Olint Corp Limited has sued the Financial Services Commission (FSC) for J$300 million, claiming wrongful intrusion after Financial Investigations Department agents raided the company’s offices in New Kingston on March 3.

The action, filed on March 7 in the Supreme Court on behalf of Olint Corp Limited and its lead principal David Smith, challenges the lawfulness of warrants under which the authorities acted in entering Smith’s business premises and subsequently searching and seizing property.

The claim was presented by a team of attorneys led by Lord Anthony Gifford QC and instructed by the firm of Watson & Watson. Christopher Dunkley and Hugh Thompson are also part of this legal team.

At around 4:00 pm on March 3, officers of the Financial Investigations Department raided Olint’s offices at Shop No 25a in the New Kingston Shopping Centre.

The agents were armed with a search warrant claiming that under Sections 7 (1) (a) and 8 (1) (a) of the Securities Act, breaches had occurred. They seized documents, records and essential computer equipment.

Section 7 of the Securities Act prohibits persons from dealing in securities without a licence issued by the Commission, while Section 8 restricts involvement in the business of providing investment advice without an investment advisor’s licence.

Last week, the state news agency, JIS News, reported that Olint was being investigated based on information received by the FSC “that certain persons have been carrying out activities which are in breach of the Securities Act”.

Smith’s lawyers, however, claimed he was heading a club started initially with a few friends where foreign currency trading activity took place, netting handsome returns.

The club, the lawyers said, grew in membership via word of mouth.

Yesterday, Smith denied the FSC’s charges. “Olint Corp Limited neither trades nor has traded in any form of securities or given any type or form of investment advice to anyone, full stop,” he told the Observer.

“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 licences 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,” he added.

Smith also said that he has never solicited people and that he traded foreign currencies, not securities for club members.

Huntley Watson, a member of Smith’s legal team, said they have asked for the reasons for the raid, but the FSC has refused to disclose the basis for their actions.

“Mr Smith has not been arrested or charged,” Watson said, “so why take away the tools of his trade? If the law says you have done something wrong it must make it unequivocally clear what law you have breached and what you have done wrong.

This is why we consider this intrusion wrong and have taken legal action. As far as we are concerned, David Smith has never been the subject of a complaint or been approached by a regulatory body for doing anything wrong. In fact, he has operated in the middle of New Kingston, a stone’s throw away from the FSC’s headquarters.”

Smith previously worked for the Bank of Jamaica and was a currency trader with Jamaica Money Market Brokers (JMMB).

Over the weekend, one of Smith’s club members, who opted not to be named, praised Smith for his approach to the business.

“When Jamaicans started experimenting with arbitrage they did it in a very unsustained and unsophisticated manner,” the club member said. “David has brought it to a new level and has become very successful with it.

I think the Bank of Jamaica and the FSC need to be making its position crystal clear. David is not trading securities, and as far as I am aware and most club members for that matter, what he is doing is not illegal. In fact, he has an impressive track record of making very good returns.”