Cayman's financial regulator begins 'internal review'

The chairman of the Cayman Islands Monetary Authority Board of Directors said Thursday that the agency will commission an internal review related to the involvement of local individuals and financial institutions in the wake of the ongoing FIFA corruption scandal.  

The FIFA probe, being conducted in the U.S., led to the arrest of Caymanian businessman Jeffrey Webb – FIFA’s former vice president and ex-CONCACAF president – last week in Switzerland and has named at least one current and one former Cayman Islands bank in what American prosecutors allege were money laundering activities.  

CIMA’s Managing Director Cindy Scotland’s husband, former government minister Mark Scotland, has worked since last year for the Cayman Islands Football Association under its president, Webb, and was in Switzerland with Webb at the time of his arrest on May 27. The family connection has prompted some concern among the local financial services industry over the appearance of conflicts of interest. 

In addition, former government minister Cline Glidden’s wife Gloria currently serves as deputy head of CIMA’s banking division. Mr. Glidden was also in Switzerland with Webb last week for FIFA’s annual meeting and has been working for CONCACAF on the creation of a regional football dispute resolution court.  

The CIMA board met Thursday to discuss a number of issues related to the ongoing FIFA scandal and how it could potentially affect Cayman’s financial services industry.  

Board Chairman George McCarthy said members were “very much concerned about the events that are occurring,” but agreed that it was too early for direct board involvement in these matters.  

Mr. McCarthy said the three-person internal review committee will include newly appointed CIMA head of banking Charles Ilako, head of compliance R.J. Berry and deputy general counsel Andre Mon Desir. After the review committee completes its work, it will present a report to CIMA’s management committee, and the management committee will report to the board, Mr. McCarthy said.  

Mr. McCarthy confirmed that Ms. Scotland would remain in her role as managing director and that there was “no need for her to set aside her role at this time.” In addition, Mr. McCarthy said there was no evidence at the present time that any Cayman Islands banks had done anything wrong.  

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  1. This story raises more questions than answers: it gives a very vague reason for the review — "related to the review of individuals and institutions." Something a little more specific might have been helpful.

    In another regard, I looked up the role of CIMA and noted that it is advisory and regulatory (among a couple other functions). No where does it say investigatory, so presumably CIMA cannot launch an investigation into individuals or banks not yet implicated? Is "investigpgation" the right word for CIMA activities anyway? Presumably all that CIMA can do now is to review compliance policies and procedures of any bank that may have been implicated in regard to any of the individuals who have been arrested? Or can it go beyond that and review any accounts of persons connected to that Individual, held at the implicated banks? Should an investigation be underway by a financial crimes unit somewhere else locally?

    Is the review that is underway to determine if CIMA performed its regulatory role in regard to the banks now implicated? Or is it to monitor how it now reviews the banks implicated, or both, as to compliance? If a bank flags a transaction, is CIMA the lead agency, or are they merely informed, while a financial crimes unit with the RCIPS innestigates? Other agency?

    A little more information in these areas may be helpful to the public in understanding what is now happening and to more fully understand the role of CIMA.

    Perhaps the board might wish to respond to some of these questions in a follow up story with the Compass.

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  2. Who exactly within the local financial services industry has expressed concern over the appearance of conflicts of interest? There should be no reason to hide the names of the individuals within the local financial services industry that were interviewed for this article.

    Mr. McCarthy, unlike the blood thirsty amongst us, clearly understands as it relates to Mrs. Scotland that there is "no need for her to set aside her role at this time". He also understands as someone with the required experience that there is "no evidence at the present time that any Cayman Islands banks had done anything wrong".

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  3. Honestly to bring some tranparency to this mess and cayman’s reputation. The relationship between the families and ex FIFA Vice President are too close and an external independent audit team from outside cayman should be contracted to complete the internal investigation. Messesrs Scotland and glidden were part of mr. Webb”s ounterange in Switzerland. Who paid for their trips, hotels, etc…

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  4. @ Mack Boland

    – The absence of evidence is not the evidence of absence

    – .. local financial services industry has expressed concern over the appearance of conflicts of interest… Code of Professional Conduct REQUIRES of financial sector professionals independence in fact and in appearance. It is mandatory.

    – I won’t call people blood thirsty and question what they have to say simply because it does not jive with my limited perspective.

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  5. Perception is reality. Whether or not any CI banks did anything wrong is not the issue. The issue is that if an investigation is to be performed, those associated with that investigation should be free and clear of any possible conflict or affiliation with CIFA or FIFA.

    Unfortunately, Cayman has a reputation about its banking. During the last US presidential election, Mitt Romney was shunned for having money in CI banks! The media said he was "hiding his money" here.

    It’s bad enough Mr. Webb has been arrested (and has been assumed guilty by US media outlets) but once those same media outlets find out that husbands and wives of his entourage are part of CIMA, they won’t trust their findings–even if they were done with utmost care and unbiased results. It won’t matter because people’s perception is the reality.

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  6. @L Bell:

    You can do anything you want with your limited perspective but I stand by what I said in my previous comment.

    Perception is reality for people with a limited perspective and people who are too lazy to think outside of the box and people who never question anything that they have been told.

    The examples in your comment only help to prove my point.

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