Evasive FSC says SSL's licence has never been suspended

The Financial Services Commission (FSC) on Wednesday said the licence of fraud-hit Stocks and Securities Limited (SSL) has never been suspended, even as the regulator dodged several questions about its oversight of the “problem institution”.  

The FSC has been under scrutiny after The Gleaner revealed a 2017 internal report in which staff at the regulatory agency said the SSL “remained a problem institution" for almost six years, up to February 2017.  

The FSC accused SSL of operating a “culture of non-compliance and mismanagement of client funds”, according to the report which was prepared ahead of a meeting where the company was trying to avert a licence suspension.  

However, at the FSC's press conference on Wednesday, very little on what happened before and after February 2017 came from the agency's executive director, Everton McFarlane.  

“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 it, what we did, but… our ability to answer certain questions at this point in time is constrained,” he said, seeking to preempt journalists.  

He outlined two roadblocks he claimed fettered the FSC's ability to speak: the ongoing fraud investigation and confidentiality obligations.  

“That in no way is an attempt, certainly by the FSC, to resile from any accountability process,” said McFarlane, who took up the top post at the FSC in August 2017.  

McFarlane was supported by acting general legal counsel Donia Fuller-Barrett who recited various parts of the law that she said restricted what the FSC can tell the public about how it was protecting investors from entities with longstanding issues. 

As a result, the public is no clearer on what exactly the FSC did, despite its notices of suspension issued to SSL up to 2017, or what happened after the agency was given another opportunity to satisfy concerns. 

On the term 'problem institution', McFarlane said the designation identifies issues of concern or any aspect of a company's operations that are significant enough to warrant attention by the FSC.  

Being styled a problem institution, he argued, does not mean that an entity is on the brink of insolvency.  

And, speaking generally, the FSC's lawyer said suspending a licence or "pulling plug" is a last resort and entities are given an opportunity to fix issues to reduce any negative impact on clients and the industry.  

The SSL was given numerous opportunities since 2013.  

But the FSC leadership could not say at what point entities flagged for a “culture of non-compliance” are actually sanctioned.  

McFarlane said there was no reason to suspend or cancel SSL's licence. 

According to the FSC head, the alleged fraud at SSL was a "despicable act of dishonesty". However, he said it shouldn't be seen as "symptomatic" of the risk for the wider industry. 

Meanwhile, McFarlane explained that the special auditor assigned to SSL will assess the availability of any insurance for clients who have lost money in the fraud.  

Sprint legend Usain Bolt has given Stocks and Securities Limited 10 days from January 16 to pay over approximately $2 billion that he said was in his account up to October 2022.  

SSL reported the $3-billion fraud to the FSC on January 10, after taking a statement from an implicated ex-employee on January 7. The former wealth advisor has not been charged.  

SSL's leadership includes chairman Jeffrey Cobham and executive director Hugh Croskery.  

- Jovan Johnson

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