Dennise Williams, Staff Reporter
OLINT CORPORATION, the investment club offering exceptionally high returns to its investors, is shifting its operations to St. Kitts.
The Financial Services Commission (FSC) issued a cease and desist order against Olint Corporation/David Smith, Overseas Locket International Corporation/David Smith, along with two other companies on March 24, 2006. In response, Olint Corporation sent out a letter earlier this week to club members informing them, "Olint Corp Jamaica has been issued with a cease and desist order. While this matter is being determined by the Courts, Olint Corp Jamaica will be adhering to the order."
This letter informed club members of a new operational framework. Olint Corp Jamaica, "has taken over the management of your club from the former managers Olint Corp Jamaica. Olint Corp St. Kitts is incorporated in the island of St. Kitts and Nevis and registered through the Financial Services Division of the island. This is where the activities of international currency trading will take place."
The company will also be branching out to the North American mainland as the letter stated, "Trading on our behalf will be David Smith and a team of currency traders located in Orlando, Florida."
Olint Corporation has made waves in the local financial sector by providing substantial monthly returns to investors over the past two years. These returns, which at times averaged ten per cent per month, allegedly induced many high net worth Jamaicans to turn their backs on established financial institutions.
An updated public notice issued by the FSC yesterday shed some light into the FSC reservations about Olint's activities. The FSC notice said that while these entities purported to be carrying out foreign currency trading activities, they were also engaged in securities activities "in breach of sections seven and eight of the Securities Act. These sections prohibit the carrying on of a securities or investment advice business without being licensed to do so by the FSC."
Olint Corporation did not take the action lying down. Sources tell Wednesday Business that Mr. Smith has made attempts to regularise his business with the authorities, but to no avail. And the FSC notes that Mr. Smith, "applied to the Commission on March 27th for a stay of execution of the Cease and Desist order directed against the company." However, "on March 30th the Commission refused the application."
Interestingly, while the Cease and Desist order speaks to activities that are in breach of the Securities Act, sources at the FSC admit, "it doesn't mean that Olint must close its offices."
A source in the FSC informed us that, "The fact that your business is domiciled outside of Jamaica doesn't mean you can do what you like in Jamaica. The question is, how is the money being received" Are investors flying to St. Kitts to do business with Olint" Or, is the money being sent from Jamaica" And how will investors know what the company is up to and where it is located? Any information given by Olint to induce investors to buy or sell is the definition of securities dealing according to Section 2 of the securities Act."
The letter from Olint to its members informed them that they could use wire transfers to shift funds. It said, "For individuals who do not wish to wire transfer, facilities will be available through licensed entities in Jamaica who will accept U.S. dollar drafts on our behalf."
The letter did not say which entities, but only that, "at this time we are in discussion with these licensed bodies and as soon as we have determined which we shall engage with, you will be advised by telephone."
And for entities that wish to make a withdrawal, the letter states, "requests can be made online. For club members in Jamaica who may not wish to receive wire transfers, U.S. dollar drafts will be provided" only on a Friday.
The Olint letter advised that the change in operations would be "temporary until the courts have made a final decision."
Brian Wynter, FSC executive director, did not give any further details about the investigation, and only commented that, "this is a very sensitive topic and you can understand that we must be very careful"
David Smith could not be contacted for comment.
