Several club members of FX trading outfit Olint are to come together to form a trustee group to recover funds from the unregulated financial organisation headed by David Smith.

Speaking with Caribbean Business Report earlier this week under condition of anonymity, the group feels that timely information as to the likelihood of recovering funds and updates on criminal charges against Olint’s lead principal have not been forthcoming.

The group is also unhappy with the way the liquidator John Connolly is handling the matter and is calling for the appointment of a replacement.

As at the end of last year, Connolly in his report deemed Smith’s Olint a Ponzi scheme purporting to make high returns from foreign currency trading. He discovered that 6,000 people had invested US$220 million in the operation. To date he has identified around US$14 million in liquid assets, with 376 people claiming some US$67 million.

Connolly concluded: “The pattern of receipts and payments indicates that the main function of the Hallmark/ Olint account was to collect money from members (US$220 million) and then meet redemption requests from members (US$156 million). We can find no evidence in our analysis of the source and application of funds of any trading profits being received in the bank account to meet these redemption requests.”

Today (Friday) meetings of Olint TCI Claimants will be held at the Jamaica Conference Centre, Kingston, to evaluate and determine the nature of claims and to update club members on the trial of David Smith for several counts of fraud.

In order to be eligible to attend and participate in the meetings, potential claimants must meet the following criteria:

1. Received email or letter from the Liquidation Team confirming their eligibility to attend these meetings

2. Submitted a claim to the Official Liquidator of Olint TCI – In compulsory Liquidation by Friday, January 29, 2010.Persons that have already submitted a claim need not re-submit their claim, as they will be advised directly.

3.Submitted all the relevant supporting documentation to substantiate claim.

By all accounts, claimants were initially slow in coming forward, many reluctant to have their level of exposure to Olint revealed openly. Caribbean Business Report now understands that over the last week, many claimants are expressing a willingness to attend the meeting in order to hear news on the likelihood of receiving any of their money.

The new trustee body is certain that the funds are intack and point to the fact that a gag order has been placed on Smith, preventing him from disclosing any information on the whereabouts of investors’ money. They maintain that Smith may well be vindicated and that in no way has he participated in any chicanery or knowingly duped his investors.

“Interested parties need to be brought up to speed on what is happening with Olint. They need to know what is fact and what is fiction. The claimants do not know the legal consequences of declaring the sums they have invested in Olint and that is a cause for concern,” said one of the trustees.

Rakesh Patel, an Olint club member said: ” It is encouraging at long last to see people coming forward to look after our interests and tell us what is going on. Hopefully this new trustee group will do some good. I put in US$150,000 and would like to get my money back. But let’s not get it twisted; David Smith was not running a legitimate enterprise which satisfied the requirements of the Financial Services Commission (FSC). The question everybody wants to know is, was David Smith trading FX and if so what happened? He was supposed to be a hotshot trader. At the very least I think club members should get back their principal.”

According to the recently formed trustee body, after a number of false starts, David Smith’s trial date has been set for the third of March, 2010, with him facing a total of 26 charges many of them for fraud.

Another trustee had this to say: “We have a number of concerns that need to be addressed .The liquidator John Connolly has authority for the funds in Olint TCI FX Traders and Olint TCI but has no jurisdiction in Jamaica. This has not been communicated to many Olint members.

“Then we understand that Connolly has already been paid US$700,000 for work done to date. If he successfully liquidates Olint, will he receive 30 per cent of all funds?

We understand that Connolly has served as an auditor for both Hallmark and TCI Bank. Bearing in mind that he is the liquidator of Olint, it raises the question, isn’t there a conflict of interest?”

Connolly did not immediately respond to phone or e-mail messages from Caribbean Business Report seeking comment.

Turning their attention to the lawsuits brought against Smith, the trustees said that of the 43 lawsuits filed, 40 have been dismissed. What they find puzzling is that Olint was frozen in July 2008 and to date the police have found no concrete evidence that Smith engaged in nefarious activities designed to illegally illicit funds from investors. Furthermore, a number of trial dates have been set and subsequently postponed or rescheduled due to insufficient evidence.

” David (Smith) was charged with fraud back in January 2008; With a trial date set for eight months down the road. Come August the prosecution said they had insufficient time to collect the evidence and therefore no case to present and so requested an extension. The judge then set a new trial date of October 26, 2009, and by request that was moved to November 03 which the judge then proceeds to move to March 03. Now the man hasn’t been found guilty, yet there are moves made to liquidate Olint TCI. That doesn’t seem right.”

The trustees believe that today’s meeting should not be open just to those wishing to make a claim but to everybody, including the press. Connolly should then use the platform to explain his efforts and outline just how he will proceed with the liquidation.

“We would like somebody to check out this Connolly guy to see what he is all about, because the investors are still very much in the dark and those who have not made a claim by the set deadline have nowhere to go. Connolly is not court-appointed in Jamaica, he is only court-appointed in Turks&Caicos. He cannot liquidate the funds in Overseas Locket Olint Jamaica. Then there is the fact that our contracts are with Hallmark and not Olint.

Connolly has received US$700,000 in fees from Olint club members’ money and no investor has received a dollar. So what was he paid so handsomely for?

” He cannot get any of the assets unfrozen in the United States or Turks& Caicos. Why not have the meetings first, explain your case and then let club members decide if they want to put in claims? That would be the right way to go.”