OT 311: Submission from Mr Michael Hardy

 

 

In my opinion, the progress being made in Bermuda towards "effective regulation" is slow to backwards. Frameworks and Statutes are one thing but proactive enforcement is another. Whilst continuing to state that the regulation in Bermuda is "strong" and that "KYC" is an essential part of the strategy of the BMA and supported by the government (ministry of Finance), scandal after scandal keeps appearing in the media without any local investigation of such criminal activity by Bermudian companies by the BMA. Yes they are now committed to helping foreign regulators to investigate criminal activities overseas i.e. for the FSA in the UK or the SEC in the US.The actual activities by these Bermudian companies, local officers and directors of these companies and or the Bermudian service providers appear never to be investigated with a view to publicly sanctioning them under the various laws under which they are licensed nor are they investigated for enabling or corroborating in the criminal acts committed in other jurisdictions or across borders. This fact is born out by the incredible statistic showing there to be no charges against Bermudian international business sector companies or connected individuals and service providers, for white collar crime, including fraud or money laundering and thus no convictions over the last 30 years that I or the Bermudian public are aware of. There have been one or two money laundering cases against Bermudians unrelated to International Business and there is ongoing an investigation by the police and the BMA regarding a local company that claimed to be regulated by the BMA for fraud.

The IMF concluded that the BMA used only "moral suasion" against licensed companies in cases of money laundering. This tactic has not been explained any further.

Further to this the BMA still claims it has no remit to investigate such possible criminal activity even when it smacks them in the face like the recent scandal of IPOC. There are many more such instances that are well reported in the media. There is no whistleblower law and the just formed FIA is only charged with accepting money laundering claims and is not responsible for investigating them. The police do not seem to be focused on white collar crime as indicated by their annual reports, whilst also helping foreign jurisdictions indict criminals in their country.

I have complained to the Ombudsman but it seems she is not willing to take the complaint on as she says again it is outside her remit, even though the Ombudsmans Act seems to indicate that such a complaint should be investigated in the public interest (in my opinion).

 

The previous Governor and the current Governor do not see the BMA as their responsibility, and are unwilling to comment on the lack of focus by the Fraud Squad on white collar crime generally.

It concerns me also that Mr. Foot is reported to have said before his upcoming visit to Bermuda that the regulation in Bermuda is OK (paraphrasing the report).

The para that you quote from the report suggests that Gibraltar has robust regulatory regime. In fact an oversight committee reviews that jurisdictions regulator from time to time and the last I read ran to many many pages. If you read the Chairman's letter included in the BMA's annual report you will find one paragraph that states that BMA is doing its job. This is supposed to be the extent of the annual report of the non-executive directors as required by the BMA's founding ACT as the oversight body for the BMA.

I am in the progress of building a website dedicated to this subject at www.bdareg.com and will detail there, all the scandals and my personal opinions on how Bermuda may be facilitating some of the major world scandalous crimes with its continued secrecy and lack of focus. Crimes that the outside world sees clearly as criminal activity, facilitated by Bermudian entities and service providers, commonly called the "Enablers". Whilst not wanting to point the finger at any particular service provider, in fact the "Enablers" depending on which scandal one refers to, in my opinion, would be necessarily be found within the Bermuda International Business Association (BIBA). This is the association whose members are accountants, lawyers, banks, trust companies etc. who would be necessary for any international entity to be set up and function from Bermuda. The BMA non-executive board is almost if not completely drawn from members of this organization.

This email represents my opinion based upon my knowledge and experience working in Bermuda for 30 years. I am willing to support my opinion with facts available to the general public, but realise that it is just that an opinion. If there is information that refutes my opinion I am not aware of it, but accept that such information may exist.

I am available for any request for further information to support my opinion that you may find useful.

 

 

18 February 2009