Bulletin # 2667
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 Designate, Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800. Written comments will be considered only if they are received within ten days from the date of this bulletin.
STATE BANK ACTIVITY
Interstate Loan Production Office
On April 3, 2015, East West Bank, a California-chartered commercial bank, filed an application pursuant to Section 36a-412(d) of the Connecticut General Statutes, seeking approval to establish a loan production office at 1224 Mill Street, Building B, Suite 224, East Berlin, Connecticut.
CONSUMER CREDIT DIVISION ACTIVITY
On March 24, 2015, the Commissioner Designate entered into a Consent Order with Commercial Services Group, Inc. d/b/a Consumer Services Group, Inc. (“Commercial Services Group”), Louisville, Kentucky. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Commercial Services Group, during the period from October 1, 2011 to January 23, 2015, acted within this state as a consumer collection agency from 2401 Stanley Gault Parkway, Louisville, Kentucky, 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, Commercial Services Group paid $10,000 as a civil penalty and $1,400 as a back licensing fee.
On March 24, 2015, the Commissioner Designate entered into a Consent Order with Village Mortgage Company (NMLS # 6331) (“Village Mortgage”), Avon, Connecticut. The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleges that: (1) on October 21, 2014, Village Mortgage caused funds received from mortgagors, intended to be held in escrow for the payment of mortgagors’ taxes and insurance premiums, to be used to pay down Village Mortgage’s outstanding operating line of credit, and (2) on November 4, 5 and 10, 2014, Village Mortgage caused funds received from mortgagors, intended to be held in escrow for the payment of mortgagors’ taxes and insurance premiums and the payment of mortgage principal and interest to third-party mortgagees, to replace monies transferred from the mortgagors’ taxes and insurance premium escrow account on October 21, 2014. Such activity would form a basis to suspend, revoke or refuse to renew Village Mortgage’s mortgage lender license pursuant to Section 36a-494(a)(1) and 36a-51(a) of the Connecticut General Statutes, issue an order to cease and desist pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes. The Consent Order settled these allegations and required that Village Mortgage: (1) for a period of three years, retain an independent certified public accountant to audit all bank accounts that contain monies held in escrow for others and issue quarterly reports on such accounts; (2) for a period of three years, retain a compliance officer; (3) develop and implement internal control policies and procedures concerning its bank accounts containing monies held in escrow for others and provide evidence that such policies and procedures have been communicated to staff and will be monitored effectively; (4) provide evidence that it has implemented a liquidity risk and cash management plan; and (5) pay $35,000 as a civil penalty.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine Issued
On March 31, 2015, 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-15-8175-S) against James E. Neilsen of Norwalk, Connecticut. Respondent Neilsen, a former broker-dealer agent, provided tax and accounting services and also did business under the name Neilsen Financial Services. James E. Neilsen had been the subject of a November 13, 2014 Order of the Commissioner imposing a $25,000 fine and directing respondent Neilsen to pay restitution in connection with activities conducted through Ulysses Partners, LLC of which Neilsen was the founding member. The fine and restitution remain unpaid.
The March 31, 2015 action alleged that, more recently, respondent Neilsen entered into investment agreements with at least two investors and represented to them that the investment would generate a 9% return with no risk of loss. The investors invested at least $243,000 with respondent Neilsen. The action also alleged that respondent Neilsen used investor monies to cover his personal expenses and that he failed to provide investors with written disclosure concerning the risks of the investment. The action added that respondent Neilsen allegedly violated the antifraud provisions in Section 36b-4(a) of the Connecticut Uniform Securities Act; that respondent Neilsen sold unregistered securities in violation of Section 36b-16 of the Act; and that respondent Neilsen made a material misrepresentation to the agency in conjunction with an investigation.
Respondent Neilsen was afforded an opportunity to request a hearing on the allegations.
Dated: Tuesday, April 7, 2015
Jorge L. Perez
Banking Commissioner Designate