The Department of Banking News Bulletin 

Bulletin # 2507 - Week Ending March 9, 2012

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

Branch Activity

Section 36a-145 of the Connecticut General Statutes requires certain applications 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.

CONSUMER CREDIT DIVISION ACTIVITY

Consent Orders

On February 8, 2012, the Commissioner entered into a Consent Order with The Lending Company, Inc. (“TLC”), Phoenix, Arizona.  The Consent Order was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that TLC employed or retained, during the period of October 7, 2009 through April 6, 2010, ten (10) individuals as a mortgage loan originator who were not licensed, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes  As part of the Consent Order, TLC was ordered to pay $10,000 as a civil penalty.

On February 14, 2012, the Commissioner entered into a Consent Order with Shamrock Financial Corporation (“Shamrock Financial”), East Providence, Rhode Island.  The Consent Order was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that Shamrock Financial employed or retained, during the period of November 28, 2007 through July 31, 2009, seven (7) individuals as originators or mortgage loan originators without first registering them, or without such individuals being licensed, in violation of Sections 36a-486(b) and 36a 511(b) of the then applicable Connecticut General Statutes  As part of the Consent Order, Shamrock Financial was ordered to pay $7,000 as a civil penalty.

On February 21, 2012, the Commissioner entered into a Consent Order with Luna’s Pay A Bill, LLC (“Luna’s”), Hartford, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that Luna’s, during the period of May through October 2008, engaged in the business of cashing checks, drafts and money orders for consideration without licensure for a general facility or limited facility at 582 Park Street, Hartford, Connecticut, in violation of Section 36a-581(a) of the then applicable Connecticut General Statutes.  As part of the Consent Order, Luna’s was ordered to pay $1,500 as a civil penalty.

Order Revoking and Refusing to Renew Mortgage Broker License, Order to Cease and Desist and Order Imposing Civil Penalty

On February 14, 2012, the Commissioner issued an Order Revoking and Refusing to Renew Mortgage Broker License, Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the Matter of:  Mortgage Store of Connecticut, LLC, (“Respondent”), Hamden, Connecticut.  The basis of the Order was that Respondent:  (1) employed or retained three (3) individuals who were not registered as originators or licensed as mortgage loan originators, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes; (2) failed to have at its main office a qualified individual as required by Section 36a-488(a)(1)(B) of the Connecticut General Statutes; and (3) answered “no” to Question 29 of its Uniform Manager’s Questionnaire dated August 22, 2011, which response constitutes the making or causing to be made in a document filed with the Commissioner a statement which is, at the time and in the light of the circumstance under which it is made, false and misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes.  The Order (1) revokes and refuses to renew Respondent’s license to act as a mortgage broker in Connecticut; (2) orders Respondent to cease and desist from violating Section 36a-486(b) of the then applicable Connecticut General Statutes and Section 36a-53a of the Connecticut General Statutes, and (3) imposes a civil penalty of $10,000 against Respondent.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Order to Cease and Desist Made Permanent

On March 7, 2012, the Commissioner entered an Order Imposing Fine against Point Stratford Development, LLC f/k/a Hollywood East/Area 51, LLC of Stratford, Connecticut.  The company was a purported digital media and real estate development firm that sought investment capital to acquire a former military aircraft assembly plant in Stratford that was being auctioned off by the U.S. General Services Administration.  The action had been preceded by a December 12, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that respondent Point Stratford Development, LLC sold unregistered Hollywood East securities to investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act.  The December 12, 2011 action had also alleged that Point Stratford Development, LLC violated the antifraud provisions in Section 36b-4(a) of the Act by failing to provide investors with any financial information concerning the respondent; failing to disclose the unregistered status of Hollywood East’s agents; failing to disclose that the Hollywood East securities would be sold to individuals who were not accredited investors; and failing to disclose the estimated cash proceeds of the securities offering.  The December 12, 2012 action had further alleged that respondent Point Stratford Development, LLC failed to disclose specific risks to investors, including risks related to the investment and acquisition of the proposed site from the federal government, including remediation costs; the risk that an economic development bond to fund the project might not be procured; the risk that Hollywood East’s property bid and deposit would be submitted in the name of an unrelated entity; and the risk that Hollywood East, if successful on the bid, would be unable to secure funds for the full purchase price, leading to a default and the forfeiture of Hollywood East’s $1 million deposit.

