The Department of Banking News Bulletin
Bulletin # 3188 - Week Ending March 28, 2025
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 directed to Jorge L. Perez, Banking Commissioner. Written comments will be considered only if they are received within ten business days from the date of this bulletin.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Vanguard Marketing Corporation (CRD No. 7452) and The Vanguard Group, Inc. (CRD No. 105958)
On March 25, 2025, the Banking Commissioner entered a Consent Order (No. 25-202513-S) with respect to The Vanguard Group, Inc., a Securities and Exchange Commission registered investment adviser, and its wholly owned subsidiary, Vanguard Marketing Corporation. Vanguard Marketing Corporation, a Connecticut-registered broker-dealer, is located at 100 Vanguard Boulevard, Malvern, Pennsylvania.
The Consent Order was an outgrowth of a multistate investigation into the activities of the firm and a parallel investigation by the Securities and Exchange Commission (the “SEC”).
Respondents marketed and distributed two types of Target Retirement Funds (“TRFs”) on behalf of Vanguard Chester Funds, a federally registered investment company: Institutional TRFs and Investor TRFs. Each type offered 12 vintages of TRFs with different target retirement years.
The Consent Order alleged that in 2020, Respondents lowered the investment minimums for the Institutional Target Retirement Funds, and that, as a result, a large number of retirement plan investors redeemed their Investor TRF shares to purchase Institutional TRF shares. The large number of redemptions caused Vanguard to sell assets in the Investor TRF, which triggered significant capital gains taxes for many retail investors who remained invested in the Investor TRF. In addition, Vanguard allegedly did not disclose the potential capital gains and tax implications to Investor TRF shareholders which were attributable to the migration of shareholders from the Investor TRF to the Institutional TRF.
The Commissioner alleged that such conduct by Respondents constituted a supervisory lapse within the meaning of Section 36b-31-6(f) of the Regulations under the Connecticut Uniform Securities Act. The Consent Order also alleged that respondents' disclosure deficiencies violated Section 36b-5(a)(2) of the Act.
The Consent Order directed Respondents to cease and desist from regulatory violations. The Consent Order acknowledged that Respondents had agreed to pay $135 million in remediation to the SEC Fair Fund, administered by the SEC, to benefit harmed investors. Counting offsets, the total amount of remediation was $92.91 million, which Vanguard paid into the Fair Fund on or about January 24, 2025. In addition, on or about January 24, 2025, Respondents paid an administrative penalty of $13,500,000 into the SEC Fair Fund.
ACK Asset Management LLC (CRD No. 155136)
On March 28, 2025, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-25-20242-S) with ACK Asset Management LLC, a Securities and Exchange Commission registered investment adviser located at 777 West Putnam Avenue, Suite 300, Greenwich, Connecticut 06830.
The Stipulation and Agreement alleged that, between October 13, 2021 and January 23, 2024, the firm failed to make the investment advisory notice filing required of SEC-registered investment advisers by Section 36b-(e) of the Connecticut Uniform Securities Act.
The firm has since made a corrective filing with the department. In resolution of the matter, the firm agreed to refrain from regulatory violations and to pay $2,950 to the agency. Of that amount, $2,500 constituted an administrative fine and $450 constituted reimbursement for past due investment advisory notice filing fees.
Valuex Research LLC, Valuex Fintech LLC, Ulrika Johansson and Peter Johansson
On March 28, 2025, the Banking Commissioner issued an Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (No. CRF-25-202417-S) against Valuex Research, LLC (“Research”), a currently dissolved Connecticut limited liability company, Valuex Fintech LLC (“Fintech”), Ulrika Johansson a/k/a Ulrika Drax Johansson a/k/a Ulrika E. Johansson (“Ulrika”) and Peter Johansson (“Peter”). Research and Fintech shared the same business address at 309 Greenwich Avenue, Greenwich, Connecticut 06830. Peter was the co-founder of Research and the managing member of Fintech.
The action alleged that, from approximately 2017 through 2021, Respondents Ulrika and Peter sold unregistered Research convertible promissory notes to at least 37 investors located in the United States and Sweden. The action also alleged that Ulrika and Peter sold unregistered pooled investments in Fintech to multiple investors in both of those countries. The offer and sale of unregistered securities by the Respondents allegedly violated Section 36b-16 of the Connecticut Uniform Securities Act.
The action also alleged that the Respondents violated the antifraud provisions in Section 36b-4(a) of the Act by, among other things, misrepresenting how the investment proceeds would be applied, commingling investor funds with their own and using investor monies to cover their personal expenses; erroneously leading investors to believe that Oppenheimer and Co. was Research’s investment banker; and failing to disclose multiple financial judgements against the Respondents.
The Respondents were afforded an opportunity to request a hearing on the allegations in the action.
CFP Fund 1, LLC
On March 28, 2025, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-24-2022-8-S) with CFP Fund 1, LLC of 290 Los Gatos-Saratoga Road, Los Gatos, California 95030.
The Stipulation and Agreement alleged that, in 2020, the issuer violated Section 36b-16 of the Connecticut Uniform Securities Act by failing to make a notice filing when it offered and sold securities to two Connecticut investors in a private placement exempt from federal registration pursuant to Rule 506 of Regulation D. The firm repaid the affected investors in twelve monthly installments.
Pursuant to the Stipulation and Agreement, the firm agreed to refrain from regulatory violations and to pay a $2,500 fine.
Dated: Tuesday, April 1, 2025
Jorge L. Perez
Banking Commissioner