ESTABLISHED 1965 www.caymancompass.com – 50 CENTS – Wednesday July 29, 2015 SportS | page 18 West Ham camps inspired kids Premier League club’s coaches gave tips High of 92 Low of 78 Slight to moderate with wave heights of 2 to 4 feet. editorial | page 4 a cHanging of tHe guard at cima Special Olympics medals piling up ron sHillingford rshillingford@pinnaclemedialtd.com The Special Olympics Cayman Islands team at the World Games in Los Angeles has already won eight medals. Cayman’s delegation of 55 includes 28 ath- letes in five sports – athletics, bocce, basket- ball, football and aquatics. Up to Monday night, Cayman had won medals in aquatics and bocce. The opening ceremony was on Saturday, and competition began the following day. In the aquatic event at the Uytengsu Aquatics Center at the University of Southern California, Keanu McKenzie won a gold medal in the 200 meter individual medley and a bronze in the 100m backstroke. Kathryn Kleinworth-Whorms took silver in the 100m freestyle and won bronze in the 100m backstroke. Ms. Kleinworth-Whorms swam well in her 200m individual medley but was disqualified. Cayman also won four silver medals in the bocce united team event at the Los Angeles Convention Center. Athletes Mark Ebanks and Anna Jackson were partnered with Leslie Hydes and Wanda Viscount. In track and field on Sunday, sprinter Cindy Whittaker won her 100m heat in 15.11 seconds. Cayman swimmer Andrew Smilley and his coach Penny McDowall were fea- tured on an ESPN Special Olympics World Games 2015 clip. Mr. Smilley and Kanza Bodden com- peted in the 1,500m open water swim on Tuesday afternoon. More then 6,500 athletes from 165 coun- tries are participating in 25 sports over the nine days of competition. The Special Olympics World Games are an international sporting competition for ath- letes with intellectual disabilities. More FIFA vIctIMs, wItnesses sought Banks under scrutiny Brent fuller bfuller@pinnaclemedialtd.com Prosecutors looking into the FIFA corrup- tion probe are asking more potential victims or witnesses to come forward if they have in- formation related to the international bribery and racketeering scandal that has rocked foot- ball’s governing body since late May. The case of the USA v. Jeffrey Webb et. al, against nine current and former FIFA officials and five executives of international sports marketing companies, has been placed at the top of the “victims/witness pending cases” list on the U.S. Attorney’s Office website for the Eastern District of New York state. Potential victims or witnesses are asked to fill out a form on the U.S. Department of Justice website, www.justice.gov, listing var- ious contact information and asking what additional information they may have in the case. Prosecutors said the site would be up- dated from time to time with information from the court that is hearing charges against Webb, Traffic USA executive Aaron Davidson and others accused in the probe. There has been evidence in the past week that federal prosecutors are not stopping with the arrest of the 14 defendants currently charged in the case. The Wall Street Journal reported Friday that the U.S. Attorney’s Office and New York state’s top financial regulator have interviewed officials at a number of U.S. banks in connection with the bribery probe. The names of several of those banks ap- pear prominently in a 161-page U.S. district court indictment made public on May 27, although none of the entities either in the U.S. or abroad are accused of wrongdoing. Brent fuller bfuller@pinnaclemedialtd.com Legislation aimed at im- proving the quality of local con- struction and Cayman’s financial services industry are due to come before the Legislative Assembly in what lawmakers expect will be a “brief” meeting next month. The assembly is due to re- convene Aug. 12. Premier Alden McLaughlin confirmed Tuesday that the meeting will go ahead as scheduled, with the legislature set to meet again sometime in September. There have been no offi- cial pronouncements regarding when government intends to bring a redrawn voting map to assembly members for approval, but it was not expected to occur during the August meeting. Builders bill The oft-debated Builders Bill is expected to reach the Legislative Assembly floor for a debate during next month’s meeting. The proposal seeks to update legislation from LA takes up construction, financial services bills PLEASE TURN TO PAGE 7 » PLEASE TURN TO PAGE 7 » report: Caribbean lionfish showing signs of cannibalism Fishermen in Florida are noticing that some lionfish appear to be displaying cannibalistic behavior. According to a National Geographic article, fishermen in the Florida Keys are reporting finding lionfish in the stomachs of some lionfish they catch. In Cayman and throughout the Caribbean, divers and fishermen are the only line of defense against the invasive species, as displayed by Ambassador Divers’ Jason Washington, left, and the Department of Environment’s Mark Orr at a recent lionfish culling tournament on Grand Cayman. For more, see page 6. - Photo: courtneY PLAtt2 LOCAL NEWS Wednesday July 29, 2015 • Cayman Compass Boost your TV & Internet experience by signing up for any Logic Fibre Bundle starting at $99 and get one month free service including the HBO premium pack. Contact a Customer Care Representative today or visit logic.ky for promotion details. www. REGmovies.com SATURDAY NIGHT: For your viewing pleasure, minors under the age of 18 will not be admitted to any lm starting after 6pm, unless accompanied by their parent. PAPER TOWNS (PG13) 1:10 | 4:00 | 7:20 | 9:50 PIXELS 3D (PG13) 1:00 | 3:30 2D | 7:00 | 9:40 2D TRAINWRECK (R) 1:30 | 4:20 | 7:10 | 10:00 VATICAN TAPES (PG13) 12:45 | 3:00 | 5:15 | 7:30 | 10:10 ANT-MAN 3D (PG13) 1:40 2D | 3:40 | 7:05 2D | 9:30 MINIONS 3D (PG) 1:20 | 4:30 2D | 7:10 9:45 2D *Additional charges will apply per 3D ticket requested. - WEDNESDAY - $8.00 www.tonymosleylifeinsurance.com EmployEr plEads not guilty to insurancE chargEs Trial date set for Feb. 23 CAROL WINKER cwinker@pinnaclemedialtd.com Burns Conolly and Burns Conolly Group Ltd. have been charged with the same set of offenses re- lating to health insurance for one employee. Mr. Conolly pleaded not guilty on behalf of the firm and himself, in Summary Court on Tuesday. The first charge is failing to effect and con- tinue a policy of health in- surance for a named em- ployee between April 1, 2013 and Feb. 28, 2014. The second charge is unlawfully deducting a total of $714.42 from the employee’s pay, not having paid any health insur- ance premiums in respect of the employee during that period. Magistrate Valdis Foldats set Feb. 23 as the trial date. Defense attorney Charmaine Richter ad- vised that she wanted to make submissions on a legal point. The magistrate sug- gested that she let the Crown know the basis of her submissions in writing and a date can be set later for any argument. Woman losEs $50,000 to financial scam A woman lost $50,000 in a scam after transfer- ring money to someone she thought represented American tax authorities, ac- cording to the Royal Cayman Islands Police Service. The victim, a Cayman Islands resident, informed police that she received unprompted emails from someone going by the name Richard Aje, who claimed to represent U.S. tax authori- ties. The scammer told the woman that she was eligible for a substantial tax refund if she sent advance fees that would be used to release the money. Police said the woman re- ported that she had sent a total of $50,000 over a period of 12 months through sev- eral transfers to the scammer, who was located in Nigeria. She used Western Union to transfer the funds. Police said there is very little chance of an arrest in this case, as no working inves- tigation practice or extradition treaty exists between Nigeria and the Cayman Islands. Prevention is the best method for cases like this, police said in a statement, re- minding the public not to re- spond to unsolicited emails asking for advance payments, promising