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Cash Plus loses battle in court
National Commercial Bank gets OK to close accountsBY Paul Henry Observer staff reporter
henryp@jamaicaobserver.com
Saturday, February 02, 2008
Embattled alternative investment club Cash Plus yesterday lost its hard fought legal battle to keep its remaining seven accounts with the National Commercial Bank (NCB) open.
Justice Marva McIntosh ruled that Cash Plus was in breach of its contract with NCB by failing to provide "vital information" (its unaudited financial statement) relevant to the bank's regulatory requirements.
A November 2007 Observer file photo of persons in attendance at a meeting of Cash Plus investors at the National Indoor Sports Centre in Kingston.
In discharging the injunction obtained by Cash Plus, which had been preventing NCB from closing the accounts, McIntosh said that the desire by the bank to discontinue the relationship with Cash Plus was an effort to protect itself. McIntosh also said that NCB had given Cash Plus sufficient notice for the closing of the accounts.
Attorneys for Cash Plus immediately applied and were granted leave to appeal the ruling. McIntosh, however, refused an application for a stay of execution of the order until the appeal is heard.
Cash Plus had taken NCB to court after the bank informed the alternative investment entity late last year of its intention to close Cash Plus' 26 accounts. Cash Plus subsequently obtained an injunction restraining the bank from closing the accounts.
The injunction was extended at a court date in December to January 24. The decision to extend the interim injunction was appealed by the bank and the Court of Appeal partly allowed the appeal, which resulted in 18 of Cash Plus' accounts being closed. One account was already closed before the court hearing.
Lawyers for NCB had argued during the four-day in-chambers hearing in the Supreme Court that Cash Plus was flouting the law by allowing the seven accounts to remain open as Cash
Plus' trading operation was unregulated and that the alternative investment scheme was, in December, served with cease and desist orders by the Financial Services Commission (FSC).
The bank also argued that its decision to close the accounts was in keeping with Bank of Jamaica guidelines as Cash Plus had failed to supply its unaudited financial statement of the year ending March 2007, a breach that could result in the bank's licence being revoked. NCB also said it risked its relationship with other banks based in New York due to the fact that Cash Plus principal Carlos Hill was convicted in the United States.
Lawyers for Cash Plus had argued that NCB had breached its contract with the alternative investment scheme by seeking to close the accounts.
On January 24, Cash Plus gave up its long running battle against the FSC when it announced in court that it would seek to register with the financial regulatory body.
National Commercial Bank gets OK to close accountsBY Paul Henry Observer staff reporter
henryp@jamaicaobserver.com
Saturday, February 02, 2008
Embattled alternative investment club Cash Plus yesterday lost its hard fought legal battle to keep its remaining seven accounts with the National Commercial Bank (NCB) open.
Justice Marva McIntosh ruled that Cash Plus was in breach of its contract with NCB by failing to provide "vital information" (its unaudited financial statement) relevant to the bank's regulatory requirements.
A November 2007 Observer file photo of persons in attendance at a meeting of Cash Plus investors at the National Indoor Sports Centre in Kingston.
In discharging the injunction obtained by Cash Plus, which had been preventing NCB from closing the accounts, McIntosh said that the desire by the bank to discontinue the relationship with Cash Plus was an effort to protect itself. McIntosh also said that NCB had given Cash Plus sufficient notice for the closing of the accounts.
Attorneys for Cash Plus immediately applied and were granted leave to appeal the ruling. McIntosh, however, refused an application for a stay of execution of the order until the appeal is heard.
Cash Plus had taken NCB to court after the bank informed the alternative investment entity late last year of its intention to close Cash Plus' 26 accounts. Cash Plus subsequently obtained an injunction restraining the bank from closing the accounts.
The injunction was extended at a court date in December to January 24. The decision to extend the interim injunction was appealed by the bank and the Court of Appeal partly allowed the appeal, which resulted in 18 of Cash Plus' accounts being closed. One account was already closed before the court hearing.
Lawyers for NCB had argued during the four-day in-chambers hearing in the Supreme Court that Cash Plus was flouting the law by allowing the seven accounts to remain open as Cash
Plus' trading operation was unregulated and that the alternative investment scheme was, in December, served with cease and desist orders by the Financial Services Commission (FSC).
The bank also argued that its decision to close the accounts was in keeping with Bank of Jamaica guidelines as Cash Plus had failed to supply its unaudited financial statement of the year ending March 2007, a breach that could result in the bank's licence being revoked. NCB also said it risked its relationship with other banks based in New York due to the fact that Cash Plus principal Carlos Hill was convicted in the United States.
Lawyers for Cash Plus had argued that NCB had breached its contract with the alternative investment scheme by seeking to close the accounts.
On January 24, Cash Plus gave up its long running battle against the FSC when it announced in court that it would seek to register with the financial regulatory body.