Stocks and Securities Limited (SSL) and the Financial Services Commission (FSC) returned to court on Thursday to discuss the progress of SSL’s winding down, a process marred by a massive fraud scandal. However, the hearing took an unexpected turn when the FSC’s legal team, led by Symone Mayhew, KC, requested that the trustee’s report on SSL be sealed from public view, citing concerns over the report’s content.
The report in question was prepared by Caydion Campbell, who was appointed trustee of SSL in May, despite objections from the FSC. Campbell was ordered by Justice David Batts to prepare a comprehensive report within 90 days, which was meant to be discussed during Thursday’s court session. However, the report was only submitted the day before the hearing, leading to Mayhew’s expression of discomfort over the late submission and its potential implications for the FSC.
“We do have certain concerns… this is not your regular case where someone files an affidavit and there’s a response. There are things in the report that trouble us,” Mayhew remarked during the session. She also emphasized the FSC’s unease over the fees involved and the broader content of Campbell’s findings.
Despite the report’s tardiness, Justice Batts agreed to accept it as final. He also acknowledged Campbell’s request for the submission date to be retroactively adjusted to reflect the actual filing time. Mayhew’s request to seal the report, based on its sensitive nature, now raises questions about the transparency of the process as the case moves forward.
Caroline Hay, KC, representing Campbell, informed the court that her client would be filing three additional applications stemming from the court’s earlier ruling in May. She also cautioned the FSC about making public statements that could mislead the media and creditors about SSL’s status and the trustee’s role.
Hay specifically referenced a recent Jamaica Observer article titled “4.7 Billion Good News for SSL Clients” that had quoted the FSC’s public updates on the SSL case. She argued that such statements created confusion about the ongoing role of the trustee and the current legal proceedings. “If we’re going to ask the trustee to pause on his publication, I would also ask the FSC to be very careful about what it publishes,” Hay said, highlighting the risk of the public being misled.
Another layer of complexity involves SSL’s fidelity insurance policy, which Campbell is seeking to recover for creditors and claimants. The trustee is also tasked with reviewing the actions of the temporary manager, Kenneth Tomlinson, who was appointed by the FSC in 2017 and replaced earlier this year.
SSL’s financial troubles first came to light in January 2023 when a significant fraud scandal emerged, shaking the trust of clients and the financial sector at large. Despite the scandal, SSL retains its securities dealer license from the FSC, although it is no longer an active member of the Jamaica Stock Exchange (JSE).
Mayhew further clarified that while SSL is in the process of winding up, it still holds its dealer’s license, and off-balance sheet assets remain a point of contention. “I don’t think [the FSC] can close their eyes and leave everything to the trustee,” Mayhew said, arguing that the regulator still has a role to play, particularly regarding assets outside the bankruptcy estate.
Justice Batts has asked all parties to refrain from further public commentary until the next court hearing on October 10. At that time, he will also rule on whether to grant the FSC’s request to seal the trustee’s report. In addition, Batts released Carlene Larmond, KC, who had served as independent counsel for SSL, thanking her for her contributions to the case over the past year.
The legal wrangling and the upcoming October 18 meeting, where Campbell plans to address creditors and claimants, remain focal points as the winding down of SSL continues. With the FSC pushing for secrecy and more applications pending, the case remains as complex and fraught as ever.
