Bulletin 3174 - December 20, 2024

The Department of Banking News Bulletin

Bulletin # 3174 - Week Ending December 20, 2024

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 directed to Jorge L. Perez, Banking Commissioner. Written comments will be considered only if they are received within ten business days from the date of this bulletin.

BANK ACTIVITY

Reorganization into a Mutual Holding Company and Merger

On December 20, 2024, pursuant to Sections 36a-192 and 36a-193 of the Connecticut General Statutes, Eastern Connecticut Savings Bank, a Connecticut-chartered mutual savings bank, filed an application to reorganize into a mutual holding company structure by organizing ECSB Financial Corporation as a Connecticut mutual holding company and forming Eastern Connecticut Savings Bank, as a reorganized capital stock savings bank; and pursuant to Section 36a-125 of the Connecticut General Statutes, merge Eastern Connecticut Savings Bank, the mutual savings bank, with an into the newly formed Eastern Connecticut Savings Bank, a stock savings bank.

Merger

On December 6, 2024, the Commissioner approved the merger of NVE Bank, a New Jersey Bank and indirect subsidiary of NVE Bancorp, MHC, with and into Ion Bank, a Connecticut Bank and wholly owned subsidiary of Ion Financial, MHC, pursuant to sections 36a-125 and 36a-412(b) of the Connecticut General Statutes.

CONSUMER CREDIT DIVISION ACTIVITY

Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist and Notice of Intent to Impose Civil Penalty

On December 9, 2024, the Commissioner issued a Temporary Order to Cease and Desist, Order to Make Restitution, Notice of Intent to Issue Order to Cease and Desist, Notice of Intent to Impose Civil Penalty and Notice of Right to Hearing ("Order and Notice") in the matter of Accelerated Debt Settlement Inc. d/b/a Accelerated Debt Solutions, NMLS # 2621854 ("ADS"), Cheyenne, Wyoming, Financial Solutions Group LLC ("FSG"), Fishers, Indiana and Cheyenne, Wyoming, Jeffrey A. Lakes ("Lakes"), (collectively, "Respondents"). The Order and Notice is the result of an investigation by the Consumer Credit Division. The Commissioner alleges in the Order and Notice that: (1) ADS' engaging or offering to engage in debt negotiation services with at least 130 residents in this state without obtaining the required license, constitutes at least 130 violations of Section 36a-671(b) of the Connecticut General Statutes by ADS; (2) ADS entered into contracts with at least 2 Connecticut residents which did not include the "Debtor's three-day right to cancel" disclosure required in Connecticut, in violation of Section 36a-671b(a) of the Connecticut General Statutes; (3) ADS charged fees in excess of amounts permitted by the Schedule of Maximum Fees and prior to ADS fully performing any debt negotiation services, in violation of Section 36a-671b(b) of the Connecticut General Statutes; (4) ADS engaged in an unfair or deceptive practice and obtained property by fraud or misrepresentation by enrolling customers in its debt negotiation services and receiving fees as a result of various false representations, including, but not limited to, representations of consumer credit card charges that never existed and referrals from individuals representing to be from the Consumer Financial Protection Bureau ("CFPB"), who in fact, were not with the CFPB, in violation of subdivisions (2) and (3) of Section 36a-671f of the Connecticut General Statutes; (5) ADS failed to comply with provisions of sections 36a-671 to 36a-671e, inclusive, or regulations adopted under said sections, or state or federal law, including the Telemarketing Sales Rule, in violation of Section 36a-671f(4) of the Connecticut General Statutes; (6) ADS' representations that fees were non-refundable when Connecticut law requires a three-day cancellation period constitute a false or deceptive statement or representation in connection with its debt negotiation program, in violation of Section 36a-671f(8) of the Connecticut General Statutes; (7) ADS failed to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable debt negotiation laws and regulations, in violation of Section 36a 671f(9) of the Connecticut General Statutes; (8) FSG's engaging or offering to engage in debt negotiation in this state without obtaining the required license, constitutes at least 2 violations of Section 36a 671(b) of the Connecticut General Statutes; and (9) Lakes, as ADS' and FSG's control person, directly or indirectly, failed to establish, enforce and maintain policies and procedures for supervising employees, agents and office operations that are reasonably designed to achieve compliance with applicable debt negotiation laws and regulations, in violation of Section 36a 671f(9) of the Connecticut General Statutes. The Commissioner found that the public welfare required immediate action to issue a Temporary Order to Cease and Desist against ADS and FSG. As part of the Order to Make Restitution, ADS was ordered to repay all amounts paid to ADS or FSG, plus interest, by each identified Connecticut consumer and repay any amounts received from any other Connecticut consumer who entered into an agreement for debt negotiation services with ADS or FSG, any fees paid by such Connecticut consumer to ADS or FSG, plus interest. Respondents were afforded an opportunity to request a hearing with regard to the allegations set forth in the Order and Notice.

SECURITIES AND BUSINESS INVESTMENTS DIVISION ACTIVITY

Jason A. Goodhue (CRD No. 5121680)

On December 18, 2024, the Banking Commissioner issued an Order to Cease and Desist, Notice of Intent to Fine and Notice of Right to Hearing (No. CF-24-8398-S) against Jason A. Goodhue, a Connecticut registered broker-dealer agent located at 129 Stonepost Road, Glastonbury, Connecticut 06033.

The action alleged that, while employed by his previous broker-dealer, Buell Securities Inc., Goodhue effected securities transactions electronically with a purported client of the firm without speaking with the client directly. Approximately $73,000 in client funds were affected. The action also alleged that Goodhue exercised discretionary trading authority in the client's account without the client's authorization. Ultimately, following the client's discovery of the $73,000 in missing funds, it was ascertained that the electronic communications were fraudulent though seemingly sent from the client's e-mail account.

Some of the client's transferred funds were recovered, and Buell Securities Inc. replaced the balance of the transferred funds. The affected client did not suffer any losses as a result. Goodhue was charged the difference between the sale price of the shares that were sold and the higher cost of replacing the shares.

The action alleged that Goodhue violated Section 36b-4(b) of the Connecticut Uniform Securities Act by engaging in dishonest or unethical practices and that he violated Section 36b-31-15b(a)(8) of the Regulations under the Act by exercising discretionary power in effecting transactions for a customer's account without obtaining written discretionary authority.

Goodhue was afforded an opportunity to request a hearing on the allegations contained in the Order to Cease and Desist and Notice of Intent to Fine.

Dated: Tuesday, December 24, 2024


Jorge L. Perez
Banking Commissioner

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