Bulletin # 2662 - Week Ending February 27, 2015

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 Bruce H. Adams, Acting Banking Commissioner, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800.  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.

SECURITIES AND BUSINESS INVESTMENTS DIVISION

Consent Order Entered

On February 23, 2015, the Banking Commissioner entered a Consent Order (Docket No. CO-15-8065-S) with respect to Nicholas John Moniodes.  Respondent Moniodes previously worked in the information technology department of broker-dealer Millenco LLC (CRD No. 33726) and did business under the name Moniodes Investments.  Respondent Moniodes had been the subject of a July 9, 2014 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing alleging that, from approximately 2004 to 2011, Moniodes entered into Investment Agreements with various investors, and represented that investor monies would be invested in the stock market, with interest payments being made based upon stock market gains.  The action had also alleged that respondent Moniodes used investor monies for his personal expenses, and that although respondent Moniodes had repaid some of the investors, one of the investors was still owed approximately $35,000.  The action had further alleged that, in addition to violating the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act, respondent Moniodes violated Section 36b-16 of the Act by offering and selling unregistered securities.

The Consent Order acknowledged that Moniodes had provided the agency with documentation that Moniodes had remitted $32,000 to the affected investor.  Moniodes also provided documentation indicating that he was financially unable to pay any fine that might have been ordered as a result of the administrative action or as a term of the Consent Order.  The Consent Order directed Moniodes to cease and desist from directly or indirectly violating Connecticut’s securities laws, including violations of the registration requirement in Section 36b-16 of the Act and the antifraud provisions in Section 36b-4 of the Act.

Amended and Restated Order to Cease and Desist, Notice of Intent to Revoke Registration as a Broker-dealer and as a Broker-dealer Agent and Notice of Intent to Fine Issued

On February 13, 2015, the Banking Commissioner issued an Amended and Restated Order to Cease and Desist, an Amended and Restated Notice of Intent to Revoke Registration as a Broker-dealer and as a Broker-dealer Agent and an Amended and Restated Notice of Intent to Fine against Meyers Associates, L.P., a Connecticut-registered broker-dealer located in New York, New York, and Bruce Meyers, Chief Executive Officer of the firm.   This action amends the Commissioner’s February 10, 2014 Order to Cease and Desist, Notice of Intent to Revoke Registration as a Broker-dealer, Notice of Intent to Revoke Registration as a Broker-dealer Agent and Notice of Intent to Fine (Docket No. CFNR-14-8132-S).

A hearing on the earlier action is pending.

The amended action alleges that 1) both the firm and Bruce Meyers failed to discharge their supervisory responsibilities; 2) the firm violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered securities; 3) the firm, with the material assistance of Bruce Meyers, violated Section 36b-14(d) of the Act and Section 36b-31-14f of the Regulations thereunder by failing to make required books and records available to the Commissioner; 4) the firm failed to maintain complete and accurate books and records; 5) the firm failed to halt improper commission splitting by its agents; 6) the firm engaged in dishonest or unethical practices in the securities business; 7) prior sanctions entered by FINRA against the firm and Bruce Meyers provided additional grounds for the Connecticut revocation action; 8) the firm provided inaccurate, false or misleading information to the Commissioner; and 9) the firm employed at least one unregistered agent in violation of Section 36b-6(b) of the Connecticut Uniform Securities Act.

Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine Issued

On February 26, 2015, the Banking Commissioner entered an Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine against Rosemarie Pokorski who did business under the name Second Impression.  The action alleged that from approximately February 1, 2012 to February 1, 2013, respondent Pokorski offered and sold unregistered securities in the form of investment agreements to at least four Connecticut residents.  Respondent Pokorski allegedly told investors that she was in the business of buying antiques and collectibles in bulk, and that she would use the invested funds to purchase the goods, sell them and divide the profits with each investor on a percentage basis.  The action also alleged that respondent Pokorski instead spent most, if not all, of the investment proceeds on personal expenses and, in so doing, violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act.

