Bulletin # 2560 - Week Ending March 15, 2013

STATE BANK ACTIVITY

Acquisition Statement

On March 13, 2013, pursuant to Section 36a-184 of the Connecticut General Statutes, Liberty Bank, a Connecticut-chartered, mutual savings bank headquartered in Middletown, Connecticut, filed an acquisition statement for the acquisition of Southern Connecticut Bancorp, Inc., a Connecticut corporation, and indirectly The Bank of Southern Connecticut, a Connecticut-chartered stock bank.  The acquisition will take place through the merger of an acquisition subsidiary, which will be formed as a Connecticut stock corporation and wholly-owned subsidiary of Liberty Bank, with and into Southern Connecticut Bancorp, Inc.  Also on March 13, 2013, Liberty Bank and The Bank of Southern Connecticut filed an application pursuant to Section 36a-125 of the Connecticut General Statutes for the merger of The Bank of Southern Connecticut with and into Liberty Bank.  Subsequent to the merger, Southern Connecticut Bancorp, Inc. will be liquidated, which will result in Liberty Bank being the sole surviving entity.  

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing Issued

On March 11, 2013, 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-13-7997-S) against 1) Method Films, Inc. a/k/a Method Films, LLC a/k/a Method Film, LLC (“Method Films”) of Sunny Isles Beach, Florida and El Paso, Texas; 2) Thierry Thelemaque of El Paso, Texas, president of Method Films; 3) Stilas Financial Services, S.A. of New York, New York; and 4) Matthew Bennett Greene of London, United Kingdom.  Respondent Greene was the founder, president and chief legal counsel of Stilas Financial Services, S.A.

The action alleged that, in September 2008 and October 2008, respondents Method Films and/or Thelemaque offered and sold Method Films securities to one or more Connecticut investors.  The offering proceeds would be used to finance the production of one or more films, including a movie entitled “Enigma.”  The securities that were offered consisted of (a) an Investor Agreement pursuant to which Method Films, through its agent Thelemaque, agreed to split Enigma gross revenues in excess of $20,000 with investors in return for a $100,000 investment; and (b) a related Promissory Note pursuant to which obligors Method Films and Thelemaque promised to pay one or more investors $1.1 million on or before September 30, 2009 – a return of one thousand percent on a $100,000 investment.  The action further alleged that respondents Method Films and Thelemaque violated Section 36b-16 of the Connecticut Uniform Securities Act by offering and selling unregistered securities.  In addition, the action alleged that respondents Stilas Financial Services, S.A. and Greene materially aided Method Films’ and Thelemaque’s violation of Section 36b-16 of the Act, in part by accepting investor monies remitted for the purpose of investing in the Method Films offering.  In addition, the action alleged that, in violation of Section 36b-6 of the Act, respondent Method Films employed respondent Thelemaque as an unregistered agent of issuer, and that respondent Thelemaque transacted business in that unregistered capacity.

According to the action, respondent Thelemaque allegedly forwarded to one or more prospective investors a purported agreement by Stilas Financial Services, S.A. to finance the Enigma film project, leading investors to believe that the film project would proceed with the support of Stilas Financial Services, S.A.  The action alleged that the respondents violated the antifraud provisions in Section 36b-4(a) of the Act by failing to disclose, among other things, any financial information concerning the respondents; the estimated cash proceeds of the offering; any risk factors related to the investment in general or the film industry in particular; the remuneration to be paid to the principals of Method Films; the basis upon which a $100,000 investment in a $1.1 million Promissory Note could yield a rate of return of 1,000 percent; or the fact that respondent Thelemaque was not registered as an agent of issuer or in any other capacity to sell securities in Connecticut.

The action stated that, to date, the respondents had not paid at least one Connecticut the promised rate of return and had failed to return any investor monies.

Each of the respondents was afforded an opportunity to request a hearing on the allegations in the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.

