State agency lifts Hurst Financial’s permit
July 21, 2008
By THE EDITORS
A variety of accusations were filed today by the state Department of Corporations against Atascadero lender Hurst Financial and its owner, James Miller, and the agency has revoked Hurst’s permit to sell securities.
Miller is one of several San Luis Obispo County hard money lenders on shaky ground because of questionable business practices.
Mary Ann Smith, the department’s senior corporations counsel, charged in the complaint that Miller violated at least five of the permit’s terms.
“The department determined in July 2008 that [Miller] operated his business in contradiction to the offering circular” presented to prospective investors.
Included in the complaint are allegations that Miller: — disbursed to borrowers “all net proceeds” on loans rather than using the “draw system” as promised to investors; — extended loans after the maturity date without approval of investors; — failed to return investor principle when requested after loan maturity date; — permitted at least one investor who was not a California resident to purchase securities in violation of state law.
Miller told investors that construction was starting on certain projects when in fact no construction had started.
According to the complaint, Miller has been violating provisions of his permit since 2004. Miller can appeal the revocation. He could not be reached for comment.
Hurst currently is the target of several lawsuits filed by investors.