Since Point Stratford Development, LLC did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent on December 29, 2011.  In fining the respondent $100,000, the Commissioner incorporated as findings the facts set forth in the December 12, 2011 action.  Point Stratford Development, LLC did not appear or contest the imposition of the fine.

Order to Cease and Desist Made Permanent

On March 7, 2012, the Commissioner entered an Order Imposing Fine against Hector Natera, managing member of Point Stratford Development, LLC f/k/a Hollywood East/Area 51, LLC of Stratford, Connecticut.  Hollywood East/Area 51, LLC was a purported digital media and real estate development company that sought investment capital to acquire a former military aircraft assembly plant in Stratford, Connecticut that was being auctioned off by the U.S. General Services Administration.  The action had been preceded by a December 12, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that, during 2007 and 2008, respondent Natera sold unregistered Hollywood East securities to investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act and transacted business as an unregistered agent of issuer in violation of Section 36b-6 of the Act.  The December 12, 2011 action had also alleged that respondent Natera violated the antifraud provisions in Section 36b-4(a) of the Act by failing to provide investors with any financial information concerning the Point Stratford Development, LLC; failing to disclose the unregistered status of Hollywood East’s agents; failing to disclose that the Hollywood East securities would be sold to individuals who were not accredited investors; and failing to disclose the estimated cash proceeds of the securities offering.  The action had further alleged that respondent Natera failed to disclose specific risks to investors, including risks related to the investment and acquisition of the proposed site from the federal government, including remediation costs; the risk that an economic development bond to fund the project might not be procured; the risk that Hollywood East’s property bid and deposit would be submitted in the name of an unrelated entity; and the risk that Hollywood East, if successful on the bid, would be unable to secure funds for the full purchase price, leading to a default and the forfeiture of Hollywood East’s $1 million deposit.

Since respondent Natera did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent on February 2, 2012.  In fining respondent Natera $100,000, the Commissioner incorporated as findings the facts set forth in the December 12, 2011 action.  Hector Natera  did not appear or contest the imposition of the fine.

Order to Cease and Desist Made Permanent

On March 7, 2012, the Commissioner entered an Order Imposing Fine against Yvette Cuccaro of North Haven, Connecticut.  The action had been preceded by a December 12, 2011 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing against respondents Cuccaro, Point Stratford Development, LLC f/k/a Hollywood East/Area 51, LLC and Hector Natera.  Hollywood East/Area 51, LLC was a purported digital media and real estate development company that sought investment capital to acquire a former military aircraft assembly plant in Stratford, Connecticut that was being auctioned off by the U.S. General Services Administration.  The December 12, 2011 action had alleged that, during 2007 and 2008, the respondents sold unregistered Hollywood East securities to investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that respondent Cuccaro transacted business as an unregistered agent of issuer in violation of Section 36b-6 of the Act.

Since respondent Cuccaro did not request a hearing on the Order to Cease and Desist, the Order to Cease and Desist became permanent on February 2, 2012.  In fining respondent Cuccaro $10,000, the Commissioner incorporated as findings the facts relating to respondent Cuccaro contained in the December 12, 2011 action.  Yvette Cuccaro did not appear or contest the imposition of the fine.