Respondent Pokorski was afforded an opportunity for a hearing on the allegations.

Stipulation and Agreement

On February 26, 2015, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-15-8201-S) with K.C. Ward Financial, LLC, a Connecticut-registered broker-dealer located in New York.  The Stipulation and Agreement alleged that, starting in September, 2012, the firm employed an unregistered broker-dealer agent in violation of Section 36b-6(b) of the Connecticut Uniform Securities Act.  The agent has since become registered in Connecticut.  In addition, the Stipulation and Agreement alleged that the firm offered and sold securities of Pegasi Energy Resources Corp. on a solicited basis in contravention of Section 36b-16 of the Act.

In resolution of the matter, the firm agreed to refrain from regulatory violations.  The Stipulation and Agreement also fined the firm $2,000, required that it reimburse the agency $1,000 for examination and investigative costs and assessed the firm $500 for past due registration fees.

Order to Cease and Desist Made Permanent Post-Hearing; $85,000 in Fines Imposed

On February 27, 2015, following an administrative hearing, the Banking Commissioner issued Findings of Fact, Conclusions of Law and an Order in the matter of Poppin Kettle Franchising, Inc., Chris T. Gregoris and Yofresh Yogurts Franchising, Inc.  The respondents had been the subject of a June 12, 2014 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-14-886-B).  Poppin Kettle Franchising, Inc., now dissolved, and Yofresh Yogurts Franchising, Inc. were both located at 8 Faneuil Hall Marketplace, Boston, Massachusetts.  Respondent Gregoris was the sole officer and director of both entities.

Respondent Gregoris had also been the president of Java's Brewin Development, Inc. which was the subject of a June 23, 2008 Order to Cease and Desist and an October 8, 2008 Order Imposing Fine issued by the Commissioner under the Connecticut Business Opportunity Investment Act (Docket No. CF-2008-845-B).  The $30,000 fine levied by the October 8, 2008 Order remains unpaid.

The June 12, 2014 action had alleged that 1) the respondents offered and/or sold unregistered Poppin Kettle Franchising, Inc. franchises and unregistered Yofresh Yogurts Franchising, Inc. franchises in violation of Section 36b-67(1) of the Connecticut Business Opportunity Investment Act; and 2) respondents Poppin Kettle Franchising, Inc. and Gregoris violated the antifraud provisions in Section 36b-67(6) of the Act by failing to provide purchaser-investors with material disclosures including the risks involved in buying the business opportunity; financial information on the seller; litigation involving Gregoris and several New York purchasers of the Java's Brewin business opportunity; background information on the seller, its principals and affiliates; that Gregoris was a control person of Java's Brewin; that the Commissioner fined Java's Brewin $30,000 for violating the Act; and that the fine against Java’s Brewin remained unpaid.

The Commissioner found that the respondents violated Section 36b-67(1) of the Act by either offering, selling or both offering and selling unregistered popcorn and yogurt business opportunities.  The Commissioner also noted that the respondents represented that they would provide a sales program or marketing program to prospective business opportunity purchasers.

After reviewing the record, the Commissioner also concluded that respondents Poppin’ Kettle Franchising, Inc. and Chris T. Gregoris had violated the antifraud provisions in Section 36b-67(6) of the Act by omitting material information such as respondent Gregoris’ prior history with Java's Brewin Development, Inc., the 2008 Order to Cease and Desist and Order Imposing Fine issued by the Commissioner against Java's Brewin Development, Inc. and key risk factors associated with the Poppin Kettle Franchising, Inc. business opportunity.

The Commissioner directed that the June 12, 2014 Order to Cease and Desist against all respondents be made permanent.  In addition, the Commissioner ordered that 1) respondents Poppin Kettle Franchising, Inc. and Chris T. Gregoris pay a $75,000 fine, jointly and severally; and 2) respondent YoFresh Yogurts Franchising, Inc. be fined $10,000.

    Dated:  Tuesday, March 3, 2015


    Bruce H. Adams
    Acting Banking Commissioner