The Department of Banking News Bulletin
Bulletin # 2440
Week Ending November 26, 2010
Bulletin # 2440
Week Ending November 26, 2010
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 Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.
STATE BANK ACTIVITY
New Bank Activity
On November 23, 2010, pursuant to Section 36a-70(i) of the 2010 Supplement to the General Statutes of Connecticut, Sachem Bank (In Organization) received approval for an extension of the period of its Temporary Certificate of Authority from December 19, 2010 to December 19, 2011.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Stipulation and Agreement
On November 23, 2010, the Banking Commissioner entered into a Stipulation and Agreement with Kjaya, LLC, a Connecticut limited liability company located at 35 Maple Tree Avenue, Unit 6, Stamford, Connecticut. The Stipulation and Agreement alleged that 1) from 2007 to 2009 and prior to its filing of a notice under Rule 506 of Regulation D, Kjaya, LLC sold unregistered securities; and 2) Kjaya, LLC employed one James McMahon as an unregistered agent of issuer in contravention of Section 36b-6(b) of the Connecticut Uniform Securities Act. James McMahon has since filed for agent of issuer registration under the Act. Pursuant to the Stipulation and Agreement, Kjaya, LLC agreed to pay a $1,800 fine and, if it planned future securities offers or sales in or from Connecticut, to retain experienced securities legal counsel to advise it on compliance with the securities laws of Connecticut and other jurisdictions. The obligation to retain securities legal counsel would run for three years following the Commissioner’s execution of the Stipulation and Agreement.
Order to Cease and Desist, Notice of Intent to Fine and Notice of Intent
to Revoke Registration as Broker-dealer Issued
On November 23, 2010, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Revoke Registration as Broker-dealer and Notice of Intent to Fine against Meyers Associates, L.P., a Connecticut-registered broker-dealer located at 45 Broadway, Second Floor, New York, New York. The action alleged that the firm violated Section 36b-6(b) of the Connecticut Uniform Securities Act by employing unregistered agents; and that the firm sold unregistered securities in contravention of Section 36b-16 of the Act. In addition, the action alleged that the firm engaged in fraudulent, dishonest and unethical conduct by failing to disclose to Connecticut customers that a “handling fee” charged by the firm included a profit to the firm, that certain customers paid lower fees and that the fee was not based on the costs of handling a particular transaction. The action also alleged that the firm failed to exercise adequate supervisory controls over its operations. Meyers Associates, L.P. was afforded an opportunity to request a hearing on the Order to Cease and Desist, Notice of Intent to Fine and Notice of Intent to Revoke Registration as Broker-dealer.
Order to Cease and Desist and Notice of Intent to Fine Issued
Order Imposing Fine Issued
In fining Jason Alexander Lawson $40,000, the Commissioner found that Jason Alexander Lawson violated Sections 36b-6(a) and 36b-4(a) of the Act. Respondent Jason Alexander Lawson did not appear or contest the imposition of the fine.
Order Imposing Fine Issued
On November 19, 2010, the Banking Commissioner entered an Order Imposing Fine against Daniel Morris Porter d/b/a D.P. Holdings Inc. of 1390 Vespucci Avenue, Copiague, New York and 109 Maple Parkway, Staten Island, New York. The respondent had been the subject of an August 23, 2010 Order to Cease and Desist and Notice of Intent to Fine alleging that he participated in a transaction involving procuring funds from a Connecticut investor for the purported purpose of investing in securities of Ionic Water Technologies Inc. In reality, the investor’s monies were deposited into a J. Lawson & Associates, Inc. bank account established by Daniel Morris Porter and Jason Alexander Lawson who used the investor’s money for their personal use and not for the purchase of securities. The August 23, 2010 action had also alleged that the investor did not receive either Ionic Water Technologies Inc. securities or a return of funds paid. The August 23, 2010 action had further alleged that 1) respondents Daniel Morris Porter and J. Lawson & Associates, Inc. transacted business as broker-dealers in violation of Section 36b-6(a) of the Connecticut Uniform Securities Act and that respondent Jason Alexander Lawson materially aided in such violation; and 2) respondents Daniel Morris Porter and J. Lawson & Associates, Inc., with the material assistance of respondent Jason Lawson, violated the antifraud provisions in Section 36b-4(a) of the Act. Since respondent Daniel Morris Porter did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent as to him on September 11, 2010.
In fining Daniel Morris Porter $50,000, the Commissioner found that Daniel Morris Porter violated Sections 36b-6(a) and 36b-4(a) of the Act. Respondent Daniel Morris Porter did not appear or contest the imposition of the fine.
Order Imposing Fine Issued
In fining J. Lawson & Associates, Inc. $50,000, the Commissioner found that the respondent violated Sections 36b-6(a) and 36b-4(a) of the Act. Respondent J. Lawson & Associates, Inc. did not appear or contest the imposition of the fine.
Dated: Tuesday, November 30, 2010
Howard F. Pitkin
Banking Commissioner