Stock market regulations working

The penalties slapped by the Securities & Exchange Commission (SEC) against four players in the 2014 First Citizens Bank (FCB) Initial Public Offering (IPO) scandal, were described by First Citizens Group CEO Karen Darbasie, as evidence that regulations of the local stock market are working.

“I think it’s an indication that the regulations of the market are working. In my view, it probably took a little long to get to this stage, this transaction took place in 2014 before I joined the bank and to be frank, we are happy to see the investigation come to a conclusion and the regulator determine what the appropriate action was and take that appropriate action,” Darbasie said on Monday.

An investigation was launched by the SEC after questions were raised about the role played by Bourse Securities regarding the acquisition of FCB IPO shares by former chief risk officer Phillip Rahaman.The others involved were Bourse Securities head and former Independent Senator Subhas Ramkhelawan and Imtiaz Rahaman, a former Bourse Securities chairman. In several newspaper notices, the SEC stated that all four will have to pay a total of $2.8m in fines.

Speaking to reporters at the Energy Conference at the Hyatt Regency in Port of Spain on Monday, Darbasie said she had not seen the report and noted that the Bank had strengthened its policies procedures regarding trading since the 2014 scandal.

“From a bank perspective, even before I joined in 2015, the board had taken its own action at that point in time and since I joined, we reviewed, along with my compliance head and the board governance committee, our policies and procedures, certainly with respect to trading in our securities and trading in securities across the board. Those were strengthened within months of me joining the organisation.”

“And we have been through several other issues since then including the additional public offering of the shares of First Citizens as well as public offerings of shares and bonds of other institutions that have been dealt with seamlessly, without issue and successfully death with, so from our side, the regulatory report took awhile but it has come to a conclusion and as a bank we have moved on. We moved on a while ago and we continue to progress on business of banking.”

Darbasie declined comment on the length of time taken by the SEC, saying the report and investigation was done by the regulator who would have needed to ensure it got to a level of detail and understanding before taking action. “And we trust in our regulatory environment to protect the wider investor public of TT.”

She said the bank’s brokers and advisory services, and not Bourse Securities, was the lead broker at the time saying the bank “worked through all of the brokers in TT to ensure everyone was given an opportunity to invest.”

Asked what would be the bank’s posture towards Bourse now, she said, “That’s too early for me to say. I need to see the report first to see what is actually in the report and what is in the finding. All I saw was the notices in the press that was published and I haven’t even read those in a whole lot of detail.”

She said the bank is “very focused on governance. We are very focused on transparency and disclosure and that will continue to be a hallmark for what First Citizens stands for in this market.”