Roger Gaspard

Roger Gaspard

AFTER deliberating on the First Citizens Initial Public Offering (IPO) for more than 19 months, Director of Public Prosecutions, Roger Gaspard, concluded that there was “insufficient evidence” from an investigation conducted internally by a team from the Trinidad and Tobago Securities and Exchange Commission (TTSEC) “for a realistic prospect of conviction for any offence under the Securities Act Chapter 83.02.”

The IPO brief, along with the report of the TTSEC’s internal investigation and a First Citizens report on the IPO, was submitted to Gaspard on June 15, 2015, the TTSEC’s chief executive, Haydn Gittens told Express Business in an interview last Wednesday.

The securities regulator received the response from Gaspard on January 27, 2017, Gittens said, in the TTSEC’s first response to the outrage that is building in some circles at what Government minister, Fitzgerald Hinds, described as the paltry fines of $2.8 million that the four respondents—dismissed FCB chief risk officer Hassan Phillip Rahaman, his cousin Imtiaz Rahaman, their stockbroker Subhas Ramkhelawan and his firm, Bourse Brokers Ltd—negotiated with the regulator to pay.

The negotiated settlement was “in full and final settlement” of the matter and “without any admission of wrongdoing or guilt or liability, whether civil or criminal or otherwise.”

Gaspard’s response was “that there was insufficient evidence arising from the investigative report for a realistic prospect of conviction for any offence under the Securities Act Chapter 83.02, or of an offence of fraud by anyone that alleged that the original application (for the FCB Shares) was a sham.”

That’s according to a summary of the DPP’s response provided by Gittens, who said he did not have Gaspard’s permission to share the letter with Express.

In effect, Gaspard’s decision was that there was no prospect of criminal charges against the four respondents ever succeeding.

Had Gaspard found that the four respondents had a case to answer, they would have been prosecuted under section 99 of the Securities Act, which states: “A person who contravenes section 91, 92, 93, 94, 95, 96 or 98 commits an offence and is liable on summary conviction to a fine of $2 million and imprisonment for five years.”

One of the recommendations in in an internal report done by the TTSEC was that proceedings be instituted against the four respondents in respect of contraventions of the 2012 Securities Act:

Hassan Rahaman, Imtiaz Rahaman, Subhas Ramkhelawan and Bourse Brokers were investigated for possible breaches of the following sections of the Act:

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

T&T’s chief securities regulator said the DPP’s January 27, 2017 advice on the matter was referred to the Commission’s internal Standing Committee in February 2017.

In April 2017, the TTSEC sought the advice of Ian Benjamin SC on whether the Commission’s investigative report showed any evidence of contraventions of the Act.

Benjamin, who was briefed in April 2017, responded with a final opinion on November 14, 2017, confirming that the three sections of the Act were possibly breached and that there was sufficient evidence to hold hearings.

It took the TTSEC until July 2018 to advise the respondents of the Commission’s intention to hold hearings into the matter.

Gitten was questioned on the fees paid to Benjamin and the Canadian firm of attorneys, Davies, Ward, Phillips and Vineberg, that was hired in March 2014 to provide “expert assistance and advice to the investigative team to be appointed by the Commission.”

Gittens responded: “Regrettably, for reasons of confidentiality, I cannot reveal the specifics with respect to the quantum of fees paid to the SC and the Canadian law firm.

“I can confirm that the fees charged were quite reasonable and in line with the quantity and quality of work carried out and the level aof experience and expertise of the legal support.”

A team of TTSEC investigators—comprising legal, enforcement and market surveillance officers—was appointed in August 2014.

Between August and November 2014, the internal team of securities investigators, assisted by their Canadian attorneys, conducted over 50 interviewees and collected a “tremendous amount of documentation” from all parties involved in the matter.

The investigators submitted their report, with its findings and recommendations, in January 2015.

Quantum of fees

As it stands, with the DPP deciding there was “insufficient evidence” to bring criminal charges against the four respondents, the only option remaining for the TTSEC was the route of administrative fines.

