statutes”); failed to pay a civil judgment which illustrates a lack of financial responsibility, character, reputation, integrity and general fitness such as to warrant belief that Condor’s business will not be operated soundly and efficiently, in the public interest and consistent with the purposes of Sections 36a-535 to 36a-546, inclusive, of the General Statutes; submitted a renewal application that contained incorrect information which constitutes a material misstatement or failure to give a true reply in an application for a license, and the filing of a statement that, at the time and in light of the circumstances under which it is made, was false or misleading in a material respect in violation of Section 36a-53a of the General Statutes.  In the Notice the Commissioner states that the alleged violations form a basis to issue an order to cease and desist against Condor and constitute sufficient grounds to revoke Condor’s sales finance license and impose a civil penalty upon Condor not to exceed $200,000.  Condor was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.  A copy of the Notice can be obtained from the department's website, www.ct.gov/dob or by contacting the department's Legal Division.

       Howard F. Pitkin

       Banking Commissioner