COK takes legal action against Intertrade

McPherse Thompson, Assistant Editor - Business

The Supreme Court has granted an injunction to COK Sodality Co-operative Credit Union against Intertrade Finance Corporation from which it is seeking to recover an undisclosed sum of money from the New Kingston-based securities trading and fund-management outfit.

The Mareva injunction, also known as a freezing order, means that Intertrade Finance Corporation is prohibited from disposing of its assets until the matter has been heard and determined by the court.

Jacqueline Mighty, COK's chief executive officer, declined to disclose the extent of the debt, citing a confidentiality order made by the court, which she said directed that the documents related to the proceedings be sealed until June 28 when the matter will again be heard.

"Having discussed the issue with our attorneys, Hamilton, Brown-Hamilton and Associates, they have advised that COK's action against Intertrade is being pursued in the courts and that the court proceedings have been sealed by the courts until June 28, 2011, which means that we are prohibited by order of the court to speak on the particulars of the matter until the seal has been removed," she said.

Last week, it also emerged that Intertrade Finance Corporation, which was hitherto involved in foreign-exchange trading, surrendered its cambio licence to the Bank of Jamaica.

Larene Samuels, director of the cambio and remittances licencing department at the central bank, said the company was not obligated to give a reason for giving up the licence and has not done so, but that it was no longer authorised to trade in foreign exchange.

Leroy Paul, vice-president for treasury and operations at Intertrade Finance Corporation, to whom the Financial Gleaner was referred, declined to comment on either the injunction granted against the company or the reason for surrendering the cambio licence.

In May, the Financial Services Commission (FSC) issued a cease-and-desist order against Intertrade Finance Corporation prohibiting the company from undertaking any new business, and its subsidiary Intertrade Investments to stop conducting securities trading.

The FSC made the order on the basis that both companies were in breach of the Securities Act.

The cease-and-desist order was also extended to board members and senior managers of the companies.

The FSC said the cease-and-desist order was issued against Intertrade Finance Corporation based on its failure to comply with Section 38 of the Securities Act, by misrepresenting to clients the nature of the securities in which their funds were invested.

In addition, the regulator said the company failed to pay over sums to certain clients, in breach of its instructions.

At the time it made the order, the FSC said that based on a review of interim financial statements and other documents relating to the company's financial position, the licencee may have misrepresented to the FSC the total funds under management, as well as the corresponding liabilities.

The FSC also had concern for the licensee's liquidity, cash flow and capital, and the safety and soundness of its operations and financial condition, as well as for the protection of the licencee's clients.

Reporter Marcella Scarlett contributed to this report.

mcpherse.thompson@gleanerjm.com