WHEREAS, the Banking Commissioner (the "Commissioner") is charged with the administration of Chapter 672a of the Connecticut General Statutes, the Connecticut Uniform Securities Act (the "Act") and Sections 36b-31-2 et seq. of the Regulations of Connecticut State Agencies (the "Regulations") promulgated under the Act;

WHEREAS, Walnut Street Securities, Inc. (“Walnut”) of 13045 Tesson Ferry Road, B1-50, St. Louis, Missouri and Tower Square Securities, Inc. (“Tower Square”) of One CityPlace, 18th Floor, Hartford, Connecticut are under common control and are both registered as broker-dealers under the Act;

WHEREAS, pursuant to Section 36b-6(d) of the Act, the following branch offices of Walnut became registered in Connecticut on the dates indicated:  1) 160 Knickerbocker Avenue, Stamford, Connecticut (the “Stamford Knickerbocker Branch”) (registered November 25, 2003); 2) 191 Post Road West, Westport, Connecticut (the “Westport Branch”) (registered January 29, 2001); 3) 30 Oak Street, Stamford, Connecticut (the “Stamford Oak Street Branch”) (registered August 1, 2003); and 4) 355 Highland Avenue, Suite 201, Cheshire; Connecticut (the “Cheshire Branch”) (registered August 1, 2003);

WHEREAS, on December 13, 1999, Tower Square’s branch office located 15 New Britain Avenue, Unionville, Connecticut (the “Unionville Branch”) became registered under Section 36b-6(d) of the Act;

WHEREAS, on October 20, 2005 the parent firm of Walnut and Tower Square notified the Commissioner in writing that, with respect to Walnut, the Stamford Knickerbocker Branch, the Westport Branch, the Stamford Oak Street Branch and the Cheshire Branch had ceased operations on December 8, 2003, November 27, 2002, November 14, 2003 and February 27, 2004, respectively;

WHEREAS, on October 20, 2005 the parent firm of Walnut and Tower Square notified the Commissioner that, with respect to Tower Square, the Unionville Branch had ceased operations on July 23, 2003;

WHEREAS, the Commissioner, through the Securities and Business Investments Division (the "Division") of the Department of Banking, conducted a follow-up investigation pursuant to Section 36b-26 of the Act into the activities of Walnut, Tower Square, and their officers, agents, employees and representatives to determine whether they, or any of them, have violated or are about to violate any provision of the Act or any Regulation or order under the Act;

WHEREAS, Section 36b-6(f) of the Act provides, in part, that:  “Any broker-dealer   . . . ceasing to transact business at any branch office or main office in this state shall, in addition to providing written notice to the commissioner prior to the termination of business activity at that office, (1) provide written notice to each customer or client serviced by such office at least ten business days prior to the termination of business activity at that office or (2) demonstrate to the commissioner, in writing, the reasons why such notice to customers or clients cannot be provided within the time prescribed ... The notice to customers or clients shall contain the following information:  The date and reasons why business activity will terminate at the office; if applicable, a description of the procedure the customer or client may follow to maintain the customer’s account at any other office of the broker-dealer or investment adviser; the procedure for transferring the customer’s or client’s account to another broker-dealer or investment adviser; and the procedure for making delivery to the customer or client of any funds or securities held by the broker-dealer or investment adviser.”

WHEREAS, Section 36b-31-6f (b)of the Regulations under the Act adds that:  “Each registered broker-dealer . . . shall establish, enforce and maintain a system for supervising the activities of its agents . . . and Connecticut office operations that is reasonably designed to achieve compliance with applicable securities laws and regulations”;

WHEREAS, Walnut and Tower Square orally represented to the Division that while their respective agents had provided the written notice to customers or clients required by Section 36b-6(f) of the Act, neither firm was able provide copies of the written notice provided by the agents;

WHEREAS, the Commissioner alleges that 1) Walnut violated Section 36b-6(f) of the Act by failing to provide written notice to the Commissioner prior to the termination of business activity at the Stamford Knickerbocker Branch, the Westport Branch, the Stamford Oak Street Branch and the Cheshire Branch; 2) Tower Square violated Section 36b-6(f) of the Act by failing to provide written notice to the Commissioner prior to the termination of business activity at the Unionville Branch; and 3) Walnut and Tower Square violated Section 36b-31-6f(b) of the Regulations by failing to enforce a system for supervising the activities of its agents and Connecticut office operations that was reasonably designed to achieve compliance with Section 36b-6(f) of the Act;

WHEREAS, Section 4-177(c) of Chapter 54 of the Connecticut General Statutes permits the resolution of a contested case by stipulation or agreed settlement;

WHEREAS, Walnut and Tower Square desire to settle the matters described herein and voluntarily enter into this Stipulation and Agreement, acknowledging that this Stipulation and Agreement is in lieu of any court action or administrative proceeding adjudicating any issue of fact or law on the matters described herein;

WHEREAS, Walnut and Tower Square, through their execution of this Stipulation and Agreement, voluntarily waive any rights each may have to seek judicial review or otherwise challenge or contest the terms and conditions of this Stipulation and Agreement;

NOW THEREFORE, THE PARTIES HERETO DO MUTUALLY AGREE AS FOLLOWS:

Administrative Orders and Settlements