The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A “super-strong” Bahamian broker/dealer would be “twice the size it is now” if not for a “bogus” US investigation targeting its principal, Tribune Business was told yesterday.

Guy Gentile, head of MintBroker International, the former Swiss America Securities, told this newspaper that the Bay Street-based business’ “super strength” - with $20m in annual revenues and profit margins in the 30 percent range - had enabled it to withstand the Securities & Exchange Commission’s (SEC) ongoing offensive against himself.

Describing the US capital markets regulator’s actions as totally unjustified, he reiterated that it had no evidence to prove its central allegation that he and MintBroker had been directly soliciting American clients while lacking the necessary registration approvals to do so.

“It’s frustrating to me that where the [US] government someone or investigates someone there’s always the perception you’re doing something wrong,” he told Tribune Business. “In this case, that doesn’t exist.

“We as a company have taken steps long, long ago to ensure we have more than one bank, and have banking partners that understand what’s happening. We’re surviving. Our business did better last year than in 2017, although not by much.

“I don’t know what will happen this year. I expect it to be about the same, maybe down a bit, but not due to this [the SEC],” he added. “There’s more competition, more players entering the space. There’s another firm in The Bahamas that competes with me, offering online trading.

“We’re still the leader in the space. We believe that we’re the largest in the space. There’s others doing exactly the same as I’m doing; they’re not doing anything differently. Why are they not being harassed.”

Mr Gentile’s Bahamian broker/dealer, which is based in the Elizabeth on Bay Plaza off Bay Street, was set up to offer online brokerage services to day traders offshore, giving them a competitive platform from which to play the markets.

However, both he and MintBroker International have been bedeviled by the SEC’s nine-year legal pursuit of himself, which - in its latest form - has resulted in banks and clearing houses severing relationships and closing accounts after receiving subpoenas from the US capital markets regulator requesting information on all their dealings.

Mr Gentile, who has already staved off several SEC lawsuits, has described its actions as a vendetta in response to his decision to stop working for it and the US Department of Justice as an informant in cases that helped snare several financial criminals.

Despite previously warning that the SEC’s actions, and especially its latest probe, could undermine both MintBroker International’s future and that of its 60 Bahamian staff, Mr Gentile said no workers had deserted a business that remains highly capitalised.

“Every week I put an in-house memo out, but it’s [the SEC investigation] not had any affect,” he told Tribune Business. “To-date we’ve lost just one bank account in Canada, but the fact the SEC says it’s investigating someone, everyone gets afraid.

“It’s a bogus investigation because they want to punish me. They’ve been getting away with it, and finally I’ve put my foot down and sued them.”

Mr Gentile said it was impossible to determine the business and clients potentially lost to MintBroker International because of the investigation, adding: “It’s hard for me to quantify in numbers. There’s no question that some customers see this and close their accounts, and some customers do not open accounts at all.

“We’ve not lost any staff because of this. We’re a very well capitalised firm. If we lose bunch of clients we’re not going to have a problem paying our staff. We’re super strong. We do $20m a year in revenue and profit margins are in the 30 percent range.

“It’s a very profitable, successful business. Could we have many more employees and clients? Yes. The firm would be twice the size if they left me alone. If I was able to focus on building my business, and not putting resources into defending myself.... This is not good for business. Most businesses don’t survive this. The fact we have says a lot right there.”

Mr Gentile, in previous court filings, detailed the lengths MintBroker International had gone to so that it cannot be accused of soliciting US clients.

“It maintains a website that is accessible from anywhere in the world, but no marketing efforts whatsoever are directed towards the United States. All of the company’s advertisements on the Internet explicitly state that the advertisement was not intended for US persons, and the broker/dealer’s website contains a pop-up which prevents access to anyone with a US Internet IP address unless they confirm they have not been solicited,” he explained.

“If a US-based investor seeks an account they cannot circumvent the pop-up and sign for one over the Internet. Instead, they must contact The Bahamas and request an access code. That code, once obtained, will allow the investor to create an online account and acts as proof that the client was not solicited by SureTrader [one of MintBroker’s trade names], but rather voluntarily took steps to find the website and open an account.

“I understand that the securities laws to not preclude unregistered broker/dealers from serving United States customers, and that the prohibition is on soliciting them - something SureTrader takes great effort to avoid doing.”

Tribune Business reported in 2016 how Mr Gentile and his broker/dealer were allegedly used as “bait” by the Federal Bureau of Investigations (FBI) to help snare numerous international securities fraudsters.

He claimed that he and his Bahamian businesses, including the now-closed Sur Club Sushi Bar, were “forced” to play key roles in undercover ‘sting’ operations targeting criminals earning millions of dollars from market manipulation scams.

Their participation even extended to the ‘bugging’, both by video and sound, of Swiss-America’s Bahamian head office in a successful bid to gain evidence against a Canadian fraudster who subsequently pleaded guilty to the charges against him.