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Jamaicans Warned to Stay Away from Ponzi Schemes




Jamaicans love to invest. At least, that’s the impression you get during the volatile years when “get rich” Ponzi schemes like Cash Plus, Olint, and World Wise Partners, dominated the Jamaican investment landscape. Jamaicans are always on the lookout for the next big thing. The usual promise? Put in a small amount (or for the greedy, a large amount) and reap incredibly huge returns. But, as Jamaicans of old (“Ole time people”) would say “You can’t plant corn and reap peas!”

Ponzi Schemes Boom and Collapse

Despite warnings from financial experts, and others with common sense, thousands of Jamaicans fell prey to unregulated financial organisations (UFOs). The Carlos Hill-led Cash Plus was a case in point. Before his arrest in 2009, Carlos Hill through Cash Plus Ltd. bilked 40,000 Jamaicans out of more than J$10 billion. This was money that most Jamaicans scraped together, some through loans and mortgages on their homes, to pump into the scheme. They hoped to reap 100 percent on their “investments” within one year – at a fantastic 10 percent per month. This promise is incredible given the much lower average return on investments in the formal investment market.

The scheme, which was actually a pyramid, took money from new investors and paid the promised monthly amounts to their existing investors. For a while, the Cash Plus scenario seemed to work – particularly for contributors who were in from the start in 2002. Eventually, the pyramid collapsed under regulatory pressure from the Financial Services Commission (FSC) and after new investor contribution to the scheme dried up.

Not surprisingly, Cash Plus folded in 2008 leaving the 40,000 Jamaicans with nothing. That is $10 billion down the drain, evaporated.  It did not help that it took the justice system eight years (in 2017) to eventually free Mr. Hill of all the fraud charges laid against him.

This turn of events left victims with no prospect of ever seeing their money again.

Lives were shattered and dreams destroyed.

Fast forward to 2018.

Ponzi Schemes Rise Again

Jamaica is not out of the woods where Ponzi schemes are concerned. The newest ones to raise concern at the Jamaica Stock Exchange (JSE) relate to Cryptocurrency. The use of Cryptocurrency has gained traction even in Jamaica. By definition, cryptocurrency is a digital currency generated by encryption technology.  Central banks do not control these currencies.

Unfortunately, the Cryptocurrency landscape is littered with fraudulent schemes that induce internet users to part with their money to buy such currencies in the hope of receiving incredible returns. The JSE and the FSC warn Jamaicans to be on the lookout for OneCoin (similar to Bitcoin) that has already scammed “investors” abroad out of US$350 million.

Although Jamaica in 2013 introduced the Securities (Amendment) Act to combat the proliferation of unregulated financial organisations, financial laws have not evolved as fast as Ponzi schemes flourish.

How to Avoid Ponzis

The Jamaica Stock Exchange (JSE) publishes the names and information of registered brokers authorised to conduct securities business in Jamaica. You can easily access this list on the JSE’s website. Currently, thirteen registered brokers are in Jamaica.

It is, therefore, a good idea to consult this list of registered brokers before committing funds you wish to invest.

Also, be cautious of any financial entity or scheme that makes it too easy for you to open an investment (or any) account. Opening an account shouldn’t be that easy. By law, all financial institutions must require the following documents from persons wishing to open an account with it:

  1. Valid Identification
  2. Tax Registration Number (TRN)
  3. Source of Funds
  4. Proof of Address
  5. References

Financial entities require these documents so they can know their customers.

Furthermore, be cautious with any organisation that cannot give you information on their investment options. Such information is usually provided in writing in the form of an account statement about your investment holdings or a prospectus detailing the investment package.

Do you remember the expressions, “all is not what it seems” or “if it is too good to be true, it usually is”?  These are red flag guides for you in moments you doubt the authenticity of any hot promise. To be fair, if your gut instinct tells you to run from such risky arrangements, it is wise to follow it. For example, any entity (whether online or offline) that promises you that your investment is guaranteed, should be avoided like the plague. They may be Ponzi schemes.

Legitimate investment advisors will admit that every investment, no matter how small, carries risk. The standard practice of investment advisors who operate above board is to discuss risk with potential clients before asking them to make their first deposit.

So, you should be wary if your “investment advisor” does not require you to complete a risk assessment questionnaire to confirm your risk tolerance. This exercise confirms whether you are aggressive, moderate, or conservative in your risk-taking behaviour. Also, this exercise is mandatory!

