David Smith

This is the tale of how an enterprising young man turned the financial sector on its head and will force the regulatory body to be clearer in its definition of what constitutes securities and investment advice.

Earlier this month David Smith, a reputable trader concentrating solely on the international FX market had both his home and business premises raided by the Financial Investigations Division (FID) for supposed breaches of the Securities Act. FID agents seized documents records and essential computer equipment.

In response, Olint Corp Limited with David Smith as lead principal has sued the Financial Services Commission for J$300-million claiming wrongful intrusion.

While Smith has not been arrested or charged he is under investigation to determine whether he breached section 7(1) (a) and 8 (1) (a) of the Securities Act.

Section 7(1) (a) prohibits persons from dealing in securities without a licence issued by the FSC while Section 8 (1) (a) rerstricts involvement in the business of providing investment advice without an investment advisor's licence.

It is yet to be determined whether Smith offered investment adviser and traded securities without a licence.
Who is David Smith?

David Smith is the son of Edith and Gilbert Smith. His mother has served as a physics teacher at St Andrews school for over forty years and at one time was the head of the science department. His father now deceased was at one time the Vice Principal of Wolmers Boys School. He taught at the school for over 40 years.

David has a brother who currently works at VMBS and a sister. He is married with two children and attends Church on the Rock.

A licensed representative at JMMB he specialised in international FX trading where his career was guided by Julian Mair and Keith Duncan. In his ten year carrer he spent seven at JMMB honing his craft.

He branched out on his own forming a club where a few friends would trade foreign curriencies. The word got around and the club grew making handsome returns of as much as 15 per cent a month for members.

Smith decided to apply his skills and helped people from alll walks of life, the testimonials are many and members are happy with both their returns and the way Smith has conducted himself.
At this point in time the club is not taking anymore members until this matter is settled . David Smith has made it clear that he has never solicited people and that he traded foreign currencies not securities for club members. Also at no time did he offer investment advice. He conducted trades on a currency-trading platform with the daily trading activity running to US$1.9- trillion.
What exactly is foreign currency trading?

According to the web site fxadvantage.com, "foreign exchange" is the simultaneous buying of one currency and selling of another Currencies are traded in pairs, for example Euro/US Dollar (EUR/USD) or US Dollar/ Japanese Yen (USD/JPY)."

The foreign exchange market is the largest financial market in the world, with a daily average turnover of well over US$1trillion---30 times larger than the combined volume of all U.S. equity markets.

About 5 per cent of daily turnover are from companies and governments that buy or sell products and services in a foreign country or must convert profits made in foreign currencies into their domestic currency. The other 95 per cent are trading for profit (as Smith does) or speculation. Trading can be done anywhere and is not centralised on an exchange, as stocks and futures markets are.

For the purposes of this article the Caribbean Business Report went on to a trading platform site located on US finance house Wachovia's which allows one to use dummy sums to conduct virtual foreign currency trading.
Speaking exclusively with Caribbean Business Report , Smith said:

"Last Friday an article appeared in The Financial Gleaner that gave the impression that Overseas Locket Corporation (OLC) is not legitimate. The articles of incorporation of OLC with the registry in Panama as well as the incorporation and registration documents of Locket investment fund have always been available in the offices for all club members to view and carry our due diligence inquiries if required.

"The website of the supervisor of banks in Panama only posted a list of offshore entities registered in Panama. This list was a warning to the public in general that these entities are not licensed as banks in the Republic of Panama. It cast no aspersion on the legitimacy of their activities or registration. OLC has never at any timepurported to be any thing other than a private investment club, trading only on the International Currency Markets.

OLC enjoys the benefit of margin leverage as high as fifty to one. Simply put this means that OLC has available to trade fifty times the amount of funds that it has in its trading accounts.

For example, if the trading Account has US$1,000,000.00 then US$50,000,000.00 is available for OLC to trade on the International Currency Markets. If 1% is gained for the entire month then the actual trading gain is US$500,000.00 which represents 50% of the US$1,000,000.00. OLC has been averaging gains of 10% per month for members, therefore all that is needed to achieve 10% per month is trading gains of 0.2% on the entire leveraged amount available for the entire month. i.e. 50,000,000 x .2% = 100,000.00 and 100,000.00 represents 10% of US$1,000,000.00.

At no point before the invasion of our club house by employees of the FSC and FID were we contacted by any financial regulatory body. In fact our company attorney on more than one occasion has by telephone spoken to representatives at both the Bank of Jamaica and the Financial Services Commission, about our operations. She at these times was consistently informed by the representatives of both these entities that we do not fall under their jurisdiction.

. The International currency market is the only Unregulated financial market worldwide.

. If the FSC believes that Olint Corp Ltd. is trading in securities and giving investment advice in relation to securities then I believe that as the regulatory body that licenses entities that may fall under the Securities Act they have every right to investigate Olint Corp. and I am confident in the positive result of any fairly conducted investigation However I strongly disagree with a hostile or prejudicial approach to investigating matters within its remit by any regulatory agency.

I am not at liberty to discuss at this time my view as to the manner in which the search of Olint Corp Limited's premises was conducted but I am sure that you will carry out your own investigations as there were many witnesses who are not a party to the action which the club has instructed its attorneys to take.

Actions taken by regulatory authorities send signals which can certainly erode confidence in the legitimacy of the activities of the entities which they purport to regulate. This should never be the objective of regulation or a professionally conducted regulatory activity in this sensitive sector. In fact the approach to these matters is usually one of mutual accommodation.

.Neither OLC nor Olint Corp Limited trades or has traded in any form of securites or given any type or form of investment advice to any one FULL STOP.

Tarrus Riley shoots video for Start Anew

Naomi Campbell to open retrospective photo show

A pleasant evening of music and much more