Judge questions legal fight as trustee and FSC seek SSL's closure

Supreme Court Judge David Batts has questioned the significance of the ongoing battle for control of Stocks and Securities Limited (SSL) since both the Financial Services Commission (FSC) and the defendant trustee are pursuing the winding up of the investment firm.

He raised the issue yesterday after it became clear that the trial, which started on February 26, was not near completion with other related cases due to be decided.  

The trial is rooted in a lawsuit that the FSC brought against SSL and trustee Caydion Campbell on January 25, 2023.

The regulator is alleging that the trustee's appointment on January 16, 2023 and the company's decision to declare solvency and seek a members' voluntary wind-up breached directives issued to the company on January 12. 

"What's the utility of having that issue (who is in control) resolved at this point in time now that both of you seem to want the same thing - a winding up under the supervision of the court," Batts asked the parties.

"And does it really matter who applies first or who applies second?"

Batts argued that the length of time it will take to determine all the related cases could impact SSL, its creditors and investors, a point supported by King's Counsel Caroline Hay, the attorney for the trustee. 

"A meeting of the minds could save cost and time," Justice Batts suggested, after earlier asking "what is the ultimate objective here?"

In March 2023, the regulator applied to the Supreme Court for permission to pursue a winding up of the company, alleging that it is insolvent. The FSC also wants Ken Tomlinson, the temporary manager it installed on January 17, to become the trustee. 

That claim has been put on pause until the current trial about who controls SSL has been determined. 

There is also a counterclaim that the SSL trustee filed against the FSC on November 27, 2023. He is seeking several declarations, including an order appointing him the trustee to pursue a court-supervised winding up of SSL. 

Hay complained that the FSC was yet to file a defence against the counterclaim.

The FSC's case is being led by Lisa White, a senior attorney in the Attorney General's Chambers.

She said the FSC has issues with what was filed as a counterclaim, including what exactly to respond to because "what is there... is a list of declarations" and not averments or claims.  

The trial has been set to continue on March 25, for three days. White will continue her cross-examination of the trustee. 

The FSC closed its case on Monday but has since applied to reopen it to rebut evidence given by the trustee. 

King's Counsel Carlene Larmond, who is the court-appointed independent attorney for SSL, is also to present her case. 

The FSC took temporary management of SSL on January 17, 2023. Its directives, which barred SSL officials from dealing with the company's assets, were issued after SSL reported a fraud on January 10, 2023. 

But the trustee has countered that the FSC was aware of efforts to restructure the company and appoint a trustee. The possibility of a joint trusteeship was also raised. 

SSL is at the centre of a $5 billion fraud, with sports legend Usain Bolt among the affected clients. 

- Jovan Johnson

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