Be wise (or learn wisdom)

In the final analysis, the onus is on you to exercise good judgement when deciding your investment strategy. Naturally, legitimate investment vehicles, such as through registered brokers for the Jamaica stock market, is the way to go.

Authentic investment advisors provide you with sound advice on investment strategies, options, and market conditions. They can also answer your investment and market-related questions.

Other warning signs that the FSC in one of its Investor Alert Bulletins raise are:

  • unlicensed dealers, promoters, and sellers
  • secretive and/or complex strategies and fee structures
  • using funds from new investors to pay off existing investors, with no investment in an underlying asset or product
  • indirect advertising – promotion through social media posts
  • pressure to buy right now – giving potential investor no time to think about the “investment”

The FSC continues to monitor the activities of unregulated financial organisations. Their website also offers you a way to contact the Commission if you are aware of such fraudulent schemes or are in doubt about the legitimacy of offers.

In the meantime, if you encounter an investment opportunity that is cloudy, foggy, and hazy – one in which you cannot make head or tail of the information surrounding it, there is only one thing to do.





Peter Parchment is a highly trained professional with twelve (12) years senior executive experience in Policy Formulation, Monitoring & Evaluation, Strategic Planning in the Public Sector, and Social Research. A strategic thinker with strong problem-solving skills, people and resource management skills and the ability to think outside the box. Equipped with sound technical report writing and consultation facilitation skills and knowledgeable in the workings of Government and the Public Service. Experienced in working with rural and urban communities in a variety of locally and externally funded projects. He is also trained in Media and Communications and writes for online clients and publications. [email protected]

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Bankers Urged to Remain Alert to Electronic Fraud




Bankers, you must remain aware of the different tools that mitigate attempts at electronic fraud. That is essentially the message from Jerome Smalling, Vice President of the Jamaica Bankers Association (JBA). He was speaking at the JBA’s seminar on anti-fraud held recently at the Terra Nova Hotel in Kingston. His warning comes against the background of the increased attempts by criminal elements at defrauding financial services institutions.

100 Seminar Participants Hear About e-Fraud Technologies

Over 100 persons participated in the anti-fraud seminar that was also held in association with the Jamaica Institute of Financial Services (JIFS). International and local experts covered topics including fraud trends, artificial intelligence, data protection, and the use of closed-circuit television images in preventing fraud. Participants got first-hand data and information on the capabilities of existing technology in perpetrating fraud.

Dirk Harrison, the Director of Prosecutions at the Integrity Commission, presented statistics reported by Transparency International that demonstrate the harmful effects of corruption on the progress of governance mechanisms.

Stay Ahead of Fraudsters – Dirk Harrison

Integrity Commission Jamaica

Harrison argued for a solution-oriented rather than a problem-oriented strategy to deal with fraud. “We must stay ahead of the fraudsters, who may ultimately be responsible for programming the same technology and machines on which we are to depend,” he said. Further, the Integrity Commission Director of Prosecutions emphasised how important it is to engage with the youth. He encouraged the seminar participants to reach out to the schools, youth clubs, and the cadet force to reinforce the message of “right and wrong,” and the consequences of choices.

Interestingly, Damian Small, the Director of Corporate Security at Scotiabank, argued that institutions must use a combination of strategies to effectively manage e-fraud. Such an approach, he explained, must be transparent and trustworthy for clients. Strategies must also create awareness on the different social engineering tactics that criminals use to collect data. Furthermore, fraud detection and prevention should also be objectives from an organisational perspective.

Law Enforcement Challenges and Weaknesses

But a report appearing in the media in 2018 highlighted major weaknesses in law-enforcement and the justice system in fighting fraud. Reportedly, in 2017, as electronic fraud spread, banks, and other financial institutions lost $750 million.

Also, the Jamaica Constabulary Force (JCF) data showed that between 2013 and 2018 the police Fraud Squad received reports on almost 3,400 alleged cases of fraud.

Unfortunately, the rate at which fraudsters are convicted in the island’s courts lags the arrest rate. Reportedly, the courts found only 115 persons guilty out of the 1,029 persons held for different rackets.  Even then, more than 50 percent of the convicted persons over the five years received their conviction only in 2017. Also, according to police data, between 2015 and 2016, the police Fraud Squad secured only three convictions for fraud.


Fraud Officers Sometimes Redeployed

Even arrests fall behind reports. During the five years to 2018, the police Fraud Squad received almost 2,000 fraud reports, but only arrested a little over 900 persons. Distressingly, the situation concerning arrests and convictions for electronic fraud is much worse.

