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IN THE MATTER OF: WARSHAW CAPITAL, LLC ("Warshaw Capital") |
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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, inclusive, of the Connecticut General Statutes, “Mortgage Lenders, Correspondent Lenders, Brokers and Loan Originators”;
WHEREAS, Warshaw Capital is a Connecticut limited liability company that is licensed as a mortgage correspondent lender under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, on July 31, 2008, Warshaw Capital entered into a Settlement Agreement with the Commissioner to resolve an allegation that Warshaw Capital employed or retained at least four (4) individuals as originators without registering them, in violation of Sections 36a-486(b) and 36a-511(b) of the 2008 Supplement to the General Statutes;
WHEREAS, the Commissioner, through the Consumer Credit Division of the Department of Banking, conducted an investigation pursuant to Section 36a-17 of the Connecticut General Statutes into the activities of Warshaw Capital 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 investigation, the Commissioner alleges that Warshaw Capital employed or retained, during the period of January 1, 2009 through the present, one (1) individual as a mortgage loan originator without licensing such individual, in violation of Section 36a-486(b) of the 2010 Supplement to the General Statutes;
WHEREAS, as a result of such investigation, the Commissioner also alleges that on December 1, 2009, Warshaw Capital filed a License/Registration Information Form (“MU1 Form”) with the Commissioner through the Nationwide Mortgage Licensing System (“NMLS”). The Commissioner further alleges that in such MU1 Form, Warshaw Capital answered “no” to disclosure question (J) which asked “[d]oes the entity have any unsatisfied judgments or liens against it?”, when, in fact, Warshaw Capital had two judgments that had been entered against it on April 1, 2009 and August 12, 2009, which judgments were not satisfied until July 14, 2010 and August 4, 2010, respectively, and that Warshaw Capital’s “no” response constitutes the making or causing to be made in a document filed with the Commissioner a statement which is, at the time and in the light of the circumstance under which it is made, false and misleading in a material respect, in violation of Section 36a-53a of the Connecticut General Statutes;
WHEREAS, the Commissioner additionally alleges that Warshaw Capital’s “no” response in its MU1 Form to the question of whether Warshaw Capital has any unsatisfied judgments or liens against it, despite two outstanding judgments against Warshaw Capital, constitutes a material misstatement in an application;
WHEREAS, On December 2, 2009, Warshaw Capital requested renewal of its mortgage correspondent lender license on NMLS (“Application”), which Application incorporated Warshaw Capital’s responses contained in the MU1 Form;
WHEREAS, the Commissioner believes that such allegations would support initiation of enforcement proceedings against Warshaw Capital, including proceedings to revoke and refuse to renew Warshaw Capital’s license pursuant to Section 36a-494(a) and subsections (a) and (b) of Section 36a-51 of the 2010 Supplement to the General Statutes, issue a cease and desist order against Warshaw Capital pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 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 Warshaw Capital pursuant to Section 36a-494(b) of the 2010 Supplement to the General Statutes and Section 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 Warshaw Capital acknowledge the possible consequences of formal administrative proceedings;
WHEREAS, Warshaw Capital voluntarily agrees to enter into this Settlement Agreement without admitting or denying any allegations set forth herein, and solely for the purpose of obviating the need for formal administrative proceedings concerning the allegations described above;
WHEREAS, Warshaw Capital herein represents to the Commissioner that the individual alleged to be an unlicensed mortgage loan originator, in violation of Section 36a-486(b) of the 2010 Supplement to the General Statutes, during the period of January 1, 2009 to the present, has applied for a mortgage loan originator license under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes, which application is currently pending;
WHEREAS, Warshaw Capital 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 Warshaw Capital requires licensure from the Commissioner under Part I of Chapter 668, Sections 36a-485 et seq., of the Connecticut General Statutes;
WHEREAS, Warshaw Capital specifically assures the Commissioner that the violations described herein shall not occur in the future;
AND WHEREAS, Warshaw Capital, 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 Warshaw Capital enter into this Settlement Agreement as follows:
| 1. | No later than the date this Settlement Agreement is executed by Warshaw Capital, Warshaw Capital shall remit to the Department of Banking by cashier’s check, certified check or money order made payable to “Treasurer, State of Connecticut”, the sum the amount of Fifteen Thousand Dollars ($15,000) as a civil penalty; |
| 2. | Upon entry of this Settlement Agreement, this matter will be resolved and the Commissioner will not take any future enforcement action against Warshaw Capital 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 Warshaw Capital based on the allegations contained herein if any representations made by Warshaw Capital in this Settlement Agreement are subsequently discovered to be untrue or if Warshaw Capital 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 Warshaw Capital 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 for its mortgage loan originators to apply for or obtain licensure 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 Warshaw Capital to enforce this Settlement Agreement if the Commissioner determines that Warshaw Capital 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 22nd day of November 2010. ________/s/_________
Howard F. Pitkin
Banking Commissioner
I, Michael Warshaw, state on behalf of Warshaw Capital, LLC d/b/a WC Financial, 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 Warshaw Capital, LLC d/b/a WC Financial; that Warshaw Capital, LLC d/b/a WC Financial agrees freely and without threat or coercion of any kind to comply with the terms and conditions stated herein; and that Warshaw Capital, LLC d/b/a WC Financial voluntarily agrees to enter into this Settlement Agreement, expressly waiving any right to a hearing on the matters described herein.
By: ________/s/_________
Name: Michael Warshaw
Title: President
Warshaw Capital, LLC
d/b/a WC Financial
State of: Connecticut
County of: Fairfield
On this the 16th day of November 2010, before me, Jessica Teixeira, the undersigned officer, personally appeared Michael Warshaw who acknowledged himself to be the President of Warshaw Capital, LLC d/b/a WC Financial, a member managed/manager managed limited liability company, that he, as such President, being authorized so to do, executed the foregoing instrument for the purposes therein contained, by signing the name of the corporation by himself as President.
In witness whereof I hereunto set my hand.
________/s/_________
Notary Public
Date Commission Expires: Dec. 31, 2013