What’s the date today? Why, it’s only January 17 – just a little over two weeks into 2023. And yet…
The joyful, optimistic cries of “Happy New Year!” have frozen on our lips – and not only because of the recent cold front over the island. We have been stunned by two pieces of news: firstly, the deeply disturbing revelations in a report from the Office of the Children’s Advocate regarding the allegedly unhealthy relationship between the Child Protection and Family Services Agency (CPFSA) and the American owner of a non-profit, Embracing Orphans, who is now accused of abusing children in state care. We are trying to get over that one.
Now, this week’s bombshell is that a number of Jamaicans (including our beloved and famous sprinter Usain Bolt) have been robbed of their savings at a well-known and established Kingston-based institution, Stocks and Securities Limited (SSL) – by at least one former employee. The sums involved are pretty high, in both U.S. and Jamaican currency. The Financial Services Commission (FSC) has appointed business recovery expert Kenneth Tomlinson as the temporary manager of SSL, and the Financial Investigations Division (FID) is investigating. Rumours are flying as to who, and what, and when and the issue is dominating news media.
The FSC will be holding a press briefing tomorrow morning (Wednesday January 18) at 10:00 a.m. It will be live streamed on their Facebook and Instagram pages (which seems a little odd to me, since many people don’t have those accounts. YouTube would have been better.
Meanwhile the Jamaica Securities Dealers Association (JSDA), a member of the Private Sector Organisation of Jamaica (PSOJ) has put out a release this evening, which I think provides some context. However, the repercussions of this event are incalculable, at this point. How much damage will it cause to the financial sector, where several smaller incidents of fraud have emerged recently in recent months? Perhaps it is too early to say. Here is the JSDA release:
Kingston, Jamaica – 17 January 2023: Over the recent months the Jamaican investment landscape has seen instances of infractions that have implications for repetitional risks and confidence erosion occasioned through employee fraud. Under the umbrella group of the Jamaica Securities Dealers Association (JSDA), the industry players are conscious of the prevailing issues and their inherent risks, and are working to educate and maintain stakeholder confidence and trust.
The JSDA works closely with the regulators to develop and adhere to appropriate systems for the industry, which facilitate the advancement of the industry and protection for investors. The JSDA operates with the values of – Credibility, Standardisation, Transparency, Collaboration, and Innovation with a mission to promote the interest of the securities industry in Jamaica and to develop and improve standards in the industry. The members of the JSDA are committed to:
- transparency and integrity in the management of client assets and data; and
- the expansion in access to investing and wealth creation which provides a strong foundation for a vibrant thriving economy.
Additionally, the Financial Services Commission (FSC) as the regulator for the securities industries, is charged with supervising its licensees under the Insurance, Securities and Unit Trusts laws. The FSC is also charged with supervising registered trustees and licensed administrators and investment managers of private pension plans for best sound practices. In doing so, the FSC oversees the registration, solvency and conduct of firms and individuals doing business in the securities and insurance (Life and General) industries. Such as:
- Securities Dealers;
- Investment Advisors;
- Securities Dealers’ Representatives;
- Investment Advisors’ Representatives;
- Mutual Funds;
- Unit Trusts;
- Insurance Companies;
- Insurance Brokers;
- Insurance Agencies;
- Insurance Managing General Agent;
- Insurance Sales Representatives;
- Insurance Loss Adjusters; and
- Insurance Consultants.
We are deeply concerned regarding the recent incidences of employee fraud within the industry. While we cannot comment on the cases under investigation in order not to prejudice the process and outcome, we are committed to a thorough investigation and full accountability for all perpetrators of fraud. Based on the fact the recent cases are being investigated by the relevant authorities, we are unable to comment on any individual client matters, in order not to prejudice any investigations.
As businesses, we are mindful that fraud is a reality in both the local and global financial industry. To mitigate against fraud, our institutions implement various detection and prevention mechanisms, which require constant evaluation and improvement as new and more sophisticated fraud schemes continue to emerge.
As financial institutions, we will work collectively and independently to ensure that all customers are fully apprised of measures that are at their disposal to do personal checks and balances. We are committed to enhancing our internal and industry controls, educating our clients, and improving our service through the consistent use of best practices and systems that detect and prevent gaps, ensuring the safety of our clients and business.
Our customers have entrusted us as custodians of their investments, and this is a responsibility we do not take lightly. As such we commit to full transparency as we identify and implement opportunities for constant improvements.
In closing, customers will be hearing from us and are encouraged to remain vigilant and regularly monitor their accounts through online platforms and suspicious activities should be reported through the appropriate channel provided by each institution.