The bottom line is that the Duke Street-based police Fraud Squad is woefully understaffed and under-resourced. Up to 2018, the police Fraud Squad had fewer than a dozen investigators assigned to tackle fraud islandwide. Even with this shortfall, the police high command sometimes redeploys these officers to other duties including Zones of Special Operations (ZOSOs) and the State of Emergency (SOE) in Western Jamaica.

Official Ambivalence Regarding e-Fraud

Interestingly, Lloyd Parchment, an anti-fraud expert at the Jamaica Bankers’ Association, suggested that official ambivalence regarding the crime of fraud contributed to the low conviction rate experienced in Jamaica. For one thing, many see fraud, particularly that against institutions like banks, as a victim-less, white-collar crime.

Parchment suggested that:

 “The justice system does not recognise fraud as a very important area of criminal activity; they do not treat it seriously.”

He further explained that the banking sector has urged the justice system to acknowledge fraud as a serious criminal offence. He also noted that the money gained from it is also fuelling more serious illegal activity. According to the JBA anti-fraud expert, banking sector leaders received only a lukewarm response from the justice ministry when they attempted dialogue on the matter of fraud.

Banks Choose Not to Report Fraud

Consequently, financial industry leaders are not so confident that investigations into the reported e-fraud cases will yield serious results. Furthermore, banks, in some cases, chose not to report fraud incidents to the police Fraud Squad as they do not see the point of doing so. Also, the substantial backlog of reported fraud cases investigated by the Fraud Squad is another disincentive for institutional victims of electronic fraud to report or follow up on fraud matters.

Parchment offered an example of what happened in a recent fraud incident:

“We had a guy recently who reaped millions of dollars in fraudulent funds from the banking industry through debit card frauds, and when we managed to engineer his arrest, and he was brought to court, he immediately pleaded guilty. He was slapped with a $200,000 fine. He then went and stole the money from a customer’s account to pay the fine. It didn’t even come out of his pocket, and he is back working the next day and continues to work right now. I have the evidence of that because we have the camera system.”

Optimistic Outlook

Participants in the recently held JBA/JIFS anti-fraud seminar got an earful on the scale of electronic fraud and the kinds of technology criminals use. Not only did presenters offer their experiences on the various ways financial institutions suffer at the hands of unscrupulous fraudsters, but they also got useful tips on how to address this growing problem.

The existing law enforcement weaknesses and challenges in the justice system, however, threaten any success in addressing the e-fraud monster.

But as an adage goes, “where there is life, there is hope”.

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BOJ Clinches Deal with Bloomberg To Allow Local FX Traders on Platform




The Bank of Jamaica (BOJ) has clinched a deal with Bloomberg (USA) to access its advertising and trading platform.  BOJ’s arrangement with the international financial and media services provider will enable FX dealers to place Foreign Exchange rates on the Bloomberg platform in local and US currencies. Other dealers will then see them in real time.

The Deal with Bloomberg for B-Match Platform

John Robinson, BOJ’s Senior Deputy Governor announced the deal. He further disclosed that the deal with Bloomberg is an interim strategy. Dealers will, however, be able to use the Bloomberg trading platform come July 1, 2019. While this arrangement with Bloomberg is temporary, the BOJ expects to launch its own comprehensive trading platform in early 2020.

Robinson, in a media interview, further stated that Bloomberg is currently testing its B-Match model. That model enables dealers to trade among themselves. Bloomberg’s B-Match model is a data-driven service that offers information on clients so advertisers may present targeted opportunities. Bloomberg offers the same service to financial entities, such as FX dealers. They will be able to use specified information to match the FX needs of other Foreign Exchange dealers and entities.

Dealers Signing Up

Reportedly, traders and large buyers have already signed on to the Bloomberg platform. They have the advantage of seeing the rates at which other banks and institutions are selling the US dollars. These traders and buyers can see this information through a special terminal linked to the central clearinghouse system operated by the Bank of Jamaica. The BOJ official noted that it is necessary for dealers to have access to the Bloomberg terminal. This access will effectively allow them to work with their large clients who need foreign exchange from time to time.

As described by BOJ’s Deputy Governor Robinson using an example, “say JPS, which want to buy US$1 million, you can come onto the system and see who is selling and for what price, and you can buy through your dealer who will process the transaction using the Bloomberg B-Match model”.

However, in accordance with the deal with Bloomberg, the BOJ must pay a fee of US$2,000 per month for accessing the platform.

