Cayman regulator fails to sanction unlicensed bank and its directors
MIAMI - A year after it was notified by victims that B & C Capital Ltd, an exempt Cayman Islands corporation with no banking licence, was accepting funds pursuant to a written instrument that described it as a bank and financial institution, the Cayman Islands Monetary Authority (CIMA) has taken no regulatory action against the company, nor brought civil or criminal charges against the directors, who were Cayman residents.
B & C, insolvent since February 2015, is now being liquidated and, without any bank accounts, millions of dollars in client accounts is missing, and unaccounted for. B & C was misrepresented to be a bank, when in truth and in fact it was a shell company with no assets. Funds were transferred into it from Dundee Merchant Bank, based solely upon its listed status as a bank on the transfer authorization itself.
The Banks & Trust Companies Law of the Cayman Islands requires any entity that accepts deposits to hold the appropriate banking licence. CIMA, pursuant to the Monetary Authority Law, has jurisdiction over financial institutions and has specific enforcement powers, but has taken no action in the B & C Capital case, notwithstanding clear and convincing evidence of massive fraud, theft of client funds, and money laundering.
CIMA has offered no explanation for its failure to protect foreign investors in this case, without any apparent reason, claiming confidentiality, but taking absolutely no action, and forcing the victims to seek redress through the courts themselves. Its open investigation has been pending for more than one year.
In recent years, there have been at least 12 major investment frauds committed in the Cayman Islands, and victims' advocates have reported that none of the victims ever recovered their money.
By Kenneth Rijock
Kenneth Rijock is a banking lawyer turned-career money launderer (10 years), turned-compliance officer specialising in enhanced due diligence, and a financial crime consultant who publishes a Financial Crime Blog. The Laundry Man, his autobiography, was published in the UK on 5 July 2012.