CONSUMER CREDIT DIVISION ACTIVITY

Consent Orders

On February 14, 2013, the Commissioner entered into a Consent Order with Elite Financial Solutions Inc. a/k/a E. F. Solutions Inc. (“Elite Financial”), Pompano Beach and Ft. Lauderdale, Florida.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on October 22, 2012, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Elite Financial.  The Commissioner alleged that Elite Financial engaged and offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the 2012 Supplement to the General Statutes.  As part of the Consent Order, Elite Financial was required to pay $1,000 as a civil penalty and to immediately cease and desist from engaging or offering to engage in unlicensed debt negotiation activity in Connecticut, in violation of Section 36a 671(b) of the 2012 Supplement to the General Statutes.

On February 14, 2013, the Commissioner entered into a Consent Order with Fort Funding Corp (NMLS # 39463) (“Fort Funding”), Brooklyn, New York.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on December 11, 2012, the Commissioner issued a Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing against Fort Funding.  The Commissioner alleged that Fort Funding failed to file certain annual information and failed to timely file certain quarterly information required by standard mortgage call reports in violation of Section 36a-534b(c)(3) of the 2012 Supplement to the General Statutes and/or Section 36a-534b(c)(3), as amended by Public Act 12-96.  As part of the Consent Order, Fort Funding paid $2,500 as a civil penalty.

On February 15, 2013, the Commissioner entered into a Consent Order with New Vision Mortgage, LLC d/b/a New Vision Group (NMLS # 2442) (“New Vision”), East Haven, Connecticut.  The Consent Order was based on an examination by the Consumer Credit Division.  As a result of such examination, the Commissioner alleged that New Vision employed or retained, on the day of April 10, 2010, one (1) individual as a mortgage loan originator who was not licensed, in violation of Section 36a-486(b) of the Connecticut General Statutes.  As part of the Consent Order, New Vision was ordered to pay $1,000 as a civil penalty.

On February 15, 2013, the Commissioner entered into a Consent Order with State Law Group and Haben Habte Tesfai, Attorney At Law (“Tesfai”).  State Law Group has offices at various locations in California and Tesfai is an attorney who was associated with State Law Group.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on July 30, 2012, the Commissioner issued a Temporary Order to Cease and Desist, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) against State Law Group and Tesfai.  The Commissioner alleged, among other things, that (1) State Law Group offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General Statutes; (2) State Law Group engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, and Section 36a-671(b) of the 2012 Supplement to the General and (3) Tesfai engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011.  As part of the Consent Order, State Law Group and Tesfai were ordered to pay $2,000 as a civil penalty and to immediately cease and desist from engaging or offering to engage in unlicensed debt negotiation activity in Connecticut.

On February 25, 2013, the Commissioner entered into a Consent Order with CTHM, LLC d/b/a Connecticut Home Mortgage (NMLS # 15831) (“Connecticut Home Mortgage”), Shelton, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that Connecticut Home Mortgage was engaged in the business of a mortgage correspondent lender from 20 locations without obtaining required branch office licenses for such locations, in violation of Section 36a-486 of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  As part of the Consent Order, Connecticut Home Mortgage was ordered to pay $20,000 as a civil penalty and $80,000 as past due licensing fees.

Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty

On February 15, 2013, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing (“Notice”) in the Matter of: First Choice Debt Resolution, LLC, (“Respondent”), Lighthouse Point, Florida.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent engaged in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the Connecticut General Statutes in effect prior to October 1, 2011, and offered to engage in debt negotiation in this state without obtaining the required license, in violation of Section 36a-671(b) of the 2012 Supplement to the General Statutes.  The Commissioner also found that the public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.

Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License and Notice of Intent to Issue Order to Cease and Desist

On February 21, 2013, the Commissioner issued a Notice of Automatic Suspension, Temporary Order to Cease and Desist, Notice of Intent to Revoke Consumer Collection Agency License, Notice of Intent to Issue Order to Cease and Desist and Notice of Right to Hearing (“Notice”) in the Matter of:  Highwood Associates Credit Resolution LLC d//b/a Highwood Associates (“Respondent”), Glastonbury, Connecticut.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent failed to maintain a surety bond during the entire period of its consumer collection agency license, in violation of Section 36a-802(a) of the Connecticut General Statutes.  The Commissioner also found that public welfare required the issuance of a Temporary Order to Cease and Desist.  Respondent was afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.

Dated:  Tuesday, March 19, 2013