MJANY readers would know the old English nursery rhyme “Johnny’s so long at the fair”, that we all sang gleefully as children and which, I am sure you will all agree, aptly and succinctly captures public sentiment on the length of time it is taking for the Securities and Exchange Commission (SEC) to complete its investigation into the First Citizens IPO. I am advised by people in the know that this is a fairly straightforward investigation that should have taken at maximum three to four weeks given the very few “persons of interest” involved and the SEC increased powers under the revised Securities Act 2012.
I wish to remind the public and in particular the SEC chairman Prof Patrick Watson that this high profile investigation reportedly started sometime in February, around the same time that Finance Minister Larry Howai, in response to serious concerns expressed in the public domain regarding the purchase of 659,588 shares by the bank’s former chief risk officer Philip Rahaman, announced that he had ordered a forensic audit into the entire IPO.
It is now June 9, almost five months later and based on the dearth of information coming out the SEC, it appears that we, are no closer to finding out what really transpired in this matter let alone who should be held accountable. In fact, speculation is rife in the public space that in light of the country’s history of treating with white-collar crime nothing will come out of this like so many others. I am sure I don’t have to remind the goodly professor that this, kind of growing sentiment cannot augur well for confidence in the stock market or in particular, its critical role of providing protection to investors from unfair, improper and fraudulent practices and fostering a fair and efficient capital market.
It was only recently that I read in a newspaper report, in response to a question posed by the Public Accounts Committee member Senator Dhanayshar Mahabir with respect to “how many actions and prosecutions of insider trading the SEC had over its 18-year existence as well as what penalties it had imposed on brokers and other market participants for infractions and how many to date had been successfully prosecuted for illegal activities,” SEC chief executive officer Wain Iton said “the short answer to your question is zero. There have been about three or four investigations but prosecutions in respect of insider trading are not an easy exercise.”
However, in fairness to both Prof Watson and Mr Iton, it should be noted that they were only appointed recently in March 2012 and January 2014 respectively. They come with “clean slates.” But more importantly being key officeholders they now have a fresh chance to write a new script going forward, an ideal opportunity to fix whatever the SEC may not have been doing right in the past.
There is an old adage that says “you never get a second chance to make a first impression.” The public is closely looking on, gentlemen. You have our support. All we ask is that you do your jobs without fear or favour, malice or ill-will and most of all let the chips fall where they may.