Victims of the alleged fraud that took place at Stocks and Securities Limited (SSL) are likely to see next to no recovery of their money, according to a recently filed trustee report which estimated $4 billion in losses for under 300 client accounts.

The investment house is currently bankrupt and being wound up under the supervision of court-confirmed trustee Caydion Campbell of PRAISE Trustee Limited.

The pro forma balance sheet of the company showed that it had assets of $770.45 million with $670.12 million being due from related parties. However, there was a deficit of $364.97 million after accounting for the various liabilities that SSL had accumulated up to May 31.

In the three scenarios presented to realise the value of remaining assets on the books, the category four creditors, ie affected trust claimants or SSL clients who were allegedly defrauded, and SSL promissory noteholders would receive no distributions after payments are made to cover the winding up and pay the tax authorities.

“It may, however, be moot whether these claims are included. As it stands now, there will be no funds available to make any distribution to these [category four] creditors, unless the proposed SSL victims compensation fund is funded via recovery from the unaffected claimants and/or otherwise resulting from court action,” stated Campbell’s redacted and reissued report filed in the Supreme Court of Jamaica.

The proposed SSL victims compensation fund would be funded from a 7.5 per cent quasi-management fee applied on SSL’s off-balance sheet portfolio or remaining unaffected client assets. That fee would bring in an estimated $345 million which would see $153.50 million being allocated to that compensation fund.

According to the trustee, the compensation fund would be directed towards victims/affected trust claimants with a contingent claim who were victims of the alleged fraud committed by Jean-Ann Panton.

Panton, a former SSL wealth advisor accused of fleecing roughly $940 million from more than 30 SSL clients over a 10-year period, has been indicted on three counts of larceny as a servant, three counts of falsification of accounts, five counts of forgery, five counts of uttering forged documents, three counts of engaging in transaction involving stolen property and three counts of breaches of the Cybercrimes Act.

She is the only person so far charged in relation to the alleged fraud.

The proposed SSL victims compensation fund pales in comparison to the purported fraud that has been announced by the Financial Investigations Division, but is in the ballpark of what has been recorded on SSL’s balance sheet for a contingent liability.

One notable victim is WellJen Limited, a company connected to track and field legend Usain Bolt, which is missing US$6.1 million to an estimated US$12 million in funds.

A co-founder of a major hardware business also has reported losses in this region.

SSL received US$1 million ($153.5 million) from its fidelity insurance policy in September 2023, but those proceeds were already used in running the operations of the company when it was under temporary management by the Financial Services Commission (FSC).

Campbell’s report explained that aggressive recovery of the related party balances might be limited due to SSL proprietary estate’s current state of affairs.

He suggested that it might be appropriate for a discussion to be had with the committee of inspection to trigger the winding up of the related parties and bring them under some formal administration to potentially recover related party balances.

“It is to be further enquired into whether some imprudent investments were made with and through these entities, since it does appear that some clients’ funds were used to finance these investments. It also warranted further enquiry into whether, in other instances, clients were induced into investing in SSL Growth Equity Limited (SSLGEL) and Delta by key representatives of SSL. Some clients have asserted that they gave no instructions/authorisation to make these investments and are ‘surprised’ that they were part of their holdings,” stated the trustee report.

The report noted that most of SSL’s balance sheet is currently built up of related party balances with parent company SSLGEL owing the firm $391.32 million, SSL Capital Cayman owing $222.26 million, Delta Capital Partners Limited owing $47 million and others owing $9.54 million.

SSL Growth Equity directly owns 62.50 per cent of SSL with George Chai owning the remaining 37.50 per cent of the company. Hugh Croskery directly owns 23.30 per cent of SSL Growth Equity with his family interest including Mark Croskery, Sarah Meany and Phillip Croskery adding up to 51.41 per cent. Chai was referenced as being the apparent largest beneficial owner of SSL.

“I should point out that, although outside of the scope of my appointment, the information available to me suggests that SSLGEL would be both balance sheet and cash flow insolvent. It would be expected that this would have been aggravated by the status of SSL which it had relied on for financial, managerial and governance support. That is, the subsidiary was in fact taking care of the parent company,” Campbell explained on the status of SSL Growth Equity.

Prior to January 2023 when news of the alleged fraud became public, SSL Growth Equity and SSL had entered into a settlement agreement in December 2022 under which SSL Growth Equity would transfer its assets directly to SSL to reduce the debt of the securities dealer. Some of these assets included its shareholdings in SSL Asset Management (Cayman) Limited, SSL Capital Cayman Limited, a company in the Cayman Islands which owned the franchise rights for Papa John’s Pizza in the territory and a 20 per cent stake in Jamaican water firm Lifespan Company Limited.

However, it does not appear that these asset transfers were consecrated based on SSL’s most recent financial statements. Also, Papa John’s Pizza closed its operations in the Cayman Islands in March 2023 which further reduces the value of SSL Capital Cayman.

SSL Growth Equity is the subject of different lawsuits, including one from Chai and Spectrum Capital Partners Limited.

Delta Capital Partners was formed by Zachary Harding in July 2020 as a private equity firm with Delta Capital Holdings Limited (formerly SSL Investments Limited) used as the vehicle to invest in different ventures. According to the trustee report, “Delta [Capital] has invested in several equity and loan deals in the region, most of which have not turned out favourably. The receivable amount represents amounts advanced to provide working capital support to Delta Capital, a portion [$49.69 million] of which was repaid in 2023.”

Delta Capital’s deal to acquire Massycard (Barbados) Limited’s credit card portfolio fizzled when Massy Holdings Limited terminated the deal. Hugh Croskery was an equal owner in Delta Capital along with Harding up to September 2022 when he surrendered his interest in the firm. Harding is listed as the largest owner of Delta Capital Partners with 57.5 per cent, Ivan Carter is the second-largest shareholder with a 30 per cent stake up to December 2022. Carter resigned from Delta Capital’s board in March 2024.

The other category four creditors include the 75 SSL promissory noteholders who are owed $750.93 million by the firm. Most of SSL’s client base are senior citizens who have retired or were near retirement. Although e-mail have been sent to more than 6,000 SSL clients since June, fewer than 800 clients have responded to Campbell.

A compensation fund could have been established under the FSC Act to benefit customers of financial institutions who suffered pecuniary/monetary loss from the operations of any entity. However, there is no publicly available information that this fund was ever established after the FSC came into existence in August 2001. The FSC and its staff are provided immunity from any liability under section 22 of the FSC Act.

A virtual case management conference will be held today at 2:15 pm in the Court of Appeal as the FSC appeals the verdict of Justice David Batts which favoured the respondents, Campbell and SSL. This hearing takes place just ahead of the first creditors’ and claimants’ meeting which will be held online and in-person at at 10:00 am on Friday at Summit.