DOB: Bulletin 2547 - December 14, 2012

The Department of Banking News Bulletin 

Bulletin # 2547
Week Ending December 14, 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
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 November 1, 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:  Instant Loans USA (“Respondent”), Wilmington, Delaware.  The Notice was the result of an investigation by the Consumer Credit Division.  The Notice alleges that Respondent offered and made at least one loan in Connecticut without the required license, in violation of Section 36a-555 of the Connecticut General Statutes, and charged Connecticut residents an interest rate of greater than 12% on a loan in an amount less than $15,000, in violation of Section 36a-573(a) of the Connecticut General Statutes, in effect prior to October 1, 2011.  The Commissioner also 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 Notice.
 
Notice of Intent to Issue Order to Cease and Desist
and Notice of Intent to Impose Civil Penalty
 
On November 13, 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:  Cornerstone Capital Group, LLC d/b/a Cornerstone Capital Financial Services (NMLS # 1185) (“Respondent”), East Hartford, 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 2012 Supplement to the General Statutes and Section 36a-534b(c)(3) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.
 
On November 14, 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:  Custom Mortgage Corporation (NMLS # 116261) (“Respondent”), South Windsor, 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 2012 Supplement to the General Statutes and Section 36a 534b(c)(3) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.
 
On November 19, 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:  Falcon Funding LLC (NMLS # 842865) (“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 required on the Nationwide Mortgage Licensing System and Registry, in violation of Section 36a-534b(c)(3) of the 2012 Supplement to the General Statutes and Section 36a 534b(c)(3) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  Respondent was afforded an opportunity to request a hearing on the allegations set forth in the Notice.
 
Notice of Intent to Revoke Check Cashing Service License, Notice of Intent
to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty
 
On November 14, 2012, 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 (“Notice”) in the Matter of:  Torrington Payment Center LLC (“Respondent”), Torrington, Connecticut.  The Notice alleges that Respondent’s failure to timely provide the Commissioner with a detailed report of corrective action taken as a result of a February 22, 2012, Report of Examination (“Report of Examination”):  (1) renders the Commissioner unable to determine that Respondent is in all respects properly qualified and of good character and that the granting such license would not be against the public interest; (2) causes Respondent to demonstrate incompetency or untrustworthiness to act as a licensed check cashing service; and (3) constitutes a failure by Respondent to fully cooperate with the Commissioner, in violation of Section 36a-17(d) of the 2012 Supplement to the General Statutes, as amended by Public Act 12-96.  The Notice also alleges that the failure of Respondent’s Member/Owner and authorized agent to timely provide the Commissioner with a detailed report of the corrective action taken as a result of the Report of Examination renders the Commissioner unable to determine that the member and authorized agent of Respondent is in all respects properly qualified and of good character and that the granting of such license would not be against the public interest.  Respondent was afforded an opportunity to request a hearing with regard to the allegations set forth in the Notice.
 
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Order
 
On December 11, 2012, the Banking Commissioner entered a Consent Order (Docket No. CRF-12-7930-S) with respect to William Alexis Cronin, Jr.  Respondent Cronin, who did business under the name Madison Financial Services, had been the subject of a June 26, 2012 Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Fine and Notice of Right to Hearing (Docket No. CRF-12-7930-S).
 
The June 26, 2012 action had alleged that, at various times between 2006 and 2008, the respondent sold unregistered nonexempt securities issued by FundGuard, LLC and Aliki Foods, LLC to Connecticut and non-Connecticut investors in violation of Section 36b-16 of the Connecticut Uniform Securities Act; that respondent Cronin received $77,500 in compensation from FundGuard, LLC and $93,500 in compensation from Aliki Foods, LLC for introducing prospective investors to those issuers; and that respondent Cronin allegedly was not registered as an agent of issuer in Connecticut at the time.  In addition, the action had alleged that 1) in failing to disclose to investors and prospective investors that he was receiving compensation from FundGuard, LLC and Aliki Foods, LLC, respondent Cronin violated the antifraud provisions in Section 36b-4(a)(2) of the Act; and 2) in failing to provide his then employing broker-dealer with prior notice of his compensated involvement in the issuer transactions, respondent Cronin violated Section 36b-31-6e(c) of the Regulations under the Act.  The action had also alleged that respondent Cronin 1) transacted business as an investment adviser absent registration; and 2) improperly borrowed $10,000 from a former broker-dealer client without notifying the brokerage firm with whom he was then associated.
 
The December 11, 2012 Consent Order stated that respondent Cronin had provided documentation evidencing his financial inability to pay the fine or restitutionary amount that otherwise might have been assessed against him.  In resolution of the pending matter, respondent Cronin agreed to cease and desist from regulatory violations.  In addition, the Consent Order barred respondent Cronin for ten years from transacting business in or from Connecticut as a broker-dealer, agent, investment adviser or investment adviser agent and from directly or indirectly soliciting or accepting funds for investment purposes from public or private investors.  The ten year bar would run from the November 7, 2011 effective date of a FINRA Acceptance, Waiver and Consent involving respondent Cronin (No. 20110258858).
 
     Dated:  Tuesday, December 18, 2012
 
 
       Howard F. Pitkin
       Banking Commissioner