Jamaica's financial fraud investigation continues, but for affected investors — including Usain Bolt — the news is not good

Originally published on Global Voices

Feature image via Canva Pro.

Just two weeks into 2023, news of a major fraud investigation at a leading securities house shocked Jamaicans and sparked considerable outrage on social media. Through his holding company Welljen, beloved sprint star Usain Bolt was among some 40 investors who lost money at Stocks and Securities Limited (SSL). Since then, the reported fraud has been the subject of much speculation and often false rumours.

Former relationship manager at SSL, Jean-Ann Panton, who had provided some details of the fraud in a signed statement on January 7, was arrested and charged on February 17 with breaches of the Larceny Act, the Proceeds of Crime Act (POCA), the Forgery Act and, the Cyber Crimes Act. The charges were laid after authorities searched her home and seized documents and electronic devices. Panton has remained incarcerated ever since and is next scheduled to appear in court on December 6.

At the time, Jamaica's Financial Investigations Division (FID), headed by a former Deputy Commissioner of Police, said in a statement:

The case is complex for three main reasons:
— The number and types of accounts affected
— The number and types of transactions conducted on the affected accounts
— The length of time (over a decade) during which questionable actions were taken against some of the affected accounts

With the exception of Usain Bolt's account, the FID was, at the time, “unable to quantify the exact amount which has been defrauded from all the affected accounts.” It reminded citizens that the process was still in its early stages. Since then, it has become clear that the case is, indeed, complex and the investigations time-consuming. The matter has also become embroiled in lawsuits, accusations and counter-accusations, which have slowed the probe.

More questions than answers

So far, none of this has been of any comfort to the many investors affected, and over the July/August break, Jamaicans increasingly asked questions about the perceived slow progress of the investigation and the fact that no further arrests have been made.

In the past week, more twists in the tale have emerged. In an August 31 statement, the FID reported that investigations to date revealed that the number of investors affected by the fraud has increased from around 40 to 70. The sums of money involved have also increased, thanks to the discovery of “other fraudulent schemes at SSL which have resulted in the misappropriation and/or loss of numerous investors’ funds amounting to over USD 10 million.”

The FID also referred to “an entrenched culture of gross mismanagement dating back well over a decade.” Its principal director of Investigations noted:

Before the next court date, we anticipate the arrest and charge of other actors involved in the multiple fraudulent schemes recently discovered.

Burden on taxpayers

This news ramped up anxiety and concerns among Jamaicans, compounded by the announcement soon after from Minister of Finance Nigel Clarke that the government (i.e. taxpayers) would be paying the employees of SSL to the tune of JMD 14 million (USD 90,648) monthly. The employees had not shown up for work in protest over the non-payment of their August salaries. Minister Clarke asserted:

SSL’s income cannot support its operating expenses, much of which are necessary to facilitate the ongoing investigations.

In March, the Financial Services Commission (FSC), which had taken over the company, reported that it was “insolvent.” Meanwhile, one employee complained to the media about the stigma that has now become attached to working at SSL:

We are not all criminals, and we have to deal with the perception every day and still turn up to work. Just tell us when we are getting paid. Somebody has to care about our position. We know that we did not steal anybody’s money. These things are hurtful, and we have children to send to school.

Staff are reportedly conducting research and producing reports to aid in the investigation, but many Jamaicans remained unconvinced. Attorney Clyde Williams asked:

The PM & his Cabinet have authorized expenditure of $15m or so monthly in a private company SSL to pay salaries & cover other expenses. Why is the Govt using tax revenue to bail out private investors? Yuh know how many yute dem $$ can send guh school, build classroom, build lab…

— Clyde Williams (@ClydeWilliams46) September 2, 2023

He added:

The MoF says the staff are needed to assist with the investigations at SSL. Bear in mind is not outsiders that stole the money form SSL. The fraud was driven internally, by staff. But that same staff is to help to find the thieves, months after the theft. Alice in wonderland!

— Clyde Williams (@ClydeWilliams46) September 3, 2023

Another Jamaican asked:

Why doesn't insurance pay for SSL salaries … why do we? Who took it?

