September 23, 2020
Clickongh

No one will be left out in bailout for clients of defunct fund managers – SEC clarifies

The Securities and Exchange Commission, SEC, has clarified that no customer will be excluded in government’s bailout package for persons whose funds have been locked-up in the 53 defunct fund management companies since November 2019.

Earlier indications were that only customers of 22 defunct companies were going to benefit in the first phase due to ongoiing legal cases with Blackshield Capital Management Limited and the others.

This led to agitation among clients of the affected companies particularly clients of Blackshield, formerly Goldcoast Fund Management.

Some of them picketed at the premises of the Ministry of Finance on September 1, 2020.

But the SEC in a statement on Wednesday, September 2, 2020, clarified that its earlier statement announcing the bailout package had been misinterpreted.

“We wish to assure all affected clients that the Government bailout package is all-inclusive, provided claims have been validated and liquidation orders secured. The SEC reiterates the fact that there is no plan to exclude any group of customers and as indicated in our last press release, the roll-out of the Government bailout will be done in phases,” SEC said in a statement.

SEC also explained that the agreement it had with government was for the bailout to be effected phases only after validation of claims and liquidation orders are secured.

“The first phase will cover clients of the twenty-two (22) companies currently under official liquidation per Court orders, based on their validated claims. The Official Liquidator will communicate details of the payment process to affected clients starting in September. The second phase would cover clients of the remaining companies after the liquidation orders are secured”.

“The point being made therefore is that receiving Government’s bailout is predicated on completion of validation and securing of liquidation orders. It is therefore a question of timing and nothing else,” SEC noted.

SEC also used the statement to respond to some of the claims made by Blackshield Capital Management Limited.

“Blackshield alleges that the SEC issued a public notice in 2017 directing that their Structured Finance (SF) product should be discontinued within six (6) months from the date of the directive. They further alleged that this singular directive by SEC set into motion unprecedented demands for redemption by customers of Blackshield and other fund managers leading to a backlog in payment. This is inaccurate. The SEC did not issue a public notice in 2017 directing that the SF product be discontinued.”

“Secondly, Blackshield alleges that the SEC refused to grant approval to an alternate product. This is another untruth.”

Source: Business