Bulletin # 2595 - Week Ending November 15, 2013

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.

PETITION FOR DECLARATORY RULING

On November 12, 2013, a petition for a declaratory ruling was filed pursuant to Section 4-176 of the Connecticut General Statutes and Section 36a-1-84 of the Regulations of Connecticut State Agencies on behalf of Sameer Qadri.  The petition seeks a declaratory ruling (1) vacating the Department’s orders directed toward Mr. Qadri on the basis of the Department’s lack of jurisdiction over him because of failure of required notice, (2) vacating the civil penalty imposed upon him as unjust, inequitable and/or excessive, and because of the failure of notice to the petitioner, and (3) such other relief as may be deemed appropriate.  Such petition was filed in connection with the Commissioner’s May 2, 2013, Order to Cease and Desist and Order Imposing Civil Penalty issued against Sameer Qadri d/b/a Accredited Law Group and an Order to Make Restitution which became final on February 23, 2013.

CONSUMER CREDIT DIVISION ACTIVITY

Consent Orders

On October 28, 2013, the Commissioner entered into a Consent Order with Connecticut Medical Financial Services, Inc. d/b/a C.M. Financial Services, Inc. (“C.M. Financial Services”), Farmingdale, New York.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged that C.M. Financial Services failed to provide written notice to the Commissioner of a change in location of its place of business its East Haddam, Connecticut office to a Farmingdale, New York office, and failed to notify the Commissioner in writing of a change in the information provided in its August 25, 2011, Renewal of Consumer Collection Agency License – Main Office not later than 10 business days after such relocation, in violation of Sections 36a 801(c) and 36a-801(b)(1), respectively, of the Connecticut General Statutes in effect prior to October 1, 2013.  As part of the Consent Order, C.M. Financial Services paid $2,500 as a civil penalty.

On October 31, 2013, the Commissioner entered into a Consent Order with Ganesh Associates, LLC (“Ganesh Associates”), Hartford, Connecticut.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, on August 19, 2013, the Commissioner issued a Notice of Intent to Revoke Check Cashing Service License, 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, among other things, Ganesh Associates’ failure to timely provide the Commissioner with a complete report of the corrective action taken as a result of an October 17, 2011, Report of Examination, constitutes a failure by Ganesh Associates to fully cooperate with the Commissioner, in violation of Section 36a-17(d) of the Connecticut General Statutes.  As part of the Consent Order, Ganesh Associates paid $2,500 as a civil penalty, and was ordered to maintain the books, records and accounts required by Section 36a-586 of the Connecticut General Statutes and Section 36a 588-3 of the Regulations of Connecticut State Agencies and to submit copies of the books, records and accounts for specified time periods to the Division Director.

On October 31, 2013, the Commissioner entered into a Consent Order with Residential Home Funding Corp. d/b/a Residential Home Mortgage Corp. d/b/a Consumer Equity d/b/a The Mortgage Corner NMLS # 34973 (“Residential Home Funding”), White Plains, New York.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, the Commissioner alleged in a Notice of Intent to Revoke Mortgage Correspondent Lender License, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing issued on August 13, 2013, that among other things, Residential Home Fundings failed to timely provide the Commissioner with a complete report of the corrective action taken as a result of a July 31, 2012, Report of Examination (“ROE”) and a May 30, 2013 Compliance Letter (“Compliance Letter”), in violation of Section 36a-17(d) of the Connecticut General Statutes.  As part of the Consent Order, Residential Home Funding paid $2,500 as a civil penalty.

On November 1, 2013, the Commissioner entered into a Consent Order with XCapital, Inc. (NMLS # 173324) (“XCapital”), Chicago, Illinois.  The Consent Order was based on an investigation by the Consumer Credit Division.  As a result of such investigation, 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 against XCapital.  The Commissioner alleged that XCapital failed to file certain annual information required by mortgage call reports, in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes.  As part of the Consent Order, XCapital paid $2,500 as a civil penalty.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Order Imposing Fine of $50,000 Issued

On November 15, 2013, the Banking Commissioner entered an Order Imposing Fine against Speed of Thought Trading Corporation of Philadelphia, Pennsylvania.  The respondent had been the subject of a September 16, 2013 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-13-7839-S) alleging that the respondent violated the securities registration requirement in Section 36b-16 of the Connecticut Uniform Securities Act.

Speed of Thought Trading Corporation did not appear or contest the imposition of the fine which was entered by default against it.

In fining the respondent $50,000 for violating Section 36b-16 of the Act, the Commissioner adopted as conclusions of law the allegations made in the Order to Cease and Desist and Notice of Intent to Fine. 

Seven Entities Fined $425,000 in the Aggregate for Securities Law Violations

On November 13, 2013, the Banking Commissioner entered seven separate Orders Imposing Fine against 1) Gabriel Abensur of Gibraltar; 2) John Morgan of New York, New York; 3) Rescon Technology Corporation of Philadelphia, Pennsylvania; 4) Northeast Development Corporation (“Northeast”) of Philadelphia, Pennsylvania; 5) Hybrid Automotive Technologies, Inc. (“Hybrid”) of Enfield, Connecticut; 6) Ironclad Investments, LLC (“Ironclad”) of Bloomfield, Connecticut, an entity which held itself out as a high performance arbitraged FOREX fund; and 7) The African Diamond Company, Inc. (now known as Coal Corporation) (“African”) of Herndon, Virginia.

Each of the respondents had been the subject of a September 16, 2013 Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CF-13-7839-S) alleging various violations of the Connecticut Uniform Securities Act.

None of the respondents appeared or contested the imposition of their respective fines which were entered by default.

Finding that respondent Abensur violated the securities registration and antifraud provisions in Sections 36b-16 and 36b-4(a) of the Act, the Commissioner fined Gabriel Abensur $100,000.  The African Diamond Company, Inc. was fined $50,000 upon a finding that it violated the securities registration provisions in Section 36b-16 of the Act and employed an unregistered agent of issuer in contravention of Section 36b-6(b) of the Act.  Hybrid Automotive Technologies, Inc. was also fined $50,000 for violating Sections 36b-16 and 36b-6(b) of the Act.  Ironclad Investments, LLC was fined $100,000 for violating Section 36b-16 of the Act.  Finding that John Morgan violated Section 36b-16 of the Act and transacted business as an unregistered agent of issuer in violation of Section 36b-6(a) of the Act, the Commissioner fined respondent Morgan $25,000.  Northeast Development Corporation was fined $50,000 for violating Sections 36b-16 and 36b-6(b) of the Act.  In addition, Rescon Technology Corporation was fined $50,000 for violating Section 36b-16 of the Act.

Dated:  Tuesday, November 19, 2013