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The Department of Banking News Bulletin 

Bulletin # 3081 - Week Ending March 10, 2023

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 March 9, 2023, Bank of England, an Arkansas-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 1224 Main Street in Branford, Connecticut. The proposed opening date is April 8, 2023.

CONSUMER CREDIT DIVISION ACTIVITY

Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing

On February 28, 2023, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (collectively, “Order and Notice”) in the Matter of: Pallida, LLC, NMLS # 1310880 (“Pallida”), Lycaste, LLC, NMLS # 2068670 (“Lycaste”), Argolica, LLC, NMLS # 1853224 (“Argolica”), Laelia, LLC, NMLS # 1700294 (“Laelia”) and Isanthes, LLC, NMLS # 1828100 (“Isanthes”) (collectively, “Respondents”), all of Seattle, Washington. The Order and Notice was a result of an investigation by the Consumer Credit Division. The Commissioner alleges that: (1) Pallida failed to address outstanding deficiencies for the retention of its license by failing to submit the required financial statements, name a qualifying individual and provide a complete chain of indirect ownership for retention of its license, and failed to cooperate with the Division’s requests for information, in violation of Section 36a-17(e) of the Connecticut General Statutes in effect at such time; (2) Lycaste acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes in effect at such time; (3) Argolica acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes in effect at such time; (4) Laelia acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes in effect at such time; and (5) Isanthes acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes in effect at such time. The Commissioner found that the public welfare required immediate action to issue a Temporary Order to Cease and Desist against Isanthes, Lycaste, Argolica and Laelia. Respondents were afforded an opportunity to request a hearing with regard to the allegations set forth in the Order and Notice.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Kara Leigh Gagnon (CRD No. 4574455)

On March 9, 2023, the Banking Commissioner entered a Consent Order (No. CO-22-202123-S) with respect to Kara Leigh Gagnon, a former broker-dealer agent of Global Atlantic Distributors, LLC.

The Consent Order alleged that Gagnon violated Section 36b-31-14e of the Regulations under the Connecticut Uniform Securities Act by failing to disclose to the Commissioner on her Form U4 (Uniform Application for Securities Industry Registration or Transfer) certain outside business activity. More specifically, while she was registered as a broker-dealer agent of Global Atlantic Distributors, LLC under the Act, Gagnon allegedly engaged in dishonest and unethical business practices within the meaning of Section 36b-l 5(a)(2)(H) of the Act and Section 36b-3l-15b(c) of the Regulations by engaging in conduct proscribed by self-regulatory organization rules, to wit, participating in outside business activity absent notice to her employing firm. Gagnon allegedly also used her Global Atlantic Distributors, LLC employee email account to communicate with a third party about a business venture unrelated to Global Atlantic Distributors, LLC. At the direction of the third-party, Gagnon acted as a go-between between the third party and several individuals who believed they were investing in a legitimate business venture run by the third party, including facilitating wire transfers. The purported new business venture of the third party turned out to be a scam. None of the victims in the scam were clients of Global Atlantic Distributors, LLC. Gagnon represented to the agency that she was unaware that the third party was running a scam.

In August, 2022, following a June 21, 2022 suspension for failure to produce documents, the Financial Industry Regulatory Authority (FINRA) had permanently barred Gagnon from association with any FINRA member in any capacities. Gagnon had failed, after multiple requests by FINRA, to produce documents and information relating to multiple wire transfers and bank withdrawals in connection with the activity described above.

The Consent Order barred Gagnon from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent and from acting in any other capacity which requires a license or registration from the Commissioner. The Consent Order also directed Gagnon to cease and desist from regulatory violations.

Acknowledging that Gagnon had provided documentation demonstrating her inability to pay the $10,000 fine that otherwise would have been imposed against her, the Commissioner stayed imposition of the fine for three years following which it would be waived if Gagnon remained unable to pay.

  

      Dated:  Tuesday, March 14, 2023

      Jorge L. Perez
      Banking Commissioner