The Department of Banking News Bulletin
Bulletin # 2796
Week Ending September 22, 2017
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
Interstate Loan Production Office
On September 12, UBS Bank USA, a Utah-chartered industrial bank, received approval to establish a loan production office at 8 Wright Street, Westport, Connecticut pursuant to Section 36a-412(d) of the Connecticut General Statutes.
CONSUMER CREDIT DIVISION ACTIVITY
On July 7, 2017, the Commissioner entered into a Settlement Agreement with Allied Interstate LLC (“Allied”) (NMLS # 928901), Plymouth, Minnesota, The Receivable Management Services Corporation (NMLS # 1117955), Bethlehem, Pennsylvania, and Receivable Management Service–Recovery Division LLC (NMLS # 953277) (together, “RMS”), Bethlehem, Pennsylvania (Allied and RMS are collectively referred to as “Respondents”)
. The Settlement Agreement was based on a multi-state examination performed by Connecticut, Idaho, Massachusetts, Minnesota and North Dakota (“Participating States”), each of whom is a party to the Settlement Agreement. As a result of the multi-state examination, the Commissioner, together with the Participating States, alleged that Allied violated various provisions of the federal Fair Debt Collection Practices Act and Part XII of Chapter 669, Sections 36a-800 to 36a-814, inclusive, of the Connecticut General Statutes, “Consumer Collection Agencies”. The Commissioner, along with the Participating States, also alleged that both Allied and RMS failed to provide immediate and unfettered access to their respective consumer collection records, in violation of Section 36a-17(d) of the Connecticut General Statutes. As part of the Settlement Agreement, Respondents are required to substantially improve their compliance management systems, oversight from their respective boards and management, and monitoring and training of employees, as well as develop, implement and maintain a compliance audit program designed to verify adherence to state and federal consumer protection requirements and identify compliance deficiencies. Respondents paid $500,000 that was divided equally among the Participating States.
SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY
Consent Order Entered
On September 22, 2017, the Banking Commissioner entered a Consent Order (No. CO-17-8199-S) with respect to The Tirex Corporation
, now or formerly of 1771 Post Road East, Westport, Connecticut, and John L. Threshie, Jr.
, its president, CEO and sole employee. The Tirex Corporation held itself out as being involved in the tire recycling business. The Consent Order alleged that from at least 2013, the respondents entered into investment agreements with investors promising that investors would receive restricted shares of The Tirex Corporation when The Tirex Corporation effected a share authorization. The Consent Order also alleged that, in at least one instance, the respondents guaranteed the investment by representing that, if an investor wished to recover any of the investment, The Tirex Corporation would trade the shares and reimburse the investor. The Consent Order stated that the securities involved were not registered and that the offering therefore violated Section 36b-16 of the Connecticut Uniform Securities Act. The Consent Order also alleged that the respondents violated the antifraud provisions in Section 36b-4 of the Act by failing to disclose the risks associated with the investment and that the shares might never be issued if authorization failed to occur.
Respondent Threshie had also been the subject of a December 21, 2016 civil action filed by the Securities and Exchange Commission in the U.S. District Court for the District of Connecticut (SEC v. John L. Threshie, Jr., D. Conn. (Docket No. 3:16 CV 2013 (WWE)). That action claimed that respondent Treshie sold hundreds of millions of shares of Tirex stock to at least 94 individuals in at least 9 states and in the process violated Sections 5(a) and 5(c) of the Securities Act of 1933. On December 28, 2016, the court in that action entered a permanent injunction against Treshie and directed him to pay $581,815 in disgorgement, prejudgment interest of $140,446.57 and a $50,000 civil penalty.
The September 22, 2017 Consent Order acknowledged that Threshie had provided the Commissioner with a written financial affidavit demonstrating that, in light of the SEC civil action, neither he nor The Tirex Corporation was financially able to pay any restitution and/or fine that otherwise might have been assessed against them.
The Consent Order barred respondents for ten years from 1) transacting business in or from Connecticut as an agent, broker-dealer, broker-dealer agent, investment adviser or investment adviser agent; 2) maintaining a direct or indirect ownership interest in a broker-dealer or investment adviser registered or required to be registered in Connecticut; and 3) acting in any other capacity that would require a license or registration under laws administered by the Commissioner. In addition, the Consent Order directed the respondents to cease and desist from regulatory violations.
Dated:Tuesday, September 26, 2017
Jorge L. Perez