DMS has sued Jazeb Jones, the former managing director of DMS Bank and Trust, for allegedly entering into “an unauthorized and improper relationship” with two clients of the bank and receiving “excessive gifts.”
According to the writ, Mr. Jones negotiated a white label agreement with one of the clients. This branding arrangement, under which the unnamed client would market certain DMS Bank and Trust products to its clients, should have raised a number of red flags for potential violations of banking regulations, DMS said.
The company claims Mr. Jones undertook several business and private trips at the clients’ expense without the knowledge or consent of his fellow directors. On one of these trips in September 2014, Mr. Jones and his family allegedly attended the wedding of the founder of one of the client companies in Greece.
DMS said the clients are referred to in the lawsuit only as “Client A” and “Client B” because the disclosure of the customer relationship requires the consent of the client under Cayman’s Confidential Relationship Preservation Law.
DMS said other directors at the bank became aware on March 5 of a criminal investigation under way in the U.K. in which Client A and several related entities were implicated.
Mr. Jones was terminated on March 9 after he allegedly did not return to work on March 6 without taking the time off or contacting his team.
According to DMS, the company had received reports in May 2014 that “Client A” was misrepresenting its relationship with DMS Bank and Trust by stating it had “purchased” and “owned” the Cayman Islands bank. These claims led to further investigations by DMS and the termination of the white label agreement with the client company before it came into effect.
DMS said its internal investigation discovered the paid-for business trips by the bank’s managing director and that a director of DMS Bank and Trust had warned Mr. Jones that such hospitality was against company policy and placed the bank and DMS Group “at serious risk of reputational harm.”
The writ stated that Mr. Jones was instructed to close the account with the client on May 29, 2014, and that he received a written warning when his private trip to the client’s wedding in Greece was uncovered.
DMS claims a fellow director also instructed Mr. Jones on three occasions between December 2014 and March 2015 to close the client’s account, when it was discovered that the managing director had failed to do so. DMS speculated that Mr. Jones refused to close the account so he would not prejudice his personal relationship with the client, who DMS claims had made him an employment offer to set up and operate a competing private bank in the Cayman Islands.
DMS said Mr. Jones’s actions placed DMS Bank and Trust and other entities in the DMS Group “at risk of serious harm to their highly valued international reputation.”
“The Defendant, placing his personal interests above those of DB&T, willfully refused to terminate Client A’s account, despite having been repeatedly instructed to do so from 29 May 2014. Had the Defendant terminated the account when instructed, that account would not have existed in March 2015 when it became public that Client A was the subject of criminal fraud investigations, and any risk to DB&T’s reputation would have been significantly reduced or eliminated,” the writ said.
Mr. Jones started as managing director of DMS Bank and Trust, class B banking license holder in the Cayman Islands, on Aug. 20, 2012. He was a member of the board from Aug. 7, 2013, together with Don Seymour, Roger Hanson and Ray Whittaker.