DFI has obtained a preliminary injunction against and the appointment of receiver for Chesterfield Mortgage Investors, Inc.
Information for Investors with CMI Investments
Wednesday, September 15, 2010
Lyn Peters, Director of Communications
PH (360) 902-8731, firstname.lastname@example.org
Bill Beatty, DFI Director of Securities
PH 360.902.8723, email@example.com
FOR IMMEDIATE RELEASE:
DFI Obtains Temporary Restraining Order Against And Seeks 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. 10, 2010, the Washington State Department of Financial Institutions (DFI) Division of Securities obtained a Temporary Restraining Order in King County Superior Court against the Seattle-based Chesterfield Mortgage Investors, Inc. (CMI). On September 13, 2010, Judge Suzanne Barnett modified the Temporary Restraining Order to allow wage and salary payments for CMI employees.
During a scheduled examination in August 2010, DFI Securities Examiners found that CMI had misused investor funds. Chesterfield Mortgage Investors, Inc. President, Charles M. Chesterfield, told DFI examiners that 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. Additionally, DFI found that 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.
“The Securities Act of Washington is in place for a reason – investor safety and protection - and DFI’s examiners are committed to ensuring business practices that promote investor protection,” DFI Director of Securities Bill Beatty said. “Our primary goal is to protect the investing public.”
After the CMI examination had been completed, DFI learned that CMI’s auditors had withdrawn the opinion for CMI’s 2009 audited financial statements. DFI never received notice that CMI’s 2009 audit opinion had been withdrawn.
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.
Restraining Order Documents
- Temporary Restraining Order (PDF)*
- Complaint for Temporary Restraining Order (PDF)*
- Order Modifying Temporary Restraining Order (PDF)*
- Motion To Modify Temporary Restraining Order (PDF)*
Declarations In Support Of Appointment Of Receiver
- Declaration By DFI Financial Examiner Bernadette McBride (PDF)* (5.73 MB)
- Declaration By DFI Attorney Janet So (PDF)* (7.19 MB)
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
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.
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