- Usain Bolt loses $12m in an alleged investment scam
- Jamaican officials and the FBI are investigating investment manager Stocks and Securities Ltd
- Others are feared caught by the scheme
Jamaican Olympic sprinter Usain Bolt has had a $12m savings and investment account he set up for his retirement wiped out. According to his lawyers, only $12,000 remains in the account held with Jamaican-based investment manager Stocks and Securities Ltd.
“It’s distressful news for anyone,” said Bolt’s lawyer, Linton P Gordon. And while the scale of the alleged fraud is headline-grabbing, the news is a timely reminder to all investors.
Simple Scam Allegedly Nets Millions
Details of what went wrong are still being established. In a possibly desperate effort to reclaim the lost funds, Bolt’s lawyers have set a seven-day deadline for the situation to be rectified before they sue the investment manager in the Supreme Court of Kingston.
At the same time, the regulator, the Jamaican Financial Services Commission (JFSC), has installed a temporary manager at Stocks and Securities. The FBI has also been invited to be part of the investigation as the scam is beginning to take on the shape of a well-planned international operation.
One source close to Stocks and Securities puts the loss down to a rogue trader, but Jamaican Finance Minister Nigel Clark has indicated that the alleged fraud could have started as early as 2010. The operation used the relatively simple technique of providing clients with falsified statements indicating their investments were worth more than they were.
Bolt’s total net worth is estimated to be $90m, so as painful as his personal loss is, his apparent approach of diversifying his investments across different firms appears to have protected him to some extent. Reports are surfacing of other losers, some of whom investigators have termed ‘elderly investors’ who may be less able to recover from the scam.
Regulator Steps In
Of particular concern is that Stocks and Securities Ltd has, until now, been licensed by the JFSC. A statement issued by the regulator outlines the actions they are taking to “enhance oversight.” The regulator stated, “the need for the FSC to have a full view of the integrity of the transactions being conducted, including the movement of funds and securities into and out of SSL.”
For clients of SSL, the intervention may be a case of too little, too late. Other investors not caught up in the scam may well lean towards managing their finances more directly in a self-trading account.
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