funds, or seeking personal information, in- cluding bank account num- bers or passport information. Anyone who receives such emails can forward them to the Financial Crimes Unit at rcips.fcu@gov.ky. Man arrested in sex attack JAmEs WhIttAKER jwhittaker@pinnaclemedialtd.com A 22-year-old man was ar- rested Tuesday on suspicion of raping a woman at knife- point in her home. Uniformed officers, backed by an air support unit, chased the suspect through West Bay after he was spotted late Tuesday morning near Powell Smith Drive in West Bay. He was caught around noon after what police described as a “long foot pursuit.” A manhunt had been under way since the attack was reported last week. The woman reported that she was punched, threatened at knife-point and then sexu- ally assaulted in her home in North West Point. West Bay divisional com- mander Frank Owens said the woman was apparently targeted at random by her assailant, whom she did not know. He said patrols had been stepped up in the area and all available resources had been dedicated to finding the suspect. Police Commissioner David Baines said Tuesday, “We know this case has con- cerned the community and we have devoted all of our energies to investigating it and making this arrest. My thanks go out to the officers involved who have worked tirelessly on it since it was reported last Thursday night, as well as the mem- bers of the public who as- sisted us.” The suspect, from West Bay, is in custody in George Town and is being ques- tioned on suspicion of “ag- gravated burglary, relating to the burglary and sexual attack,” according to a po- lice statement. Artists gallery and workshop opens JENNY PALmER jpalmer@pinnaclemedialtd.com A new gallery and work- shop space in Camana Bay is holding an opening reception Wednesday night, July 29, to launch its Summer Art Series. Organizers say the Peripheral Spaces represents the concept of bringing art- ists of all mediums together to share this pop-up location until the end of August. Peripheral Spaces are shared creative work spaces for like-minded people to get together for inspiration and motivation and is part art gallery and part art studio, located on Market Street across from Bay Market. Mediums to be exhib- ited include original paint- ings, giclee, fine art photog- raphy, sculptures, ceramics and film screenings, as well as performances from local musicians. The space of- fers a working area for art- ists during open studio times. Some of the partici- pating guest artists will be Laurel Schmid, Chris Duty, Avril Ward, Gordon Solomon, Mary McCallum, Sue Howe and Renate Seffer. Ms. Ward said, “We are thrilled that Camana Bay has supported local artists in this space. We hope these next few weeks will see a coming together of creative people reaching out not only to visitors, but also each other to inspire and con- nect, making this space an exciting hub of creativity for all to enjoy.” Mr. Duty will host adult workshops from 6-8 p.m., covering watercolors on Tuesdays and acrylics on Thursdays. Ms. Callum, of the Visual Arts Society, said, “It is a pleasure to volunteer to be part of this great collabora- tion of different artists. I am enjoying creating this com- munal art space, which is a combination of art exhibit and working studio. I look forward to what the month will bring and to attracting other artists and creative groups to get involved.” The space will also be used for Visual Arts Society Kids Art Camps, for ages 6-12. The camps run in the mornings from Monday to Wednesday, until Aug. 12, covering themes that include nature, recycling and tissue paper fun. Children will be able to make mobiles, wind charms and sculptures out of coconut, driftwood or recycled pieces.3 LOCAL NEWS Cayman Compass • Wednesday July 29, 2015 KIRK MOTORS LTD AUTO CARE CENTER Auto Care Center diagnose the problem and fix it right the first time. We have certified licensed technicians. We diagnose and test your vehicle so we will NOT charge you for a FULL SERVICE if it’s not needed - NO HIDDEN FEES. FREE QUOTE. FREE DROP OFF SERVICE. 100% Customer Satisfaction OPEN 6 DAYS A WEEK FOR YOUR CONVENIENCE Mon-Friday 7:30am - 5pm Saturday 9am -12pm. • Oil & Filter Service + 26 Point Inspection $54.95 • 2 or 4 wheel Alignment starting at $80.00 • Computer Scan Test $59.95 • Full A/C Service $85.00 • Drop Off Service to your Home or Office in the George Town area $FREE www.napacayman.com www.facebook.com/napacayman EMAIL: info@kirkmotors.ky Hurley’s Media buys Cayman 27 television station Charles DunCan cduncan@pinnaclemedialtd.com Hurley’s Media announced this week that it has bought Cayman 27 from Logic, and government regulators signed off on the deal on Friday to fi- nalize the sale. The television station adds a new dimension to Hurley’s Media, part of Hurley’s Entertainment, which also owns Z99FM and Rooster 101.9FM. The new owners say they plan to keep the existing local programming. Randy Merren, man- aging director for Hurley’s Entertainment, said in an in- terview with the Cayman Compass that he plans to take the three broadcast stations and “roll them all under one umbrella” in a new campus at Camana Bay once the building is complete. “Television and radio broadcasts are an obvious synergy. Hurley’s radio sta- tions and CITN’s products are well-established and trusted in the community,” Mr. Merren said. The station quoted him as saying, “This partnership is something I have been working on for quite some time, as I believe together we can serve the Cayman com- munity by providing news and entertainment across nu- merous platforms.” The station’s 31 remaining employees will all be able to continue with the new company or take a sever- ance package from Logic. Mr. Merren told the Compass he believes all the employees will stay with the station. While work wraps up at the new Camana Bay studios, Mr. Merren said, Cayman 27 employees will move to Regatta Office Park. He said local news will not air Tuesday or Wednesday this week while the staff relocates. Cayman 27 has broad- cast from Logic’s Television Centre for more than 20 years. Logic bought the station last year as part of the deal to acquire WestStar. The future permanent home will be at 18 Forum Lane in Camana Bay. Mr. Merren told Cayman 27 that “being located at Camana Bay’s Town Centre will give us greater interaction with our audiences, while pro- viding an exciting backdrop for our programs.” The Information and Communications Technology Authority approved the new license on Friday, granting the new company ac- cess to the same channels and frequencies. The five-year license re- quires that the station air four hours of public content a day, including two hours that has not been broadcast before, between 6 a.m. and 9 p.m. “Public content” includes news, arts and culture and local educational program- ming. The station will also have to give four one-hour slots per week for free for community broadcasts. Chamber members have mixed reviews on port proposal Charles DunCan cduncan@pinnaclemedialtd.com The Chamber of Commerce Council, based on polls of its member busi- nesses, said Tuesday that it supports continued develop- ment of the cruise sector and cargo port, but stopped short of supporting the current cruise berthing proposal. A majority of the busi- nesses who responded sup- port the berthing proposal, but many of those called for more environmental studies and mitigating the damage to the reefs in the area. In comments sub- mitted to the Department of Environment on the most recent report, the Chamber called on government and the environmental report con- sultant to give more detailed information on the area of coral that could be destroyed and specifics on the cost to move the coral and mitigate the environmental damage. The environmental impact assessment for the cruise berthing proposal, released in June, states 15 acres of reef habitat could be de- stroyed and another 15 to 20 acres could be impacted by construction. The Chamber Council, in a