Stocks and Securities Limited (SSL) and the Financial Services Commission (FSC) were back in court Thursday for a progress update on winding down the fraud-affected SSL, but things took a turn when the FSC requested that the trustee’s report be sealed due to concerns over its content.

The request was made by Symone Mayhew, KC, the new legal counsel representing the FSC, to the judge overseeing the case, Justice David Batts, after going over the report prepared by Caydion Campbell, whose appointment as trustee of SSL was upheld by the court in May, against the wishes of the FSC.

At that time, Justice Batts ordered Campbell to prepare a report within 90 days and that report was to be the subject of the court hearing on Thursday.

However, it was revealed that Campbell submitted the report on Wednesday, a day before the hearing, and that he was requesting that the extension for the filing of the report be dated to when it was submitted. There were no objections by any of the attorneys present to accepting the late report, but Mayhew noted that the FSC’s side was at a disadvantage due to the late submission of the report.

“We do have certain concerns though, My Lord. We do believe that given the nature of this estate, certainly fees, would have to be approved by the court, My Lord. We have particular concerns about the report that has been filed. It’s an odd situation, My Lord, as I was saying to my friend. It’s not your regular claim where someone files an affidavit and there is a response, but there are things in the report that trouble us,” said Mayhew, in her statement to Justice Batts.

Justice Batts accepted Campbell’s request that his report, which was filed late, be accepted as final. Caroline Hay, KC, Campbell’s legal representative, gave notice that the SSL trustee would be filing three additional applications to the court which arise from Justice Batts last ruling in May.

“We also have some concerns about the publication of the report, My Lord, given the things that concern us and we’re wondering, My Lord, if it’s an appropriate matter to do so. If we had gotten it before, we would have been able to make the proper applications, but ending further consideration, My Lord, … the report be sealed, but we are going to be approaching the court with some format as it relates to the content of the report,” Mayhew added in her remarks.

The request to seal the trustee’s report by the FSC could affect the October 18 meeting Campbell had set with creditors and claimants. Campbell has been reviewing the activities undertaken by the temporary manager Kenneth Tomlinson, who was appointed by the FSC in January 2017, up until he was dislodged in May. Campbell had indicated in his letter to claimants and creditors that he would be seeking to recover the insurance proceeds of SSL’s fidelity insurance policy which was used by Tomlinson during his time as temporary manager.

With the FSC seeking to have the trustee’s report sealed, Hay asked that the FSC be careful in its publications to the media and public to avoid creating an incorrect narrative. She mentioned this point as she noted that Campbell had to deal with the FID (Financial Investigations Division), grant creditors, adjudication claims and off-balance sheet assets for SSL clients and that threats on litigations came from some clients whose claims didn’t come in a timely manner.

Hay even referenced a Jamaica Observer article, titled “$4.7 billion good news for SSL clients” and quoted verbatim from the same article which contained parts of the FSC’s statement to the public. The FSC has been limiting its public commentary on SSL which has been to the dissatisfaction of affected SSL clients. The regulator last updated the public in May after the judgement.

“Only to just indicate that I notice my friend made a request in relation to the dissemination of the report based on the concerns that they have. I don’t have a difficulty advising my client to pause in relation to that, but I would also ask that counsel’s client, the FSC, the claimant in the matter, also consider its publications because it continues to publish in the media conduct and what I will call a suggestion of continuing regulatory approval and supervision over the company,” Hay mentioned in her comments to Justice Batts.

She also added, “It is causing some queries to the trustee in relation to that. I think that if we’re going to look at the report and ask the trustee to pause on his publication, I would also ask the FSC to be very careful about what it also publishes because the public, appearing in some instances to be misled by … the role of the trustee now is in light of that. There was a recent article on the 24th of September talking about good news for SSL clients and mentioning the issues of directions to the company that is under the current supervision of the court and speaking directly to creditors in relation… That causes questions for my client.”

Prior to the events in January 2023 when a fraudulent event was unveiled to the public, SSL operated as a member-dealer of the Jamaica Stock Exchange (JSE) and was licensed by the FSC as a securities dealer. While the JSE terminated its agreement with SSL, the entity still holds the FSC license even though it is not actively trading or operating the business.

“As I understand it, My Lord, even though the entity is in winding up, there is still a dealer’s license that has not been surrendered and it is still… They’re not trading, My Lord, but the question is really I’m not sure that one can say that there is no role for the FSC in particular to those off-balance sheet assets. I think the FSC is going to continue to receive enquiries and to the extent that matters strictly speaking involving the bankruptcy estate, I think the appropriate thing would be to refer those to the trustee. But there are matters that fall outside of the bankruptcy estate, which as regulator, I don’t think they can close their eyes and say we’re going to leave it up to the trustee. So, I think there is some role for the regulator in the matter, especially related to those off-balance sheet assets,” Mayhew said in response to Hay’s comments.

Batts asked that all concerned parties keep a lid on further public dialogue until the next hearing on October 10. He also indicated that he will also consider the FSC’s request to have the report sealed. Batts stayed another case that was jointly heard yesterday and released Carlene Larmond K.C. as the independent counsel for SSL while expressing gratitude for her service over the last year in the matter.