The Department of Banking News Bulletin
Bulletin # 2509
Week Ending March 23, 2012
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.
CONSUMER CREDIT DIVISION ACTIVITY
On March 1, 2012, the Commissioner entered into a Consent Order with 1st American Home Loans, LLC (NMLS # 2960) (“1st American”), Danielson, Connecticut. The Consent Order was based on an examination by the Consumer Credit Division. As a result of such examination, the Commissioner alleged that 1st American employed or retained, during the period of August 27 through November 17, 2010, one (1) individual as a mortgage loan originator who was not licensed, in violation of Section 36a-486(b) of the then applicable Connecticut General Statutes. As part of the Consent Order, 1st American was ordered to pay $1,000 as a civil penalty.
On March 13, 2012, the Commissioner entered into a Consent Order with Acre Mortgage & Financial, Inc. (NMLS # 13988) (“Acre Mortgage”), Marlton, New Jersey. The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Acre Mortgage, while seeking to obtain a mortgage lender license in Connecticut, made a material misstatement, within the meaning of Section 36a-494(a)(1)(A) of the Connecticut General Statutes, in its “Uniform Mortgage Lender/Mortgage Broker Form” (“MU1 Form”), filed with the Nationwide Mortgage Licensing System and Registry (“NMLS”) on August 22, 2011, and failed to promptly file a change in the information most recently submitted in connection with its license with NMLS, in violation of Section 36a-490(b) of the Connecticut General Statutes, as amended by Public Act 11-216. As part of the Consent Order, Acre Mortgage was ordered to pay $5,000 as a civil penalty.
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 March 5, 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”) in the Matter of: Alliance Mitigation Group (“Respondent”), Los Angeles and Fullerton, California. The Notice was the result of an investigation by the Consumer Credit Division. 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, in effective on July 2, 2010, and that Respondent is offering 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 public welfare required the issuance of a Temporary Order to Cease and Desist against Respondent and orders Respondent to repay fees to indentified Connecticut residents. Respondent was afforded an opportunity to request a hearing with regard to 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 March 7, 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 (“Notice”) in the Matter of: Rawlins & Rivera, Inc., a Florida corporation a/k/a RRI, Inc. and Rawlins & Rivera, Inc., a Georgia corporation a/k/a RRI, Inc. (collectively, “Respondents”). The Florida corporation has an office in Altamonte Springs, Florida, and the Georgia corporation has an office in Atlanta, Georgia. The Notice alleged that Respondents acted within this state as a consumer collection agency without a consumer collection agency license, in violation of Section 36a 801(a) of the 2012 Supplement to the General Statutes. Respondents were afforded an opportunity to request a hearing with regard to the allegation set forth in the Notice.
Petition for Declaratory Ruling
On March 21, 2012, a petition for a declaratory ruling was filed pursuant to Section 4-176 of the Connecticut General Statutes and Sections 36a-1-64 and 36a-1-84 of the Regulations of Connecticut State Agencies on behalf of Persels & Associates, LLC (“Persels”), Towson, Maryland. The petition requests that the Commissioner: (1) issue a declaratory ruling stating that a law firm that offers debt negotiation services to a client using Connecticut attorneys is not required to have a debt negotiation license from the Department when the debt negotiation services are delivered in aid of the firm’s representation of the client, as evidenced by a retainer agreement, the offering of legal advice, and the delivery of other services constituting the practice of law; (2) issue a declaratory ruling clarifying the Commissioner’s interpretation of the attorney exemption provided in Section 36a-671c of the Connecticut General Statutes, with specific guidance as to when a Connecticut attorney or law firm must have a license from the Department to offer legal services in the field of debt negotiation, or (3) hold a public declaratory ruling proceeding, or initiate regulation-making proceedings pursuant to Section 4-168 of the Connecticut General Statutes on the subject of the attorney exemption provided in Section 36a-671c of the Connecticut General Statutes.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Connecticut man Barred from Connecticut Securities Activity
for Seven Years; Fined $7,500
On March 21, 2012, the Commissioner entered a Consent Order with respect to Michael H. Clinton. The Consent Order alleged that 1) Michael H. Clinton referred at least 19 Connecticut residents to invest with Michael S. Goldberg, member of Michael S. Goldberg, LLC d/b/a Acquisitions Unlimited Group; and 2) Goldberg told investors that Acquisitions Unlimited Group liquidated distressed assets obtained from JP Morgan Chase Bank, thus enabling Goldberg to pay investors returns of up to 20% over the short term. Goldberg was ultimately charged with allegedly devising and executing a scheme to defraud investors of over $100 million over a 12 year period. Goldberg pleaded guilty to three counts of wire fraud and was sentenced on May 16, 2011 to 120 months in prison on each count, the sentence to be served concurrently (United States v. Michael S. Goldberg, D. Conn., Criminal No. 3:10 CR192 (JCH)). Goldberg is also involved in two Chapter 7 bankruptcy proceedings through which restitution to investors will be sought.
On September 13, 2010, the Bankruptcy Trustee and Michael H. Clinton entered into a Settlement Stipulation and Order following an action by the Bankruptcy Trustee against Clinton in the U.S. Bankruptcy Court, District of Connecticut, Hartford Division (James Berman, Chapter 7 Trustee v. Michael H. Clinton et al., Adv. Pro. No. 10-02-095 (ASD)). Pursuant to the Settlement Stipulation and Order, Clinton, would pay $785,000 in settlement of the claims asserted by the Bankruptcy Trustee against Clinton.
The agency’s Consent Order also alleged that Michael H. Clinton violated Sections 36b-6(a) and 36b-16 of the Connecticut Uniform Securities Act by offering unregistered securities and transacting business as an unregistered agent.
The Consent Order barred Michael H. Clinton from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent for seven years, and directed him to cease and desist from regulatory violations. In addition, the Consent Order fined Michael H. Clinton $7,500 and required that he consult with Connecticut securities counsel regarding any future securities related activities.
Dated: Tuesday, March 27, 2012
Howard F. Pitkin