Bulletin 2523 - June 29, 2012

State of Connecticut
Department of Banking

The Department of Banking News Bulletin
Bulletin # 2523

Week Ending June 29, 2012

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 Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail . Written comments will be considered only if they are received within ten days from the date of this bulletin.

CREDIT UNION ACTIVITY

Branch Activity

Date

Credit Union

Location

Activity

6/27/12

Sikorsky Financial Credit Union

Stratford

Stratford High School

45 N. Parade Street

Stratford, CT 06615

Filed

CONSUMER CREDIT DIVISION ACTIVITY

Check Cashing Service License Activity

Date

Check Casher

Location

Activity

6/25/12

Brooklyn Check Cashing LLC

432 Rubber Avenue

Naugatuck, CT 06770

Approved

6/28/12

Buckeye Check Cashing

of Connecticut, LLC

1050 E. Main Street

Bridgeport, CT 06608

Filed

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY Order to Cease and Desist; Order to Make Restitution

and Notice of Intent to Fine Issued

On June 26, 2012, 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 with respect to William Alexis Cronin, Jr. whose last known business address is 11 Woodland Road, Madison, Connecticut. Respondent Cronin did business under the name Madison Financial Services. The action alleged that, at various times between 2006 and 2008, the respondent sold unregistered nonexempt securities issued by FundGuard, LLC and Aliki Foods, LLC to Connecticut and non-Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act. The action also alleged that respondent Cronin received $77,500 in compensation from FundGuard, LLC and $93,500 in compensation from Aliki Foods, LLC for introducing prospective investors to those issuers. Respondent Cronin allegedly was not registered as an agent of issuer in Connecticut at the time. In addition, the action alleged that 1) in failing to disclose to investors and prospective investors that he was receiving compensation from FundGuard, LLC and Aliki Foods, LLC, respondent Cronin violated the antifraud provisions in Section 36b-4(a)(2) of the Act; and 2) in failing to provide his then employing broker-dealer with prior notice of his compensated involvement in the issuer transactions, respondent Cronin violated Section 36b-31-6e(c) of the Regulations under the Act. The action also alleged that respondent Cronin 1) transacted business as an investment adviser absent registration; and 2) improperly borrowed $10,000 from a former broker-dealer client without notifying the brokerage firm with whom he was then associated.

Respondent Cronin was afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.

Consent Order

On June 29, 2012, the Banking Commissioner entered a Consent Order with respect to Bankers Life and Casualty Company , an Illinois life insurance company, and BLC Financial Services, Inc. , its wholly-owned subsidiary, both of Chicago, Illinois. BLC Financial Services, Inc. was previously registered as a broker-dealer only in Illinois and has since terminated its federal and state registrations. The Consent Order followed a multistate investigation, capped by a global settlement, into unregistered broker-dealer and investment advisory activity by the firms. The multistate investigation also focused on the firms’ employment of dual agents who, although registered with UVEST Financial Services Group, Inc. and ProEquities, Inc., were not registered agents and investment adviser agents of the respondents. The respondents received revenue sharing payments based on the dual agents’ securities transactions. Both UVEST Financial Services Group, Inc. and ProEquities, Inc. are registered broker-dealers in Connecticut.

The Consent Order directed Bankers Life and Casualty Company and BLC Financial Services, Inc. to cease and desist from transacting business as a broker-dealer or investment adviser in Connecticut absent registration and from employing unregistered agents or investment adviser agents. The Consent Order also fined the respondents $965,469.30, which represented Connecticut’s share of the $9.9 multistate settlement, and required that they reimburse the state $5,000 for past due agent licensing fees. The Consent Order also required that the respondents pay the expenses, not to exceed $2,000 in the aggregate, of one or more examinations to be conducted by the Securities and Business Investments Division within 24 months.

Additional remedial steps in the settlement included a requirement that the respondents 1) contract with an independent third party to review their compliance with the Consent Order; 2) not attempt to recoup their settlement payments from dual agents, UVEST Financial Services Group, Inc. ProEquities, Inc. or their customers (including through premium increases); 3) cede supervisory, compensation and other control over agent securities and investment advisory activities to the broker-dealer with whom they had a third party brokerage agreement; and 4) in the case of Bankers Life and Casualty Company, curb the securities-related activities of insurance producers who were not licensed to sell securities products or give investment advice on securities.

Dated: Tuesday, July 3, 2012

Howard F. Pitkin

Banking Commissioner