statement, says that the environment should be protected, but that must be balanced with keeping Cayman competitive as a cruise destination. Summarizing its posi- tion, the Council writes, “The cruise ship industry and the cargo port are important eco- nomic drivers and contribute positively and substantially to economic development, at- tract millions of dollars in foreign exchange and provide necessary government rev- enue, jobs and private sector investment. The Chamber Council supports the further development of the cruise sector and improvements to the cargo port as essential in- frastructure initiatives.” The council asked its more than 600 member businesses about the berthing proposal. The Chamber said 67 mem- bers responded. Of the 12 businesses directly related to the cruise industry, nine sup- ported the proposal and three wanted tendering to continue. Of the respondents from other industries, 27 said the port should continue ten- dering cruise passengers and improve facilities on the shore, 18 called for more studies but support the port, and 10 said to move ahead with the current proposal. The rest either did not re- spond or were undecided. In the comments from those who responded to the survey, the names of whom the Chamber kept anony- mous, the poll shows a wide diversity of opinion. One comment said Cayman should do better with stay- over tourists: “Cayman’s focus should be more on long-stay tourists. There is great com- petition and more coming from Cuba and so we need to greatly improve our tourism marketing, product and ser- vice to be known as first class.” Another comment said Cayman should focus on at- tracting fewer ships with high-end passengers. “I would only support a lower volume, higher-end cruise tourism, which may spend more per head and have lower environ- mental impact. The current level or increased levels are wrong for Cayman in the me- dium and long term (and right for a few select persons in the near term),” the commenter wrote in the Chamber report. But several commenters in the survey wondered about Cayman’s place in the cruise industry if it does not add the new infrastructure: “Cayman is the only sizable cruise port in the Caribbean without berthing facilities. Competition amongst ports is getting more significant and Cayman is complacent that the cruise lines will keep coming here. A number of external factors will change the nature of the cruise industry over the next 10 to 20 years and Cayman could be a big loser.” Many of the respondents called for more information on the actual costs of the project, potential job losses, details about economic im- pacts, and more information on environmental damage in the harbor. Randy MerrenThe islands’ most-trusted news source 4 – EDITORIAL – Opinion&Letters The Cayman Compass welcomes comments, opinions and viewpoints from readers. Letters to the editor can be emailed to editor@pinnaclemedialtd.com, submitted via www.caymancompass.com, sent by post or hand-delivered to the Compass office. A changing of the guard at CIMA The Cayman Islands Monetary Authority has under- gone a major shake-up … but, frankly, not the one 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 corrup- tion scandal. Mrs. Scotland, you see, is married to former gov- ernment minister Mark Scotland, who since last year has worked for the Cayman Islands Football Associa- tion 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, reg- ulated 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. 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 commu- nity. 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 repu- tation 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. Wednesday JuLy 29, 2015 • Cayman COmpass Should Cayman follow UK’s lead on home foreclosures? Kerrie Cox For the overwhelming ma- jority of people, buying their own home and using mort- gage finance facilities is the single biggest financial com- mitment during their lifetime. As such a loan is generally repayable over a long period, it is not surprising that for some people, their circum- stances may change over time – whether it be through ill heath, unemployment, divorce, etc. – which causes them to have difficulties in making the repayments due under the terms of their mortgage. Arrears in mortgage ac- count payments are likely to lead to foreclosure unless the bank has been quickly in- formed of any financial diffi- culties and has come to an ar- rangement with the defaulting borrower. It should be noted that once a borrower falls into arrears, the bank’s right to foreclosure usually crystal- lizes and remains exercisable even upon any subsequent re- payment of the arrears. Although the Cayman Islands chief justice is- sued Grand Court Practice Directions in 2012 and 2014 in respect of the necessary procedures to be applied in foreclosure proceedings and the methods to be adopted by banks in selling “foreclosed property,” the reality is that there is little in the court’s discretion to prevent foreclo- sure and corresponding sale where those procedures have been followed. Consequently, where there are genuine per- sonal circumstances, already anxious homeowners will have the additional worry and concern of losing their homes. In the U.K., it was recog- nized that repossession of one’s home should be a last resort; wherever possible, lenders should be open to the idea of helping borrowers in temporary financial difficulty. Equally, it was acknowledged that lenders had a contrac- tual right to enforce their se- curity otherwise a stricter application of lending cri- teria would be applied which would affect the ability of prospective homeowners to obtain funding. As a result, the U.K. en- acted Section 36 of the Administration of Justice Act 1970 (as amended). In es- sence, this section provided the court with a range of stat- utory powers including the ability to suspend orders for possession and stay execution of warrants of possession. The section is most frequently re- lied upon by borrowers who may be in arrears with their mortgage installments but can reasonably offer to pay off those arrears over a period of time; in appropriate cir- cumstances, the court would be invited to suspend any order for possession on the basis of “terms” as opposed to the defaulter suffering an im- mediate order for possession. To succeed in such an ap- plication, it must appear to the court – based upon reli- able evidence – that if it sus- pends the order on terms, the borrower is likely, within a reasonable period, to pay the balance on the arrears and correspondingly, the mortgage installments as they fall due. In practice, the English courts will often gauge a rea- sonable period for payment of arrears over the balance of the mortgage term. However, the power to stay or suspend enforcement of an order for possession under Section 36 is cautiously exercised; each case will turn on its own facts and circumstances. A typical order may be: Possession in 28 days sus- pended on payment of: (a) the current monthly in- stallments; and, (b) a monthly ordered amount paid towards the ar- rears going forward. Such an order serves the purpose of the legislation; firstly, it affords the appro- priate borrower with an op- portunity to keep their home and pay off any mortgage arrears; and, secondly, pro- vides a degree of protection to the lender: if the arrears are cleared but there is sub- sequent default by the bor- rower, they will be in imme- diate breach of part (a) of the suspended order, and the lender should be able to pro- ceed straight to enforcement in the normal way. What must be acknowl- edged, is that there is a distinc- tion between the provisions of the indigenous Registered Land Law and that of the po- sition in the U.K.; in Cayman, the bank has a right to sell the property as opposed to taking possession of it. Consequently, any consideration of intro- ducing similar Section 36 type legislation to Cayman would require some modification. However, extending the dis- cretion of judges in