In a recent court session, Stocks and Securities Limited (SSL) and the Financial Services Commission (FSC) convened to discuss the progress of SSL’s winding down process. The proceedings took an unexpected turn when the FSC, represented by new legal counsel Symone Mayhew, KC, requested that the trustee’s report be sealed due to concerns over its sensitive content.
This request was presented to Justice David Batts, who is overseeing the case, following the submission of a report by Caydion Campbell. Campbell, whose role as trustee was reaffirmed by the court in May despite the FSC’s objections, was mandated by Justice Batts to deliver a comprehensive report within 90 days. However, it was disclosed that Campbell had submitted the report only a day before the scheduled court hearing, prompting discussions about the implications of this late filing.
Mayhew highlighted the challenges posed by the late submission, emphasizing that it placed the FSC at a disadvantage. “We have particular concerns about the report that has been filed. It’s an odd situation; there are things in the report that trouble us,” she stated to Justice Batts. Despite these concerns, Justice Batts accepted Campbell’s report as final and allowed the late submission without objections from the other legal representatives present.
During the hearing, Campbell’s legal counsel, Caroline Hay, KC, informed the court that the trustee intends to file three additional applications that stem from the previous ruling made by Justice Batts in May. The discussion also veered towards the publication of the trustee’s report, with Mayhew expressing the FSC’s reservations about making the report public given the sensitive nature of its content.
“Given the things that concern us, we’re wondering if it’s appropriate to publish the report. If we had received it earlier, we could have made the proper applications,” Mayhew remarked, indicating the FSC’s desire to seal the report for the time being. This request could potentially impact a meeting Campbell has scheduled with creditors and claimants on October 18.
The trustee’s responsibilities include reviewing activities conducted by the temporary manager, Kenneth Tomlinson, who was appointed by the FSC in January 2017 until he was removed in May. Campbell has indicated his intention to pursue the recovery of SSL’s fidelity insurance proceeds, which were utilized during Tomlinson’s management.
As discussions continued, Hay cautioned the FSC to be judicious in its public statements regarding the report. She raised concerns about how the FSC’s publications might create misunderstandings, especially since Campbell has been involved with various stakeholders, including the Financial Investigations Division (FID) and clients making claims against SSL.
Referencing a recent article from the Jamaica Observer that highlighted optimistic developments for SSL clients, Hay stressed that miscommunication could lead to confusion regarding the trustee’s role amidst ongoing regulatory oversight. “The public may be misled by the appearance of continuing regulatory approval and supervision over the company,” she explained.
SSL, previously a member-dealer of the Jamaica Stock Exchange (JSE) before being implicated in fraudulent activities earlier this year, still retains its FSC securities dealer license, despite not actively operating or trading. Justice Batts acknowledged the complexity of the situation, recognizing that the FSC still has a role to play concerning off-balance sheet assets associated with SSL, despite the ongoing winding-up process.
With the next hearing scheduled for October 10, Justice Batts urged all parties involved to refrain from further public commentary until then. He also indicated he would consider the FSC’s request to seal the trustee’s report, signaling a cautious approach as the legal proceedings continue.
