The Department of Banking News Bulletin
Bulletin # 2830
Bulletin # 2830
Week Ending May 18, 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.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Blaine Capital, LLC (IARD No. 282864) – Stipulation and Agreement Entered
On May 15, 2018, the Banking Commissioner entered into a Stipulation and Agreement (No. ST-18-8396-S) with Blaine Capital, LLC, an investment adviser located at Six Landmark Square, Fourth Floor, Stamford, Connecticut 06901. The Stipulation and Agreement alleged that, prior to its registration as an investment adviser under the Connecticut Uniform Securities Act, the firm performed advisory services and collected advisory fees from clients in violation of Section 36b-6(c) of the Act. The Stipulation and Agreement also alleged that, during a period when the firm was registered as an investment adviser with the Securities and Exchange Commission, the firm failed to file the notice required by Section 36b-6(e) of the Act. The Stipulation and Agreement acknowledged that the firm had refunded $7,750.48 in advisory fees to those clients to whom it had rendered advisory services while unregistered. Pursuant to the Stipulation and Agreement, the firm agreed to pay a $5,000 fine and to refrain from regulatory violations.
Thomas Michael Bakitas and DRBS Algorithm, LLC - Order to Cease and Desist and
Notice of Intent to Fine Issued
Notice of Intent to Fine Issued
On May 17, 2018, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-18-8359-S) against Thomas Michael Bakitas, now or formerly of 2964 State Street, Hamden, Connecticut 06517 and 1107 Del Mar Avenue, Chula Vista, California 91911. Also named in the action was DRBS Algorithm, LLC, a now defunct Connecticut limited liability company controlled by Bakitas. The action alleged that Bakitas, a self-described “Professional trader, M.D. Physician, Mathematician & algorithm trading system inventor” who was “Merrill lynch [sic] trained”, used social media to promote his “Nasorean Algorithm Protected Trading System” and shared securities recommendations with subscribers. Those signing up for Bakitas' Standard plan were charged $1,188 per year, and those signing up for the more advanced Premium plan were charged $3,500 annually. Premium membership allegedly featured individual text alerts, telephone calls from Bakitas and WhatsApp file assistance. The action alleged that the respondents transacted investment advisory business absent registration under the Connecticut Uniform Securities Act.
The respondents were afforded an opportunity to request a hearing on the allegation in the Order to Cease and Desist and Notice of Intent to Fine.
Troy Rejda - Consent Order Entered
On May 17, 2018, the Banking Commissioner entered a Consent Order (Docket No. CO-17-8212-S) with respect to Troy Rejda of Ozark, Missouri. Rejda had been named as a respondent in a December 1, 2017 Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine involving CE Capital Limited, Arthur Connolly and Trevor M. Allen, Sr. Among other things, that action alleged that the respondents offered and sold unregistered securities in the form of participation agreements and failed to disclose to investors how a $50,000 investment could yield a promised return of $450,000 in 31 days or less.
On January 3, 2018, the Order to Cease and Desist and Order to Make Restitution had become permanent by default against respondents CE Capital Limited and Arthur Connolly. A $100,000 fine was imposed against CE Capital Limited and Arthur Connolly by default on January 31, 2018. The matter involving Trevor M. Allen, Sr. is pending.
The Consent Order relating to Rejda alleged that Rejda 1) violated Section 36b-16 of the Connecticut Uniform Securities By offering and selling unregistered securities to at least one Connecticut investor; 2) violated the antifraud provisions in Section 36b-4(a) of the Act; and 3) violated Section 36b-6(a) of the Act by transacting business as an unregistered agent of issuer.
In executing the Consent Order, Rejda represented that he had repaid the affected investor $19,000. That amount represented what Rejda had been paid for participating in the conduct which was the subject of the administrative proceeding.
The Consent Order fined Rejda $5,000 and directed him to cease and desist from regulatory violations.