Newsmaker… Week: SSL fraud heats up amid resignation, home search Loop Jamaica

The content originally appeared on: News Americas Now

Black Immigrant Daily News

The content originally appeared on: Jamaica News Loop News

This week’s featured overall development as Newsmaker of the Week just ended are the developments surrounding the fraud scandal now rocking investment firm, Stocks and Securities Limited (SSL) and the scrutiny by its regulator, the Financial Services Commission (FSC), for its oversight, or lack thereof, of SSL.

After stonewalling journalists, dodging and being ultra-evasive in response to questions on the FSC’s own monitoring of SSL at a press conference on Wednesday, the FSC’s Executive Director, Everton McFarlane, tendered his resignation a day later.

That was announced by Finance and the Public Service Minister, Dr Nigel Clarke, along with a disclosure that Bank of Jamaica (BOJ) Chief Prudential Officer, Kerron Burrell, is to act in the position of FSC Executive Director.

While investigations are well under way into the reported massive fraud at SSL, law enforcers and operatives of Financial Investigations Division (FID) of the Finance Ministry on Friday descended on the apartment of Jean-Ann Panton, a former SSL employee who admitted to private investigators that she swindled large amounts of funds from the accounts of over 30 persons at the firm.

The statement with her detailed outline was circulated on social media, and has left the woman’s attorney, Tamika Harris, livid.

When asked if she knew how the document got released, she said she did not.

“I’m upset about it and that is all I’m going say,” she said.

The FID and the Jamaica Constabulary Force’s Fraud Squad are also working the case to unravel “this fraud”, with “a view to identifying all connected parties and bringing them to justice.”

But up to now, investigators have been unable to quantify the exact amount of the SSL fraud.

Panton is yet to charged in relation to the fraud, but the FID, in a statement on Friday, said she is to be questioned with a view of being subsequently charged by the police.

Perhaps of some comic relief to the very serious nature of the overall situation, a video was circulated of Panton exiting a high-end motor vehicle and using a walker for assistance before she sat in a wheelchair and was subsequently pushed inside the apartment in Millsborough, St Andrew amid the search.

Officers seized documents, as well as electronic devices, at the premises in the presence of Panton and her attorney, to assist in the ongoing probe

Senior Superintendent Stephanie Lindsay, who heads the constabulary’s Corporate Communications Unit (CCU), confirmed that Panton was in a wheelchair, but could not give details about her health.

Interestingly, sprint legend Usain Bolt was not among the individuals who were named by Panton in her statement to private investigators who were allegedly contracted by SSL.

But Bolt’s legal team on Tuesday issued SSL with a 10-day ultimatum to return his missing money – in excess of US$12 million (Ja$1.8 billion) – or face legal action. The retired sprinter’s account at SSL now reportedly contains only US$12,000.

That outline would likely make Bolt the largest financial casualty of the reported fraud at SSL, but he did not make Panton’s list of over 30 clients who she allegedly swindled.

Due to Bolt being an alleged victim of the fraud at the investment firm, the story has been covered extensively in the international media, including the BBC, CNN, Blomberg, Forbes and Al Jazzera.

The SSL fraud became public on January 12 after it was revealed that Bolt was among the individuals who had been hit by embezzlement at SSL. Clarke revealed last week that many elderly citizens were also defrauded of funds at the entity.

With Bolt’s team threatening a lawsuit and pressure mounting on the FSC to state how it regulated SSL over the years, McFarlane and others called a press conference, during which he said a recommendation on the course of action for the investment firm could come within weeks.

Usain Bolt

The FSC announced a day earlier that Kenneth Tomlinson was appointed as the temporary manager of SSL.

In elaborating, McFarlane said Tomlinson could provide a recommendation much earlier than the 60 days that was prescribed by the Financial Services Commission Act (2001).

“He’s not been given a long time. It’s not months, it’s weeks. We know how urgent it is, and how potent it is,” McFarlene told Loop News following the press briefing on Wednesday morning.

McFarlane, speaking at the press conference, pointed out that the case of SSL should not be seen as “symptomatic” of the wider industry amid widespread shock at information that the “questionable actions” on some SSL accounts dated back to over a decade.

The temporary manager, whose primary task is to assess and make recommendations with SSL customers in mind, would look at the issue of insurance and its accessibility.

McFarlane indicated that SSL has fidelity insurance, which is taken out against losses incurred through dishonestly of employees. The extent of SSL’s insurance coverage, however, has not been disclosed.

The then FSC Executive Director described the alleged fraud at SSL as a “despicable case of dishonesty”, even amid him dodging questions about the commission’s oversight of the now scandal-ridden entity.

It was reported that the FSC had flagged SSL as a problem entity several years earlier over its questionable business practices.

When quizzed on its oversight of the institution, McFarlane said: “We are aware that there are a number of questions that are of public concern.

“Questions, for instance, relating to the FSC’s past actions, what we knew, when we knew and what we did. Our ability to answer such questions at this time is constrained.”

The FSC’s Acting General Legal Counsel, Donia Fuller-Barrett, indicated that suspending a licence, or “pulling the plug”, was the last resort, and entities are given an opportunity to fix issues in order not to “shock the system”.

Still, McFarlane was perceived to be dodgy in his responses, and left much to be desired at the press conference that was also plagued by audio issues for its social media viewers.

In fact, many observers have concluded that the press briefing highlighted FSC’s actions in looking pass the issues at SSL, as its 2017 report acknowledged that the investment firm has “a culture non-compliance and mismanagement of clients’ funds”.

