Unless the Trinidad and Tobago Securities and Exchange Commission can prosecute perpetrators of fraud, leading to “stiff jail time”, robust SEC legislation will be meaningless.
And, therefore, it is important
the Securities and Exchange
Commission (SEC) sends a message
to those who perpetrated the wrong-doing in the First Citizens’ initial public offering (IPO) that they are going to be called to account and called to book.
So said Independent Senator Dhanayshar Mahabir in the Senate yesterday, at Tower D, International Waterfront Centre, Port of Spain, as he contributed to the motion asking the Senate to accept the report of the Joint Select Committee established to consider the Securities and Exchange Commission Bill.
“We need to send this message
to those who feel that they could get away with (fraud): Not this time,” he said.
Mahabir said Parliament was producing excellent law that would satisfy the international community that the country’s security laws were well refined.
But he said the SEC needed
to understand the critical role it has to play, with respect to
the reduction of securities fraud.
“It is important for wrongdoers to know that there would be punishment and stiff
punishment, not just fines. These people must do jail time
because, usually, the perpetrators of fraud are wealthy enough to pay the fine. They are not concerned about social sanctions. These are people who lack shame.... What we need to do is for them to rub shoulders with some of the gang leaders and members in blue collar and rough crime, for them to really understand what they have done to the population, to the Ministry of Finance, is wrong,” he said.
“How could that agency (SEC), as knowledgeable as they are in the law, have passed a prospectus on the First Citizens issue, which was said to contain some flaws. One waits for the outcome of their investigation...let it be a strong case.... We know that a wrong was done,” he said. He said the “good thing” in the First Citizens IPO fiasco was no member of the Government or Opposition was implicated.
He said it was individuals in the bank who engaged in “side-deals and trading”, “violating the trust of the Minister of Finance and defrau ding the people of this Republic”.
Mahabir said in this industry, there is a tendency, once the public has moved on, for those who have participated and mastered fraud to carry on with their trade on another unsuspecting population.
“There is no shortage of those who hold the view that public savings are theirs to plunder,” he added.
Mahabir said the Securities
and Exchange Commission in
its 18 years of its existence, had not in a single case built a dossier, or created a file or prosecuted a case for fraud.
“It cannot be that the individuals coming to the Stock Exchange were persons whose character were beyond reproach. It had to be that there was a level of malfeasance which was not detected,” he said.
He said the “grand buccaneers” must be caught and dealt with, just as the petty thieves are.
He said the last time the SEC came before the Joint Select Committee, he learnt out of a staff of 60, only five were involved in investigations and the police arm of the organisation was very ineffective.
“We have had fraud of colossal proportions which brought a recession in this economy for the last five years in the CLICO matter. And we are not seeing anyone talking about any prosecution or anyone paying the price in the manner that Bernie Madoff or Allen Stanford have in the United States,” he said.
Mahabir said the United States SEC institutes 100 prosecutions a year for Ponzi schemes.
He said in this country’s history of fraud in the securities sector, they were all Ponzi schemes.