Hartford Business Journal

6 Hartford Business Journal • June 4, 2018 • www.HartfordBusiness.com Reporter's Notebook Gregory Seay | gseay@HartfordBusiness.com Real Estate, Economic Development/Construction, Banking & Finance and Manufacturing FINANCIAL SERVICES Voya Financial lands in legal hot seat I t has been a less than memorable spring so far for global wealth- manager/adviser Voya Financial Inc., based in Windsor. In March, Voya, the former spinoff from Dutch insurer ING with head- quarters and some 1,700 employees at 1 Orange Road, off Day Hill Road, agreed to a $3.6 million settlement with federal securities regulators for alleged conflict of interest practices at two of its subsidiaries — Voya Invest- ments LLC and Directed Services LLC. Now, Voya is tentatively set to ap- pear before the state Department of Banking at a July "cease-and-desist'' hearing on Banking Commissioner Jorge Perez's determination that Voya failed to properly supervise some of its securities broker-dealers. Perez has proposed fining Voya a maximum $100,000 for its actions. According to the banking depart- ment's online enforcement log, state bank regulators' claims against Voya stem from ongoing difficulties it has had supervising several former bro- ker-dealers, including Dale J. Quesnel Sr., an ex-Enfield stockbroker. Quesnel, the banking department's regulatory case summary says, was banned by Connecticut regulators for his alleged role in hawking some $2 million in dubious promissory notes to investors across the nation. Problem was, Voya had not vetted nor approved those notes — technically securities — for sale by its brokers. Such activity is known in the securi- ties industry as "selling away,'' and getting caught can cost violators their licenses, prompt a lifetime securities ban and fines, even jail time. The banking department summary suggests Quesnel has been on the agency's radar for years, amid evi- dence that he was less than truthful in disclosures to Voya and state and federal securities regulators about his financial past and present, and his allegedly questionable dealings with clients in and outside Voya. Perez, whose office licenses and regulates firms and individuals en- gaged in the issuance, sale or trading of registered stocks and securities, asserts that Voya failed to properly supervise Quesnel, as well as a handful of broker-dealers outside Connecticut. "Quesnel was able to sell away the unregistered … offerings because Voya ignored multiple red flags that became apparent to Voya at different times during Quesnel's association with Voya," the cease-and-desist order reads. "These red flags should have put Voya on notice that Quesnel might be violating state securities laws." A banking department spokeswoman said the agency cannot comment on pending disciplinary matters. In the Connecticut broker-dealer matter, a Voya spokesperson said the company does not comment on pend- ing litigation. About the $3.6 million settlement with the U.S. Securities and Exchange Commission, Voya said in a statement: " … This settlement … means we avoid a lengthy and costly litigation process and can focus our resources on deliv- ering high-quality investment service to our clients." Shifting strategy Connecticut's disciplinary proceed- ings against Voya come against the backdrop of painful memories for many individual and institutional investors who watched the value of their stocks, bonds and other securi- ties plummet in value amid the 2008 near-financial meltdown. It also prompted many states to join the federal government in tightening rules regulating the securities industry. As of March 31, Voya had $541 bil- lion in assets under management and administration. The Fortune 500 com- pany had 2017 revenues of $8.6 billion. Meantime, Voya recently has also spent time tweaking its business model. Last December, Voya announced plans to exit the annuities market, selling off closed-block variable an- nuity accounts valued at about $35 billion, plus disposing of its individual fixed and fixed indexed annuity busi- ness to an investor consortium led by affiliates of Apollo Global Management LLC, Crestview Partners and Rever- ence Capital Partners. In March, Voya said it will acquire Pen-Cal Administrators, a California deferred pay-benefit consultancy for an undisclosed sum. DEAL WATCH Plainville industrial building sells for $335,000 A 5,280-square-foot Plainville industrial building has sold for $335,000, brokers say. CBI Properties purchased the building on two parcels totaling about a half-acre at 5 Cronk Road from Anderson Turf Irrigation Inc., according to seller's broker Lyman Real Estate. Anderson Turf I sold the building in order to relocate to new facilities at 21 Industrial Drive in Avon, Lyman said. Hartford's Carousel Apts. sold The 17-unit Carousel Apartments in Hartford's Asylum Hill neighborhood has sold for $995,000, or $58,529 per unit, brokers say. The building at 286 Farmington Ave. has a mix of 11 one- and two-bedroom flats, and six two-bed, 1 ½ bath townhomes, according to seller's broker Chozick Realty. All units offer tenant-paid heat and hot water, central air, and exposed brick features. The Brooklyn, New York buyer was 286 Farmington Partners BSD LLC and the seller was David C. Smith, city records show. MANUFACTURING CT manufacturing workers see stagnant wages Connecticut's manufacturing workers saw their wages and hours worked stagnate in April, despite a significant demand for new workers. The likely reason for slow wage growth? More younger workers are entering shop floors, replacing older employees who are leaving the workforce at the peak of their earnings. CT Manufacturing Employee Hours & Wages Apr. 2018 Apr. 2017 Average Weekly Hours 40.7 40.7 Average Hourly Earnings $24.98 $24.59 CT Private Industry Employee Hours & Wages Apr. 2018 Apr. 2017 Average Weekly Hours 34.2 33.7 Average Hourly Earnings $31.75 $31.63 Source: CT Department of Labor Windsor's Voya Financial finds itself in legal hot water of late, including in Connecticut, for alleged conflicts of interest and lack of oversight at two units. PHOTO | CONTRIBUTED 5 Cronk Road, Plainville. PHOTO | CONTRIBUTED PHOTO | CONTRIBUTED Carousel Apartments, 286 Farmington Ave., Hartford.

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