Bulletin # 2722 - Week Ending April 22, 2016

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 Jorge L. Perez, 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, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage.  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

Notice of Intent Not to Renew Mortgage Broker License

On April 11, 2016, the Commissioner issued a Notice of Intent Not to Renew Mortgage Broker License and Notice of Right to Hearing (“Notice”) in the Matter of:  Quinstreet Media, Inc. (NMLS # 2547) (“Respondent”), Foster City, California.  The Notice was the result of an investigation by the Consumer Credit Division to determine if Respondent continues to meet the minimum standards for renewal of its mortgage broker license.  The Commissioner alleges that Respondent’s failure to have a designated qualified individual for Connecticut (“QI”) at its Main Office who has the required experience and the required mortgage loan originator license would be sufficient grounds for the Commissioner to deny an application for a mortgage broker license under Section 36a-489(a)(1)(A) of the Connecticut General Statutes, and would be sufficient grounds for the Commissioner to refuse to renew Respondent’s mortgage broker license in this state pursuant to Section 36a-494(a)(1) of the 2016 Supplement to the General Statutes and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes.  Such failure to have a QI who has the required experience and mortgage loan originator license also causes Respondent to fail to meet minimum standards for renewal under Section 36a-489(a)(2)(A) of the Connecticut General Statutes, which shall cause such license to expire.  Respondent was afforded an opportunity to request a hearing on the allegation set forth in the Notice.

Consent Order

On April 15, 2016, the Commissioner issued a Consent Order against Equity 4 U, Inc. (“Equity4U”), Lamar, Missouri.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that from May 2010 to December 2015, Equity 4 U engaged in the business of money transmission in this state without a license, in violation of Section 36a-597 of the Connecticut General Statutes, and engaged in the business of debt adjustment in this state without a license, in violation of Section 36a-656 of the Connecticut General Statutes.  To resolve the matters alleged, Equity 4 U agreed to cease and desist from engaging in the business of money transmission in this state without a license and debt adjustment in this state without a license and paid a civil penalty of $50,000.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Order to Cease and Desist and Notice of Intent to Fine Issued

On April 20, 2016, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-16-8302-S) against Entertainment Only, LLC, a Florida concert promoter located at in Bradenton, Florida.  The principal owner of the company is Ryan A. Vincent.  The action alleged that the company violated Section 36b-16 of the Connecticut Uniform Securities Act by selling unregistered securities in the form of investment agreements.  The action also alleged that, in effecting the securities sales, the company employed an unregistered agent of issuer in violation of Section 36b-6(b) of the Act.  Two Connecticut residents invested a total of $154,000 with Entertainment Only, LLC.  To date, $110,000 in cash has been returned to the investors.

Entertainment Only LLC was provided with an opportunity to request a hearing on the Order to Cease and Desist and Notice of Intent to Fine.

Broker-dealer Registration Revoked

On April 20, 2016, the Banking Commissioner entered an Order revoking the broker-dealer registration of Halcyon Cabot Partners, Ltd. (Docket No. NR-16-8261-S).  The firm is located in New York, New York.  The action had been preceded by a February 16, 2016 Notice of Intent to Revoke Registration as a Broker-dealer that was based on several sanctions imposed by the Financial Industry Regulatory Authority (“FINRA”) on July 16, 2014, October 6, 2015 and December 16, 2015, including an expulsion from FINRA membership.  In expelling the firm from membership, FINRA alleged, among other things, that the firm wilfully violated the antifraud provisions in Section 10(b) of the Securities Exchange Act of 1934 as well as Rule 10b-5 thereunder in conjunction with a sham placement agent agreement and deceptive commission sharing arrangement.

Since the Notice was returned to the department as undeliverable, and since the firm failed to request a hearing on the allegations in the Notice, those allegations were deemed admitted and the firm’s broker-dealer registration was revoked effective April 20, 2016.

Notice of Intent to Deny Registration issued

On April 22, 2016, the Banking Commissioner issued a Notice of Intent to Deny Registration as an Investment Adviser (Docket No. NDCD-16-8295-S) with respect to Harbor Vista Wealth Management LLC.  The firm, headed by Guy-Max Delphin (CRD No. 3083371), is located in Stamford, Connecticut.  The action also included an Order denying the firm’s withdrawal of its registration application as an investment adviser; an Order to Cease and Desist; and a Notice of Intent to Fine.

