Financial institutions assure clientèle
Financial commentator agrees that financial system remains safe
Barita assured clients that its 45-year operation is being built on a strong financial foundation and operating well above the industry's regulatory requirements.

Amid a number of cases concerning financial fraud in the local market, some institutions have moved to assuage customers that their investments remain safe.

In the wake of an alleged multi-billion-dollar fraud unfolding at investment firm Stocks and Securities Limited (SSL), in which funds totalling near $2 billion are believed to have been fleeced so far from the account of retired sports legend Usain Bolt along with previous cases of fraud detected at other financial institutions such as Sagicor and NCB banks, customers have grown weary, expressing heightened doubts about the status of their monies invested across various entities in the financial sector. However, some institutions in seeking to restore calm and allay the fears of clients have, since last week through a series of issued statements and social media postings, sought to assure customers about the safety of their funds.

Brokerage house Barita Limited, in touting its 45-year-old operation as being built on a strong financial foundation, said its business remain in order and operating well above the industry's regulatory requirements. A position which its directors said was also supported by formidable capital adequacy ratios.

"This positions the company to be a safe haven for its clients as we have the capacity to fully absorb several shocks, whether emanating from risk factors associated with financial markets or our business operations, including occupational fraud," the company noted.

The firm indicated that with over $32 billion being held in reserve to withstand shocks, the investments of its clients remain safe and in sound hands. It further said that in any unlikely event of fraud on customer accounts, there was also "tremendous capability to make them whole".

Expressing similar sentiments, regional financial conglomerate JMMB likewise assured clients that they were "top priority" and that their investments with the institution remains safe.

President of MoneyMasters Limited Claudette Crooks in a notice also informed clients that the company remains fully committed to the principles of transparency and high ethical standards even as it ensures strong control and risk mitigate procedures across its business.

"MoneyMasters understands the importance of client's security, confidentiality and safety of funds. It is the focus of the company to protect and grow your capital—our operating system is built around independent third-party oversight of your investments," she said.

The Bank of Jamaica (BOJ), as the regulator for deposit-taking institutions, last week also said that while they were concerned about instances of alleged fraud in the local financial sector, gave assurance that entities under its supervision including commercial banks, building societies and a merchant bank remains "adequately capitalised and liquid with all deposits in these institutions remaining safe and secure".

With financial crimes becoming more rampant worldwide, financial commentator Dennis Chung shares the belief that locally, the sector remains safe. This being congruent to sentiments offered by members of the Jamaica Securities Dealer Association (JSDA), who, during Jamaica Observer Business Forum held last week, unanimously expressed confidence in the general safety of investments locally.

"The system is safe and financial institutions are safe, I can speak to the ones I'm chairman of such as GK Capital Management, which I know is very strong, and I think for the most part that all, if not most of the others, are also very strong," he told the Business Observer during an interview on Monday.

Chung, in asserting that "fraud will always occur" whether at a financial institution or at other entities, said that what then becomes more important is to have the proper internal control systems in place to help with detecting cases quickly.

"Fraud is always occurring in the system [even at the lowest levels involving cases of petty cash theft to the millions sometimes reported missing], but what needs to be done is to have proper segregation of duties and proper controls in place," he reasoned.

In light of what has been argued to be an apparent lack of oversight provided by the Financial Services Commission (FSC) in the SSL matter, Chung called for independent assessment amid doubts in the system.

"I understand the minister is going to change the board but there still will be concerns, but if they were to do this and put a set of people in charge of providing unbiased review and independent assurance to the public, I believe this will go a far way than allowing a company to put out information on itself," he said.

On Monday, Finance Minister Dr Nigel Clarke appointed a new board to the FSC, following the resignation of former executive director Everton McFarlane last week. Central bank Governor Richard Byles has since been appointed to chair the board.

In line with Chung's recommendation, the minister in a press briefing on Monday also disclosed that the assistance of international forensic auditors and other partners including the US Federal Bureau of Investigations (FBI) is also to be engaged as stakeholders try to get answers from the SSL probe.

Chung, in sharing an outlook on the prospects for investment going forward, said that despite current developments in the local sector, he remains optimistic.

"The system is good and I think people who are serious about investing will still have confidence in it," he stated, noting that as a local investor, he like others remain on the lookout for cheap assets to invest in, especially since the best time to buy is when people are selling and vice versa.

CROOKS...MoneyMasters understands the importance of client's security, confidentiality and safety of funds. It is the focus of the company to protect and grow your capital—our operating system is built around independent third-party oversight of your investments (Photo: Napthali Junior)
CHUNG...the system is good and I think people who are serious about investing will still have confidence in it
Kellaray Miles

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