Bulletin # 3015 - Week Ending December 3, 2021

DEPOSIT INDEX AND INTEREST RATES

Pursuant to Section 36a-26 of the Connecticut General Statutes, the Commissioner has determined the deposit index for the calendar year 2022 to be 0.06%.

The following rates are for the period commencing January 1, 2022 and ending December 31, 2022.

PLEASE NOTE: The interest rates provided herein are done as a convenience to the public; the Commissioner has no authority to establish interest rates beyond what is provided in statute. Accordingly, parties required to pay interest under these sections must ensure compliance with the applicable statute(s). 

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Stone Beach Investment Management, LLC (IARD No. 163163)

On December 2, 2021, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-21-202042-S) with Stone Beach Investment Management, LLC of 51 Riverside Avenue, Westport, Connecticut 06880. The firm is registered as an investment adviser with the Securities and Exchange Commission. The Stipulation and Agreement alleged that from June 5, 2014 until March 31, 2021, the firm failed to make the notice filings required by Section 36b-6(e) of the Connecticut Uniform Securities Act. The firm has since made a curative filing.

Pursuant to the Stipulation and Agreement, Stone Beach Investment Management, LLC agreed to refrain from violative conduct and to pay $3,625 to the department. Of that amount, $2,500 constituted an administrative penalty and $1,125 represented reimbursement for past due investment advisory notice filing fees.

LPL Financial LLC (CRD No. 6413)

On December 3, 2021, the Banking Commissioner entered a Consent Order (Docket No. CO-21-201911026-S) with respect to LPL Financial LLC, a Connecticut-registered broker-dealer. The Consent Order alleged that the firm violated Section 36b-31-6f of the Regulations under the Connecticut Uniform Securities Act by failing to enforce its supervisory procedures with regard to two former agents of the firm, Connecticut residents James Thomas Booth (CRD number 1906145) and Matthew O. Clason (CRD number 4692266).

Booth allegedly misappropriated approximately $1.1 million from his LPL Financial LLC clients, and plead guilty to one count of securities fraud in federal court (United States v. James T. Booth, Crim. No. 19-cr-00699-JGK (S.D.N.Y.)). On November 17, 2020, Booth was sentenced to a 42-month prison term. Booth’s conduct also involved generating consolidated client account statements with fictitious investments and sending those statements to clients in an effort to deceive clients about the value of their accounts. Booth had been the subject of a June 18, 2020 Order issued by the Commissioner revoking Booth’s registration as a broker-dealer agent and investment adviser agent and fining Booth $100,000, a penalty amount that remains unpaid. The revocation was uncontested.

The Consent Order acknowledged that LPL Financial LLC had entered into settlements with those firm clients who were affected by Booth’s scheme, and that the firm had repaid those clients a total of $1,636,347.07.

Clason purportedly opened a joint bank account with an LPL Financial, LLC customer without the firm’s knowledge, then transferred approximately $668,000 from the customer’s brokerage account to the joint account. Clason then proceeded to withdraw at least $620,000 from the joint account for his personal use without the customer’s knowledge or consent. On May 12, 2021, in connection with the foregoing conduct, Clason plead guilty to one count of wire fraud in federal court (United States v. Matthew O. Clason, Crim. No. 3:21-cr-00066 (D. Conn)). Clason is currently scheduled to be sentenced on December 7, 2021.

The LPL Financial LLC customer affected by Clason’s conduct has since been fully compensated through a February 25, 2021 settlement involving the firm and other parties. LPL Financial, LLC contributed $500,000 to that settlement.

The Consent Order directed LPL Financial, LLC to cease and desist from violating Section 36b-31-6f of the Regulations and to comply with the Act, its Regulations and any order under the Act. The Consent Order also fined the firm $350,000 and required that it pay an additional $150,000 to the department to be used, at the Commissioner's discretion, for financial literacy and investor education initiatives, training and related materials.