A changing of the guard at CIMA

The Cayman Islands Monetary Authority has undergone some major changes … but, frankly, not the ones which we had anticipated.

On June 4, the Compass Editorial Board called publicly for CIMA Managing Director Cindy Scotland to recuse herself from all matters that may come across her desk relating to the unfolding FIFA corruption scandal.

Mrs. Scotland, you see, is married to former government minister Mark Scotland, who since last year has worked for the Cayman Islands Football Association under Jeffrey Webb. Mr. Webb faces charges in the U.S. and Cayman, separately, related to alleged money laundering offenses. Mentioned in the U.S. indictment of Mr. Webb is a Cayman Islands bank, regulated by CIMA and, by proxy, by Mrs. Scotland.

Similarly Gloria Glidden, the deputy head of CIMA’s banking supervision division, is wedded to Cline Glidden, also a former government minister, who until recently was working with Webb on the creation of a football dispute resolution court.

The next day, June 5, the Compass published a story in which CIMA Board Chairman George McCarthy announced the formation of a three-person internal review committee, which would report to board members about matters involving the FIFA scandal, local individuals and Cayman financial institutions.

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Just yesterday we published the news of a changing of the guard at CIMA. Meanwhile, CIMA has not addressed any possible recusals by either Mrs. Scotland or Mrs. Glidden.
It is important to emphasize that we are not suggesting any actual wrongdoing by any of the people or parties mentioned above. Nobody, except Webb, has been charged with or formally accused of any misdeed. Likewise, when we call for recusals in these instances, readers should understand that we are not calling for anyone’s resignation. Recusals — a common practice in boardrooms — and resignations are not synonymous.

We are about appearances, not about wrongdoing, and it is critical that CIMA appears beyond reproach in the eyes of the international investment community. Make no mistake: CIMA occupies an elevated position in Cayman’s regulatory Pantheon. While, say, the Liquor Licensing Board or the Tourism Attraction Board may be local or even parochial, CIMA’s reputation is decidedly global. For the good of Cayman’s financial services sector, it cannot be compromised — or even questioned.

Having said that, the news we published yesterday signaled the passing of the torch in that Mr. McCarthy, along with at least two other CIMA directors, are now being replaced on the board by other Cabinet appointees. Mr. McCarthy has played an integral and influential role over the decades in the development of Cayman as an offshore financial center, and deserves the recognition and thanks of all of us in these islands. We suspect he will continue to serve, either officially or in a quieter capacity, to the betterment of his country.

Replacing Mr. McCarthy as CIMA board chairman is Grant Stein (former managing partner of Walkers Global in Cayman), a well-known and highly regarded personage in Cayman’s financial community. At his side will be new directors Gus Pope, Patricia Estwick and Bryan Murphy.

We welcome Mr. Stein and CIMA’s new directors to their new posts. We would ask them to revisit the recusal issues we have raised. Our concerns are not accusatory and, we think, ought not to be considered as being contentious.

For the Cayman Compass’s full FIFA coverage, visit the Compass Data Desk.

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  1. The financial industry operating in Cayman is a cornerstone of the islands’ prosperity. An earlier Cayman government wisely established CIMA as an independent monetary and financial sector regulatory body compliant with applicable international standards. Under the able leadership of its managing director, Cindy Scotland, CIMA has attracted and developed a capable staff. Together these play a critical role in the success of Cayman’s financial industry.

    Being a small island, it has always been a challenge for CIMA to find professionals with relevant financial sector experience without serious conflicts of interest to oversee its operations. Thus the Cayman government wisely decided to appoint a number of overseas experts to its board of directors. I was one of them, serving two and a half terms from 2003 to 2010. CIMA directors and staff routinely recuse themselves from the consideration of any matters with which they might have or appear to have a conflict of interest.

    I do not know if any matters related to the FIFA scandal, such as the supervision of the Cayman bank involved, have come before CIMA, but it is disappointing that Ms. Scotland has not publicly stated her intention to recuse herself in such cases as suggested by the Cayman Compass Editorial Board (July 29). Similarly, CIMA’s oversight board should publicly announce it policy and intention to demand it of her and any other staff with potential conflicts of interest.

    This raises a deficiency in CIMA’s governance that was discussed but left unaddressed when I was on the Board. CIMA’s managing director is appointed by and accountable to the Cabinet. Her salary is fixed by the Cabinet. As a result the MD is less responsive to the guidance and direction of the board than she should be. It is long overdue to fix this weakness in the never-ending and critical task of preserving a financial sector regulator of the highest caliber.


    Warren Coats