Finance Minister Dr Nigel Clarke says the potential demise of investment firm Stocks and Securities Limited (SSL) will have a limited impact on Jamaica’s financial sector.

Speaking on Taking Stock, Dr Clarke said that SSL currently represents roughly 2% of Jamaica’s securities dealer sector and that the company’s demise will not have any significant impact on the overall sector.

SSL has been under intense scrutiny over the past two weeks, as reports have emerged that a former employee fleeced billions from investors, including sprint legend Usain Bolt.

Bolt’s involvement has caused intense interest and scrutiny from international media, which the Minister said does negatively impact Jamaica’s reputation.

“This is a body blow to Jamaica but when similar situations happen in Europe or North America individuals who engage in wrongdoing are fingered as the offenders and entire countries are vilified,” Clarke said.

The Minister also reiterated that the Government will “leave no stone unturned” in the pursuit of uncovering what happened at SSL. 

He also added that he remains confident in the financial sector despite the massive breach of trust caused by the alleged multi-billion-dollar fraud at SSL.

“I would say the market is robust and it is strong; we have spent much of the past 20 years improving the regulatory framework in the financial sector and it has survived the global financial crisis we did not have any firms fail during that,” he said. 

“We survive two debt exchanges, the financial sector also went through the COVID-19 pandemic and inflation crisis and through all that we continued to grow, and prosper,” he said.

“The demise of SSL as an entity will not have a systemic impact on the financial systems,” he said. 

Policy reforms

The Minister had previously announced several policy reforms to ensure confidence in the financial industry. 

Chief among those reforms is the announcement that the Bank of Jamaica is to take over the duties of the Financial Services Commission (FSC). 

The FSC was responsible for regulating Jamaica’s insurance, pension and securities industries. 

This move gives the BOJ complete governance over the country’s financial sector. 

BOJ Governor Richard Byles was appointed chair of the FSC’s board, and several Central Bank officials were named to the board.

The FSC came under fire during the scandal for failing to take action against SSL. 

A 2017 report revealed that the Commission had flagged the investment company as a “problem institution” with a “history of non-compliance and mismanagement of client funds”. Despite that classification, the company’s license to operate was never suspended or revoked.

During the press conference to announce the changes, Dr Clarke said that the investigative authorities, which includes the US-based Federal Bureau of Investigation, will have operational control over the investigation.

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