The administrative route was on hold pending the DPP’s assessment of the validity of the criminal charges. The burden of proof with criminal charges is much higher than with the administrative charges, Gittens said.

Said Gittens: “Once we went the administrative route, there is a cap on the fines that we can levy, which is $500,000 per contravention.”

Given the three charges and the four respondents, the cap on the administrative fines they faced was $6 million, “in mathematical terms.”

Gittens said the $6 million cap on the administrative fees that the Commission could have charged the three men and the company is in accordance with section 156 (1) of the Securities Act.

Hassan Phillip Rahaman paid about $22 a share, a total of $14.5 million, to acquire 659,588 FCB shares in the undersubscribed employee bucket at the IPO in August 2013. Rahaman sold 634,588 of those shares to his cousin Imtiaz at $42.15 per share on January 14, 2014 for a total consideration of $26,747,884.20.

With the dividends paid on the shares in December 2014, the profit on the transaction amounts to $13 million.

Gittens said: “There isn’t a relationship between the so-called profits on the transactions and the amount of the administrative fine the Commission can levy.”

No complaints received

Gittens said the TTSEC has an internal process that determines the floor on a negotiating position, based on the seriousness of the breach.

“From the regulators’ perspective the seriousness of the breach relates to the impact on the market: someone actually losing money; an investor losing money and we get a complaint,” he said .

Gittens said while the FCB IPO matter, “understandably and naturally engendered alot of public outcry., we received no complaints of someone actually losing money on the transaction.

“In other words, a fraud case in which someone loses $100,000 is a Level 1 transaction from a regulatory perspective.

“But in the absence of evidence that someone actually loses money or suffered some other harm that is proven, then this is not a Level 1 contravention from a regulatory perspective. It was a Level 2 contravention.”

Gittens said he could not go into further detaills because the Level 1 and 2 contraventions constitute the internal process of the TTSEC.

Asked how he would respond to the public sentiment that the negotiated settlement was weak and lacked proportionality, Gittens said: “I think I responded to that by outlining the restrictions the Commission had in terms of the fines it could commit. I indicated that the Commission had a process for ranking the seriousness of the breach, which it adhered to.

“From the Commission’s perspective, that was the basis that we indicated it was proportionate.”

can’s specifically answer that, except to say I know there is a process. I believe there may have been some changes in the appointments during the period of time that could have contributed to it. There is a very formal process and the team has to be approved by a panel of the Commission.”

Gittens, who joined the TTSEC in August 2017, repeated the phrase “I can’t specifically answer that...” when asked about slippages in time at the Commission between January 2014, when the scandal broke, and when he joined the institution.

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

The investigative team, as well, served a Notice of Adverse Report on each of the four respondents, which outlined their failure to fulfill a duty or obligation under the Securities Act. This is a necessary step in the process of finding fault.

And the team, in its report dated January 12, 2015, recommended that the matter be referred to the Director of Public Prosecutions for his consideration, pursuant to section 168 of the Securities Act.

Gittens disclosed that the TTSEC retained a Canadian firm of attorneys, Davies, Ward, Phillips and Vineberg, on March 17, 2014 to provide “expert assistance and advice to the investigative team to be appointed by the Commission.” That team of TTSEC investigators—comprising legal, enforcement and market surveillance officers—was appointed in August 6, 2014, almost five months later.

Asked why it took almost five months for the investigative team to be appointed, Gittens said: “I can’s specifically answer that, except to say I know there is a process. I believe there may have been some changes in the appointments during the period of time that could have contributed to it. There is a very formal process and the team has to be approved by a panel of the Commission.”

Between August and November 2014, the internal team of securities investigators, assisted by their Canadian attorneys, conducted over 50 interviewees and collected a “tremendous amount of documentation” from all parties involved in the matter.

The investigators submitted their report, with its findings and recommendations, in January 2015. One of the recommendations in the internal report was that proceedings be instituted against the four respondents in respect of the following contraventions of the 2012 Securities Act:

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

The investigative team, as well, served a Notice of Adverse Report on each of the four respondents, which outlined their failure to fulfill a duty or obligation under the Securities Act. This is a necessary step in the process of finding fault.

