Court keeps leash on SSL
Fraud-hit Stocks & Securities Limited’s (SSL) quest to overturn a Supreme Court injunction, which blocks it from doing anything with its assets, has ended in failure at one of the first hurdles.
The Court of Appeal yesterday refused an application by SSL and trustee Caydion Campbell for extension of time to file a notice and grounds of appeal against a decision in favour of regulator, the Financial Services Commission (FSC).
The ruling was reserved on Monday after a panel of three judges heard arguments from attorney for Campbell and SSL, King’s Counsel Caroline Hay, and Assistant Attorney General Faith Hall, who appeared for the FSC.
The panel comprised justices Marva McDonald-Bishop, Nicole Simmons and Marcia Dunbar-Green.
Simmons gave the oral decision and indicated that the reasons would be released late Friday or next Monday. They were not available up to press time.
As the appeal was an interlocutory one, meaning it arose out of an ongoing case, Campbell and SSL cannot challenge the appeal court’s decision.
SSL, Campbell and the FSC are in a court battle over whether Campbell was duly appointed trustee of the company, a situation that has implications for the management of the 50-year-old private investment and brokerage firm.
The FSC filed a claim against SSL and the trustee on January 25, the same day it got an injunction without the other side present.
In April, after hearing arguments from both sides, the Supreme Court granted an interim injunction to the FSC, blocking Campbell’s appointment, and restraining the company from taking any steps to control its assets and/or to dissolve its operations. The order will remain in place until the FSC’s claim is resolved.
Justice Stephane Jackson-Haisley accepted the FSC’s argument that Campbell’s appointment on January 16, one day before it took temporary management of SSL and appointed a temporary manager, “will have serious repercussions” for clients’ assets. The FSC has also alleged a breach of directions it issued to SSL on January 12.
“There is a serious issue to be tried and … the claimant (FSC) has a real prospect of success in the claim,” the judge said, adding later that “the balance of convenience weighs heavily in favour or the grant of the injunction”.
SSL and Campbell wanted the injunction lifted, claiming that the judge made numerous errors; that Campbell was properly appointed and that the FSC has no basis or right to bring the claim, among other things.
“The court has to consider the parties that are affected by this order. SSL is a company that has investors. There are parties … who have sued SSL and are actively pursuing judgments. This is going on while the claims validation exercise, that only the trustee can perform, is not under way. So if there is judgment entered on any of claims identified, that will crystallise their claim without validation,” Hay argued on Monday.
Focus is now on July 3, when the Supreme Court will have its first hearing in the FSC’s lawsuit.
At least 40 clients, including sports icon Usain Bolt, have reportedly been affected by the alleged theft of $3 billion from accounts. One person has been charged.
SSL reported the fraud on January 10.
A multi-agency probe, with help from the US Federal Bureau of Investigation, has been taking place.