the Grand Court may assist those de- faulting borrowers in circum- stances where they could dem- onstrate a likelihood in paying off their arrears over a reason- able period of time and, being capable of discharging their remaining borrowing in a con- ventional manner. It would not help everybody but for some, it may provide timely relief. Kerrie Cox is a barrister and attorney at Diamond Law Attorneys in Cayman. Printed and Published by: Caymanian Compass Limited (a subsidiary of Pinnacle Media Ltd) Compass Centre Shedden Road, George Town send us yOur VieWs Or neWs: P.O. Box 1365 Grand Cayman KY1-1108, Cayman Islands Telephone: (345) 815-0095 Email: newsdesk@pinnaclemedialtd.com adVertise With us: Telephone: (345) 949-5111 Email: sales@pinnaclemedialtd.com Website: www.caymancompass.com PUBLISHERS daVid r. legge and Vicki l. legge EdITOR-In-CHIEf daVid r. legge A MEMBER OF THE INTER-AMERICAN PRESS ASSOCIATION “Give light and the people will find their own way” Arrears in mortgage account payments are likely to lead to foreclosure unless the bank has been quickly informed of any financial difficulties and has come to an arrangement with the defaulting borrower.5 LOCAL NEWS Cayman Compass • Wednesday July 29, 2015 CAMANA BAY / ROYAL PLAZA / COUNTRYSIDE UNLIMITED TEXTS UNLIMITED DIGI TO DIGI CALLS UNLIMITED FOR 3 MONTHS DATA BREAK FREE GO UNLIMITED TALK AND TEXT ALL YOU WANT WITH DIGICEL’S NEW PREPAID AND POSTPAID PLANS Burglar ordered to compensate victims CAROL WINKER cwinker@pinnaclemedialtd.com A magistrate on Monday ordered a burglar to pay to the victims of his crime a total of $1,682. Magistrate Valdis Foldats also imposed a suspended sentence with a supervision order and two years probation. Marc Lee Connolly, 37, pleaded guilty to the bur- glaries in January, 2012. One of the offenses was at an East End bar. Connolly was or- dered to pay $81.98 for bottles of liquor he stole after forcing open a window. The other two burglaries were residential. The mag- istrate noted that they were breaches of trust because the owners had hired him to per- form specific tasks. Crown counsel Neil Kumar explained that the owner of an East End apartment had found the door open and a 27-inch TV with built-in VHS and DVD player missing. The item’s value was $600. A police investigation showed that the woman’s husband had previously hired Connolly to clear some bush from the yard. When police spoke to him he admitted the offense. He said he had used a screwdriver to force the door lock. He told officers he sold the TV to get money for drugs. In December, 2011, an East End resident left the island for the holidays, hiring Connolly to serve as caretaker during his absence and to feed his pet dog. Connolly used a case knife to force the front door open and he damaged the rear door when leaving the prem- ises. He stole a 32-inch TV, a laptop computer, a computer bag with documents, a cell- phone and a bottle of rum. The total value of the stolen goods was $3,484. When the owner returned and confronted him, Connolly admitted selling the items to get drugs. He assisted this complainant in recovering some of the items. The owner later requested compensation of $1,000. Connolly was remanded in custody on January 12, 2012. Defense attorney John Furniss explained that Connolly spent the next six months in custody awaiting admission to Caribbean Haven, a residential drug treatment center. He remained there for 36 weeks, until March, 2013. He was then placed on bail, but was back in custody from June to October, 2013. Then he had surgery on his back and hip and when he re- turned to court, he tested pos- itive for cocaine and remained in custody ever since. Mr. Furniss asked that Connolly be given credit for his early guilty pleas, the time he spent at Caribbean Haven and in custody, and the fact that he committed no further offenses while on bail. “It’s the cocaine,” Mr. Furniss said. “It has to be beaten at some stage,” he commented, suggesting another effort at counseling and abstinence. The magistrate said people have a right to expect to feel secure in their own homes. Sentences for burglary should deter others from committing the offense as well as punish the offender, he indicated. The local tariff for a second or subsequent burglary is three to four years. In this case, Connolly had already spent almost a year in custody and a year at Caribbean Haven. The magistrate imposed concurrent suspended sen- tences of two years for each burglary, with a supervi- sion order. For consuming co- caine, Connolly was placed on probation for two years with conditions that he at- tend counseling programs, at- tend Narcotics Anonymous and Alcoholics Anonymous meetings, and not enter li- quor license premises. For any breach, he will be brought back to court and resentenced. For four charges of failing to attend court, he was or- dered to perform 40 hours of community service. He allowed six months for payment of compensation. Walkers raises $15k for schools With rockin’ event Walkers recently trans- formed its covered car park into a concert venue for a night of rock ‘n’ roll that raised more than $15,500 for music programs in Cayman’s schools. At the “Walkers Reigning Rock Star” event, contes- tants were backed by 1981, a band of Walkers lawyers comprising Tim Buckley, Rolf Lindsay, Neil Lupton and Andrew Gibson. Walkers staff mem- bers were invited to support their favorite contestants by buying votes, with all pro- ceeds going to charity. Nino Dilbert won the entertaining Walkers Charity Rocks 2015. “I kept my eye on the prize, campaigned a little before- hand, and brought the trophy home with my cover of Def Leppard’s ‘Pour Some Sugar on Me,’” said Mr. Dilbert. “The best part of the experience was hearing the crowd go wild and knowing that win, lose or draw, it was all for the benefit of schoolchildren.” Other competitors were Natalie Ramsey, who orga- nizers say tore up the stage with her version of “Hard to Handle” by the Black Crowes and took the prize for Best Rock Costume. The award for Best Stage Presence went to Keyreaye Bodden, who elec- trified the crowd with her rock star swagger and ren- dition of Blondie’s “Call Me,” organizers said. Mr. Buckley said, “It was a fantastic night. Walkers staff deserve all the credit for get- ting behind Walkers Charity Rocks … Research shows that learning music in school facilitates learning other core subjects, like English, math- ematics and languages, and enhances skills that children use in other areas of life. “We just want to make sure that as many children in Cayman as possible benefit from music.” Plans for a Walkers Charity Rocks 2016 are al- ready in the works. Walkers hopes to open the competition to other professional services firms next year and raise even more money for charity. Education Minister Tara Rivers and Winston Connolly, councilor to the minister, accept a check for music programs in the schools from Walkers partners Tim Buckley and Rolf Lindsay. Also pictured is ‘Walkers Charity Rocks’ winner Nino Dilbert and Walkers Social Committee member Tasha Lemay.6 LOCAL&REGIONAL Wednesday July 29, 2015 • Cayman Compass 99 TO GRAB YOURSELF A SAMSUNG S6, OR iPHONE 6 $99 DOWN AND $99 A MONTH. YOU HAVE CAMANA BAY | GEORGE TOWN | COUNTRYSIDE CHANCES HURRY WHILE STOCKS LAST IN STORE NOW SAMSUNG GALAXY S6- $99 Report: Caribbean lionfish showing signs of cannibalism AshAni FrAncis-collins afrancis-collins@pinnaclemedialtd.com Lionfish off the coast of the Florida Keys appear to be displaying signs of cannibalistic behavior, ac- cording to a recent National Geographic article. The first indication of cannibalism in lionfish was found in both Mexico and the Bahamas, according to a study published in a Public Library of Science journal in 2012. Cannibalism is a rare behavior in fish, so the in- crease in this activity has piqued the interest of ma- rine scientists in the region. Although it may sound like a blessing, this type of activity may not necessarily be a good sign, according to Stephen