Minister of Finance Dr Nigel Clarke finally broke the Government of Jamaica’s self-imposed silence when he spoke late Thursday 19 January 2023, on the massive fraud at Stocks and Securities Limited (SSL) in Kingston, Jamaica. Dr Clarke gave the assurance of a full and thorough investigation, hours after he announced that the executive director of the Financial Services Commission (FSC), Everton McFarlane, had resigned from the post, one day after facing the press about the multi-billion-dollar fraud at SSL. Unconfirmed reports hinted that the monies involved could run in excess of US$30 million or J$4.5 billion, making it the single largest fraud case in Jamaica’s history.
SSL’s culture of non-compliance
The revelation that in 2017, SSL was flagged by the FSC for its “culture of non-compliance and mismanagement of client funds” came as a surprise to many when the news of the massive fraud began to make the rounds in Jamaica. According to a report in the media, the particular finding was contained in an explosive eight-page report prepared by the FSC in February 2017 ahead of a meeting with SSL representatives who were trying to convince the regulators not to suspend its dealers’ licence as such a suspension (even for a single day) would have led to a total destruction of the company and cause massive destabilization within the island’s financial sector. The FSC also pointed out that the SSL has been “a problem institution”, especially concerning its financial position and noted that for the five years and six months leading up to February 2017, the company had been operating under its directions and “has remained a problem institution” for failing to file its annual report for the period up 30 June 2016; failing to file audited accounts within 90 days of the close of a financial year; and its practice of granting credit to connected parties in violation of orders issued in 2013.
FSC’s non-action aided and abetted SSL
In the circumstances, one could easily argue that the culture of non-compliance and fiduciary violations were aided and abetted by the FSC’s unwillingness to exercise the powers under its hand and bring the company to heel. That these revelations had been made a full five years earlier and had not resulted in any serious enforcement by the FSC not only justifies the immediate departure of McFarlane, it also provides a basis for a complete house cleaning. McFarlane had indicated, at a disastrous press conference called on Wednesday, that “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”, he said. The fact is that the FSC has always been in possession of the tools that the agency needed to address the issues it reported but did nothing. The result is the monolith of a fraud perpetuated on unsuspecting Jamaicans by a group too callous to show regard for those who had reposed in them their trust and confidence to manage their funds, in many cases, their life’s savings.
Government’s tardy response alarming
That it took the Jamaican Government more than a week to offer a comment on the development must be seen as a major embarrassment, even as every major news and sporting channel around the world was reporting on the massive fraud in Jamaica which has snared the former World and Olympic Champion and primary Ambassador at Large for brand Jamaica. The government’s tardiness in getting out ahead of this has severely damaged the island’s reputation, not to mention the damage to the confidence of Jamaicans at home and in the Diaspora who are constantly being wooed by its embassies and consulates to take their funds and other investments to Jamaica “one of the best places in the world to save and invest.” Jamaicans everywhere have expressed their disgust with the authorities for their lethargy and tardiness in addressing the issue even as a substantial number of Jamaicans view the response as providing escape routes for individuals connected to the company and associated with major players in the governing Jamaica Labour Party. For many of these commentators, this is just one more instance of the pervasive corruption that has taken root in the country and having feasted on its heart has now begun to consume the island’s soul.
Jamaicans everywhere are horrified that such a caper could have been orchestrated against other Jamaicans who have worked hard to accumulate their personal savings and that the perpetrators would target among all persons, Usain Bolt, arguably the island’s best son. Bolt, despite the multiple overseas options available to him, had always concentrated his investment activities on the island, especially since his retirement. He has served as a magnet for attracting outside investors into Jamaica, yet the Jamaican system revered in the “choppa” culture has now turned to consume even him.
Proposed investigation is an empty promise
Minister Clarke has declared that “There will be full transparency, and no stone will be left unturned in unearthing exactly how the funds were allegedly stolen, who benefited from such theft, and who organized and collaborated in this”. Clarke has also promised that, “The probe will also seek to identify whether assets have been acquired with the proceeds of this fraud. If and when such assets are identified, all legal steps will be taken to restrain these assets with the intention of full forfeiture”.
The Minister’s utterances are not just late, they also provide very little comfort to the scores of Jamaicans, many of them elderly individuals, who seem set to lose their entire life’s savings as any recovery and disposal is likely to be merely cents on each dollar of investment stolen.
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