And the team, in its report dated January 12, 2015, recommended that the matter be referred to the Director of Public Prosecutions for his consideration, pursuant to section 168 of the Securities Act.

In the interview Gittens sought to clarify “certain inferences,” that were alive in the securities market.

Gittens disclosed that the TTSEC retained a Canadian firm of attorneys, Davies, Ward, Phillips and Vineberg, on March 17, 2014 to provide “expert assistance and advice to the investigative team to be appointed by the Commission.” That team of TTSEC investigators—comprising legal, enforcement and market surveillance officers—was appointed in August 6, 2014, almost five months later.

Asked why it took almost five months for the investigative team to be appointed, Gittens said: “I can’s specifically answer that, except to say I know there is a process. I believe there may have been some changes in the appointments during the period of time that could have contributed to it. There is a very formal process and the team has to be approved by a panel of the Commission.”

Between August and November 2014, the internal team of securities investigators, assisted by their Canadian attorneys, conducted over 50 interviewees and collected a “tremendous amount of documentation” from all parties involved in the matter.

The investigators submitted their report, with its findings and recommendations, in January 2015. One of the recommendations in the internal report was that proceedings be instituted against the four respondents in respect of the following contraventions of the 2012 Securities Act:

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

The investigative team, as well, served a Notice of Adverse Report on each of the four respondents, which outlined their failure to fulfill a duty or obligation under the Securities Act. This is a necessary step in the process of finding fault.

And the team, in its report dated January 12, 2015, recommended that the matter be referred to the Director of Public Prosecutions for his consideration, pursuant to section 168 of the Securities Act.

In the interview Gittens sought to clarify “certain inferences,” that were alive in the securities market.

Gittens disclosed that the TTSEC retained a Canadian firm of attorneys, Davies, Ward, Phillips and Vineberg, on March 17, 2014 to provide “expert assistance and advice to the investigative team to be appointed by the Commission.” That team of TTSEC investigators—comprising legal, enforcement and market surveillance officers—was appointed in August 6, 2014, almost five months later.

Asked why it took almost five months for the investigative team to be appointed, Gittens said: “I can’s specifically answer that, except to say I know there is a process. I believe there may have been some changes in the appointments during the period of time that could have contributed to it. There is a very formal process and the team has to be approved by a panel of the Commission.”

Between August and November 2014, the internal team of securities investigators, assisted by their Canadian attorneys, conducted over 50 interviewees and collected a “tremendous amount of documentation” from all parties involved in the matter.

The investigators submitted their report, with its findings and recommendations, in January 2015. One of the recommendations in the internal report was that proceedings be instituted against the four respondents in respect of the following contraventions of the 2012 Securities Act:

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

The investigative team, as well, served a Notice of Adverse Report on each of the four respondents, which outlined their failure to fulfill a duty or obligation under the Securities Act. This is a necessary step in the process of finding fault.

And the team, in its report dated January 12, 2015, recommended that the matter be referred to the Director of Public Prosecutions for his consideration, pursuant to section 168 of the Securities Act.

AS the repurcussions of the February 3 announcement of the negotiated settlement of the FCB Initial Public Offering (IPO) issue, continues to rankle many, the T&T Securities and Exchange Commission (TTSEC) has broken its silence, insisting that its management of the fallout of T&T’s biggest stocks and shares scandal was by the book.

Earlier this month, the TTSEC disclosed that the four respondents in the IPO Scandal—dismissed FCB chief risk officer Hassan Phillip Rahaman, his cousin Imtiaz Rahaman, their stockbroker Subhas Ramkhelawan and his firm, Bourse Brokers Ltd—agreed to pay a total of $2.8 million “in full and final settlement” of the matter and “without any admission of wrongdoing or guilt or liability, whether civil or criminal or otherwise.”

Hassan Phillip Rahaman paid $14.5 million to acquire 659,588 FCB shares from the employee bucket in August 2013. Rahaman sold 634,588 of those shares to his cousin Imtiaz at $42.15 per share on January 14, 2014 for a total consideration of $26,747,884.20.

