Fri | Aug 18, 2017

JSE regulator sues his bosses

Published:Wednesday | May 3, 2017 | 5:00 AMMcPherse Thompson
Marlene Street Forrest, managing director of the Jamaica Stock Exchange.
Wentworth Graham, chief regulatory officer in the JSE Regulatory and Market Oversight Division.
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Chief Regulatory Officer Wentworth Graham has filed a claim against the Jamaica Stock Exchange (JSE) and its managing director, Marlene Street Forrest, alleging breach of his employment contract, following efforts to suspend him from the job.

Graham is attempting to block the suspension, which he is fighting before the Industrial Disputes Tribunal (IDT), and any other action that could result in his dismissal.

Supreme Court Justice Viviene Harris is expected to continue hearing submissions in Chamber, this morning, on Graham’s application for an injunction barring the JSE from convening a disciplinary hearing against him, pending the outcome of proceedings at the IDT relating to his suspension.

SUSPENSION NOT PUNITIVE

As chief regulatory officer in the Regulatory and Market Oversight Division of the JSE, Graham’s job is to ensure that listed companies and licensed brokers comply with the rules and regulations of the JSE.

He is also asking the court for an order to allow him to continue in his employment, to which the JSE is objecting on grounds that his suspension is not punitive because he has been sent on leave but is being paid.

Attorney Georgia Gibson-Henlin QC made submissions on Graham’s behalf on Monday. The JSE’s attorney, Patrick Foster QC, began submissions on Monday and is expected to conclude today, Wednesday.

Street Forrest, who was recently promoted to managing director, has been named first defendant in her former capacity as company secretary and general manager, and the JSE the second defendant in the claim filed in the Supreme Court on April 24.

Graham was suspended in mid-January, and would have faced disciplinary hearings in March, according to a 37-page letter laying out a series of issues against him dating back several years.

But he began fighting the suspension immediately, by turning to the Ministry of Labour & Social Security for a hearing.

Graham is contending that the JSE, by its actions, flouted and disregarded his contract, the Labour Relations and Industrial Disputes Act and the Labour Relations Code by refusing to attend conciliation proceedings. He is also arguing that he was not suspended because he is being paid, even though he has been directed not to show up to work and physically barred from doing so when he attempted to attend.

According to the particulars of his claim against the JSE obtained by Gleaner Business, the minister initially refused to refer the dispute to the IDT on the basis of the JSE’s assertion that Graham was not suspended.

As a result, on March 10, 2017 Graham sought a court order for an injunction, as well as for judicial review of the minister’s decision not to refer the matter to the IDT, pending an opinion from the attorney general.

On March 21, the labour ministry advised Graham and the JSE that the matter is to be referred to the IDT, as a result of which the application was discontinued against the minister.

According to the claim, filed by attorneys Henlin Gibson Henlin, Graham reports directly to the Regulatory and Market Oversight Committee (RMOC). That committee is comprised of only independent directors of the JSE and its decisions are final and binding on the JSE and all market constituents.

The Jamaica Stock Exchange Limited is itself a listed company on its own exchange, and as such is it, too, is subject to market oversight.

RMOD and RMOC were created on May 14, 2008 when the JSE demutualised to separate the commercial and regulatory functions of the JSE.

It was also created to address varying negative perceptions about the JSE such as conflict of interest, insider trading, and market manipulation, according the claim.

Before 2008, Graham held the position of assistant general manager of the JSE and had investments on the exchange.

He was offered the position of chief regulatory officer, a condition of which was that he was required to sell all his shares in companies listed on the JSE and agree not to undertake any further trading on the market.

That was in exchange for the JSE providing him compensation at a level that reflected the loss of his investment income and also commensurate with his position as chief regulatory officer.

Graham is contending that in 2008 when he was appointed, the JSE advised him that he would be paid 50 per cent of the chief regulatory officer’s compensation and emoluments in year one, and if he performed creditably, he would be paid the full compensation thereafter. He is saying that although he met that and other requirements the JSE has breached that promise because to date, he has not received the compensation expected.

Among other things, he is claiming damages for loss of investment income from 2008 and alternatively for retroactive salary from that year.

mcpherse.thompson@gleanerjm.com