Bulletin 2828 - May 4, 2018

State of Connecticut
Department of Banking

The Department of Banking News Bulletin

Bulletin # 2828 -
Week Ending May 4, 2018

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.

STATE BANK ACTIVITY

Branch Activity

Section 361-145 of the Connecticut General Statutes requires certain applications for a branch, of for a limited branch at which loans will be made, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage. Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days. Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.

DATE:
April 16, 2018

BANK:
Salisbury Bank and Trust Company, Lakeville

LOCATION:
701 Route 9, Fishkill, NY 12524

ACTIVITY-BRANCH TYPE:
Opening Date - Full Service Branch

DATE:
April 24, 2018

BANK:
Salisbury Bank and Trust Company, Lakeville

LOCATION:
FROM: 1004 Main Street, Fishkill, NY 12524
TO: 701 Route 9, Fishkill, NY 12524

ACTIVITY-BRANCH TYPE:
Consolidation Date - Full Service Branch

DATE:
April 30, 2018

BANK:
United Bank, Hartford

LOCATION:
6958 Aviation Blvd., Suite 1A, Glen Burnie, MD 21061

ACTIVITY-BRANCH TYPE:
Filed to Open a Limited Branch

DATE:
July 24, 2018

BANK:
United Bank, Hartford

LOCATION:
36 Washington Street, Wellesley, MA 02481

ACTIVITY-BRANCH TYPE:
Closing Date - Loan Production Office

CREDIT UNION ACTIVITY

Branch Activity

DATE:
April 30, 2018

CREDIT UNION:
Connex Credit Union, North Haven

LOCATION:
155 Main Street, Monroe, CT 06468

ACTIVITY-BRANCH TYPE:
Approved to Open a Full Service Branch

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

AFT Logistics, LLC, Brandi Freeman and Javeir Johnson - Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine Issued

On May 2, 2018, 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 (Docket No. CRF-18-8331-S) against AFT Logistics, LLC n/k/a Equity One Contractors LLC of 1681 Highway 73, Iron Station, North Carolina 28080-9776. Also named in the action were the company's managing members, Brandi Freeman and Javeir Johnson a/k/a Jay Johnson , both of 1423 Quinnipiac Avenue, Unit 703, New Haven, Connecticut 06513. The action alleged that in April 2016, the respondents offered two Connecticut investors an opportunity to invest in a trucking venture run by respondents and to achieve an income stream averaging $1,400 to $2,000 weekly. The investors invested $10,000 in the venture. The action alleged that, contrary to representations made by the respondents, at least a portion of the investors' funds was used to pay for respondents' personal expenses, and that respondents failed to honor the investors' request for a return of their investment. The Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine alleged that the respondents sold unregistered securities in violation of Section 36b-16 of the Connecticut Uniform Securities Act and violated the antifraud provisions in Section 36b-4(a) of the Act.

The respondents were 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.

Moreau Investment Management Company (IARD No. 108574) - Consent Order Entered

On May 2, 2018, the Banking Commissioner entered a Consent Order (No. CO-18-8349-S) with respect to Moreau Investment Management Company , a Connecticut registered investment adviser located at 436 North Lake Street, Litchfield, Connecticut 06759. The Consent Order followed an examination and investigation of the firm which uncovered evidence that, from September 11, 2015 to February 2, 2016, 1) the firm's allocation of profits from block trading accounts resulted in the accounts of Roger Robert Moreau (CRD No. 1701859), president of the firm, receiving a profit of approximately $7,000; and 2) during that time frame, the firm failed to establish, enforce and maintain an adequate written trade allocation policy regarding block trading accounts. Such conduct allegedly violated the supervision requirements in Section 36b-31-6f(b) of the Regulations under the Connecticut Uniform Securities Act.

The Consent Order fined the firm $10,000 and directed it to cease and desist from regulatory violations.

Barton W. Stuck, Signal Lake Management, LLC, Signal Lake Side Fund, L.P., Signal Lake Side Fund II, L.P., Signal Lake Side Fund IIA, L.P. and Signal Lake General Partner LLC (CRD No. 285438) – Order to Cease and Desist Made Permanent; $700,000 in Fines Imposed

On May 2, 2018, following an administrative hearing, the Banking Commissioner entered Findings of Fact, Conclusions of Law and an Order (Docket No. CF-17-8254-S) against Signal Lake Side Fund, L.P, Signal Lake Side Fund II, L.P. and Signal Lake Side Fund IIA, L.P. , all of 606 Post Road East, Westport, Connecticut 06880; Signal Lake Management, LLC , investment manager of the funds; Signal Lake General Partner LLC , the general partner of an affiliated nonrespondent; and Barton W. Stuck , a managing member of the funds' investment manager as well as a control person of the funds.

The respondents had been the subject of a June 27, 2017 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing alleging that 1) at various times between 2007 and 2014, Stuck and the fund respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and/or selling unregistered fund securities to investors; 2) from approximately 2008 to 2014, in providing investment advice to the funds on a compensated basis, Signal Lake Management, LLC transacted business as an unregistered investment adviser in violation Section 36b-6(c)(1) of the Act and engaged Stuck as an unregistered investment adviser agent in violation of Section 36b-6(c)(3) of the Act; 3) respondent Stuck violated Section 36b-6(c)(2) of the Act by transacting business as an unregistered investment adviser agent; 4) Stuck and Signal Lake Management, LLC violated the antifraud provisions in Section 36b-4(a) of the Act by falsely representing to an investor in Signal Lake Side Fund II, L.P. that millions of dollars in additional investor capital had been provided to finance the partnership's operations when no such monies had, in fact, been received; and 5) Stuck and Signal Lake General Partner LLC violated Section 36b-23 of the Act by making a misleading Form ADV filing with the agency.

The hearing decision concluded that respondent Stuck violated the antifraud provisions in Sections 36b-4(a)(2) and 36b-4(a)(3) of the Act in connection with sales of Signal Lake Side Fund II, L.P. securities by falsely representing that the fund was a successful partnership with capital commitments exceeding $150 million. The hearing decision also found that Stuck, on behalf of Signal Lake General Partner LLC, violated Section 36b-23 of the Act by making false or misleading statements on that entity’s Form ADV filing. Among those misstatements was a representation that an affiliated entity had $145 million in assets under management and that the affiliate’s records were maintained and audited by O’Connor Davies. The decision also found that Signal Lake Management, LLC violated Section 36b-6( c)(1) of the Act by transacting business as an unregistered investment adviser and that Stuck violated Section 36b-6(c)(3) of the Act by transacting business as an unregistered investment adviser agent of Signal Lake Management, LLC. The hearing decision concluded that, while securities of Signal Lake Side Fund L.P and Signal Lake Side Fund II, L.P. were sold in violation of Section 36b-16 of the Act, the record did not support a similar conclusion for securities of Signal Lake Side Fund IIA, L.P.

The accompanying Order rendered the June 27, 2017 Order to Cease and Desist permanent as to each respondent effective May 3, 2018. In addition, the Order fined respondent Stuck $500,000, fined Signal Lake Management, LLC $100,000 and directed Signal Lake General Partner LLC to pay a $100,000 fine.

Dated: Tuesday, May 8, 2018

Jorge L. Perez
Banking Commissioner