The Supreme Court has dismissed the application brought by Olint Corporation Limited and LewFam Trading Limited against the Financial Services Commission, which sought to nullify the cease and desist order served on the entities by regulators in March.

Last month the court granted Olint a stay of execution on a cease and desist order on the condition that Olint did not accept any new members until the hearing in March 2007 or until the court gave its go-ahead.

"This is a case where we want certain issues to be ventilated in the court. They sought to frustrate that by going to court to say we can't have it heard," FSC executive director Brian Wynter, told TheFinancial Gleaner Thursday in his reaction to the decision by the court.

Investigation

On March 3 and 6, the FSC - armed with a search warrant - raided Olint's former New Kingston-based office, seized documents and launched an investigation into claims that Olint might have breached sections 7 and 8 of the Securities Act.

The documents have been returned to Olint, as mandated by the law, and no criminal charges have been brought against the two companies, which argue that they are an investment club, not traders.

The FSC holds a different view.

"What we are saying to them and to anybody out there is that if you deal in securities trading you must be licensed. That's what the act says," said Wynter.

They haven't got a licence so they must stop. That's our reasoning."

Section seven of the Securities Act prohibits the transaction of securities without a licence from the FSC, while Section eight prohibits persons from providing investment advice without an investment advisor's licence.

Specifically, to qualify for a dealer's licence, the trader must have a capital base of $5 million.

"To get a licence is not terribly onerous. For people like Olint - from what they say they are doing - that's nothing," said the FSC top boss of the capital requirement.

business@gleanerjm.com

Taken from the Financial Gleaner, Friday December 29, 2006.