On that score, McFarlane said if issues occur, the FSC would give entities time to address or implement corrective actions, which maybe could not be resolved “the next day or the next month”.

He said the FSC monitored those corrections, but stated that SSL did not implement the “corrective actions”.

Everton McFarlane

As such, he said “I cannot speak to the specifics, but clearly if there was a condition that required for them (SSL) to satisfy certain obligations… we would take steps to suspend the licence.”

But McFarlane confirmed that the licence had not been suspended.

More questions followed for McFarlane relative to an instance in 2020 when a cease and desist order was issued on SSL.

In response to that question, the then FSC head said: “There is no reason to presume that the same issues continued from 2017 into 2020.

“What you’re presuming is that somehow, between 2017 and 2020, nothing was done, and that the actions that you speak to out of 2017, apply perfectly to 2020,” McFarlane stated, adding that “I will not confirm or deny that”.

Asked whether the FSC acted too late before stepping in to address the now developing fraud issues at SSL, an adamant McFarlane stated: “Those kinds of questions, at this point in time, I am constrained to answer.

“It’s not that we’re not aware that there are not questions of public interest.”

But he rapped those who were involved in the perceived fraud racket at SSL, though he refused to be questioned further on the number of persons he believed were involved.

“This despicable act of dishonesty by an employee at SSL, and possibly with collaborators, we believe, cannot be taken as symptomatic of the risk for the entire industry,” declared McFarlane.

Following the testy exchanges at the press briefing and pressure from citizens for the Government to respond to especially the loss of funds from Bolt’s account at SSL, Finance and the Public Service Minister, Dr Nigel Clarke, in a release late Thursday, declared that no stone will be left unturned in the investigation into the alleged fraud at the entity.

“There will be full transparency. No stone will be left unturned in unearthing exactly how funds were allegedly stolen, who benefited from such theft, and who organised and collaborated in this,” stated Clarke.

“There are many questions to be answered, such as the time period between becoming aware of this fraud and informing the regulatory and investigative authorities, and the actions taken in the interim, among other matters,” he said.

Dr Nigel Clarke

The probe, said the minister, will seek to identify whether assets have been acquired with the proceeds of the fraud.

He added that if and when such assets are identified, all legal steps will be taken to restrain the applicable assets with the intention to effect forfeiture.

“On behalf of the Government of Jamaica, we empathise with all investors who have been impacted in this way, and particularly those of advanced age who, at some time in the past, brought their working years to a close,” Clarke said in his statement.

And after many persons clamoured for him to address the SSL fraud matter, Prime Minister Andrew Holness did so on Friday, stating that he is “thoroughly disgusted and upset” by the allegations.

“While I understand the hurt and upset all Jamaicans feel at this time, I urge the public not to fuel panic through speculation and baseless assertions,” said Holness.

In a statement, Holness said he was briefed on the matter by the relevant Government agencies and officials.

He said the briefing is important to properly inform and guide any public pronouncements he makes on the matter.

“Like all Jamaicans, at home and abroad, I am thoroughly disgusted and upset by revelations in the public domain surrounding this matter,” declared Holness.

“I am very concerned and sympathetic to all those hardworking Jamaicans who, at this moment, are uncertain of the status of funds they have invested with the institution in question,” the prime minister continued.

Prime Minister Andrew Holness

“While every investor’s distress must be equally acknowledged, there is a dimension of a heightened public sense of betrayal, which I share, that a national Icon who has brought so much pride to all of us, is also a victim of the alleged fraud,” he added.

Having had the benefit of the briefing, Holness said he can “confidently” say to the nation that all the relevant Government entities are seized of the urgent nature of this matter, the great public concern, and the suffering of the victims.

The SSL debacle and other related developments have generated significant commentary on some social media platforms.

In response to Clarke’s assurance that the case will be properly investigated, Facebook user, Godley Dempster, said: “Talk, talk, talk and more talk”.

Another user, Paulette Jackson, commented: “Joke of the century.

“The FSC fell down badly on the job, because all Governments on both sides do is shift their friends and supporters from here to there all when they cannot do the job,” she claimed.

Social media users also weighed into the prime minister’s response on the SSL fraud racket.

Jean Abrahams commented: “Too little, too late and nothing new from the PM. Could have saved paper”.

Richard Dennis shared: “We know investigations are ongoing, Mr Prime Minister, what we want is all white collar criminals arrested and charged like the poor man, and not just the small man, sir, every big man involve for prison, sir.”

On the resignation of the FSC’s executive director, Clifton Whittacker posted: “Waste of time.

“John public need to know the big worthless fish that steal sir (Usain) Bolt hard-earn money…,” he added.

Sharla Simpson commented: “Good, the press conference yesterday (Wednesday) was a fiasco and an embarrassment”.

Dorothy Maxwell stated: “That press conference was embarrassing, and the man couldn’t answer simple questions and (a) educated people these.”

Meanwhile, in regards to Friday’s development relative to the search of the apartment building owned by the ex-SSL employee who has been implicated in the fraud, Facebook user, Shanna Lee, wrote: “All the assets should be seize and the house should be put on auction sale”.

Shared Yvonne Griffiths: “From this buss, there should have been a warrant to search the home and seize assets. Kmt. With her expertise… and knowledge, what unu expect to find…? Unu eva a play catch-up.”

Commented Nica Clarke: “Time for action. The victims need their money back with explanation”.