Golding moves to resolve investment schemes issue

[Karl]

Golding moves to resolve investment schemes issue
published: Saturday | January 5, 2008


With concerns about the fate of som investment schemes, Prime Minister Bruce Golding has mandated the Ministry of Finance to convene a meeting with the Attorney General and the Financial Services Commission (FSC).

The meeting, the Prime Minister's first official move to address the issue, is to be held to formulate clear guidelines on the way forward for unregistered investment clubs.

Mr. Golding has instructed Finance and the Public Service Minister, Audley Shaw and Minister without Portfolio in the Finance Ministry, Don Wehby to meet with Attorney General Dorothy Lightbourne and representatives from the FSC to address what he described as "the growing concerns relating to the unregistered schemes".

Report to be submitted
A report is to be submitted to the Prime Minister by Monday.
Mr. Golding gave the directive yesterday after meeting with Ministers Shaw and Wehby, representatives of the banking sector and FSC officials at Jamaica House.

As part of the discussions, which will take place on the weekend, the group has been asked to examine any deficiencies in the existing statutory (regulatory) process that would need to be adjusted, as well as what initiatives could be taken in relation to assets held by operators of the schemes, should the need arise.

The Prime Minister said the priority was to protect the integrity of the country's financial system and establish the requisite legislative framework for dealing with other investment schemes that might develop in the future.
Meanwhile, the FSC is without a chairman today, following reports that Michael Hylton has stepped down.

[Jawge]

I can't believe this:
The Prime Minister said the priority was to protect the integrity of the country's financial system and establish the requisite legislative framework for dealing with other investment schemes that might develop in the future.

Good thing I am the eternal learner.

[Karl]

Regulating alternative investment schemes
Raulston Nembhard
Saturday, January 05, 2008


The ruling by the Supreme Court that the Financial Services Commission (FSC) has the power to regulate alternative investment schemes has brought the activities of these schemes under greater scrutiny, and rightly so.

The commission has issued a cease and desist order to Cash Plus in which many Jamaicans have invested hard-earned funds.

The ball is now clearly in the court of the government to act, and to do so expeditiously and decisively in order to ensure that these entities are brought within the ambits of the law governing regulation and licensing. In this, the government finds itself between "a rock and a hard place".

Mr Audley Shaw, the minister of finance, when he was in the Opposition seemed to have taken an eirenic view of these operations. He seemed to have believed that the regulation of these schemes would stifle entrepreneurship. The government would not want to appear to be doing this at a time when it is extolling the virtues of free enterprise and toting the freeing-up of the entrepreneurial energy of the Jamaican people. Yet, the government would realise that no investment scheme can be allowed to operate outside of the requirements of law. At some point such entities have to be reined in.

In the matter of Cash Plus, the JLP administration is now faced with the unenviable task of reining in an entity in which a growing number of Jamaicans, wittingly or unwittingly, against their best judgments or in tandem with an astute investment mindset, have placed great confidence, if not a growing stockpile of their hard-earned money. To them, people like Carlos Hill and David Smith have become rock stars, but the government need not fear their "heroic" status in doing what ought to be done.

The governing principle that the government will have to respond to is what is in the best interest of the Jamaican people. It should not allow itself to be dissuaded by any growing dissatisfaction or prognostications about social upheaval that would occur if it does what is right by upholding the law. It is not enough for the government to say: "Don't come to us to bail you out when things wrong." It is precisely for the protection of the public that commissions such as the FSC were instituted by law.

It so happens that there comes a time when a government has to protect people from their own folly. There are some who have invested in Cash Plus who are foolishly bleating that they will take their own losses and the government should leave them be. But we know that when the real problems arise, it is the government that will be blamed for not protecting them. They will not take responsibility for being seduced by those who come with great promises of an economic Utopia to be reached which can circumvent the ethic of hard work. In situations like these, governments are damned if they do and damned if they don't - so just go ahead and do it anyway.

It is the circumvention of the work ethic that should cause us all concern. It is the psychological basis for the pervasive gambling mindset that has overtaken the society. One of the serious issues that the church in particular should be wrestling with is the dangerous gambling addiction that many, especially poorer members of the society, are struggling with.

We are yet to understand that we have a serious gambling addiction crisis in Jamaica which is at the root of many of the problems in the home. It is not unlike the gambling addiction that plagues America, but in a small country like Jamaica we ought to be alarmed at the pernicious grip of gambling on the minds of so many. This for me is the most compelling reason why we ought to be careful about the introduction of casino gambling in Jamaica.

The truth is that too many people believe that they can get a great output with little input. As long as they can have the good things of life with little sweat, all is well. This mentality has been nourished and encouraged over the years by the investment in government paper where a person could easily put his money in the bank and then relax on the beach expecting a higher return than if he had invested in a factory.

The theological lesson to be learnt from the Cash Plus phenomenon is that man cannot live by bread alone. We have become a money-grabbing society at the expense of the larger things that should define us as human beings.

We worship at the shrine of Mammon (god of money) and many of us are becoming soulless acolytes as we trample on our brothers and sisters "to get a food". This aggressive mentality to be rich at all costs feeds the criminal monster in our midst. Yes, it lays bare the difficulty of creating and holding on to life-nourishing values and attitudes without which a nation cannot survive.

Dealing with alternative investment schemes is one of the most important challenges that will face the Bruce Golding administration in 2008. Good, proactive governments anticipate crises and respond to them preventively. They are expected to have foresight and are placed in positions to see down the road what the ordinary citizen cannot see.

This is one of the benefits of power, but it is likely to become a deficit if it is not handled astutely. We trust that a proper and just course will be charted, for Jamaica can only be the poorer for it if we fail.
stead6655@aol.com