Bulletin # 3039 - Week Ending May 20, 2022

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 business days from the date of this bulletin.

BANK ACTIVITY

Interstate Loan Production Office

On May 19, 2022, 1st Financial Bank USA, a South Dakota-chartered bank, filed an application pursuant to Section 36a-412(d) of the Connecticut General Statutes, seeking approval to establish a loan production office at 47 Sherman Hill Road in Woodbury, Connecticut.

 
CONSUMER CREDIT DIVISION ACTIVITY

Consent Order

On May 9, 2022, the Commissioner entered into a Consent Order with Loan X Mortgage LLC (NMLS # 1879263) (“Loan X”), Birmingham, Michigan. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Loan X failed to file with the Nationwide Multistate Licensing System and Registry a change of address of its main office at least thirty (30) calendar days prior to such change, and, in connection with such change, failed to provide a bond rider or endorsement, or addendum, as applicable, to the surety bond on file with the Commissioner, in violation of Section 36a-490(b)(2) of the Connecticut General Statutes. As part of the Consent Order, Loan X paid $500 as a civil penalty.

  
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

KJM Securities, Inc. (CRD No. 20277)

On May 16, 2022, the Banking Commissioner entered a Consent Order (No. NRC-21-202027-S) with respect to KJM Securities, Inc. now or formerly of 48 Sagamore Road, Suite 29, Bronxville, New York 10708-1534. The firm had been expelled from FINRA membership on January 2, 2020 for financial reporting violations, and the FINRA expulsion was sustained by the Securities and Exchange Commission on January 25, 2022 (SEC Release No. 94059).

The Consent Order had been preceded by a December 23, 2021 Notice of Intent to Revoke and Cancel Registration as a Broker-dealer and Notice of Right to Hearing (Matter No. NRC-21-202027-S) alleging that the firm violated Section 36b-31-14c of the Regulations under the Connecticut Uniform Securities Act by failing to file an annual audited financial report. In addition, the action alleged that the firm’s apparent cessation of business formed a basis for canceling the firm's registration under Section 36b-15(d) of the Act.

The Consent Order directed the firm to 1) cease and desist from regulatory violations; and 2) not re-apply for registration as a broker-dealer in Connecticut until the firm's FINRA membership and registration had been reinstated and the firm became registered as a broker-dealer under federal law.

Joseph Michael Fedorko, Jr. (CRD No. 2007317)

On May 17, 2022, the Banking Commissioner entered a Consent Order (No. CO-22-20225-S) with respect to Joseph Michael Fedorko, Jr. of Old Greenwich, Connecticut. Joseph Fedorko was most recently employed as a broker-dealer agent of Laidlaw & Company (UK), Ltd. The Consent Order alleged that, while associated with Laidlaw & Company (UK), Ltd. Fedorko 1) transacted business as an unregistered investment adviser agent in contravention of Section 36b-6(c)(2) of the Connecticut Uniform Securities Act; 2) engaged in excessive trading in at least one client account; and 3) exercised discretionary trading authority for at least one client account without first obtaining written discretionary authority from the client. The Consent Order alleged that the latter two practices were proscribed as dishonest or unethical under Sections 36b-4(b) and 36b-15(a)(2)(H) of the Act and Sections 36b-31-15b(a)(8) and 36b-31-15b( c) of the Regulations thereunder.

The Consent Order directed Fedorko to cease and desist from regulatory violations; suspended his broker-dealer agent registration for eighteen months; and fined him $7,500.