By NEIL HARTNELL
Tribune Business Editor
The Chamber of Commerce last night fully endorsed its chief executive's performance and integrity after details of his ten-year securities industry ban and total $210,000 fines emerged.
Michael Maura, the Chamber's chairman, in a signed statement described Edison Sumner as "an integral part of the success" of the private sector advocacy body since 2013 following his "settlement agreement" with the Securities Commission over activities prior to joining.
The Chamber statement was released after Tribune Business obtained the agreement, signed on July 18, 2018, relating to Mr Sumner's previous role as a 5 percent shareholder, director and chief operations officer of the failed broker/dealer, Montaque Capital Partners, which collapsed into court-supervised liquidation in 2011 (see other article on Page 1B).
Related party transactions featured heavily in Montaque Capital Partners, and the Securities Commission's case against Mr Sumner centred on just one - Internet Protocol Solutions International (IPSI), the 'triple play' Internet, TV, and data/communications provider - for which he was also president and chief executive.
IPSI, whose chairman was former governor-general, Sir Orville Turnquest, and included other prominent Bahamians such as Larry Carroll and Fritz Stubbs as directors, owed Montaque Capital Partners some $178,006 when the broker/dealer fell into insolvency.
Mr Maura last night said the settlement agreement related to events prior to Mr Sumner's hiring, "and the appointment took into consideration" what was detailed in it.
"The [Chamber] chief executive advises that the settlement agreement represents acceptance of responsibility, as a director, for the matters contained therein and draws to a close an extended process," Mr Maura added.
"The performance of the Chamber chief executive has not been impacted by the proceedings of the Securities Commission, and he has been an integral part of the successes of the Chamber and its increased profile and contribution to the economy of the Commonwealth of the Bahamas and, specifically, the activities of commercial enterprises represented by the BCCEC."
Mr Maura gave Mr Sumner the Chamber's full backing to continue in his post, adding: "The BCCEC looks forward to Mr Sumner's continued efforts in his role as the chief executive."
The documents obtained by Tribune Business suggest that Mr Sumner was a minor player, and almost "collateral damage", in Montaque Capital Partners' failure, with the main role occupied by 95 percent majority owner and president, Owen Bethel.
This is indicated by the much harsher sanctions imposed by the Securities Commission against Mr Bethel, which include a life ban from the securities industry (appealable after 15 years); a collective $600,000 in fines; and repayment of an "acceptable" amount of the $3.5m owed to Montaque Capital Partners by related parties and affiliates.
Mr Sumner, by contrast, received just a 10-year capital markets ban that can be appealed after six. He has to pay a collective $150,000 fine, representing $50,000 for each of the three infractions identified by the Securities Commission - improper record-keeping/accounting; the mingling of client funds with those of the company's; and "conflict of interest".
The regulator's issues with Mr Sumner centred on IPSI, which was 16 percent owned by Montaque Capital Partners, and the related party transactions through the broker/dealer that resulted in the 'triple play' provider owing it some $178,000.
"In the case of the defendant [Mr Sumner], a company called IP Solutions International, for which at all material times the defendant acted as its president and chief executive, and which was also an investee company of Montaque, was indebted to Montaque in the amount of $178,0006," the settlement agreement stated.
It added that IPSI had agreed to pay Montaque Capital Partners' liquidators, accountants Ed Rahming and Kenneth Krys, $60,000 - around one-third of what is owed - to settle the debt and also purchase the 16 percent equity stake back from the insolvent broker/dealer.
These terms were adopted into the settlement agreement, with Mr Sumner in a February 25, 2016, affidavit describing IPSI as having zero net worth. He added at the time: "Unfortunately, IPSI is currently unable to pay the agreed amount of $60,000 as set out above. It is seeking financial assistance to fund the settlement. At this time IPSI is not able to confirm a date for payment."
Mr Sumner declined to comment when contacted by Tribune Business, citing the confidentiality clause in the Securities Commission settlement that prevents either party from speaking publicly about the deal and its terms.
The settlement agreement, though, noted that while Mr Sumner "does not agree with the premise for the Commission's sanctions", he accepted his responsibility as a director for what had occurred at Montaque Capital Partners.
"The defendant further noted that, to expedite the conclusion of this matter, he will accept 'without prejudice' sanctions imposed by the Commission. The defendant has also declared his current inability to pay penalties in full," it added.
"During the material times and notwithstanding the defendant's [Mr Bethel] explanation, the defendant's actions violated the securities laws and were contrary to the public interest. The defendant's conduct was both detrimental and prejudicial to the interests of Montaque and its clients."