Bulletin # 3144 - Week Ending May 24, 2024

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 business days from the date of this bulletin.

CREDIT UNION ACTIVITY

Name Change 

On May 21, 2024, the Commissioner approved the application of SoundView Financial Credit Union, Bethel, Connecticut, a Connecticut credit union, to amend its bylaws pursuant to Section 36a-437a(h)(3) of the Connecticut General Statutes to change its name to Albright Credit Union.

Merger

On May 24, 2024, the Commissioner approved the merger of First Bristol Federal Credit Union, a federal credit union, with and into Nutmeg State Financial Credit Union, a Connecticut credit union, pursuant to Section 36a-468a of the Connecticut General Statutes. The proposed effective date of the merger is June 1, 2024.

CONSUMER CREDIT ACTIVITY

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

On May 13, 2024, 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 (“Order and Notice”) in the matter of: CREDIT RECOVERY MANAGEMENT GROUP LLC d/b/a CR GROUP (“Respondent”), Tonawanda, New York. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a 801(a) of the Connecticut General Statutes in effect at such time, which form the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a 804(b) and 36a-50(a) of the Connecticut General Statutes; (2) Respondent failed to provide information requested during the investigation or otherwise cooperate with the Commissioner, in violation of Section 36a-17(e) of the Connecticut General Statutes, which form the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; and (3) Respondent failed to establish a system for supervision and compliance under Section 36a 805(a)(15) of the Connecticut General Statutes, which forms the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes. The Commissioner 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 Order and Notice.

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

On May 13, 2024, 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 (“Order and Notice”) in the matter of: NELSON CRUZ & ASSOCIATES LLC (NMLS # 1862472) (“Respondent”), Dallas, Texas. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a 801(a) of the Connecticut General Statutes in effect at such time, which form the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; (2) Respondent failed to provide information requested during the investigation or otherwise cooperate with the Commissioner, in violation of Section 36a-17(e) of the Connecticut General Statutes, which form the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; (3) Respondent failed to establish a system for supervision and compliance under Section 36a 805(a)(15) of the Connecticut General Statutes, which forms the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a 52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes; and (4) Respondent acted in a manner that failed to comply with 12 CFR Section 1006.14 Regulation F of the Fair Debt Collection Practices Act (“FDCP Act”), by the frequency of telephone calls Respondent made to the complainant in connection with the debt, and failed to comply with 12 CFR Section 1006.34 Regulation F of the FDCP Act, by failing to provide the complainant with validation of the debt, which constitutes a violation of Section 36a-812 of the Connecticut General Statutes, which violations form the basis to issue an order to cease and desist against Respondent pursuant to Sections 36a-804(b) and 36a-52(a) of the Connecticut General Statutes, and to impose a civil penalty upon Respondent pursuant to Sections 36a-804(b) and 36a-50(a) of the Connecticut General Statutes. The Commissioner 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 Order and Notice.

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 May 13, 2024, 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 (“Order and Notice”) in the matter of: MIDLAND GROUP AND ASSOCIATES LLC (“Respondent”), Los Angeles, California. The Order and Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) Respondent’s acting within this state as a consumer collection agency without a consumer collection agency license constitutes violations of Section 36a-801(a) of the Connecticut General Statutes; (2) Respondent’s using false, deceptive or misleading representations in connection with the collection of a debt, including falsely representing that the debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid, constitutes violations of subdivisions (5) and (10) of Section 36a-809-11 of the Regulations of Connecticut State Agencies; (3) Respondent’s using false, deceptive or misleading representations or means in connection with the collection of any debt, including falsely representing that the alleged debt was valid and that a lawsuit would be filed against the consumer by Respondent should the debt remain unpaid constitutes falsely representing the character, amount or legal status of a debt, in violation of 12 CFR Section 1006.18(b)(2)(i) of Regulation F, threatening to take action that cannot legally be taken or that is not intended to be taken, in violation of 12 CFR Section 1006.18(c)(1) of Regulation F, and using any false representation or deceptive means to collect or attempt to collect any debt, in violation of 12 CFR Section 1006.18(d) of Regulation F, violations of which constitute violations of Section 36a-812 of the Connecticut General Statutes; and (4) Respondent’s failure to provide information requested during the investigation constitutes a violation of Section 36a-17(e) of the Connecticut General Statutes. The Commissioner 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 Order and Notice.

Consent Order

On May 23, 2024, the Commissioner entered into a Consent Order with BlockFi Trading LLC d/b/a BlockFi Trading d/b/a BlockFi (NMLS # 1873137), Jersey City, New Jersey (“BlockFi”). The Consent Order resolved allegations made by the Commissioner in a Notice of Automatic Suspension, Notice of Intent to Revoke Money Transmission 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 against BlockFi on February 14, 2023 (“Notice”). The Notice was the result of an investigation by the Consumer Credit Division. The Commissioner alleged in the Notice that: (1) BlockFi’s failure to transmit monetary value received from Connecticut purchasers is conduct that is likely to materially prejudice the interests of purchasers, which constitutes an unsafe or unsound practice within the meaning of Section 36a-608(a) of the Connecticut General Statutes; and (2) BlockFi’s failure to maintain a surety bond that runs concurrently with the period of its money transmission license, as required pursuant to Section 36a-602(a) of the Connecticut General Statutes, constitutes sufficient grounds for the Commissioner to revoke BlockFi’s license to engage in the business of money transmission in Connecticut pursuant to Section 36a-602(c) of the Connecticut General Statutes and subsections (a) and (b) of Section 36a-51 of the Connecticut General Statutes. As part of the Consent Order, BlockFi agreed to the issuance of a civil penalty in the amount of $150,000. The civil penalty is considered an allowed general unsecured claim against BlockFi, Inc., in In re BlockFi, Inc., Case No. 22-19361 pending in the United States Bankruptcy Court for the District of New Jersey.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY 

The Cheetah Fund L.P., C.M. Allen Capital Management, Inc. and Craig Murfee Allen (CRD No. 2625516)

On May 20, 2024, 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 (No. CRF-24-202310-S) against The Cheetah Fund L.P., an investment fund located at 3090 East Paces Ferry Road, Suite 77, Atlanta, Georgia 30305, C.M. Allen Capital Management, Inc. and Craig Murfee Allen. C.M. Allen Capital Management, Inc., a Georgia corporation, was administratively dissolved on October 22, 2020. Respondent Allen of 3185 Nancy Creek Road NW Atlanta, Georgia 30327, was the control person of the two entities.

The action alleged that the Respondents violated Section 36b-16 of the Connecticut Uniform Securities by offering and selling unregistered interests in The Cheetah Fund L.P. to Connecticut investors. The action also alleged that the Respondents violated the antifraud provisions in Section 36b-4(a) of the Act by, among other things, making inflated unsubstantiated earnings claims to investors, falsely representing that The Cheetah Fund had been audited, falsely representing that a famous investor had invested in The Cheetah Fund and, in the case of Respondent Allen, using investor funds to pay his personal expenses. Connecticut investors were unsuccessful in attempting to recoup their invested funds from Respondents. The Respondents were afforded an opportunity to request a hearing on the Order to Cease and Desist, Order to Make Restitution and Notice of Intent to Fine.

      Dated:  Tuesday, May 28, 2024

      Jorge L. Perez
      Banking Commissioner