— oDessa (@oblessa) September 3, 2023

Opposition Leader Mark Golding posted on Facebook:

SSL is in ‘temporary management’, not liquidation, and its ownership has not changed. Yet the government is funding SSL’s working capital needs using taxpayers’ money, with no end in sight, and they say it’s not a loan. So what are the terms of this indefinite, uncapped capital injection? We would like to know.

Social media as a communication channel

Over the weekend, government officials responded with alacrity to the new controversy, using social media instead of traditional methods of communication. Opinion was mixed on this, with some feeling that more formal methods should be used, while others felt it was a good move to make the information easily accessible. While the minister of information spoke on his personal TikTok account about the weighty matter, the jury was out as to whether he was reaching the Jamaican public, or just his followers:

Nesta is on TikTok live explaining the ssl situation rather than addressing the nation in a formal public forum.lmao pic.twitter.com/i8QcmPrLZm

— Borborygmus (@CruffBsc) September 2, 2023

Meanwhile, Minister of Finance Nigel Clarke was busy fielding many questions at a one-hour Twitter Space session that was attended by around 500 listeners. Stressing that the country has “survived several financial and other crises,” he sought to reassure Jamaicans that there will be a “dogged pursuit” of justice in the SSL matter. He revealed that UK investigators Kroll “were in Jamaica all of last week” and assured netizens that investigators “will come forward when there are new developments,” concluding:

The number one priority is to have a complete and thorough investigation, which we believe to be in the public interest.

Lawsuits and law enforcement

As far as Bolt is concerned, his lawyers — who claimed that their client’s account value fell from JMD 2 billion (USD 12.7 million) in October 2022 to JMD 1.8 million (USD 12,000) in January 2023 — were granted a court order on May 31 to determine the extent of Panton’s accounts with other banks. An elderly investor has filed a separate lawsuit against the firm, and 10 other defendants, including Panton and SSL founder Hugh Croskery. Both cases are scheduled to be heard in the Supreme Court on October 23.

Responding to these concerns on June 12, the Financial Services Commission (an independent, self-financing regulatory body) explained that its task was not easy, due to ongoing court disputes involving former SSL executives. Referring to “an active and ongoing collaboration with various law enforcement agencies” (including the FBI, the local Fraud Squad, the United Kingdom-based forensic accounting and intelligence firm Kroll, and the Asset Recovery Inter-Agency Network for the Caribbean) the FSC's Statement pointed out:

The public is also aware that there is an ongoing dispute involving the Commission and SSL as we aim to establish the full scope of our authority and ability to act to deal with the matter, based on the assumption of temporary management. This has caused a delay in certain actions which the Commission would have taken to resolve the concerns of current SSL clients and stakeholders but for the extant matters being litigated before the court.

The FSC was referring to two as yet unresolved court disputes with SSL. The Supreme Court ruled in July that the government’s application to shut down the fraud-hit investment firm will be heard in open court in November so that the public and investors can follow the proceedings. The FSC is also seeking to dislodge a particular SSL-appointed trustee; this case will be heard first.

Is history repeating itself?

Stocks and Securities Limited has a long and complex history dating back to 1977 when it was established as Paul Chen-Young and Company, a member of the namesake financier's Eagle Group. It was taken over by the Financial Sector Adjustment Company (FINSAC) in 1997 during the financial sector collapse of the 1990s. Chen-Young died three years ago in Florida. His former company's name was changed in 2006, under its new owner. The FINSAC era, which was the subject of a discontinued government enquiry, is a topic that still sparks political arguments and heated controversy.

Responding to a post regarding another long-defunct insurance company owned by Paul Chen-Young, commentator Wayne Chen observed:

I recall being offered an opportunity to become a shareholder when Paul Chen-Young was preparing to launch Eagle Merchant Bank in the early 1980s. An objective, dispassionate history of #Jamaica‘s financial sector 1980s-90s is sorely needed. The good, the bad, and the ugly.

— Wayne Chen (@wcchen) May 8, 2023

As the Jamaican public, and at least 70 investors, anxiously await the next episode in the SSL saga, the matter has unearthed some painful issues that many would have preferred to stay in the past. Is history about to repeat itself, as the Advocates Network suggested earlier this year? The story is to be continued, and the final months of this year could well reveal more.

As one young poster on “X” (formerly Twitter) commented:

Right now it's SSL vs The People of Jamaica.

— DR. KYLE (@dprincescorpio) September 3, 2023

Originally published in Global Voices.