The Department of Banking News Bulletin 

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 Howard F. Pitkin, Banking Commissioner, at the Connecticut Department of Banking, 260 Constitution Plaza, Hartford, CT 06103-1800 or via E-mail. Written comments will be considered only if they are received within ten days from the date of this bulletin.

STATE BANK ACTIVITY

Branch Activity

Section 36a-145 of the Connecticut General Statutes requires certain applications for a branch, or for a limited branch at which loans will be made, be accompanied by a plan detailing how adequate services to meet the banking needs of all community residents will be provided.  Plans are submitted when such applications are filed and are available for public inspection and comment at this Department for a period of 30 days.  Questions concerning branch activity should be directed to the Financial Institutions Division, (860) 240-8180.

Main Office Relocation

Quinnipiac Bank & Trust Company will relocate its main office from 2600 Dixwell Avenue, Hamden, Connecticut, to 2704 Dixwell Avenue, Hamden, Connecticut, effective Monday, August 12, 2013.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Commissioner Enters Orders Imposing Fines of $210,000 in the Aggregate for Business Opportunity Act Violations

On July 16, 2013, the Banking Commissioner entered three separate Orders Imposing Fine (Docket No. CF-13-8051-B) against Accelerated Mentoring LLC, now or formerly of Boise, Idaho; Clancey Braxton Yohman, managing member of Accelerated Mentoring LLC; and Josh Jensen, a representative of the company.  Accelerated Mentoring LLC, previously known as Internet Sales Institute LLC, was in the business of selling Internet-based training, personal coaching and software to enable purchasers to start their own “work at home” e-commerce business.  The three respondents had been the subject of a March 18, 2013 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-13-8051-B) alleging that 1) the respondents violated Section 36b-67(1) of the Connecticut Business Opportunity Investment Act by offering and selling unregistered business opportunities; 2) respondents Accelerated Mentoring LLC and Yohman violated Section 36b-67(2) of the Act by making unsubstantiated earnings or income claims; and 3) respondents Accelerated Mentoring LLC and Yohman violated the antifraud provisions in Section 36b-67(6) of the Act by failing to provide critical disclosures to prospective purchasers.  None of the respondents requested a hearing on the Order to Cease and Desist and Notice of Intent to Fine.

Adopting as findings the allegations contained in the Order to Cease and Desist and Notice of Intent to Fine, the Commissioner fined Accelerated Mentoring LLC $90,000.  Clancey Braxton Yohman also was directed to pay a $90,000 fine.  A fine of $30,000 was imposed against respondent Josh Jensen.

Broker-dealer Registration Conditioned

On July 18, 2013, the Banking Commissioner executed a Stipulated Agreement (No. ST-13-8103-S) conditioning the registration of MDS Securities, LLC as a broker-dealer in Connecticut.  The firm is located in Kittanning, Pennsylvania and focuses on selling private placements, gas or oil interests, tax shelters and limited partnerships in primary distributions.  Connecticut law requires that the principals of a securities brokerage firm fulfill certain experience requirements, and the firm did not satisfy the experience criteria.  The Stipulated Agreement required that, for two years, the firm not engage in retail securities brokerage activities in or from Connecticut in connection with any primary or secondary distribution, but rather effect transactions exclusively with or through other Connecticut registered broker-dealers.   Subject to that limitation and for a two year period, 1) where the firm served as dealer manager in a Regulation D offering, Connecticut securities purchasers were required to be accredited investors; and 2) where the firm served as dealer manager in a public offering of oil and gas securities, the Stipulated Agreement required that Connecticut securities purchasers satisfy specific suitability criteria.  MDS Securities, LLC became registered as a broker-dealer under the Connecticut Uniform Securities Act on July 18, 2013.

CONSUMER CREDIT DIVISION ACTIVITY

Consent Order

On June 21, 2013, the Commissioner entered into a Consent Order with Fidelcap Corp. d/b/a/ Fidelity Capital (NMLS # 6262) (“Fidelity Capital”), Larchmont, New York.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on December 17, 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.  The Commissioner alleged that Fidelity Capital failed to timely file certain annual 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) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  As part of the Consent Order, Fidelity Capital paid $2,500 as a civil penalty.

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

On June 25, 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:  American Trust Counsel LLC a/k/a American Trust Counsel. P.A. (“Respondent”), Sunrise, Florida.  The Notice alleged 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.  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.  As part of the Order to Make Restitution, Respondent was ordered to repay moneys plus interest to an identified Connecticut resident and to repay to any other Connecticut residents who entered into an agreement for debt negotiation services with Respondent on and after October 1, 2009, any fees paid plus interest.  The Commissioner also found that 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 allegation set forth in the Notice.

Notice of Intent to Refuse to Renew Mortgage Broker License

On June 25, 2013, the Commissioner issued a Notice of Intent to Refuse to Renew Mortgage Broker License and Notice of Right to Hearing (“Notice”) in the Matter of:  Fairfield County Mortgage Company (NMLS # 116804) (“Respondent”), Fairfield, Connecticut.  The Notice was the result of an investigation by the Consumer Credit Division to determine if Respondent continues to meet the minimum qualifications for licensure.  The Notice alleges that Respondent does not have a designated qualified individual who is a Connecticut licensed mortgage loan originator, which constitutes sufficient grounds to refuse to renew Respondent’s license to act as a mortgage broker in Connecticut for the 2013 licensing period pursuant to Section 36a-494(a)(1), subsections (a) and (b) of Section 36a-51 and Section 36a-489(a)(2)(A) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.

Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty

On June 24, 2013, 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 (“Notice”) in the Matter of:  Carollo, Joseph E. d/b/a Carollo Mortgage (NMLS # 93416) (“Respondent”), South Glastonbury, Connecticut.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent failed to file certain annual information required on the Nationwide Mortgage Licensing System and Registry, in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.

On June 24, 2013, 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 (“Notice”) in the Matter of:  Gateway Mortgage Services, LLC (NMLS # 70340) (“Respondent”), Waterford, Connecticut.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent failed to file certain quarterly and annual information required on the Nationwide Mortgage Licensing System and Registry, in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.

On June 24, 2013, 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 (“Notice”) in the Matter of:  Harbor Financial, LLC (NMLS # 112573) (“Respondent”), Hamden, Connecticut.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent failed to timely file certain quarterly information, and failed to file certain other quarterly information and certain annual information required on the Nationwide Mortgage Licensing System and Registry, in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.

On June 24, 2013, 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 (“Notice”) in the Matter of:  Xcapital Inc. (NMLS # 173324) (“Respondent”), Chicago, Illinois.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent failed to file certain annual information required on the Nationwide Mortgage Licensing System and Registry, in violation of Section 36a 534b(c)(3) of the Connecticut General Statutes.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.