Bulletin # 2733 - Week Ending July 8, 2016

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, 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

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, address how the establishment of the branch will be consistent with safe and sound banking practices and promote the public convenience and advantage.  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.

CREDIT UNION ACTIVITY

Appointment of Agent and Distribution Plan

On July 6, 2016, the Commissioner issued an Order, Appointment of Agent and Distribution Plan (“Order”) In the Matter of: The Termination of Victory/Piaterer Mutual Benefit Association (“Victory/Piaterer”). Under the Order and pursuant to Section 36a-470a(d)(1) of the Connecticut General Statutes, the Commissioner took possession of the property and business of Victory/Piaterer, appointed Larry Tucker as Agent and ordered the distribution of assets for the dissolution of the credit union.

CONSUMER CREDIT DIVISION ACTIVITY

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

On June 27, 2016, 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:  Lightning Mortgage Inc. (NMLS # 111621) (“Respondent”), Jersey City, New Jersey.  The Notice was the result of an investigation by the Consumer Credit Division.  The Commissioner alleges that Respondent failed to timely file certain annual information required on the Nationwide Multistate Licensing System and Registry, in violation of Section 36a-534b(c)(3) of the Connecticut General Statutes and in violation of an order of the Commissioner.  Respondent was afforded an opportunity to request a hearing on the allegation set forth in the Notice.

Order to Cease and Desist and Order Imposing Civil Penalty

On June 28, 2016, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the matter of:  E.L.S. Marketing Inc a/k/a Evergreen Legal Service a/k/a Evergreen Legal Service LLP (“Respondent”), Diamond Bar, California.  The basis of the Order was 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.  Respondent was ordered to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and to pay a civil penalty in the amount of $100,000.  In addition, an Order to Make Restitution issued against Respondent on March 22, 2016, remains in effect and became permanent against Respondent on April 14, 2016.

On June 28, 2016, the Commissioner issued an Order to Cease and Desist and Order Imposing Civil Penalty (“Order”) in the matter of:  Irene E. Smith d/b/a Direct Loan Counseling and d/b/a Direct Loan Advisors and d/b/a California's Realty (“Respondent”), Brea, California.  The basis of the Order was 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.  Respondent was ordered to cease and desist from violating Section 36a-671(b) of the Connecticut General Statutes, and to pay a civil penalty in the amount of $100,000.  In addition, an Order of Restitution issued against Respondent on March 22, 2016, remains in effect and became permanent against Respondent on April 14, 2016.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Consent Order Entered

On July 7, 2016, the Banking Commissioner entered a Consent Order (No. CO-16-8170-S) with respect to Trade-PMR Inc., a Connecticut-registered broker-dealer located in Gainesville, Florida.  The firm focuses on serving the needs of registered investment advisers.  The Consent Order alleged that, commencing in 2010, through inaction or a lack of system monitoring, the firm allowed J. Capital Advisors Wealth Management (CRD No. 151176) and its president Aaron Jousan Johnson (CRD No. 4402048) to deduct excessive advisory fees from client accounts.  J. Capital Advisors Wealth Management’s Connecticut investment adviser registration had been revoked by the Commissioner in 2013 for conduct relating to the excessive advisory fee deductions (Docket No. RS-13-8063-S).  Aaron Jousan Johnson’s investment adviser agent registration was also revoked by the department.  On July 14, 2014, the Securities and Exchange Commission imposed a permanent bar on Johnson (Docket/Case No. 3-15808) in a collateral action.

The Consent Order involving Trade-PMR Inc. alleged that the firm failed to establish, enforce and maintain an effective compliance and supervisory system for monitoring account activity that would have flagged the deduction of excessive client advisory fees from client accounts, and that this conduct violated Section 36b-31-6f of the Regulations under the Connecticut Uniform Securities Act.

The Consent Order directed the firm to enhance its supervisory procedures and to cease and desist from regulatory violations.  In addition, the Consent Order required that the firm establish a $75,000 fund to benefit affected clients of J. Capital Advisors Wealth Management and Aaron Jousan Johnson who had accounts at Trade-PMR Inc. between 2010 and 2012.  Following notice, the affected clients could file a claim for payment from the fund.  Monies would then be disbursed on a pro rata basis no later than 90 days following the Commissioner’s entry of the Consent Order.