>> All Orders and Certificates by date
ORDER APPROVING APPLICATION OF
PRIM CAPITAL CORPORATION, CLEVELAND, OHIO TO ESTABLISH A NONDEPOSITORY
TRUST COMPANY TO BE KNOWN AS NEW YORK TRUST COMPANY
Prim Capital Corporation, Cleveland, Ohio ("Prim") filed
an application to establish a nondepository trust company, pursuant
to 9-B M.R.S.A. Chapter 121, to be known as The New York Trust Company
("NY Trust"). NY Trust's office will be located at 200 Public
Square, Suite 2500, Cleveland, Ohio but it will have a registered office
in Portland, Maine.
The application was accepted for processing on January 4, 2007. Public
notice, as required by Title 9-B M.R.S.A. 252.2(B) and 312.3, was provided
by publication, posting on the Bureau's website and e-mail to interested
parties affording them an opportunity to submit written comments or
request a hearing. The Bureau received no comments during the public
comment period ending February 12, 2007. Processing of the application
was suspended, at the applicant's request, on April 10, 2007 for up
to thirty days, or until no later than May 10, 2007.
A Principal Bank Examiner of the Maine Bureau of Financial Institutions
conducted an investigation of this transaction. All evidence and pertinent
material which were considered by the Examiner were also considered
by the Superintendent in reaching his decision.
Prim is an Ohio corporation that provides investment advice, consulting
and financial planning services to individuals, trusts and institutions.
Prim, founded in 1997 by Joseph A. Lombardo, is the holding company
for Prim Securities, Inc., a licensed broker-dealer; Prim Advisors,
Inc., a registered investment advisor; and Prim Agency, a licensed independent
insurance agency. Prim will be a 20% owner of NY Trust, with the remaining
80% owned equally by Christian Laettner, Aaron McKie, Scottie Pippin
and Terry Porter, well-known current or former National Basketball Association
players. These four individuals, along with Mr. Lombardo, will constitute
the initial board of directors. As detailed in Appendix A, the Bureau
is requiring at least two additional directors before NY Trust may commence
NY Trust will focus on providing money management services to high
net worth individuals, initially targeting professional athletes and
entertainers. It will then expand its sales and marketing efforts to
include high net worth individuals and smaller financial institutions
that do not offer trust services. NY Trust will hire third-party money
managers to invest client funds. NY Trust will emphasize highly personalized
services and technology, with the latter used for educating potential
clients, to increase operational efficiencies and to complement sales
representatives in marketing. Messrs. Laettner, McKie, Pippen and Porter
will participate in marketing activities, particularly in investing
seminars and group functions; their participation is expected to accelerate
Prim has demonstrated sound financial performance with experienced
management and has competed successfully in the high net worth trust
business. The Bureau considered the competitive effects, the future
prospects and the convenience and needs of the markets to be served
and found them consistent with approval. Accordingly, the application
to establish a nondepository trust company with the name "The New
York Trust Company" is approved, subject to the conditions listed
on Appendix A.
The transaction shall be completed within one year of the effective
date of this Order, unless a written extension is granted by the Superintendent.
Any person aggrieved by this Order shall be entitled to a judicial review
of the Order in accordance with the Maine Administrative Procedure Act,
Title 5, Chapter 375, subchapter VII.
By order of the Superintendent, effective June 3, 2007.
Lloyd P. LaFountain III
May 4, 2007
Christian Laettner, Joseph A. Lombardo, Aaron
McKie, Scottie Pippin and Terry Porter are approved as directors.
However, before NY Trust may commence operations, it must add at least
two additional directors, at least one of whom is not a director,
officer or employee of Prim or any of its affiliates, who have recent
experience in an executive capacity in the trust/fiduciary/investment
advisor business. Any change in the directors, including the two additional
required directors, during the first three years of operation requires
the prior written approval of the Bureau.
Joseph A. Lombardo is approved as the chief
executive officer. The remainder of the senior management team, including
the senior trust officer, is subject to the prior written approval
of the Bureau. Any change in the senior managers during the first
three years of operation requires the prior written approval of the
The initial equity capital of NY Trust shall
be at least $2,000,000, which shall be paid-in in cash.
On an on-going basis, Tier 1 capital (as
defined in Bureau Regulation 27) shall not be less than the greater
of (a) $1,800,000 or (b) the sum of (1) 10 basis points (0.10%) of
discretionary assets and (2) 5 basis points (0.05%) of nondiscretionary
assets, including assets held in custody, unless a different amount
is established by the Superintendent pursuant to 9-B M.R.S.A. §412-A
(2). As such, the Superintendent reserves the right to change the
above formula for determining ongoing capital adequacy.
If NY Trust fails to maintain Tier 1 capital
in the minimum amount specified above in Condition #4, NY Trust shall
be deemed to have inadequate capital and the Bureau shall have the
authority to take any action authorized by Regulation 27.
Prior to the issuance of Certificate to Transact
Business and pursuant to 9-B M.R.S.A. §1213-A, NY Trust shall
pledge readily marketable assets having a fair value of at least $500,000
to the Bureau.
At all times, NY Trust shall maintain liquid
assets at least equal to 75% of the minimum Tier 1 required in Condition
All transactions between NY Trust and Prim
Capital Corporation, including any subsidiaries and affiliates of
Prim Capital Corporation, shall be conducted subject to the provisions
of 9-B M.R.S.A. §468. Prior to commencing operations, NY Trust
shall enter into written agreements, acceptable to the Bureau, governing
all relationships, including shared management, employees, space and
equipment, with Prim Capital Corporation (and its subsidiaries and
affiliates) and any other affiliate. The Board of Directors of NY
Trust shall annually review and approve any service agreements and
any other transactions with affiliates, including any cost allocation
or fee-sharing provisions in such agreements or other transactions.
NY Trust shall maintain all financial statements
required to be filed with the Bureau in accordance with generally
accepted accounting principles. NY Trust shall maintain all of its
statements and records separate and segregated from those of Prim
Capital Corporation (and its subsidiaries and affiliates) and any
NY Trust shall submit monthly financial statements,
board of director minutes and other requested reports to the Bureau
for the first two years of operation.
NY Trust shall not declare or pay any dividends
without the prior written approval of the Bureau for the first three
years of operation.
During the first three years of operations,
NY Trust shall not implement any material change or deviation from
the operating plan without the prior written approval of the Bureau.
During the first three years of operations,
NY Trust may not open any offices without the prior written approval
of the Bureau.
All technology-related vendor contracts must
stipulate that the performance of services provided by the vendors
to NY Trust is subject to the Bureau's examination and regulatory
Prior to the issuance of a Certificate to
Transact Business, NY Trust shall submit its written Anti-Money Laundering
Program and Customer Identification Program to the Bureau.
The Superintendent must approve the organizational
documents (i.e., Articles of Organization and Bylaws).
NY Trust must submit evidence that it has
obtained adequate fidelity bond coverage, including an Errors and
Omission rider; the coverage must be in an amount (including the amount
of the deductible) and for such coverage that shall be satisfactory
to the Superintendent.
NY Trust will comply with all applicable
laws, including the Maine Banking Code (Title 9-B M.R.S.A.), regulations
and policies of the Bureau.
On the business day prior to the issuance
of a Certificate to Transact Business, the Chief Executive Officer
of Prim Capital Corporation and NY Trust must certify in writing to
the Bureau that no material adverse changes have occurred with respect
to the financial condition or operation of Prim Capital Corporation
and NY Trust, respectively, as disclosed in the application.