Money Transmitter Agrees to Multistate Settlements for Operational Failures

A California-headquartered money transmitter and one of its control persons agreed to a California consent order and a multistate consent order for the company’s failures to, (i) satisfy some outstanding money transmission liabilities; (ii) maintain required net worth or tangible net worth; and (iii) maintain permissible investments or securities.  The control person named in the consent orders was the Chief Executive Officer, majority owner, and a qualified individual of the company.  Under the orders, he will not be allowed to be involved in a money transmission company until permitted by the applicable state’s regulator.

These final consent orders follow interim consent orders from March 22, 2024, which cited some of the same failures and found that the company experienced significant deterioration in its financial condition.  The company stated that it had ceased money transmission operations in January of 2024, and was winding down.

The consent orders require, among other things, that the money transmitter cease and desist from all money transmission activities, and maintain a website for at least two years for consumers to file complaints regarding unpaid transactions.  The multistate consent order included a $1 million administrative penalty and the California consent order included a $300,000 administrative penalty, both to be waived upon the company’s compliance with the consent order provisions regarding handling of any unpaid transactions.