SSL defends its role as probe continues into alleged multi-million dollar fraud
KINGSTON, Jamaica, Feb 1, CMC – The embattled Stocks and Securities Limited (SSL) says it had intended to facilitate law enforcement and other professional investigators as they probe the recent events at the investment firm without making public comment.
“However, it has become necessary to set the record straight in respect of some damaging and widely repeated inaccuracies which suggest, inter alia, that the SSL directors and management sought to dispose of assets in order to frustrate efforts by authorities to take control of same,” the company said in a lengthy statement, adding “this is simply untrue”.
The Jamaica government has already announced that the United States Federal Bureau of Investigation (FBI) will assist local authorities in the investigation of the alleged multi-million dollar fraud at SSL.
Prime Minister Andrew Holness has said no effort will be spared in uncovering the full extent of the fraud at the SSL, whose clients included including eight-time Olympic champion Usain Bolt.
The legendary world class sprinter is allegedly to have been fleeced of millions of dollars in local and foreign currencies given to the firm to invest.
Bolt has indicated through his lawyer that he had a balance of US$12.7 million at SSL as at October 31, 2022, but that figure declined to US$12,000 on January 11.
In the statement, SSL said that on January 10, this year, it had notified the Financial Services Commission (FSC) of the discovery of apparent fraud and of the immediate steps being taken.
“This serves to advise the Financial Services Commission that Stocks and Securities Limited (SSL) is currently investigating allegations of alleged fraud committed by an employee serving in the role of Client Relationship Manager.
“The exposure is unknown, and SSL is currently undertaking investigations with the support of our attorneys, Guardsman Elite, and external auditors. The employee was interviewed by our attorneys on January 6 and 7, 2023 in the presence of her attorney and has admitted to wrongdoing. Other interviews are scheduled for the week of January 9, 2023, with known associates,” the company said in its correspondence to the FSC.
The SSL said that “at this time, it appears that the employee amended and generated fraudulent client documents including encasement requests and statements to circumvent the internal protocols”.
It said that the matter had been reported to the Board of Directors and communication had been sent to clients.
“The Company estimates that within seven to 14 days there will be a reasonable estimate of the exposure, however, this is unknown at this time. SSL has confirmed that its insurance policy includes coverage for employee dishonesty and forgery with coverage up to US$1 million. Efforts are also being made to have the employee commit to restitution.”
SSL acknowledged that a representative of Bolt had visited the company on January 11 indicating the employee being investigated “had turned up at their offices to confess that she had falsified statements provided to them, had stolen money from them and other SSL clients, and was requesting help…Bolt’s management team to repay the clients whose funds she had stolen.
“It is believed that the reasons that she did not initially confess to defrauding this particular client are (1) she was aware of the tremendous spotlight which the Bolt name would bring to bear on her activities, and (2) amazingly, she, for whatever reason, and despite having admitted to the Bolt management team that …Bolt was among her victims, apparently still believed that she could borrow the money from the Bolt management group to repay the other SSL clients”
SSL said that the very first point at which the company became aware that the fraud affected the legendary sprinter was when the member of the Bolt management team visited SSL’s office, “the former employee having omitted any mention of this client in her initial confession”.
It said work had started to review all transactions related to those clients whom she had initially listed and to carry out the notifications to the FSC, the Jamaica Stock Exchange (JSE), affected clients, insurance, when Bolt’s representatives visited the SSL office.
“The shock experienced by all was and remains palpable. While the company believed that the impact on the first identified 39 clients could be addressed with the cooperation of regulators, it was immediately apparent that the national and indeed, global stature of the last client impacted would likely make a measured and systematic approach to investigation very challenging indeed.”
In defending its decision not to comment on the situation until today, SSL reiterated that it had issued a press release notifying the public that alleged fraud had been identified and that at the time of the FSC notice, it was unaware of any alleged fraud related to Bolt’s holding company.
“SSL appointed a trustee on January 16, 2023, and the Financial Services Committee appointed a Special Investigator and Temporary Manager on January 17, 2023. Practically, the FSC through their Temporary Manager has had control over the entity so SSL has not been in a position to respond publicly or clarify allegations.”
The company also denied reports that SSL directors and shareholders were moving towards winding up the entity in contravention of FSC instructions, saying the appointment of a trustee “was not, we repeat, not to wind up the company”.
It said that although his key objectives were intended to be to ensure that all necessary conservatory measures were in place over the assets of SSL, as well as to ensure compliance with the enhanced governance protocols as directed by the FSC, it was intended that he would also use the results of the IBR to explore the restructuring and reorganisation options that were available to preserve and enhance the value of the business, operations, and undertakings of SSL for the benefit of all its stakeholders”.
SSL said that the events that have unfolded have had tremendous adverse consequences for the affected clients, and for the hard-working staff at SSL.
“The former employee’s dishonesty has led to the most widely publicised news event from Jamaica in recent years. The Board and Management had five business days between the confession and the FSC taking over the entity.”
“Jamaica has a highly reputable financial market, with a sound regulatory framework operating at international standards. This remains so despite the recent spate of cases of fraud at various financial institutions.
“A few bad apples, who do what fraudsters do – find ways to beat the system – should not cast doubt and suspicion on the many thousands who toil daily to preserve the integrity of the sector. Justice should be the objective for all affected clients, famous or unknown. That is our aim and we will continue to support that objective in every way possible,” the SSL added.
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