Broadbelt, co- founder and partner of Ocean Frontiers dive shop in Grand Cayman. “This is believed to only happen when they have eaten all other fish popula- tions,” Mr. Broadbelt said. “When they have eaten ev- erything in sight, then they start to eat themselves.” Mr. Broadbelt is not yet concerned about the pos- sibility of this behavior spreading to Cayman waters. “They have not yet reached that point here,” he said. “I would be surprised to hear any cases of anyone wit- nessing lionfish cannibalism in the Cayman Islands.” Mr. Broadbelt said Ocean Frontiers alone has culled more than 10,000 lionfish in the past two years. “They’re still a problem, and if left unchecked they will rebound back to the scale they were at a couple years ago,” he said. “It’s a matter of staying on top of the problem.” Jason Washington, oper- ator of Ambassador Divers and a member of Cayman United Lionfish League, said he is not surprised to hear of the cannibalism occurring in other countries, although he has not observed any in- dication of it in Cayman. “Through the 15 [lionfish culling] tournaments that we’ve had, we’ve seen the in- side of a lot of lionfish and I’ve seen stingrays, reef fish … They’ll eat anything [up to] half their size,” he said. Mr. Washington said in any case, it is important to stay informed and to keep up conservation efforts. In April, the first con- firmed lionfish was found off the coast of Brazil, and lionfish continue to be a problem throughout the Caribbean. Mr. Washington said the spread of lionfish is difficult to manage or contain because of the way they breed. “They fertilize eggs that can drift for miles and miles on ocean cur- rents,” Mr. Washington said, “so wherever mother ocean takes them they’re going to wind up.” Lionfish can lay upward of 30,000 eggs per spawn and can spawn every four days in the right conditions. This equates to a potential of each lionfish laying more than 2 million eggs per year. Stacy Frank is one of the founders of Lionfish University, a non-profit that seeks to raise awareness about lionfish. “So far I haven’t seen any evidence [of lionfish can- nibalism] in the Cayman Islands, but this of course doesn’t mean it’s not hap- pening or could not happen,” Ms. Frank said. “It’s kind of like the video we shot of the grouper eating the li- onfish – that also doesn’t usually happen.” Members of Lionfish University caught on video a grouper seemingly hunting and eating a lionfish in Little Cayman earlier this year. Ms. Frank said that it would be impossible to know for certain what po- tential implications the can- nibalistic behavior could have with so little knowl- edge of the phenomenon. It could be that lionfish re- sort to this behavior after depleting their other food sources, she said, but she noted that there are re- spected voices in the marine biology field who believe otherwise and say that the cannibalistic behavior has other causes. “What it would mean – I don’t think anybody really knows. It’s a very controver- sial topic,” she said. Lionfish have invaded reefs throughout Cayman and the Caribbean. Chelsea Clinton in haiti to visit family foundation projeCts PORT-AU-PRINCE, Haiti (AP) – Chelsea Clinton is visiting Haiti with a group of inves- tors and philanthropists to oversee development of projects financed by the Clinton Foundation. The two-day trip be- gins Tuesday and will in- clude visits to businesses in Port-au-Prince and the Mirebalais community northeast of the capital. Clinton is the founda- tion’s vice chair. She’s ac- companied by foundation president Donna Shalala. The two also will host a meeting about women’s roles in the Haitian workforce and their access to markets. The Clinton Foundation says it has helped raise more than $30 million for Haiti since a devastating 2010 earthquake. Former U.S. President Bill Clinton founded the global charity after leaving the White House. The foun- dation’s finances have re- ceived intense scrutiny as Hillary Rodham Clinton seeks the White House.The islands’ most-trusted news source 7 Cayman Compass • Wednesday July 29, 2015 Your home. Your terms. Introducing a better way to own your home or access equity. Scotiabank’s Variable Flex Mortgage brings you: • Lower rates • Rate lock guarantee for 1 year • Flexibility to switch to fixed rate options Ask our knowledgeable Home Loan Advisors if a Variable Flex Mortgage† is right for you. †This product only applies to owner/non-owner occupied residential properties. Customers must comply with the Terms and Conditions applicable to Scotiabank Mortgages. 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For information on how you can own your own home on your terms, contact us today. cayman.scotiabank.com/yourhomeyourterms PAYMENTS AS LOW AS: $100,000 | $449 $250,000 | $1,123 $500,000 | $2,245 Loan Amount | Monthly Payment RATES AS LOW AS: † 3.50% Discover what’s possible Find us at /ScotiabankKY The U.S. Attorney General’s Office, while inves- tigating criminal allegations against a number of FIFA of- ficials, has flagged “the cen- trality of the U.S. financial system” in the numerous bribes and kickbacks de- scribed in the scheme. Those bribe payments, federal prosecutors al- lege, were made by sports marketing companies to ranking members of FIFA in exchange for receiving the commercial rights to various football tourna- ments, including World Cup qualifying matches. The indictment filed in the U.S. District Court, Eastern District of New York ac- knowledges the “use of shell companies, nominees and numbered bank accounts in tax havens in other secretive banking jurisdictions,” but it focuses on the American fi- nancial structures used in the racketeering scheme. “The defendants and their co-conspirators relied heavily on the U.S. financial system in connection with their activi- ties,” the indictment states. “This reliance was signifi- cant and sustained and was one of the central methods and means through which they promoted and concealed their schemes.” For example, in one of the bribe schemes de- scribed in the indictment, it is alleged that in 2012 Webb solicited a US$3 mil- lion bribe from Traffic USA for his agreement to sell the company the rights to 2018 and 2022 World Cup qualifying matches, held at the time by the Caribbean Football Union. Federal prosecutors allege that a portion of the pay- ment was wired from Traffic International’s bank ac- count in Miami to an HSBC bank in Buffalo, New York. About US$1 million was then bounced – via a front com- pany – to a Hong Kong HSBC account, then to an account at Standard Chartered Bank in New York City and on to credit an account at Fidelity Bank in the Cayman Islands, according to the indictment. The account in Cayman was held by Webb asso- ciate Costas Takkas, who is also charged in the case, ac- cording to the indictment. It is alleged that Takkas, after keeping a portion of the bribe money for himself, transferred funds back to the U.S., where the money was used for a swimming pool at a Loganville, Georgia res- idence owned by Webb, and other real estate he owned in Stone Mountain, Georgia. Both HSBC and Standard Chartered Bank were con- tacted in the continuing U.S. Attorney’s probe, The Wall Street Journal reported on July 24. Local review Former Cayman Islands Monetary Authority Chairman George McCarthy said in June that the agency would commission an in- ternal committee following Webb’s arrest in Switzerland on U.S.