Bulletin # 2950 - Week Ending September 4, 2020

CREDIT UNION ACTIVITY

Merger

On September 4, 2020, Mutual Security Credit Union (“Mutual Security”), a Connecticut credit union, and Consolidated Controls Corp. Federal Credit Union (“Consolidated Controls”), a federal credit union, filed an application pursuant to Section 36a-468a of the Connecticut General Statutes seeking approval for the merger of Consolidated Controls with and into Mutual Security. In connection with the application, Mutual Security is proposing to expand its field of membership to include the select employee group that makes up Consolidated Controls’ field of membership. 


SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Solace Investments, LLC and Rafael Alves Muzzi - Orders Imposing Fine Entered

On September 4, 2020, the Banking Commissioner entered two separate Orders Imposing Fine against Solace Investments, LLC of 90 Church Street, Naugatuck, Connecticut 06770 and against Rafael Alves Muzzi, the sole member of Solace Investments, LLC (Docket No. CRF-20-8411-S). Solace Investments, LLC and Rafael Alves Muzzi were named as co-respondents in a June 25, 2020 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-20-8411-S). The June 25, 2020 action had alleged that from at least January 2017 to June 2018, Muzzi, individually and through Solace Investments, LLC, raised approximately $800,000 from at least 25 investors primarily located in Connecticut for the purpose of pooling investor funds to invest in FOREX accounts managed by Muzzi to trade currency. The June 25, 2020 action also alleged that, from at least January 2017, in connection with offers and sales of the FOREX investments, Muzzi, directly and through Solace Investments, LLC 1) represented to investors that their money would be invested in FOREX investments when, in reality, only a portion of such investments were ever made; 2) failed to disclose to investors the amount of investor monies that Muzzi failed to invest and that he kept for himself; and 3) mailed monthly account statements to investors that did not accurately reflect the true status and transactional history of such accounts. The respondents also allegedly failed to disclose to prospective investors any risk factors related to the FOREX investments, including financial information on Muzzi or Solace Investments, LLC; the fact that respondents would use a portion of investor monies for personal expenses and to pay off earlier investors or that the FOREX investments were not registered under the Connecticut Uniform Securities Act. The Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine had further alleged that respondents violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act; engaged in dishonest or unethical practices in violation of Section 36b-4(b) of the Act; and sold unregistered securities in violation of Section 36b-16 of the Act.  

Since neither Solace Investments, LLC nor Rafael Alves Muzzi requested a hearing on the allegations, the Order to Cease and Desist and the Order to Make Restitution became permanent as to each of them on July 30, 2020 and July 14, 2020, respectively.

In addition, Solace Investments, LLC and Rafael Alves Muzzi did not request a hearing on the Notice of Intent to Fine and the Orders Imposing Fine were entered by default. Finding that Solace Investments, LLC and Rafael Alves Muzzi violated the antifraud provisions in Section 36b-4(a) of the Act, engaged in dishonest or unethical practices in violation of Section 36b-4(b) of the Act and sold unregistered securities in violation of Section 36b-16 of the Act, the Commissioner fined Solace Investments, LLC $300,000 and imposed a $300,000 fine on Rafael Alves Muzzi.

      Dated: Tuesday, September 8, 2020