In an exclusive interview with Express Business last Wednesday, chief executive officer of the TTSEC, Hadyn Gittens, sought to clarify “certain inferences,” that were alive in the securities market.

There is also an internal process for the TTSEC to accept or reject the recommendations of an investigative team, Gittens said, which meant that the report was submitted to the Standing Committee of the TTSEC, which accepted the recommendation of the investigators that the matter be sent to the DPP on March 29, 2015.

The investigators’ report was submitted to the DPP on June 15, 2015, more than two months after the referral decision was taken.

Gittens said the investigators’ report was referred to the DPP because of the perception of the seriousness of the matter.

“The decision was taken to fully explore whether criminal charges should be brought against the four respondents. That is the process involved with referring it to the DPP, as opposed to administrative charges.”

It took DPP Roger Gaspard 19 months and 12 days to provide his legal conclusion on the investigation conducted by the TTSEC’s internal team plus a report on the matter that was completed by FCB.

AFTER deliberating on the First Citizens Initial Public Offering (IPO) for more than 19 months, Director of Public Prosecutions, Roger Gaspard, concluded that there was “insufficient evidence” from an investigation conducted internally by a team from the Trinidad and Tobago Securities and Exchange Commission (TTSEC) “for a realistic prospect of conviction for any offence under the Securities Act Chapter 83.02.”

The IPO brief, along with the report of the TTSEC’s internal investigation and a First Citizens report on the IPO, was submitted to Gaspard on June 15, 2015, the TTSEC’s chief executive, Haydn Gittens told Express Business in an interview last Wednesday.

The securities regulator received the response from Gaspard on January 27, 2017, Gittens said, in the TTSEC’s first response to the outrage that is building in some circles at what Government minister, Fitzgerald Hinds, described as the paltry fines of $2.8 million that the four respondents—dismissed FCB chief risk officer Hassan Phillip Rahaman, his cousin Imtiaz Rahaman, their stockbroker Subhas Ramkhelawan and his firm, Bourse Brokers Ltd—negotiated with the regulator to pay.

The negotiated settlement was “in full and final settlement” of the matter and “without any admission of wrongdoing or guilt or liability, whether civil or criminal or otherwise.”

Gaspard’s response was “that there was insufficient evidence arising from the investigative report for a realistic prospect of conviction for any offence under the Securities Act Chapter 83.02, or of an offence of fraud by anyone that alleged that the original application (for the FCB Shares) was a sham.” That’s according to a summary of the DPP’s response provided by Gittens, who said he did not have Gaspard’s permission to share the letter with Express.

In effect, Gaspard’s decision was that there was no prospect of criminal charges against the four respondents ever succeeding

Had Gaspard found that the four respondents had a case to answer, they would have been prosecuted under section 99 of the Securities Act, which states: “A person who contravenes section 91, 92, 93, 94, 95, 96 or 98 commits an offence and is liable on summary conviction to a fine of $2 million and imprisonment for five years.”

One of the recommendations in the internal report was that proceedings be instituted against the four respondents in respect of the following contraventions of the 2012 Securities Act:

Hassan Rahaman, Imtiaz Rahaman, Subhas Ramkhelawan and Bourse Brokers were investigated for possible breaches of the following sections of the Act:

• Section 91 (1), which deals with creating a false or misleading appearance of trading activity;

• Section 91 (2), which deals with creating or maintaining an artificial price for a security; and

• Section 94, which deals with engaging in a transaction that will result in a misleading appearance of trading.

As it stands, with the DPP deciding there was “insufficient evidence” to bring criminal charges against the four respondents, the only option remaining for the TTSEC was the route of administrative fines.

Said Gittens: “Once we go the administrative route, there is a cap on the fines that we can levy, which is $500,000 per contravention.” Given the three charges and the four respondents, the cap on the administrative fines they faced was $6 million, “in mathematical terms.”

Gittens said: “There isn’t a relationship between the so-called profits on the transactions and the amount of the administrative fine the Commission can levy.”

