ARE WE TO RAISE COUNTRY RISK ON THE CAYMAN ISLANDS ?

If you have been reading this blog lately, you know that I have been extensively covering a major financial scandal unfolding in the Cayman Islands. There are allegations of illegal co-mingling of investor account with those of financial advisers, of unqualified and unlicensed financial services companies engaging in securities trading, of financial advisers with dodgy backgrounds illegally using client money to trade for their own accounts,  and of the forging of client signatures, and the alteration of documents, among other crimes.

The case will be a test of the current ability, and inclination, of Cayman law enforcement agencies, and regulators, to enforce the laws and regulations governing financial services.While there is sufficient law on the books to protect investors, whether it will be enforced in this specific case, meaning in both its criminal and civil aspects, will be a good indicator of how financial professionals outside of the Caymans should evaluate County Risk.

If justice is done, you can be assured that the system works as it was designed to do, and therefore the risks of doing business are within normal parameters, meaning that they are minimal However, if investors lose their money, and their securities cannot be recovered, we will have to reconsider the safety of investments, or financial transactions in general, with financial service firms located in the Cayman Islands.