-based charges of racketeering and money laundering. Caymanian busi- nessman Webb is a former FIFA vice president and ex- CONCACAF president. At least one current and one former Cayman Islands bank, Fidelity and Barclays, were named in connection with the probe, although nei- ther bank was accused of wrongdoing in records filed with the U.S. court. The CIMA board met in early June to discuss a number of issues related to the FIFA investigation and how it could potentially af- fect Cayman’s financial ser- vices industry. Mr. McCarthy said at the time that members were “very much concerned about the events that are occur- ring,” but agreed that it was too early for direct board in- volvement in these matters. Mr. McCarthy said the three-person internal re- view 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 com- mittee will report to the board, Mr. McCarthy said. On July 21, the Cayman Islands government re- placed three members of the CIMA board of directors, including Mr. McCarthy, whose tenures had expired. New CIMA chairman Grant Stein was contacted Monday for comment about the new board. He indicated he was not yet ready to dis- cuss the changes on the board, though he may do so later this week. More FIFA victims, witnesses sought 2007 that was never brought into force following passage in the Legislative Assembly. The primary purpose of the Builders Law is to ensure proper qualifications of con- struction firms. The bill and accompanying regulations will create registration cate- gories, from general contrac- tors to tradesmen such as plumbers, roofers and ma- sons, with a sliding scale of requirements and fees. General contractors – businesses qualified to en- gage in construction, and civil contractors – businesses that build roads, docks, bridges and utilities infra- structure – must meet strict criteria for experience and qualifications. Smaller or less experienced businesses can apply for a separate cate- gory of “building contractor” for construction of commer- cial, industrial or residential buildings less than 25,000 square feet or three stories. A fourth category of “residen- tial contractor” is for busi- nesses that construct or ren- ovate buildings comprising four homes or less. The bill, if passed, will es- tablish a Builder’s Board re- sponsible for maintaining a register of business entities and qualified individuals in the construction field. Businesses will be re- quired to prove they have the necessary number of quali- fied individuals on staff to qualify in the category for which they are applying to be registered. Individual con- tractors and tradesmen will be required to demonstrate they have necessary qualifi- cations before they can be li- censed under the legislation. Financial services Two bills made public earlier this month, if passed, will enable Cayman-based funds and managers con- nected with the European Union to elect a regime of prudential regulation consistent with the EU Alternative Investment Fund Managers Directive. The bills, which seek to amend the Mutual Funds Law and the Securities Investment Business Law, may mean that the Cayman Islands quali- fies for a so-called “third country passport” under the European directive. The passport would allow Cayman funds to be mar- keted to professional inves- tors across the EU, rather than through private place- ment in each EU member state individually. The European Securities and Markets Authority was to assess Cayman’s regula- tory regime and its super- visory cooperation with EU regulators to provide advice to the European Commission by July 22 on which jurisdic- tions should be considered for a “third country passport.” The proposed amend- ments to the Mutual Funds Law introduce the con- cept of a “regulated EU con- nected fund,” which is ei- ther managed from or marketed in a member state of the European Economic Area and elects to fall within the Cayman Islands Monetary Authority’s regu- lated EU connected fund re- gime. The AIFMD regime applies to both open- and closed-end funds. The bill amending the Securities Investment Business Law creates the “EU connected manager” designa- tion for individuals who fall within the existing scope of the law, who conduct man- agement, marketing or depos- itary activities as defined by the EU directive and who vol- untarily decide to fall within CIMA’s new EU connected manager regime. Manderson discharged on murder charge Carol Winker cwinker@pinnaclemedialtd.com Justin Devon Manderson, who was scheduled to go on trial for the Jan. 3 murder of Victor Oliver Yates Jr., was dis- charged on Tuesday afternoon after witnesses backed out of testifying in the case. Deputy Director of Public Prosecutions Patrick Moran entered a formal notice that the Crown was not proceeding. He told Justice Malcolm Swift that there had been a number of developments since charges of murder and possession of an unlicensed firearm were brought against Manderson. These develop- ments related to Crown wit- nesses in the case. Mr. Moran said civilian witnesses, “who provided wit- ness statements upon which this case rests in its en- tirety, have now individu- ally indicated their unwill- ingness to substantiate the allegations, each for their own separate reasons.” He said police and the of- fice of the DPP made repeated efforts to seek to address their withdrawals of coopera- tion. “Those efforts have not met with success,” he advised the court. “We cannot proceed without witnesses,” he said. Entering the formal notice of not proceeding does not act as a bar to subsequent proceedings being brought against a defendant, Mr. Moran pointed out, and this possibility had been brought to Manderson’s attention. Justice Swift told Manderson, “You are discharged.” Manderson was repre- sented by lead counsel Michael Duck, instructed by attorney Clyde Allen. CONTINUED FROM PAGE 1 LA takes up construction, financial services bills CONTINUED FROM PAGE 18 WORLD&REGIONAL Wednesday July 29, 2015 • Cayman Compass NY prison worker pleads guilty to helping two killers escape PLATTSBURGH, N.Y. (AP) – A prison worker admitted Tuesday to smuggling hacksaw blades in frozen hamburger meat to two killers who later broke out and spent more than two weeks on the run, and pros- ecutors said they believed no one else knowingly aided in the elaborate escape. Joyce Mitchell, a tailor shop instructor at Clinton Correctional Facility, wept as she pleaded guilty to charges of first-degree promoting prison contraband, a felony, and misdemeanor fourth-de- gree criminal facilitation. Mitchell, 51, faces a sen- tence of 2 1/3 years to 7 years in prison under terms of a plea deal with prosecutors. Sentencing is set for Sept. 28. Her lawyer said his client won’t be able to post the bail set by the judge at $100,000 cash or $200,000 bond. Mitchell was jailed shortly after the elaborately staged June 6 escape of Richard Matt and David Sweat. Matt was shot and killed by searchers June 26, about 30 miles west of the northern New York prison; Sweat was captured near the Canadian border two days later and sent to another prison. Mitchell admitted pro- viding hacksaw blades, chisels, a punch tool and a screwdriver to Matt. Authorities say she became close to the pair and agreed to be their getaway driver. But she backed out at the last moment, forcing Matt and Sweat to flee on foot after they emerged from a manhole near the maximum-security prison. Defense attorney Stephen Johnston said Mitchell “got in over her head.” “I think that to a cer- tain extent Matt got her to feeling good about herself, better than she had for a pe- riod of time, and she was swept off her feet a bit, for a period,” Johnston said. “And then when she realized who she was dealing with, everything changed.” Investigators also said Mitchell had discussed killing her husband, Lyle Mitchell, as part of the plot. Lyle Mitchell was in court Tuesday and declined to speak with an Associated Press reporter afterward. Authorities said Joyce Mitchell smuggled the hacksaw blades and other tools into the prison by hiding them in frozen meat she placed in a refrigerator in the tailor shop. They said correc- tions officer Gene Palmer then took the meat to Sweat and Matt, who were housed in a section where inmates are al- lowed to cook their meals. Authorities do not believe Palmer knew of the escape plan. He was released on bail after being arrested on charges including promoting prison contraband. Corrections officials said Tuesday that Mitchell, who was arrested June 12, resigned from her job on June 25 and remains eligible for a pen- sion. Investigators do not