JAMAICA-FINANCE-FSC to strengthen fraud prevention in regulated institutions on the heels of massive SSL fraud


KINGSTON, Jamaica, CMC – The Financial Services Commission (FSC) will be taking steps to help institutions that it regulates strengthen their mechanisms to detect and prevent fraud, according to Executive Director Everton McFarlane.

He committed against allegations of fraud at investment firm Stocks and Securities Limited (SSL), which has seen several investors lose billions of dollars.

During a press conference on Wednesday, McFarlane said internal controls within the financial system have worked well, particularly for the securities industry, but acknowledged that internal controls and security arrangements are invariably breached.

“But in the vast majority of cases, such breaches are detected in a manner to limit the scale,” he said.

McFarlane noted that the level of fraud uncovered at SSL, which “has never happened before,” was a “despicable act of dishonesty by an employee… and possibly with collaborators, [which] we believe, cannot be taken as symptomatic of the risk for the entire industry”.

He contended that employee theft “is a risk all businesses face, and it’s a risk that businesses, for the most part… and, particularly, financial institutions, take very seriously”.

The FSC executive director said the incident at SSL presents an opportunity for all stakeholders, including the FSC, to “take whatever steps necessary to strengthen the ring of fraud protection even more.”

“We encourage security dealers to immediately take steps to reassess the existing controls, for example, know your employee policies and procedures, levels of authorizations and firewalls between the front, middle, and back offices, and information technology security protocols, among other areas of the operations,” he said.

McFarlane further emphasized that no system of anti-fraud procedures will be fully effective “without concerted vigilance on the part of customers.”

Consequently, he said, the FSC “will also be working with the [securities] industry to improve the knowledge and the opportunities for clients to exercise greater and more effective due diligence.”

“Investments will always be subject to various financial risks and rewards, but we believe that, in general, the [local] industry is robust to serious fraud,” McFarlane said.

Last week, SSL disclosed that several of its clients, including eight-time Olympic champion Usain Bolt, had allegedly been fleeced of millions of dollars in local and foreign currencies given to the firm to invest.

Bolt has indicated through his lawyer that he had a balance of US$12.7 million at SSL as of October 31, 2022, but that figure declined to US$12,000 on January 11.

The Jamaica Gleaner newspaper reported Wednesday that attorneys representing Bolt want SSL to return the track star’s investments “in record time, or face a huge lawsuit.”

The newspaper said the law firm Frater, Ennis & Gordon had given SSL 10 days to furnish the money Bolt invested ten years ago.


Please enter your comment!
Please enter your name here