The Bill to Amend the Securities Act 2012 was passed on Friday night. The bill required a simple majority, but when Deputy Speaker Nela Khan put the question to the House of Representatives at the International Waterfront Centre, Port of Spain, asking “those in favour” of having the bill passed, there were only “ayes”.
But before this, Government had made a critical change in the Statute of Limitation for initiating prosecution for offences such as insider trading from three years to seven years.
The change came after Diego Martin North East MP Colm Imbert argued vociferously during the debate and then during the Committee stage, that if Government really wanted to deal with the scourge of insider trading and market manipulation it had to put a more realistic time frame for the gathering of justiciable evidence in order to prosecute wrongdoers (than three years).
Imbert said insider trading was a “very complicated thing” and in jurisdictions like the United States it sometimes took seven to eight years to investigate and initiate charges, noting that in the Insurance bill, the statute of limitations was ten years.
Earlier Imbert had stated that what happened during the First Citizens IPO was insider trading. “How would an employee of FCB know that 50 per cent of the shares allocated for employees had not been taken up? It is inside knowledge obviously...How did Mr Rahaman know that if he applied for an additional 600,000 plus shares he would get it?..You don’t need all these high powered lawyers and accountants to take 13 months...it is so glaring,” he said. He added that he disagreed with making the offences under the Securities Bill summary offences, as opposed to indictable offences. It would mean that the jail term is capped at 10 years, he noted.
Imbert said problems had arisen in 2012 and 2013 since the passage of the Securities Act.
He cited the financial fiascoes including the First Citizens IPO and the disclosures in the CLICO and HCU Commission of Enquiry.
Imbert also said former deputy chairman of First Citizens Anil Seeterram recommended disciplinary action for three members of the management of First Citizens.
He said: “One week before the end of their financial year, his father (Chanka Seeterram) sold 450,000 shares. Now they decided they wanted to penalise three members of the management.”
But Imbert said: “They must be fired. Unless he was blind he must have seen his father bought 450,000 shares. The employees are saying, ‘How could you want to discipline me when there are questions?’”
Finance Minister Larry Howai in his wind-up pointed out that the penalties and jail time for insider trading were increased from five million and seven years jail (under the 2012 Securities Act) to $10 million and ten years jail with the new amendments. Stating that ten years jail was a sufficient deterrent to committing the crime of insider trading, Howai said: “There is no one who would say I don’t mind going to jail for ten years.”
Howai said: “Most of the comments which were made by (Imbert) on FCB situation were actually taken care of in the Bill. We do have all of the relevant requirements to successfully prosecute these matters, and, in fact, there are two or three that are being prosecuted at the moment. The new board (at First Citizens) is dealing with this, he said.
“That is why certain changes were made to the bank and we recognise some of the issues and we did phase those changes in. As soon as the issue regarding Chanka Seeterram came to our attention, we made the changes that we needed to make all of those issues which (Imbert) has raised. The government does not get the credit for the work it is doing on all of these particular issues,” he said.
—additional reporting by Ria Taitt