The Editor Speaks: Another embarrassment to our financial reputation
With all the recent revelations of money laundering from prominent members of our society, their denials and then guilty pleas, the ‘astonishment and horror’ of Cayman being placed on the UK financial regulator’s (UK Financial Conduct Authority) list of high-risk jurisdictions for money laundering, the last thing we wanted was another similar revelation.
Unfortunately we have.
Canover Watson, Managing Director of Admiral Financial Services and Director of the Cayman Islands Stock Exchange has, along with a breach of trust charge, been arrested last Thursday on suspicion of money laundering.
Mr Watson has issued a statement denying the allegations.
Let us hope this time there is no recant and he is able to prove his innocence.
With the financial service companies reputations already lower than a coal mine since the economic melt down, there is no denying nothing surprises the general public now when another of their members is accused.
Even worse, the Cayman Islands – the perceived financial den for tax evaders and other shady matters dealing with money – have been labeled as ‘notorious’ and the world press is happy to keep it that way.
How long that label is going to remain, no matter how much we protest and show proof to the world how clean we are, is not going to be a short time.
In June the 2014 Makovsky Wall Street Reputation Study was released and it showed that even after six years the financial service companies are still grappling with reputation and customer service issues associated with the economic meltdown.
In an article under the heading “Financial Firms Struggle With Bad Reputations” published by Credit Union Times it said:
“The study revealed this negative perception took an even bigger toll on sales, as the companies interviewed reported an average business loss of 27% — equalling billions of dollars — in the last two years as reputational and customer service issues persisted.
“Eighty-one percent said the financial crisis continued to have a major effect on stakeholder perceptions of their companies.
The study proves beyond any doubt negative public perception can hurt where it matters most – the money in your pocket.
The Cayman Islands relies on a good reputation for its continuing prosperity and the financial sector is very much a big part of it.
Perhaps my use of the words “another embarrassment” is not strong enough.
To read the Credit Union Times article go to: http://www.cutimes.com/2014/06/17/financial-firms-struggle-with-bad-reputations-stud
Dear Editor
The service providers need pull up their socks. Over the past ten years there have been numerous examples of director and auditor negligence in the hedge fund business, before that it was the banking business withnthe likes of First Cayman Bank, Eurobank, Guardian and Fidelity to name just a few. Frequently the same old names crop up. Had they been in the US the SEC would have taken legal action but here in Cayman the regulators have no enthusiasm and have a total
lack of drive. Kudos to the Auditor General for following up on this particular issue.
I do suspect he is maybe looking at others. Whether he is right remains to be seen but at least we have confidence that he is acting on behalf of the good people of the Cayman Islands as indeed his predeccessors did before him . Finally I do consider him a watchdog rather than a blood hound which is contrary to your own expressed opinion of a few weeks ago, but there again my auditing days have been over for many years.