think knowledge of the plot went be- yond Matt, Sweat and Mitchell. Clinton County District Attorney Andrew Wylie said he expected the Palmer and Sweat cases to go to a grand jury next month. “At this time, there are no other individuals who have been identified through the investigation as being in- volved directly or indirectly with the June 6, 2015 escape,” he said. Matt and Sweat cut through their adjoining cell walls over months, climbed down catwalks to tun- nels, broke through a brick wall, cut into and out of a steam pipe and cut a chain holding a manhole cover out- side the prison to get away, authorities said. Authorities said Joyce Mitchell smuggled the hacksaw blades and other tools into the prison by hiding them in frozen meat she placed in a refrigerator in the tailor shop. Joyce Mitchell has pleaded guilty to assisting in the escape of two prisoners. - PHOTO: AP WEST PALM BEACH, Fla. (AP) – Two teens missing at sea had strayed from the agreed-upon boundaries for their fishing trip, the stepfather of one of the boys said Tuesday, as the Coast Guard continued a massive search off Florida’s Atlantic coast. Nick Korniloff said his 14-year-old stepson Perry Cohen and the boy’s friend Austin Stephanos were sup- posed to remain on the Loxahatchee River and the Intracoastal Waterway during their outing Friday. He said he didn’t believe the boys were heading to the Bahamas, as some have spec- ulated, but that they obvi- ously ended up in the deep waters they were supposed to steer clear of. “It’s a bit of a surprise to see, for us, that they went off- shore,” Korniloff said. At this point though, after four days of searches for the boys, the stepfather said why the boys ended up in the Atlantic is irrelevant, and he’s focusing on the years of experience they had on the water that could keep them alive. He said his stepson learned to swim before he walked, and spent every op- portunity he could boating, fishing, snorkeling and other- wise enjoying the ocean. “We have a huge amount of confidence and I think that’s a testament to why the Coast Guard is working so hard,” Korniloff said. “They’re doing that because the boys have all the ingredients that could lead to a big success here.” The boys were last seen Friday afternoon buying $110 worth of fuel near Jupiter. Thunderstorms and heavy rains were forecast in the Jupiter area later Friday af- ternoon. However, Coast Guard Capt. Mark Fedor called it “typical South Florida weather” that didn’t provide an immediate an- swer to what happened to the teens. The Coast Guard was alerted at 5 p.m. that the boys were overdue, and the search began. The 19- foot boat was found Sunday, capsized, off Ponce Inlet, more than 180 miles north of where the boys started their journey. The search has continued, day and night, with areas of concentration moving based on the Gulf Stream and ocean conditions. The search area has steadily moved north, with crews focused on a swath of water from Daytona Beach, Florida, up through Savannah, Georgia. By Tuesday morning, the Coast Guard had scoured an area the size of West Virginia. “We’re still actively searching, still doing what we can to find these two,” Chief Petty Officer Ryan Doss said, noting three Coast Guard cutters, a Navy ship and a plane were deployed Tuesday in the search. The teens’ families pledged a $100,000 reward in the search and a famous neighbor – NFL Hall of Famer Joe Namath – promised to continue searching local beaches in hopes of finding clues. Though the boys’ boat was overturned it did not appear damaged. No foul play was suspected. One life jacket was found near the boat, though it was unclear how many life jackets had been on board. Water temperatures were warm and not cited as a factor in the boys’ survival. Florida requires minors to have boating safety instruc- tion in order to operate a boat of 10 horsepower or greater, but no licenses are issued. Korniloff said both boys had completed the course. Teens missing on fishing trip strayed from route TRIPOLI, Libya (AP) – A court in Libya on Tuesday sen- tenced a son of Moammar Gadhafi to death by firing squad after convicting him of murder and inciting geno- cide during the country’s 2011 civil war. It is unlikely, however, that the sentence against Seif al-Islam Gadhafi will be carried out anytime soon, as a militia in western Libya has refused to hand him over to the government for the past four years. That uncertainty reflects the chaos still gripping this North African nation split between rival militias and governments while facing an affiliate of the extremist Islamic State group. The Tripoli court sen- tenced to death eight others, including former Libyan spy chief Abdullah al-Se- noussi, who is in their cus- tody. Also sentenced to death were foreign intelli- gence chief Abuzed Omar- Dorda and Gadhafi’s former Prime Minister Baghdadi al-Mahmoudi. The rulings can be ap- pealed, and a defense lawyer in the case, Ali Aldaa, said he would challenge it before the Libyan Supreme Court. The Tripoli-based top court has in the past ruled the Tobruk government as illegiti- mate, raising questions over whether it is under pres- sure from militias that dom- inate the city. Only 29 of the 38 Gadhafi-era figures were present in court. Six others were sentenced to life in prison and four were cleared of charges. U.S.-based Human Rights Watch said the trial was “undermined by se- rious due process viola- tions,” and called on the Libyan Supreme Court to in- dependently review the ver- dict. Other international or- ganizations, including the U.N. High Commissioner for Human Rights and the Council of Europe, also con- demned the verdict. “This trial has been plagued by persistent, cred- ible allegations of fair trial breaches that warrant in- dependent and impar- tial judicial review,” said Joe Stork, Human Rights Watch’s deputy Middle East and North Africa director. “The victims of the serious crimes committed during the 2011 uprising deserve justice, but that can only be delivered through fair and transparent proceedings.” The Council of Europe said the case should have been turned over to the International Criminal Court at The Hague, which wants Seif al-Islam on charges of crimes against humanity. LibyA cOurT senTences GAdHAfi sOn TO deATH fOr 2011 kiLLinGs Lilly Folds lights paper lanterns during a candlelight vigil and paper balloon release at Jupiter Inlet Park in Florida on Monday evening, for teenagers Austin Stephanos and Perry Cohen. - PHOTO: APThe islands’ most-trusted news source 9 Business Cayman Compass • Wednesday July 29, 2015 Consumer confidence falls significantly U.S. consumer confidence fell this month to the lowest level since September. Consumers are worried about the job market and rattled by events in Greece and China, authorities said. Europe is wary of letting its banks rival JPMorgan Mark GilbErt In the coming years, there are likely to be a couple of empty seats at the global investment-banking table. While U.S. financial institu- tions consolidate their dom- inance of the world’s secu- rities markets and Asia’s exploding middle class be- gins to propel that region’s banks onto the world stage, Europe looks set to be left behind. The next challenger to JPMorgan Chase is much more likely to emerge from China than from either the U.K. or the eurozone. The $176 billion of global loans handled by JPMorgan equals the combined activity of Deutsche Bank, Barclays and HSBC. In global equi- ties, the five top U.S. banks have done $166 billion of business this year, more than double what their five most- active EU and Swiss peers have brought to market. In worldwide corporate debt, JPMorgan and Bank of America Merrill Lynch have a combined market share of 15.7 percent, while Deutsche Bank and Barclays have about 11.3 percent. In the aftermath of the fi- nancial crisis, the ambitions of the European contenders for world-beating status have all been curtailed. Deutsche Bank, arguably the region’s best bet to become a world champion, effectively