The territory’s financial regulator, the Cayman Islands Monetary Authority (CIMA), announced on Tuesday that the Privy Council has refused an application to appeal from an international stock trading platform, which had been challenging CIMA’s order to produce records for an ongoing investigation in Australia – records the entity claims to not have.

The case stems from efforts by the Australian Securities and Investments Commission to obtain information from the stock trading platform – a group of companies known as the Vantage Group – for an ongoing investigation into alleged market manipulation it has been conducting since March 2015, according to information from CIMA and court documents.

Cayman authorities became involved in 2017 when the Australian regulator requested information from CIMA about Select Vantage, a Vantage Group company that is domiciled here but is not a licensee of CIMA.

In March 2017, CIMA obtained a Grand Court order for Select Vantage to turn over the telephone numbers, addresses, and trader identification numbers of each Vantage Group trader involved in the investigation in Australia.

Select Vantage, however, argued that Select is only a subsidiary company that holds stock trading capital, and therefore does not hold information about traders. The company that actually employs traders is domiciled in Anguilla and operates in Costa Rica, according to Select Vantage.

At the Court of Appeal hearing last October, Select also argued that the company should have access to evidence that was presented during the ex parte hearing – the Grand Court granted CIMA the order in March without Select Vantage having the chance to argue against it. Not having access to that material is “unfair and contrary to the rules of natural justice,” the company argued.

“[The Grand Court decision] seems to be emboldened by what was presented at the ex parte hearing … He had something in mind that we weren’t allowed to learn,” stated Select Vantage’s attorney, Tom Lowe, at the October hearing.

For CIMA’s part, attorney Neil Timms argued at the hearing that the regulator made its application ex parte and sought to keep the evidence from Select Vantage because “we weren’t confident that we could keep the material confidential.”

Mr. Timms added that none of the evidence that Grand Court Justice Raj Parker reviewed would have tainted his judgment on the technical issue of whether Select Vantage could comply with the court order.

Before the hearing ended, Mr. Lowe disputed any suggestion that Select Vantage records might “dissipate” if the company had more information about why the regulators were seeking the company’s records.

The Cayman Islands Court of Appeal sided with CIMA, rejecting Select Vantage’s arguments that it should have access to all the material the Grand Court relied on in its decision to order the company to produce internal records.

Justice of Appeal Richard Field stated that there is a strong public interest in keeping information shared between Cayman and overseas regulators confidential, according to CIMA’s press release.

After the Court of Appeal made its ruling, Select Vantage President Daniel Schlaepfer told the Compass that his firm would petition the Privy Council to appeal.

However, The Privy Council denied that application, according to CIMA, which touted the decision as an affirmation of its powers.

“This decision by the Privy Council effectively affirms CIMA’s powers to require information and documents in response to a proper request from an overseas regulatory authority whether the company or companies involved are licensed by CIMA or not,” said CIMA Managing Director Cindy Scotland.

1 COMMENT

  1. You have to question why ‘traders’ and companies feel the need to have multiple companies registered in a number of territories – particularly ones who are seen to ‘protect secrecy’ – and the inevitable conclusions is that this is done to mask the true ownership and to defy attempts for them to pay taxes etc in the countries where they are due.

    Which is why there should be an open, public, register of interests.

    Of course, Cayman wishes to thwart this much to its shame.