Thursday, September 30, 2010
Lyn Peters, Director of Communications
PH (360) 902-8731, email@example.com
Bill Beatty, DFI Director of Securities
PH 360.902.8723, firstname.lastname@example.org
FOR IMMEDIATE RELEASE:
DFI Obtains Preliminary Injunction Against And The Appointment Of Receiver For Chesterfield Mortgage Investors, Inc.
State examiners find misuse of investor funds and significant violations of Securities Act of Washington
Olympia – On Sept. 29, 2010, the Washington State Department of Financial Institutions (DFI) Division of Securities obtained a Preliminary Injunction in King County Superior Court against the Seattle-based Chesterfield Mortgage Investors, Inc. (CMI). A receiver, Mel R. Codd, was appointed for CMI. CMI and its president, Charles Chesterfield, entered into a consent order with DFI in which, among other things, CMI agreed to the revocation of its mortgage broker-dealer registration and Chesterfield agreed to the revocation of his securities salesperson registration.
DFI’s action was based on an examination of Chesterfield Mortgage Investors, Inc. in August 2010, during which DFI examiners found that CMI had misused investor funds. The company’s president, Charles M. Chesterfield, told DFI examiners CMI had taken funds from early loan payoffs and had used the funds for other purposes, instead of repaying the investors who had purchased participation investments in those loans.
DFI also found that CMI had reconveyed the real property that secured at least four of those loans totaling more than $1 million. CMI continued to send investors monthly account statements with regular interest payments, without notifying the investors that the underlying loans had already been repaid and that the real property interest securing some of the loans had been released.
“DFI has no tolerance for companies that play fast and loose with investors’ hard-earned money,” DFI Director Scott Jarvis said. “Misappropriation of investor funds is reprehensible and those responsible are being held accountable.”
DFI Director of Securities Bill Beatty said “we are pleased a receiver has been appointed to take control of CMI’s assets, make an accounting to the court, and disburse the funds and assets as appropriate.”
Starting Oct. 5, 2010, investors who have questions about the receivership may call the receiver, Mel Codd, at CMI’s telephone number: 206.464.8770.
Investors who have questions about their CMI investments may call DFI at 1-800-372-8303, press “0” for the operator and ask to speak to someone about Chesterfield Mortgage Investors, Inc.
About Division of Securities
www.dfi.wa.gov/sd ▪ 360.902.8760 ▪ 877.RINGDFI (746.4334)
The Division of Securities regulates securities investments, franchises, business opportunities, and off-exchange commodities sold in Washington and the firms and individuals that sell these products or provide investment advice. The Division handles complaints, conducts investigations, and takes appropriate enforcement actions to protect investors and combat fraud.
www.dfi.wa.gov ▪ 360.902.8700 ▪ 877.RINGDFI (746.4334)
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information:
www.twitter.com/FinEd4All ▪ www.twitter.com/DFIConsumers ▪ finlit.blogspot.com ▪ www.youtube.com/user/WADFI ▪ www.homeownership.wa.gov