sig- naled a halt to its globe- trotting ambitions by firing Anshu Jain, a co-chief exec- utive officer, in June. His re- placement, John Cryan, says the bank can’t afford the “luxury” of devoting gobs of capital to the trading busi- ness. This fall, he is expected to extend the 3.5 billion euros (US$3.9 billion) of cost cuts announced in April, although he may preview his plans in this week’s earnings release. Barclays also fired its CEO, Antony Jenkins, ear- lier this month. Jenkins, whose background was in retail banking, struggled to restructure the investment- banking division. Chairman John McFarlane is expected to step up the pace of scaling back that division’s activi- ties when he announces the bank’s earnings this week. HSBC Holdings, which used to market itself as the world’s local bank, is a truly global institution. But it made 78 percent of its profit in Asia last year, with just 3.2 percent coming from Europe. Moreover, one of these days it may well make good on its constant threats to quit the U.K. and relocate its headquarters to some- where in Asia, fully disquali- fying it as a European player. And Royal Bank of Scotland, the U.K.’s other pretender to world-class status in the boom times, has been forced to shrink after needing a bailout of more than 45 bil- lion pounds (US$70 billion). RBS remains a ward of the U.K. government. None of the other European names that crop up in the league tables, such as France’s BNP Paribas, Italy’s Unicredit or Spain’s Santander, have truly global ambitions. Both of the region’s Swiss challengers for global status – UBS and Credit Suisse – are focusing on managing money for the wealthy rather than chasing profit by trading se- curities. UBS said on Monday that income from its wealth- management unit more than doubled in the second quarter. Credit Suisse CEO Tidjane Thiam, who took charge of the Swiss bank four months ago after building his career in the insurance business, said last week that “part of the thinking in the investment bank is to shrink, to be able to focus on really the most value-creating busi- nesses” because “regulation has developed in an unsup- portive or unfavorable way.” Complaints from U.K. and European banks that their overseers have shown more enthusiasm for solving too- big-to-fail by focusing more on the first two words of the problem than their U.S. coun- terparts have some merit. That also means the typical solution to this kind of in- dustry problem – merging smaller institutions into bigger players with sufficient clout to compete globally – isn’t available. European reg- ulators want their invest- ment banks to shrink, not grow, and have tailored new rules to nudge them in that direction. Wall Street seems to have better weathered the post-crisis storm, which is perhaps testament to its lob- bying skills. Do European compa- nies need a European hand to hold as they navigate the global capital markets? Do European stocks, bonds and currencies require non-U.S. participants for efficient trading? Does it matter if there isn’t a European bank that can bestride the world of finance? I would argue that it does, but for a different reason than the geography of head- quarters. I’m a supporter of regulators who want to re- turn to some form of the Glass-Steagall Act, which forced U.S. banks to split their lending and securi- ties businesses. A complete separation of basic deposit- taking and lending activities from deal-making and deriv- atives trading makes sense to me. That applies to the U.S. behemoths as well as their European cousins. Cleaving Barclays, Deutsche Bank, Citigroup or whoever else into retail and investment banks, and then letting those riskier units merge into bigger cross-border institutions – properly regulated, mind – seems a more sensible outcome than the current fractured landscape. Mark Gilbert is a Bloomberg View columnist and a member of the Bloomberg View editorial board. The next challenger to JPMorgan Chase is much more likely to emerge from China than from either the U.K. or the eurozone. LONDON (AP) – BP re- ported a second-quarter loss Tuesday after the London- based oil company set aside another $10.8 billion to cover the cost of the Deepwater Horizon accident. The net loss of $5.82 billion compared with net income of $3.37 billion a year earlier. Underlying replacement cost profit, which strips out one- time items and changes in the value of inventories, fell 64 percent to $1.31 billion as oil prices remained low. The report is the first since BP announced a deal that will provide a further $18.7 billion to five U.S. states affected by the 2010 accident that killed 11 workers and spewed mil- lions of gallons of crude into the Gulf of Mexico. BP said the settlement would bring its full obligations to $54.6 billion. Besides dealing with the weight of the Deepwater Horizon disaster, BP is like other oil giants struggling to deal with the plunge in oil prices. The price of Brent crude, an international bench- mark variety of oil, averaged $62 a barrel in the second quarter – compared to $110 a barrel in the same quarter a year earlier. “In the past few weeks oil prices have fallen back in re- sponse to continued over- supply and market weakness and the recent agreements re- garding Iran,” BP CEO Bob Dudley said. “I am confi- dent that positioning BP for a period of weaker prices is the right course to take, and will serve the company well for the future.” Dudley said the company is responding by increasing efficiency and continuing “with capital discipline and divestments.” Uncertainty in the Middle East has also had an impact. In Libya, BP reported explo- ration write-downs and other costs totaling $598 million. This includes a $432 million write-off because there is “sig- nificant uncertainty on when drilling operations might be able to proceed.” Fadel Gheit, a managing di- rector at Oppenheimer & Co. Inc. said that BP – like other major integrated oil companies – had been expected to report the lowest quarterly earnings in years. “The earnings outlook re- mains challenging,” he said. Energy company BP slides to loss in 2nd quarter In this April 21, 2010, file photo, the Deepwater Horizon oil rig burns in the Gulf of Mexico. BP and five Gulf states announced an $18.7 billion settlement on July 2 that resolves years of legal fighting over the environmental and economic damage done by the energy giant’s oil spill. - Photo: AP JAmAicA to retire $3B in oil deBt to VenezuelA KINGSTON, Jamaica (AP) – Jamaica has forged a deal to retire $3 billion in oil debts to Venezuela thanks to bond sales. Jamaica said last week it has issued roughly $2 billion in bonds on the in- ternational capital market that will pay down the debt it accumulated through Petrocaribe, a Venezuelan program that provides fuel to countries at market prices but under generous credit terms. Officials say a nego- tiated settlement with Caracas will dismiss about $3 billion in long-term debt in exchange for $1.5 billion. It was not immediately clear Friday if Jamaica’s deal will retire all of its Petrocaribe debt. The fi- nance ministry said this week’s bond issue transac- tion was “the largest cap- ital markets fundraising ever undertaken by the gov- ernment of Jamaica.” Jamaica’s Petrocaribe settlement is similar to one the Dominican Republic ne- gotiated with Venezuela ear- lier this year. That Caribbean country dismissed $4 billion in Petrocaribe debt in ex- change for $2 billion. On Thursday, IMF Communications Director Gerry Rice said the organi- zation supports Jamaica’s debt buyback. “It’s an important step in reducing the value of the country’s public debt and will help to put debt firmly on a downward trajectory,” Rice told reporters. Jamaica is in the third year of a four-year $930 million loan package with the International Monetary Fund and it has passed consecutive tests without shortfalls. Officials say a negotiated settlement with Caracas will dismiss about $3 billion in long-term debt in exchange for $1.5 billion.Next >