The action was based on the firm’s allegedly misleading responses to certain form filings concerning one Robert Neil Tricarico (CRD No. 1500863) whom the firm identified as an advisory affiliate.  Tricarico was the subject of 1) a February 24, 2015 FINRA suspension for failing to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information regarding the status of compliance (Case No. 10-00920); and 2) an April 30, 2015 FINRA bar (Case No. 2014043719001) for failing to provide information requested by FINRA during a FINRA investigation into whether Tricarico converted customer funds.

The action alleged that Harbor Vista Wealth Management LLC violated 1) Section 36b-23 of the Connecticut Uniform Securities Act by making a materially false or misleading statement in a document filed with the Commissioner; and 2) Section 36b-31-14e(a) of the Regulations under the Act by failing to promptly file a correcting amendment.

The Commissioner ordered that Harbor Vista Wealth Management LLC’s application to withdraw its pending investment adviser registration be denied until final resolution of the matters alleged.  Harbor Vista Wealth Management LLC was afforded an opportunity to request a hearing on the allegations in the Notice of Intent to Deny Registration as an Investment Adviser, the Order to Cease and Desist and the Notice of Intent to Fine.

Notice of Intent to Deny Registration and Order to Cease and Desist Issued

On April 22, 2016, the Banking Commissioner issued a Notice of Intent to Deny Registration as an Investment Adviser Agent, Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. NDCDRF-16-8200-S) against Robert Neil Tricarico, an applicant for registration as an investment adviser agent of Harbor Vista Wealth Management LLC (IARD No. 174937).  Also named in the action was RNT Wealth Management LLC of Darien, Connecticut.  Respondent Tricarico was the sole member of RNT Wealth Management LLC.
On November 21, 2014, the executrix of a client’s estate had filed a civil complaint against Tricarico in Connecticut Superior Court (Moore v. Tricarico, Docket No. FBT-CV14-6046911-S) alleging that Tricarico had misappropriated over $1 million from the decedent while Tricarico was associated with Wells Fargo Advisors Financial Network, LLC and LPL Financial LLC.  The civil suit was ultimately settled and withdrawn in April 2015.  Before the civil suit was settled, and in conjunction with a department investigation, Tricarico allegedly made false statements to the Division concerning the sums appropriated.  The Commissioner’s action alleged that such statements violated Section 36b-23 of the Connecticut Uniform Securities Act, and that Tricarico knew the statements were false because he was personally involved in transferring funds from the client's accounts to himself directly and through RNT Wealth Management LLC, an entity he controlled.

The Commissioner’s action also alleged that, in the spring of 2015, Tricarico and RNT Wealth Management LLC violated Section 36b-16 of the Act by offering and selling unregistered promissory notes issued by RNT Wealth Management LLC to at least five of Tricarico’s  ex-broker-dealer clients.  The notes guaranteed a ten percent return.  The action alleged that despite the guaranteed nature of the notes, RNT Wealth Management LLC and Tricarico failed to make any payments to investors.  The action also alleged that the respondents violated the antifraud provisions in Section 36b-4(a) of the Act by failing to provide investors with any offering document or other written disclosure describing the investment’s risks, the registration status of the securities or the fact that RNT Wealth Management LLC and Tricarico lacked funds to make payments on the notes.  In addition, in violation of Section 36b-6 of the Act, Tricarico allegedly transacted business as an unregistered agent of issuer, and RNT Wealth Management LLC unlawfully employed him in that unregistered capacity.

The action was also based on the Tricarico’s allegedly misleading responses to certain form filings, responses which violated Section 36b-23 of the Act and 36b-31-14e(a) of the Regulations thereunder.  Specifically, the responses concerned 1) a February 24, 2015 FINRA suspension for failing to comply with an arbitration award or settlement agreement or to satisfactorily respond to a FINRA request to provide information regarding the status of compliance (Case No. 10-00920); and 2) an April 30, 2015 FINRA bar (Case No. 2014043719001) for failing to provide information requested by FINRA during a FINRA investigation into whether Tricarico converted customer funds.

Robert Neil Tricarico and RNT Wealth Management LLC were afforded an opportunity to request a hearing on the allegations.