BOJ’s Comprehensive FX Trading Platform in the Works

Responding to a question on whether the BOJ would have a supervisory role in the Bloomberg B-Match system, Robinson indicated that the BOJ will coordinate rather than supervise the use of that platform. Each dealer will have his or her own terminal. The BOJ will, however, “shepherd them into sharing all this information”, Robinson explained.

Also, the BOJ’s comprehensive FX platform is still a work in progress. However, it will, in addition to the Bloomberg B-Match system, allow foreign exchange buyers to register and see the FX rates offered by each bank. FX buyers will then get the best price.

Bloomberg, a major provider of round the clock financial information and news, offers a professional analysis of financial data and news, as well as the analytical tools that financial professionals can use. The Bloomberg Terminal is one of its key income streams that is an integrated platform for streaming price data, trading information, news, and financial analysis to more than 300,000 customers globally.

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Sagicor Investments Jamaica Limited to Raise $4 Billion Through IPO




Sagicor Financial

Another IPO is on the horizon. This time, it is the Sagicor Investments Jamaica Limited that is seeking to raise around $4 billion through an initial public offering. Sagicor Investments is offering shares in the Sagicor Select Funds Limited, which is a fund pool consisting of financial stocks that are listed on the Jamaica Stock Exchange. The public offer will open on July 3 and close on July 17, 2019.

Sagicor Investments Jamaica Limited Offers 2.5 billion Stocks

Investors can purchase a total of 2.5 billion stock units at a price of $1.00 per unit. Also, they have the choice to purchase from an additional pool of 1.5 billion stock units should Sagicor Investments Limited choose to upsize the IPO.

The Sagicor IPO consists of shares in two classes – Class A shares offered to Sagicor Investment Limited clients and Class B shares offered to members of the public who subscribe to this initial public offer. The prospectus from Sagicor Investments Limited stated that the company was structured as a passive equity fund with separate classes of shares listed as a Financial Select Fund.

JSE Financial Index Grows 18%

Presently, the Financial Select Fund has invested $1.1 billion in 11 of the 23 financial stocks that constitute the Jamaica Stock Exchange Financial Index. The funds raised from this IPO will go toward acquiring more financial stocks. Sagicor Investments Limited aims to match the financial securities that constitute the JSE Financial Index as closely as possible.

With the Financial Select Fund, investors can track the Index’s value, the net asset value (NAV) of the Fund, and its market value daily. Such information is published on the Jamaica Stock Exchange website and will be published by the Sagicor Investment Jamaica Limited.

On March 1, 2019, the Jamaica Stock Exchange (JSE) launched the JSE Financial Index. This Index consists of insurance companies, financial and microfinancing companies that are trading on the main and junior markets. On Thursday, June 20, 2019, the JSE Financial Index closed at 118 points, which represents an 18.25 percent growth since it was debuted.

While Sagicor leads the unit trust market with its Sigma branded unit trust packages, its Financial Select Fund focuses on a specific sector (financial). So, investors have the choice of specialising in a sector without suffering the accompanying concentration risk.

Why Buy into an IPO?

Investing in shares offered through an initial public offering is like entering an opportunity on the ground floor. Through this strategy, the investor benefits from significant gains once the shares hit the stock exchange. Once the IPO shares are listed on the stock exchange, it’s all systems go as the normal trading takes effect.

A quick look at the performance of some of the investment opportunities offered through IPOs from 2018 to date shows strong gains in price since they were offered to investors.

Look at this table below:

Table 1: Performance of Companies Offered through IPOs from 2018 to Date

Company Symbol Date of IPO IPO Price Closing Price June 20, 2019 % Change
Elite Diagnostic ELITE Feb. 2018 2.00 3.95 98%
Everything Fresh Limited EFRESH May 2018 2.50 1.49 -40%
Fontana Limited FTNA Dec. 2018 1.88 4.43 136%
iCreate Limited Ordinary Shares iCreate Jan / Feb, 2019 1.01 0.8 -21%
Indies Pharma Ordinary Shares INDIES July 2018 1.50 3.21 114%
Mayberry Jamaica Equities MJE July 2018 7.56 11.31 50%
Sygnus Credit Investments Limited JMD Ordinary Shares SCIJMD May 2018 13.72 13.39 -2%
Wigton Windfarm WIG April 2019 0.50 0.84 68%


So, as you consider whether to buy into this latest IPO, read the prospectus and talk with your broker or financial advisor.


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