DOB: Cornerstone Capital Group, LLC, Settlement Agreement

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IN THE MATTER OF:

CORNERSTONE CAPITAL GROUP, LLC

    ("Cornerstone")

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SETTLEMENT AGREEMENT        

WHEREAS, the Banking Commissioner (“Commissioner”) is charged with the administration of Part I of Chapter 668, Sections 36a-485 to 36a-534c of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
 
WHEREAS, Cornerstone is a limited liability company that was licensed by the Commissioner as a mortgage lender from September 6, 2005 through November 26, 2008, and is currently licensed by the Commissioner as a mortgage broker;
 
WHEREAS, in November 2008, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an examination pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Cornerstone to determine if it had violated, was violating or was about to violate the provisions of the Connecticut General Statutes within the jurisdiction of the Commissioner;
 
WHEREAS, as a result of such examination, the Commissioner alleges that Cornerstone employed or retained, during the period of February 13, 2007 through March 15, 2007, one (1) individual as a loan originator without registering such individual, in violation of Sections 36a-486(b) and 36a-511(b) of the then applicable Connecticut General Statutes; 
 
WHEREAS, the Commissioner believes that the unregistered loan originator allegation would support initiation of enforcement proceedings against Cornerstone, including proceedings to revoke Cornerstone’s license pursuant to Sections 36a-494(a) and 36a-51 of the Connecticut General Statutes, issue a cease and desist order against Cornerstone pursuant to Sections 36a-494(b) and 36a-52(a) of the Connecticut General Statutes, and impose a civil penalty of up to one hundred thousand dollars ($100,000) per violation on Cornerstone pursuant to Sections 36a-494(b) and 36a-50(a) of the Connecticut General Statutes;
 
WHEREAS, Section 4-177(c) of the Connecticut General Statutes and Section 36a-1-55(a) of the Regulations of Connecticut State Agencies provide that a contested case may be resolved by agreed settlement, unless precluded by law;
 
WHEREAS, both the Commissioner and Cornerstone acknowledge the possible consequences of formal administrative proceedings;
 
WHEREAS, Cornerstone agrees to voluntarily enter into this Settlement Agreement without admitting or denying any allegations set forth herein, and solely for the purposes of obviating the need for formal administrative proceedings concerning the allegations described above;
 
WHEREAS, Cornerstone herein represents to the Commissioner that it has reviewed and updated its internal policies, procedures and controls for assessing whether an individual engaged in mortgage-related activity with Cornerstone requires licensure from the Commissioner under Part I of Chapter 668, Sections 36-485 et. seq., of the Connecticut General Statutes, including but not limited to, licensure as an originator under Section 36a-486(b) of the Connecticut General Statutes;
 
WHEREAS, Cornerstone herein represents to the Commissioner that the individual alleged to be an unregistered loan originator in violation of Sections 36a-486(b) and 36a-511(b) of the Connecticut General Statutes during the period of February 13, 2007 through March 15, 2007 is no longer engaged in any mortgage-related activity with Cornerstone that would require such individual to be so licensed;  

WHEREAS, in connection with this settlement, Cornerstone was provided the option to pay a civil penalty in the amount of One Thousand Dollars ($1,000) in settlement of the allegations contained herein;
 
WHEREAS, the State of Connecticut is a participant in the Nationwide Mortgage Licensing System and Registry (“NMLS&R”), jointly developed by the Conference of State Bank Supervisors (“CSBS”) and the American Association of Residential Mortgage Regulators to establish a unified and modern system of mortgage licensing and registration, and is committed to the success of NMLS&R;
 
WHEREAS, in connection with this settlement, Cornerstone was provided an alternative option to make a voluntary contribution in the amount of One Thousand Dollars ($1,000) to the State Regulatory Registry LLC (“SRR”), a wholly-owned subsidiary of CSBS, to support NMLS&R;
 
WHEREAS, Cornerstone elected to make a voluntary contribution to SRR in lieu of a civil penalty;
 
AND WHEREAS, Cornerstone, through its execution of this Settlement Agreement, voluntarily agrees to waive any rights to a hearing upon the allegations contained in this Settlement Agreement, and waives the right to seek judicial review or otherwise challenge or contest the validity of this Settlement Agreement;
 
NOW THEREFORE, the Commissioner and Cornerstone enter into this Settlement Agreement as follows:

1. No later than the date this Settlement Agreement is executed by Cornerstone, Cornerstone shall make a voluntary contribution by cashier’s check, certified check or money order in the amount of One Thousand Dollars ($1,000) to SRR to support NMLS&R;
2. Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Cornerstone based upon the allegations contained herein; provided that entry of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Cornerstone based on the allegations contained herein if any representations made by Cornerstone in this Settlement Agreement are subsequently discovered to be untrue or if Cornerstone is not fully complying with any term or condition stated herein;
3. Nothing in the entry of this Settlement Agreement shall adversely affect the ability of Cornerstone to apply for or obtain licenses or renewal licenses under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, and to apply for or obtain licensure of its originators from the Commissioner;
4. Notwithstanding paragraph 2 herein, execution of this Settlement Agreement is without prejudice to the right of the Commissioner to take enforcement action against Cornerstone to enforce this Settlement Agreement if the Commissioner determines that Cornerstone is not fully complying with any term or condition stated herein.  For purposes of this paragraph, a violation of this Settlement Agreement shall be deemed to be a violation of an order of the Commissioner.

IN WITNESS WHEREOF, the parties hereto have caused this Settlement Agreement to be executed by each of them or their duly authorized representatives on the dates hereinafter subscribed.


Dated at Hartford, Connecticut
this 20th day of March 2009.              ________/s/_________
                                                     Howard F. Pitkin
                                                     Banking Commissioner



I, Carl A. Castanho, state on behalf of Cornerstone Capital Group, LLC, that I have read the foregoing Settlement Agreement; that I know and fully understand its contents; that I am authorized to execute this Settlement Agreement on behalf of Cornerstone Capital Group, LLC; that Cornerstone Capital Group, LLC agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Cornerstone Capital Group, LLC voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.                                        

                                            By:  ________/s/_________
                                                   Name:  Carl A. Castanho
                                                   Title:  Member
                                                   Cornerstone Capital Group, LLC


State of:  Connecticut

County of:  Hartford

On this the 11th day of March 2009, before me, Carl A. Castanho, the undersigned officer, personally appeared Carl A. Castanho who acknowledged himself to be the Member of Cornerstone Capital Group, LLC, a member managed limited liability company, and that he, as such Member being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the limited liability company by himself as Member.

In witness whereof I hereunto set my hand.


                                         ________/s/_________
                                         Notary Public
                                         Date Commission Expires:  12/31/2011


Administrative Orders and Settlements