Order to Make Restitution and Order to Cease and Desist Become Permanent

On March 5, 2012, the Banking Commissioner issued a Certification rendering permanent an October 28, 2011 Order to Cease and Desist and Order to Make Restitution issued against Movies for a Better World, LLC.  The October 28, 2011 action had also included a Notice of Intent to Fine.  Movies for a Better World, LLC is a purported film, music and literary development company of Greenwich, Connecticut.  The October 28, 2011 action had alleged that, in 2009, the Movies for a Better World, LLC and its president, Michael J. Martineau, offered and sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that Michael J. Martineau transacted business as an unregistered agent of issuer.  In addition, the action had alleged that the respondents violated the antifraud provisions of the Act by failing to disclose to investors any risk factors related to the investment; financial information relating to the issuer or the performance of its prior development projects; financial or background information on the issuer’s principals; compensation paid to the issuer’s principals and affiliates; the estimated cash proceeds of the offering; how the offering proceeds would be applied; and material litigation involving the principals of the issuer.

Since Movies for a Better World, LLC did not request a hearing on the Order to Cease and Desist and the Order to Make Restitution, each of those orders became permanent on November 17, 2011.  The restitutionary order obligated Movies for a Better World, LLC to provide the Commissioner with documentation concerning the identities of affected investors, the amounts invested and refunds made to any of the investors.  The restitutionary order also obligated Movies for a Better World, LLC to reimburse investors sums invested plus interest for the period  from August 1, 2009 to November 17, 2011.

On March 7, 2012, the Commissioner entered an Order Imposing Fine against Movies for a Better World, LLC.  Incorporating as findings the facts set forth in the October 28, 2011 action, the Commissioner fined the firm $50,000.  Movies for a Better World, LLC did not appear or contest the imposition of the fine.

Order to Make Restitution and Order to Cease and Desist Become Permanent

On March 5, 2012, the Banking Commissioner issued a Certification rendering permanent an October 28, 2011 Order to Cease and Desist and Order to Make Restitution issued against Michael J. Martineau, president of Movies for a Better World, LLC.  The October 28, 2011 action had also included a Notice of Intent to Fine.  Movies for a Better World, LLC is a purported film, music and literary development company of Greenwich, Connecticut.  The October 28, 2011 action had alleged that, in 2009, the Movies for a Better World, LLC and its president, Michael J. Martineau, offered and sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act, and that Michael J. Martineau transacted business as an unregistered agent of issuer.  In addition, the action had alleged that the respondents violated the antifraud provisions of the Act by failing to disclose to investors any risk factors related to the investment; financial information relating to the issuer or the performance of its prior development projects; financial or background information on the issuer’s principals; compensation paid to the issuer’s principals and affiliates; the estimated cash proceeds of the offering; how the offering proceeds would be applied; and material litigation involving the principals of the issuer.

Since Michael J. Martineau did not request a hearing on the Order to Cease and Desist and the Order to Make Restitution, each of those orders became permanent on February 2, 2012.  Mailings of the orders were returned to the department as unclaimed.  The restitutionary order obligated respondent Martineau to provide the Commissioner with documentation concerning the identities of affected investors, the amounts invested and refunds made to any of the investors.  The restitutionary order also obligated respondent Martineau to reimburse investors sums invested plus interest for the period  from August 1, 2009 to February 2, 2012.

On March 7, 2012, the Commissioner entered an Order Imposing Fine against Michael J. Martineau.  Incorporating as findings the facts set forth in the October 28, 2011 action, the Commissioner fined respondent Martineau $50,000.  Michael J. Martineau did not appear or contest the imposition of the fine.

Connecticut-Registered Investment Adviser Assessed $2,050 for Engaging Two Unregistered Investment Adviser Agents

On March 9, 2012, the Commissioner entered into a Stipulation and Agreement with Fleming, Perry & Cox, Inc., a Connecticut-registered investment adviser of Stamford, Connecticut.  The Stipulation and Agreement alleged that, from at least January 2008 through December 2010, the firm engaged two unregistered agents.  Since that time, one of the individuals became registered as an investment adviser agent of the firm under the Connecticut Uniform Securities Act and the other individual ceased to be an investment adviser agent of the firm.  The Stipulation and Agreement required the firm to refrain from violative conduct and to remit $2,050 to the department.  Of that amount, $1,500 constituted an administrative fine and $550 would be applied to reimburse the department for past due investment adviser agent registration fees.

Dated:  Tuesday, March 13, 2012