Get documents about "OFR 1st Quarter 2005
Document Sample
Office of Financial Regulation
Quarterly Report to
The Financial Services Commission
Don B. Saxon
Commissioner
March 31, 2005
Office of Financial Regulation
The Office of Financial Regulation (Office or OFR) is dedicated to safeguarding the private financial
interests of the public by licensing, chartering, examining and regulating depository and non-
depository financial institutions and financial service companies. The Office protects consumers from
illegal financial activities of non-depository institutions and companies, while preserving the integrity
of Florida’s markets and financial service industries.
Significant Events
Visited Bank of Florida, Ft. Lauderdale
Major Initiatives Spoke at OFR Annual Banking Meeting
Spoke at OFR Annual Investigators Meeting
National Association of State Credit Union
Attended Florida Bankers Association (FBA) Director’s Workshop
Supervisors presented its initial accreditation certificate Attended the Association of Registration Management (ARM)
of OFR in January 2005 Conference
Attended the Conference of State Bank Supervisors (CSBS)
Washington Fly-In
221 Final Orders Issued Attended the North American Securities Administrators
(1/01 – 03/31/2005) Association (NASAA) 2005 Winter Enforcement Meeting
Attended the Federal Reserve Debate & Confirm Banking
Industry Outlook Workshop
7
Investigations 15 Participated in the NASAA Continuing Education Working Group
9 Financial Meeting
Securities Institutions Participated in Central Registration Depository (CRD) Steering
Committee Meeting
Participated in National Association of Securities Dealers (NASD)
Licensing and Registration Council Meeting
Participated in NASAA Joint Technology Working Group Meeting
Participated in New York Stock Exchange (NYSE) Meeting
Participated in OFR Area Financial Manager Meeting
Met with NASAA Corporate Office
90 Met with representatives from the Investor Protection Trust
Finance Attended Florida Export Finance Corporation Board Meeting
Met via teleconference with General Accounting Office on Anti-
Money Laundering Exam process
Attended International Bankers Advisory Board Meeting
Spoke at FBA Annual Capitol Day
Financial Institutions
Ensure the safety and soundness of the state financial institution system. Support efforts
to promote Florida’s domestic and international financial services industries.
Number of Institutions Significant Events
250
200
196 76% of customer satisfaction surveys returned rated OFR 2 or better
on a scale of 1-5 (1 being highest, 5 being lowest)
150
Institutions Under Formal Administrative Action: 6
97
100
Application for Commerce Bank of Southwest Florida (Ft. Myers) filed
50
50 January 13th
18
Application for Banco Lationamericano de Expotaciones, S.A. (Miami)
0
Credit Union Foreign Bank Office Bank Trust Company filed January 14th
Financial Data (as of 6/30/04) Application for Providence Bank (Winter Haven) filed January 20th
60 Application for Coutts Bank von Ernst Ltd. (Miami) filed January 20th
52.1
50 Application for The Victoria Mutual Building Society (Miami) filed
42.1 Credit Unions January 25th
40
Foreign Bank
Offices Application by Sunrise Bank (Cocoa Beach) filed January 27th
30 Banks
17.0 Application by First Capital Bank (Marianna) filed January 31st
20 15.8 14.1
13.5
Application by Seaside Bank & Trust (Orlando) filed February 1st
10
5.3
1.7
Application by CNL Bank, First Coast (Jacksonville) filed February 10th
0
Liberty Bank (Clearwater) opened February 22nd
Assets Deposits Capital
Licensing & Chartering: July 1 - March 31, 2005 Alarion Bank (Ocala) opened February 28th
16 15
14
Nature Coast Bank (Crystal River) opened March 7th
12
10 Pending
Stonegate Bank (Ft. Lauderdale) opened March 7th
10
8
Approved
Application by Bank of Coral Gables (Coral Gables) filed March 8th
6 Complete
6 5 5
Application by GulfSouth Bank (Destin) filed March 15th
4 3 3
2
2
1
2
1 Application by Florida Bank of Commerce (Orlando) filed March 24th
0
0
Acquisition Branch De Novo Merger
Bureau of Financial Investigations
Conduct financial investigations into allegations of fraudulent and unlicensed activity.
Significant Events Significant Events
Fiscal Year 04-05 January 1 – March 31, 2005
Pensacola: Lifetime Capital, Inc. - Lifetime Capital obtained over $110 million from
Investigations Opened: 109 investors by misrepresenting the life expectancy of terminally ill persons. Two corporate
executives, David Svete and Ron Girardot, were found guilty by a federal jury of mail
Investigations Closed: 176 fraud, money laundering, and interstate transportation of stolen property. A third employee,
Enforcement Actions: 66 Cases Closed with Actions who pled guilty to conspiracy to defraud, cooperated with the prosecution of the case. At a
hearing scheduled for May 2005, Svete and Girardot face potential sentences of 125 years
81.9 Years Prison and 95.7 Years Probation Imposed imprisonment and $42 million in fines and restitution.
Miami - First Financial Services, Inc. - On March 31, 2005, John Pateras from First
****************************************** Financial Services, Inc., was arrested in Miami. Pateras was charged with 20
On-going investigations: 409 * counts of securities fraud, 1 count of organized fraud, and 1 count of aggravated white-
collar crime. Between 1998 and December 2003, Pateras operated a nationwide securities
* Note – Includes Preliminary Investigative Reviews scheme through 3 different companies. He induced 30 people nationwide, including 4
Floridians, to invest $580,000 in financial ventures with reliance on false representations.
