The Financial Services Commission (FSC) has appointed a special auditor to probe the operations of Stocks and Securities Limited (SSL) where a massive fraud is being investigated.

The special auditor is part of the enhanced oversight embarked on by the FSC after it became aware of reports of allegations of fraud at SSL.

In a release last week, the FSC, which is Jamaica’s regulator for non-deposit-taking financial institutions, including securities dealers, said it had issued directions to SSL as a supervisory tool to allow it to engage the entity in a process of enhanced oversight.

“In the case of SSL, this enhanced oversight reflects the need for the FSC to have a full view of the integrity of the transactions being conducted, including the movement of funds, and of securities into and out of SSL.

“Under the Directions, SSL can still conduct business on behalf of its clients but with the oversight and approval of the FSC. The FSC will simultaneously continue its investigations into matters related to SSL,” the regulator said.

READ: UPDATE: FSC intervenes in SSL employee fraud

In the meantime, OBSERVER ONLINE has confirmed that SSL has issued a statement to its clients in which it said that only a small per cent of the accounts of its clients have been negatively impacted by the fraud which sources say could be approximately $1.2-billion.

The company told its clients that the people whose accounts were impacted would be contacted individually.

“We assure you that our main priority is the safety of the portfolios entrusted to us. In that regard, we have taken steps to secure those assets and as soon as the matter was detected internal protocols were heightened to detect suspicious activity in the shortest possible time,” said SSL.

“We understand that you are anxious to receive more information and assure you that we are closely monitoring the matter,” added the company.

Arthur Hall