By YOURI KEMP
A Bahamian broker/dealer has hinted it resorted to court action to remove the five-day licence/registration suspension imposed on it last week by the Securities Commission.
Guy Gentile’s online broker SureTrader, an affiliate of his Swiss America Securities, used its Facebook page to announce its re-opening this Tuesday - one day before the temporary suspension imposed last week was supposed to expire.
“We have good news. By court order, our suspension has been lifted and trading has resumed,” SureTrader told its clients and the wider capital markets. “We will also resume normal business operations tomorrow, Tuesday, September 24, and our priority will be to ensure that all client queries, concerns and requests are responded to in a timely manner.”
The Securities Commission’s announcement of the initial suspension said it was due to last until yesterday, again indicating that Mr Gentile and his broker/dealer, which employs 60 persons at its offices in Elizabeth on Bay off Bay Street, were successful in persuading the courts to overturn the regulator’s actions.
Mr Gentile has not responded to Tribune Business phone or e-mail messages for several days now, and SureTrader staff declined to comment on the situation when contacted by this newspaper.
However, a previous message on the broker/dealer’s website alleged that the Securities Commission’s concerns did not relate to its financial health and soundness. In a September 21 posting, SureTrader told clients: “We are truly for the interruption in business caused by the unexpected suspension of our licence by the Securities Commission.
“The suspension is intended to be temporary pending the resolution of a few concerns by the Securities Commission. The Securities Commission has a meeting scheduled with the firm’s management for Tuesday, September 24, to discuss their concerns and our proposed resolutions.
“We believe that we will have a productive meeting. The concerns expressed to us are not about the firm’s liquidity or solvency. We confirm that we are able to very easily meet our obligations. We hope to return to normalcy next week.”
Given the subsequent reference to court action, it is unclear whether the meeting with the Securities Commission took place given that the very same day SureTrader was touting the ban being lifted by “court order”.
The broker/dealer, in its latest missive, promised that it will “not charge trade commissions to our clients, and all withdrawal fees will be waived until further notice”.
It added: “All e-mails will be answered in the order received, and we ask for your patience as we work to process the backlog of requests. We do expect longer than normal wait times, but we assure you that the team will do its best to respond to chats, emails and telephone calls throughout the entire day.
“If you were in a trade and not able to close your position during the temporary suspension, please e-mail them and the management team will review each case individually for remediation.”
The temporary suspension banned SureTrader and all its employees from dealing with client assets. Tribune Business understands that the Securities Commission has kept Mr Gentile and his businesses under close scrutiny for some time, and this is not the first time he has had a run-in with the Bahamian regulator.
Mr Gentile and Swiss America Securities previously agreed to a $120,000 settlement with the Securities Commission in 2018 after failings were identified failings in their customer due diligence processes and record-keeping procedures.
The fines were spread over 10 failings, which included not verifying client accounts; not conducting KYC and risk monitoring of clients; failing to provide details on insurance coverage and an outsourcing agreement; and not notifying the Securities Commission of its name change.
Mr Gentile told Tribune Business at the time that all the breaches had been adequately addressed, but he has subsequently been engaged in a long-running battle with the SEC over multiple allegations that he and Swiss America/SureTrader violated US securities laws.
While the SEC’s first effort was defeated in the US courts, it quickly came back with claims that Swiss America and Mr Gentile were breaching securities laws by acting as an unregistered broker/dealer and soliciting US clients without the necessary registration and permissions.
This was vehemently denied by Mr Gentile, but the SEC has been making progress in its bid to obtain potential evidence via subpoenas issued to one of his former attorneys and a Florida-based business. The south Florida district court has said it is minded to grant the SEC’s subpoena enforcement requests despite resistance from the targets and Mr Gentile.