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.
On July 3, 2014, the Commissioner issued an Order Revoking Consumer Collection Agency License and Order to Cease and Desist (“Order”) in the Matter of: NCC Recovery, Inc. (“Respondent”), Victorville, California. The basis of the Order was that Respondent failed to maintain a surety bond that runs concurrently with the period of its consumer collection agency license, in violation of Section 36a-802(a) of the 2014 Supplement to the General Statutes. The Order revokes Respondent’s license to act as a consumer collection agency in Connecticut from 12550 Hesperia Road, Suite 212, Victorville, California, and orders Respondent to cease and desist from violating Section 36a-802(a) of the 2014 Supplement to the General Statutes.
On July 1, 2014, the Commissioner, along with the Commissioner of the Division of Banks for the Commonwealth of Massachusetts (collectively, “Regulators”), entered into a Joint Consent Order with Norwich Commercial Group, Inc. d/b/a Norcom Mortgage and d/b/a Mortgage Force (NMLS # 71655), Avon, Connecticut (“Norcom”). The Consent Order was based on an examination jointly conducted by the Regulators. The Consent Order requires enumerated corrective action by Norcom. As part of the Consent Order, and without admitting or denying any findings of fact or violations of law, Norcom paid a civil penalty to Connecticut in the amount of $6,000 in consideration for Norcom conducting business with a mortgage loan originator who did not hold an active mortgage loan originator license. Administrative penalties were also paid to Massachusetts.
On July 3, 2014, the Commissioner entered into a Consent Order with Residential Mortgage Services Inc. d/b/a Residential Mortgage Services (“Residential Mortgage”). The Consent Order was based on an investigation by the Consumer Credit Division. As a result of such investigation, the Commissioner alleged that Residential Mortgage changed the address of its branch office specified on its most recent filing with the Nationwide Mortgage Licensing System and Registry (“NMLS”) and failed to file such change with NMLS at least 30 calendar days prior to such change, in violation of Section 36a-490(b) of the Connecticut General Statutes. As part of the Consent Order, Residential Mortgage paid $500 as a civil penalty.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Connecticut-registered broker-dealer Fined $10,000 for Supervisory Violation
On July 14, 2014, the Banking Commissioner entered a Consent Order (No. CO-14-7988B-S) with respect to Syndicated Capital, Inc., a Connecticut-registered broker-dealer located in Santa Monica, California. From 2002 to 2006, the firm maintained a branch office at 152 Deer Hill Avenue, Suite 203, Danbury, Connecticut, and employed Stephen Burton Blankenship (CRD number 2234577) as a registered broker-dealer agent. Blankenship, the sole managing member and control person of Deer Hill Financial Group, LLC, also conducted tax preparation, financial planning and investment advisory services from the Danbury location. Following allegations of unregistered investment advisory activity, fraud and misappropriation, the Banking Commissioner entered a Consent Order (Docket No. CO-12-7988-S) with respect to Blankenship and Deer Hill Financial Group, LLC on August 31, 2012. That consent order revoked Blankenship's registration as a broker-dealer agent and permanently barred both Blankenship and Deer Hill Financial Group, LLC from transacting securities business in or from Connecticut. In addition, the U.S. District Court for the District of Connecticut fined Blankenship $7,500, directed Blankenship to make $607,516.81 in restitution and sentenced Blankenship to 41 months in prison following Blankenship’s guilty plea to one count of federal mail fraud and one count of federal securities fraud (United States of America v. Stephen Blankenship, D. Conn. Case No. 3:12CR197 (VLB)).
The Consent Order with Syndicated Capital, Inc. alleged that, in contravention of Section 36b-31-6f of the Regulations under the Connecticut Uniform Securities Act, the firm failed to establish, enforce and maintain a system for supervising the activities of its agents, including Blankenship, reasonably designed to achieve compliance with applicable securities laws and regulations.
The Consent Order acknowledged that Syndicated Capital, Inc. and another securities brokerage firm had reimbursed affected investors for 100% of the financial losses they incurred as a result of Blankenship's misconduct. Specifically, Syndicated Capital, Inc. repaid affected investors $303,758.20.
In resolution of the matter, the Consent Order fined Syndicated Capital, Inc. $10,000 and directed the firm to refrain from regulatory violations.
Dated: Tuesday, July 22, 2014
Howard F. Pitkin