Open Investigations by Type The case was worked jointly with the U.S. Postal Inspection Service.
2
Banking - Unlicensed Orlando: Patricia Grant - Patricia Grant, Edgar Grant, and Geisha Morris were
5 arrested for allegedly falsifying documents to obtain mortgage loans and properties in
Banking - Licensed
Orange, Broward, and Palm Beach counties. Their conspiracy allegedly defrauded
3 mortgage lenders of more than $3 million by submitting false employment information,
60 Securities - Registered forged bank statements, and other documents in order to obtain loans. All three defendants
Other face charges of racketeering, conspiracy to commit racketeering, organized fraud, grand
theft, and mortgage fraud.
West Palm Beach: Lambert Asset Management - On January 25, 2005, Thomas
193 Mitchell Lambert III, pled guilty to 6 counts of mail fraud in the U.S. District
96 Securities -
Finance - Unlicensed Unregistered
Court, Southern District. Lambert raised over $250,000 from 5 Florida investors. He
deposited these funds into his personal bank account and used the money for his own
benefit. Lambert used the U.S. mail to send bogus monthly statements to the investors
showing growth in their accounts. This was a joint investigation with the U.S. Postal
Inspection Service.
50 West Palm Beach: Florida Secured Funding Corporation, Inc. - On February 1, 2005,
Finance - Licensed Tim Sacora was arrested for 13 federal counts of scheme to defraud, mail and wire fraud.
The investigation revealed that Sacora used investor’s money to maintain an extravagant
lifestyle. There were over 95 Florida investors; nationwide investors losses exceeded $7
Other: The Bureau of Financial Investigations conducted its million. This was a joint investigation with the Ft. Myers U.S. Attorney, IRS, and FBI.
Annual Training, February 28-March 4, 2005.
Bureaus of Finance and Securities Regulation
Regulate non-depository financial service companies & related industries; protect
consumers from illegal financial activities; protect the investing public from investment &
securities fraud while facilitating capital formation in the State.
Number of Exams Significant Events
Securities Finance Money Transmitters
500
450 For the quarter ended 3/31/05, the Bureau of Finance Regulation assessed 24
462 administrative fines to various entities totaling $123,750.
400 418
350
300 On March 21, 2005, Carlos A. Shibata, a former Miami stock broker, signed a
250 stipulation and consent agreement with the Office in which he agreed not to apply
200 for registration as a broker or investment adviser for a period of 15 years. This
150 176 action was a result of his guilty plea to two counts of wire fraud in the U.S. District
100
105 Court of the Southern District of Florida. While Shibata was employed by Smith
50 82
0 35 Barney as a registered broker, he diverted $290,471 from a client’s securities
brokerage account at Smith Barney to an account he controlled at E*Trade Bank
Opened Closed on February 13, 2004. Shibata later attempted to wire an additional $150,000
7/1/04-3/31/05 from the same account in order to purchase a 2004 Lamborghini at The Collection
in Coral Gables.
Number of Complaints
Securities Finance Money Transmitters
On March 18, 2005, the Office entered into a stipulation and consent agreement
with Apex Lending, Inc. Apex consented to cease and desist from future
1000
violations of Mortgage Brokers and Lending Act (Chapter 494, F.S.), to pay an
900
1084 982 administrative fine totaling $75,000, and agreed to a 2 year probation of its
800
license.
700
600
In March, the Money Transmitter Regulatory Unit held its first Annual Examiner
500 Training Program in Orlando. The training program focused on Bank Secrecy
400 Act, Anti-Money Laundering, and Deferred Presentment (Payday Lending) issues.
300
200
194
100 137
12 10
0
Opened Closed
7/1/04-3/31/05
Bureau of Regulatory Review
Review all applications to conduct business as a financial service company or securities
firm; review license applications for individuals; and impose licensing restrictions or deny
July 1, 2004 – March 31, 2005 licensure based on findings.
Licenses Approved 62,026 Renewals, Filings & Public Record
Denied/Withdrawn 2,783 Requests Received: 74,314
Licensed w/Restrictions 73 Significant Events
Applications Processed
14,351
Money Transmitters
1,736 The Office took action against 37 Retail Installment (Chapter 520) entities for
Pre-need Sales
unlicensed activity resulting in administrative fines of $55,575. The majority of
148
Securities Issues these actions were against motor vehicle retail installment sellers and retail
installment sellers who were previously licensed but failed to renew and
continued to operate without a license .
41,403
Securities branch offices were required to renew their licenses for the 2005-
Finance
81,668
2006 license year with a deadline of March 31, 2005. As of the deadline,
Securities Agents approximately 94% had renewed with 53% utilizing the Office’s electronic
renewal process.
6,424
During the quarter, the Office finalized development and conducted user
Securities Dealers acceptance testing of a web-based process for receiving mortgage broker
applications on-line. It is anticipated that the new process will be implemented
Mortgage Broker Exam in April, 2005.
2004 - 2005
3000
2500
2000
1,712 1,633 1,474 1,470 1,702 1,486 1,366 1,656 1,947
1500
1000
711 672 759 720 727 731 668 815
500 628
0 1
July Aug Sep Oct Nov De Jan Feb Mar
# No Shows # Taking Exam
