ZACHARY Harding has said that for much of the 33 months he served as chief executive officer of Stocks and Securities Limited (SSL) he was “cleaning up” irregularities that had been previously cited by the regulator, the Financial Services Commission (FSC).
Harding made the admission Saturday during an interview with the Jamaica Observer about SSL which is now embroiled in scandal as a result of a still-unfolding fraud affecting dozens of investors including sprint legend Usain Bolt.
The FSC regulates non-deposit-taking institutions like SSL, which it had labelled a problem institution in 2017 for, among other things, a “culture of non-compliance and mismanagement of client funds”.
The FSC also stated that from 2011 up to February 2017 SSL had been operating under its directions yet it “has remained a problem institution” ostensibly for failing to file its annual report for the period up to June 30, 2016; failing to file audited accounts within 90 days of the close of a financial year; and granting credit to related parties in violation of orders issued in 2013.
Harding served as CEO of SSL from September 2019 to June 2022. He noted that during much of his tenure employees worked from home because of the COVID-19 pandemic.
“A bunch of the time we weren’t even in office; we were the first to implement a work-from-home regime before the Government even did it,” he said, adding that during the period his priority was keeping the business up and running and ensuring that the staff and investors were safe.
According to Harding, he had no reason to believe that any member of staff was not operating above board, specifically up to the requirements of the FSC.
“We first met with the FSC a month after I joined. I sat with the entire leadership team at SSL — Deputy Chairman Hugh Croskery, Chairman Jeffrey Cobham and Chief Financial Officer Allison Hemmings. We went and we met with the FSC to discuss the rampant issues that had been there prior to me arriving,” said Harding.
He said that after meeting with the FSC the regulator gave guidance in terms of where the weaknesses were. Harding said he quickly put a team in place to focus specifically on “repairing these irregularities”.
The former CEO stressed that “there were several red flags before, which were known and documented. I came in and I met with the FSC, apprised myself of what the issues were before I got there, and set up a committee specifically focused on repairing those irregularities”.
Harding shared that the committee was headed by SSL’s risk and compliance officer in conjunction with the chief financial officer. He said he was satisfied that the two took meaningful steps to address the problems that had been identified.
“Everybody worked very hard because the company was at risk of losing its licence. Everybody was involved and there was a project committee that was set up just to deal with the issues that were identified by the FSC,” said Harding.
“We interacted on a daily basis with the FSC, reported to them and had an ongoing weekly type situation as we repaired those things,” he added.
Harding said the decisions taken appeared to have worked as “when the first set of external audits were done while I was there, issues were still flagged but we worked specifically to try and close those gaps in order to continue operating and maintain our licence.
“By the time I left we had gone through two successful audits and the FSC had even commented that they recognised the efforts that we had put in,and that we had really made strides in improving the things that they had highlighted that were problematic,” he said.
“While I was there we successfully completed two audits and we were working closely with the FSC on addressing any irregularities — and many irregularities were inherited when I joined — and we worked through to minimise those and repair those. I spent most of my time there repairing issues that I inherited,” he insisted.