Bulletin # 2839 - Week Ending July 20, 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.

CREDIT UNION ACTIVITY

Branch Activity

CONSUMER CREDIT DIVISION ACTIVITY

Consent Order

On July 13, 2018, the Commissioner entered into a Consent Order withDeily & Glastetter, LLP d/b/a Deily & Glastetter, LLP Attorneys at Law(NMLS # 1417238) (“Deily”), Albany, New York.The Consent Order was based on an investigation by the Consumer Credit Division.As a result of such investigation, the Commissioner alleged that Deily acted within this state as a consumer collection agency without the requisite consumer collection agency license, in violation of Section 36a-801(a) of the Connecticut General Statutes.As part of the Consent Order, Deily paid $5,000 as a civil penalty.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Wilbanks Securities, Inc. (CRD No. 40673) - Broker-dealer Registration Revoked and Canceled

On July 13, 2018, the Banking Commissioner entered an order by default revoking and canceling the broker-dealer registration ofWilbanks Securities, Inc.in Connecticut.The firm maintained its principal office at 4334 Northwest Expressway, Suite 222, Oklahoma City, Oklahoma73116.The action had been preceded by a June 7, 2018 Notice of Intent to Revoke and Cancel Registration as Broker-dealer.The revocation and cancellation of registration was based on the firm's apparent cessation of business as a broker-dealer as well as an October 6, 2017 Financial Industry Regulatory Authority action cancelling the firm's FINRA membership.Wilbanks Securities, Inc. did not request a hearing on the matter.

Trevor M. Allen, Sr. Fined $100,000 Following Hearing

On July 13, 2018, following a hearing, the Banking Commissioner enteredFindings of Fact, Conclusions of Law and an Order by default againstTrevor M. Allen, Sr.(Docket No. CRF-17-8212-S).The action had been preceded by a December 1, 2017 Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine alleging that 1) Trevor M. Allen, Sr., Capital Account Signatory for Hong Kong-based CE Capital Limited, offered and sold unregistered securities in the form of participation agreements in or from Connecticut; 2) respondent Allen violated the antifraud provisions in Section 36b-4 of the Connecticut Uniform Securities Act by failing to disclose, among other things, how a $50,000 investment could yield an additional return of $450,000 in 31 days or less; financial and background information on CE Capital Limited and its principals; risk factors relating to the investment; and information on how the investment proceeds would be applied; and 3) respondent Allen transacted business as an unregistered agent of issuer in violation of Section 36b-6 of the Act.   Although respondent Allen requested a hearing on the allegations in the December 1, 2017 Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine, he failed to appear at the February 27, 2018 hearing.   The July 13, 2018 action concluded that respondent Allen 1) violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered CE Capital Limited securities in or from Connecticut to at least one investor; 2) violated the antifraud provisions in Section 36b-4(a) of the Act; and 3) transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act.   The July 13, 2018 action rendered the December 1, 2017 Order to Cease and Desist and Order to Make Restitution permanent, and fined respondent Allen $100,000.

ProEquities, Inc. (CRD No. 15708) Fined $7,500 for Supervisory Violation  

On July 20, 2018, the Banking Commissioner entered a Consent Order (No. CO-18-8400-S) with respect toProEquities, Inc., a Connecticut-registered broker-dealer having its main office at 2801 Highway 280 South, South Birmingham, Alabama35223.The Consent Order alleged that the firm violated Section 36b-31-6f(b) of the Regulations under the Connecticut Uniform Securities Act by failing to establish, enforce and maintain an adequate supervisory system in connection with the activities of former agent Matthew Charles Woodard (CRD No. 5699485).During his association with the firm, Woodard was also the founding member, control person and treasurer of Toppikgink 539, LLC d/b/a Titan Brokerage Services, an activity that Woodard did not disclose to ProEquities, Inc.Woodard allegedly persuaded one of his ProEquities clients to authorize a $10,000 wire transfer from the investor's ProEquities account to Toppikgink 539, LLC's account, and that Woodard used at least a portion of the wired funds not for investment but to pay his personal expenses.The Consent Order alleged that ProEquities, Inc. should have taken additional steps to review the transaction in question.   The Consent Order fined ProEquities, Inc. $7,500 and directed it to cease and desist from regulatory violations.In addition, the Consent Order required that the firm reimburse the affected investor $90 to cover wire transfer fees. Pursuant to a separate March 23, 2018 Consent Order with Woodard (No. CO-17-8279-S), provisions had been made for the affected investor to receive $325,000 in restitution.

Vir-Sec, Inc. and Christopher Murphy - Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine Issued

On July 20, 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-18-8268-S) againstVir-Sec, Inc.of 2840 West Bay Drive, #212, Belleair Bluffs, Florida 33770 andChristopher Murphy, president and control person of Vir-Sec, Inc.Vir-Sec, Inc., a currently inactive Delaware corporation, was involved in the development of Internet security software.The action alleged that the respondents violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and/or selling unregistered securities.The offering was conducted through general solicitation at a Connecticut hotel.The action also alleged that the respondents violated the antifraud provisions in Section 36b-4(a)(2) of the Act by failing to provide investors with material information concerning the issuer's financial condition, the specific risks associated with investing in Vir-Sec, Inc. and background information on the issuer's officers, directors and their compensation.   The respondents were afforded an opportunity to request a hearing on the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.   SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITYWalter John Dubiel (CRD No. 4234689) - Consent Order EnteredOn July 12, 2018, the Banking Commissioner entered a Consent Order (No. CO-18-8440-S) with respect to Walter John Dubiel, a former broker-dealer agent and investment adviser agent of ProEquities, Inc. Dubiel was also a former broker-dealer agent of First Allied Securities, Inc. and a former investment adviser agent of First Allied Advisory Services, Inc. The Consent Order alleged that 1) in approximately January 2015, Dubiel shared his First Allied confidential client log-in credentials with one Matthew Charles Woodard, then an unregistered individual, without notice to the affected clients and contrary to firm policy; 2) as a result, Woodard used the credentials to access an investor's advisory account and execute securities transactions without the investor's knowledge or consent; and 3) Dubiel engaged in dishonest or unethical practices within the meaning of Sections 36b-5(f) and 36b-15(a)(2)(H) of the Connecticut Uniform Securities Act. Woodard had been the subject of a March 23, 2018 Consent Order (No. CO-17-8279-S) with the department.The Consent Order barred Dubiel for seven years from 1) transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent; and 2) acting in any other capacity that required a license or registration from the Commissioner. In addition, the Consent Order fined Dubiel $10,000 and directed him to cease and desist from regulatory violations.