THE Financial Investigations Division (FID) said it is expected to advise the police to make more arrests in relation to the fraud probe at Stocks and Securities Limited (SSL) as it reveals the skulduggery at the securities dealer is much bigger than previously thought and has affected almost twice as many people as stated earlier.

Selvin Hay, director general of the FID, seemingly responding to concerns about the lack of update on the fraud probe, in a release Thursday said the investigation is progressing with the application of the highest professional standards.

“It has taken on new dimensions which are wider than first expected,” Hay was quoted as saying in the release. “What is being uncovered is that there are approximately 70 affected accounts, this is significantly more than the just-over 40 affected accounts at the initial phase. The investigation has also identified other fraudulent schemes at SSL, which has resulted in the misappropriation and/or loss of numerous investors’ funds amounting to over US$10 million ($1.5 billion),” Hay said.

When the probe started in January it was reported that the fraud involved some $3 billion.

“The FID is robustly pursuing various lines of inquiry and taking all the necessary steps to lead evidence-based prosecutions in the court at the appropriate time against all guilty parties to include Jean-Ann Panton, the sole accused perpetrator so far,” the release said.

But Panton, who was charged in February in relation to the fraud, is not the only person who will face the court when proceedings into the matter resume.

“Before the next court date we anticipate the arrest and charge of other actors involved in the multiple fraudulent schemes recently discovered,” Keith Darien, the FID’s principal director of investigations, added.

He, too, like his boss, cautions on the calls for updates on the matter.

“The duration of the fraudulent activities as well as the variety of fraud has resulted in the investigative process taking an extended period. Prosecuting financial crimes requires meticulous evidence-gathering to ensure success in the court and to follow the money so that any illicit funds or assets may be identified, restrained, and recovered,” Darien said on the matter.

Just last week, the Opposition People’s National Party issued a call for the Government and law enforcement officials to provide an update on the status of the investigations into the fraud at SSL.

Darien, meanwhile, is appealing to victims of the fraud to come forward with information that can help in the investigation.

“Our investigators have contacted the affected parties via e-mail and phone calls, but the responses from some have been short of encouraging. We continue to appeal to those affected to contact the FID. It is a critical part of seeking justice through the courts,” Darien said in the release.

The investigative process has brought together a variety of local regulatory and law enforcement agencies to include the Financial Services Commission (FSC) and the Jamaica Constabulary Force’s (JCF) Fraud Squad. This is strengthened by investigative partnerships with the US-based Federal Bureau of Investigations (FBI) and UK-based forensic accounting and intelligence firm Kroll, as well as relevant member countries of the Asset Recovery Inter-agency Network for the Caribbean (ARIN-Carib).

Apart from unveiling that the fraud is bigger than first thought, the FID said it also revealed an entrenched culture of gross mismanagement dating back well over a decade.

Dr Nigel Clarke, the minister of finance, in reacting to the release said the new information shows the commitment to unveiling the full extent of the fraud and the actions to be taken to prosecute those responsible.

“On a number of occasions this year, including in my budget presentation in March of 2023, I outlined the policy position of the Government of Jamaica with respect to the investigation into the SSL matter. And that policy position that I have outlined is to get international help, to leave no stone unturned, and to follow the evidence wherever it shall lead. The release from the FID today is consistent with that policy direction,” Clarke declared.

Justice David Batts ruled in mid-July that a trial to be heard between November 1 and 3 would be held in open court to allow clients, creditors, and the general public to follow the proceedings of the case. A pretrial review is set for October 2 as the FSC seeks to have its claim heard for SSL to be wound up due to it being insolvent. Kenneth Tomlinson is the temporary manager for SSL since January with the FSC seeking to have him appointed as trustee of the firm through the Supreme Court.

SSL is currently involved in several open court cases, including with Welljen Limited, a business connected to Usain Bolt; Jean Elizabeth Forde; Deborah Franz; Mae Elaine Tapper; Jamaica Small Loans and Microfinancing Limited (t/a Boost Financial Services); and Robin De Lisser. Former SSL directors and executives, such as Sarah Meany, Mark Croskery, Hugh Croskery, Jean-Ann Panton, Lamar Harris, Zachary Harding, and Jeffrey Cobham have been listed as additional defendants in amended claims by some of the claimants listed above.

Kroll Associates UK was appointed in March as the forensic auditors in the investigation, which spans nearly a decade. The FSC has also sought several new hires in the last two months, including a senior investigator and analysts for nearly every division. Auditing firm KPMG confirmed in a media statement in May that it had not audited SSL since June 30, 2017.

SSL was cited nearly every month in 2022 by the Jamaica Stock Exchange’s Regulatory and Market Oversight Division (RMOD) for different breaches before they were ultimately terminated as a member-dealer on February 24. Several stocks held by the firm were sold in the month of February and up to the termination date.

Some SSL clients received an e-mail entitled ‘SSL Account Update – [Urgent Action Required]’ on July 17 which highlighted that the temporary management team is finalising the requirements to allow clients access to their accounts again and is requesting certain information from clients. As a result, the letter referenced that all client records are to comply with regulatory requirements regarding KYC (Know Your Customer) and all client accounts are accurate as of June 30.

The letter requested the client sign that the account balance of X is accurate and has a section if the balance should be a different amount as per documents provided. It highlighted that the client confirmation should be returned by no later than July 24 and if no response is received, the balances stated in the letter are assumed to be as stated.

Different SSL clients have also contacted the firm and have been told they should receive e-mail on the confirmation of their account balances.

SSL clients who hold international securities, like stocks on the Nasdaq through an omnibus account under SSL’s name, have been unable to get any clarity regarding the assets held under an omnibus account with a US broker.

There are concerns by many clients regarding SSL promissory notes in their portfolios which are due by December 11, 2023. Several SSL clients have reached out to the Jamaica Observer to inform us that they have not received interest income on bonds, have been unable to access their stock portfolio, and are unable to get straight answers from the JSE, FSC, or SSL on the situation since the developments became public in January. SSL securities are currently being held in escrow at the Jamaica Central Securities Depository with clients unable to access them up to today.

“Negotiations are ongoing between the regulators and several securities dealers to accommodate the transfer of SSL’s securities portfolio. Once completed, you will be provided with an update related to regaining access to your account,” said a May 10 e-mail from an SSL manager to a client.