A Middletown physician has been sanctioned and fined by the state banking department for selling unregistered securities to investors, including at least one former patient, and using some of the proceeds to pay his medical malpractice insurance. Dr. Wayne P. Franco, who is the majority owner of three limited-liability companies including New Heart LLC, which promises medical innovations through stem-cell research, was fined $10,000 and barred from improperly selling securities to investors, in a recent consent order approved by state banking officials. Franco’s dealings with patients were featured in an October 2011 story by C-HIT. The consent order alleges that Franco sought investments in his companies as an unregistered agent, and that he failed to disclose to investors that approximately $29,000 in solicited funds were used to pay for his medical malpractice insurance. The banking order directs him to cease and desist such improper solicitations, and to retain experienced legal counsel to handle necessary regulatory filings and provide the Connecticut Banking Department with 30 days’ advanced written notice of any such securities offers.