He said that is in accordance with section 156 (1) of the Securities Act

Hassan Phillip Rahaman paid about $22 a share, a total of $14.5 million, to acquire 659,588 FCB shares in the undersubscribed employee bucket at the IPO in August 2013. Rahaman sold 634,588 of those shares to his cousin Imtiaz at $42.15 per share on January 14, 2014 for a total consideration of $26,747,884.20.

— has broken its silence, insisting that its management of the fallout of T&T’s biggest stocks and shares scandal was by the book.

Earlier this month, the TTSEC disclosed that the four respondents in the IPO Scandal—dismissed FCB chief risk officer Hassan Phillip Rahaman, his cousin Imtiaz Rahaman, their stockbroker Subhas Ramkhelawan and his firm, Bourse Brokers Ltd—agreed to pay a total of $2.8 million “in full and final settlement” of the matter and “without any admission of wrongdoing or guilt or liability, whether civil or criminal or otherwise.”

Hassan Phillip Rahaman paid $14.5 million to acquire 659,588 FCB shares from the employee bucket in August 2013. Rahaman sold 634,588 of those shares to his cousin Imtiaz at $42.15 per share on January 14, 2014 for a total consideration of $26,747,884.20.

Gaspard received report

Or 18 months, 23 days excluding the end date.

Good Morning Anthony:

Advising as follows:

The FCB IPO Investigation, and the report prepared by the Commission concerning same were referred to the Office of the Director of Public Prosecution (DPP) in June 2015. In January 2017, the Commission was informed by the DPP

1. Ian Benjamin SC (SC), was retained by Staff in the matter.

2. Regrettably, for reasons of confidentiality, I cannot reveal the specifics with respect to the quantum of fees paid to SC and the Canadian Law firm. I can confirm however that the fees charged were quite reasonable and in line with the quantity and quality of work carried out and the level of experience and expertise of the legal support.

3. As per below, we actually received the Opinion from SC on November 14th 2017.

For the purpose of providing clarity, I will summarize the sequence of events after Staff received the letter from the DPP on January 27th 2017:

• February 2017 - The matter was referred to the Commission’s internal Standing Committee.

• April 2017 – Request sent to SC seeking advice on whether the Investigative Report showed any evidence of contraventions of the Act.

• November 14th 2017 – Final Opinion received from SC confirming that 3 sections were possibly breached and that there was sufficient evidence to hold a Hearing.

• February 21st 2018 – Further advice was received from SC with respect to a procedural matter.

• May 21st 2018 – The Board of Commissioners (BOC) approved the holding of a Hearing into the 3 possible breaches.

• July 20th 2018 – Respondents advised of the Commission’s intention to hold a Hearing.

• November 8th 2018 – after much organization and reorganization due to the packed and conflicting court schedules of all of the legal counsel involved (each respondent was represented by different Senior Counsels and legal teams), the first procedural Pre-Hearing Conference (PHC) was set for this date.

• Unfortunately, due to a personal issue with one of the Commissioners on the PHC, the November PHC had to be postponed.

• January 30th 2019 – the first PHC was held. A second PHC was scheduled for July 22nd 2019 to conclude agreements on procedural issues.

• June 2019 – Settlement Offers started to come in from the Respondents.

• July 22nd 2019 – Second PHC held.

• The Commission’s Pre-Hearing Commission and Hearing Panel were advised that Settlement negotiations were taking place and a decision was taken to suspend further Hearings pending the outcome of Settlement negotiations.

• December 5th 2019 – A Status Hearing was held before the Hearing Panel for the purpose of providing an update on the Settlement negotiations.

• December 20th 2019 – Settlement Agreements were reached with all respondents.

As an aside. I would like to confirm the following:

• The NCB Global Holdings Ltd’s takeover Bid to shareholders was made on December 8th 2017

• January 9th 2018 – a group of Minority shareholders lodged complaints with the TTSEC on this matter.

• March/April 2018 – Public Hearings were held into this matter.

I trust that this suffices.

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