Scams, Schemes, and Scandals

The 21st century exposed the viciousness of a group of institutional financial pirates that wreaked havoc on thousands of Caribbean and Grenadian investors leaving few survivors standing in the aftermath.

The end result of their nefarious deeds was three consecutive years of blows that seemed coordinated in unison to inflict maximum pain.

In 2007, Capital Bank went rogue with Manager Finton De Bourg arrested for misappropriating $100 million of customers’ savings.  In 2008, SGL Holdings declared bankruptcy and $30 million of Grenadian investments vanished, and with mastermind David Smith languishing in a U.S. jail investors’ money remains in limbo.

The following year, 2009, insurance deposits of Caribbean Life (CLICO) and British American (BAICO) policyholders were frozen when parent company, C L Financials, suffered a massive liquidity crisis.

For years Grenada, regional governments, and stakeholders have been making loud noises seeking payback for CapBank depositors but especially solving the CLICO/BAICO debacle deemed “too big to fail”.  In stark contrast, the silence surrounding SGL investors has been deafening, so here we highlight the narrative of this festering issue.

In 2006, SGL Holdings incorporated under the Laws of Grenada as a company trading currencies in the foreign exchange (FOREX) market.  Company principals were Grenada nationals, Lester Clyne of C-Tech Security, Glen Clement of Osprey Lines, and Sylvene Blisset, a resident in New York.

In preamble SGL’s client contract stated, “the company was in business taking speculative leverage positions in the currency market with sums invested by customers”.
Section 2.4 stated 80% of customers’ deposits were protected and guaranteed.  With minimum initial deposits of US$1, 000 monthly returns on investment (ROI) projected an 8 percent average.

In July 2008, with a multi-million dollar haul from investment deposits, SGL abruptly declared bankruptcy.  In a customer communiqué, management stated “assets of the trader OLINT TCI Corp were frozen by Turks and Caicos authorities and the company was pursuing avenues to recover investors’ funds”.

Stunned by this unexpected development investors demanded their “80% guaranteed” refund with repeated appeals for government intervention.  However, the only response was political platitudes and to date not a single step has been taken by any administration on this issue.

In two years, with tacit government collusion, a rogue company had perpetuated a massive scam on the Grenadian people, decimating or completely wiping out life savings and plunging the most vulnerable into poverty.

Grenadians had been lured into a Caribbean-wide ponzi scheme trap by OLINT Traders with SGL Holdings domestic partner in crime.

This writer’s layman analysis of SGL’s contract agreement holds the company fully liable to its investor clientele. First, Section 10 of the contract stated that SGL was governed by the Laws of Grenada and subject to our court’s jurisdiction in all matters.  As such, any violation of the contractual agreement with Grenadian citizens falls under the jurisdiction of our laws.

And SGL was clearly in breach of contract by failing to refund the guaranteed 80% deposit stipulated in the agreement.

Second, SGL ostensibly represented itself as a company trading depositors’ money in the FOREX market when in fact it only collected investors’ money for OLINT Traders, not trading it.  Therefore, the company’s trading claim was a misrepresentation of the truth making SGL guilty of taking customers’ money under fraudulent false pretenses.

Thirdly, SGL failed to inform customers about its role in the business depriving them from making informed investment decisions.  By omission of this material fact the company is guilty of gross deception and criminal negligence with intent to mislead and is incriminated under Section 6.

Fourthly, Section 2.2 advised that the services carried some degree of risk consistent with Section 4 provisions, i.e., deposits are used “for taking leveraged speculative positions in the FOREX market”.  Note carefully, the risk advised was “market risk” NOT “management risk”, the cause of the bankruptcy.  Hence, SGL faces strict liability for unduly exposing investors to risks “ultra vires” of those specified in contract.

In sum, SGL principals knowingly aided and abetted a massive scam on citizens of Grenada and must be held accountable.

In a democracy government has custodianship of its citizens in a social contract for justice and protection.  It is government’s fiduciary and vicarious responsibility to intervene on citizens’ behalf against unscrupulous business transactions and provide remedy.

In the eighties, United States government worked tirelessly recovering investors’ money from the infamous Madoff ponzi scheme.  Today, CARICOM governments (including Grenada) are making coordinated efforts to recover CLICO/BAICO investments from the failed CL Financials Group.  But for eight years the Grenada government has ignored the SGL issue demonstrating a double standard that exposes the existential contradiction between law and social justice.

Overtime, it has become clear that government has written off SGL investors as expendable collateral damage of rampant financial liberalisation.

In the interest of the investing public of Grenada, Carriacou, and Petit Martinique we demand restitution and closure for these long-suffering SGL investors and “justice delayed is justice denied”.

Jay Bruno

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