All content of David Marchant

John McLean facing legal battle over Cayman land

January 30, 1998

Cayman's minister for land, John McLean, is facing possible legal action after he was awarded Crown land potentially worth millions of dollars that another local resident claims is legally his.Leroy Johnson has consulted attorneys about bringing a civil lawsuit against McLean and has even gone so far as to file a criminal complaint against the minister with the Cayman police, alleging theft.

Marsh & McLennan steps into punitive damages coverage row in Bermuda

January 30, 1998

Marsh & McLennan, the world's largest insurance broker, has raised eyebrows in Bermuda by setting up an offshore facility to circumvent laws in sixteen US states that discourage companies from buying insurance against punitive damages awards.The broker's actions have drawn attention to the controversial but increasingly popular practice of American insurance companies using offshore structures they ultimately own to write politically sensitive punitive damages coverage they are not allowed to provide in the US.

Bahamas accounts used to pay share ramp bribes

January 30, 1998

Bank accounts in the Bahamas was used to bribe brokers who were paid to ramp up the share prices of small companies by promoting them to their unsuspecting clients.Details of the scheme emerged this month after two men pleaded guilty to various offences in the US, including conspiracy, wire fraud, commercial bribery and securities fraud.Leonard Ruge, a 40-year-old Canadian living in Florida, and Theodore Heitzman, 51, of California, each face up to five years in prison and a maximum fine of $250,000.

Bermuda Stock Exchange rights offering under-subscribed

January 30, 1998

A rights offering carried out by the Bermuda Stock Exchange has raised nearly $2 million to pay for a new trading system and future expansion but was significantly under-subscribed, we can reveal.BSX chief executive officer William Woods would not comment on information we received from sources that the offering, which took place last August, was under-subscribed by as much as $700,000.

Insider Talking: January 30, 1998

January 30, 1998

OffshoreAlert's unblemished track record when it comes to publishing exposes, despite letters threatening litigation; human cloning group touts Cayman and Bahamas as potential domiciles, who is disgrunted ex-Bank of Butterfield employee who criticized recently-retired chairman Sir David Gibbons?, Richard Black and Mike Cascio look to form new Bermuda insurance facility, possible bribery in the Turks and Caicos Islands, Cayman Islands Monetary Authority MD Neville Grant accepts no responsibility for collapse of First Cayman Bank, Global Private Banking magazine causes mirth by describing closure of FCB as an example of regulators "acting tough on miscreants", Cayman-based Oxford Advisors opens up office in Bermuda, 18 luxury homes in Bermuda sold for a total of $72 m in 1997, and what effect, if any, will the death of Charles Collis have on Bermuda Fire and Marine Insurance litigation? 

First Proceeds of Criminal Conduct Law cases in Cayman

December 30, 1997

The Cayman Islands authorities have so far processed three matters under the Proceeds of Criminal Conduct Law, which became law in September, 1996 but became operational at the beginning of this year.Two of the matters involved applications from the US authorities to restrain the assets of suspected criminals while the other resulted in the prosecution of a man on relatively minor money laundering offences, to which he pleaded guilty and was given a prison term, said Cayman's Attorney General Richard Coles.

Western Union stops money transfers to offshore gambling operations

December 30, 1997

Western Union has cut off money transfer services to 40 offshore bookmakers in an attempt to curb unlawful sports gambling in Florida.The action was taken at the request of the attorney general to combat the proliferation of sports betting operations headquartered in the Caribbean and soliciting wagers from Florida residents.

Russian banks banned from the Bahamas, says Central Bank Governor

December 30, 1997

Reports by a newspaper in The Bahamas that a Russian bank has been approved for a bank licence are inaccurate, said the governor of the Central Bank of the Bahamas, Julian Francis.The Punch newspaper had reported that the Alpha Bank had been given permission to set up in the Bahamas.But Francis said there had been no change in the Central Bank's position that Russian banks will not generally be allowed into the Bahamas because of difficulties in adequately regulating them.

Legal victory for Mentor liquidators against Ambassador Insurance

December 30, 1997

In a ruling that has implications for all schemes of arrangement in Bermuda, the liquidators of Mentor Insurance have won an important victory in the highest court of Bermuda's legal system - the Privy Council in London.The Privy Council ruled this month in Mentor's favour in a case against Ambassador Insurance Company by determining that the courts have no jurisdiction to extend the deadline for the submissions of appeals against claims previously rejected by the scheme administrator and also for the filing of the original claims.

John Felderhof sued by Bre-X bankruptcy trustees

December 30, 1997

Deloitte & Touche, as trustee of bankrupt Canadian mining firm Bre-X Minerals, has brought a lawsuit in the Cayman Islands against its former chief geologist, John Felderhof; his wife, Ingrid; and a Cayman company they control called Spartacus Corporation.The lawsuit was filed in the Grand Court of the Cayman Islands on December 19 and signals the beginning of what will probably be a long legal battle between Felderhof and those who claim he was largely responsible for the massive Bre-X stock fraud that netted him millions of dollars.

Caribbean hotels insurer goes into run-off

December 30, 1997

The Caribbean Hotel Association Insurance Company Ltd., which hit financial trouble soon after it started, has stopped writing new business after just two and a half years in business. The news comes after many member countries of the Caribbean Hotel Association, for whom the company was specifically set up to insure, failed to put their money where their mouths were and buy insurance from CHAIC.

Cayman-UK tax initiative debate

December 30, 1997

Excerpts of a discussion at a meeting on December 3, 1997 of the Finance Committee of the Cayman Islands Legislative Assembly in which opposition members raised the delicate matter of whether the UK government had asked Cayman to begin recognizing fiscal offences in its mutual legal assistance laws. When Offshore Alert first confirmed the existence of a tax initiative in July, the Cayman government accused us of reporting lies. But, as you might be able to discern from the dialogue, there clearly were discussions on the subject, although it appears that the issue has temporarily gone away.

Bermuda introduces Proceeds of Crime Act

December 30, 1997

Bermuda has followed in the footsteps of the Cayman Islands and the British Virgin Islands and become the latest country in the region to pass anti-money laundering legislation covering the proceeds of various of crimes.

BFCL comes to an ignominious end

December 30, 1997

One of the most ambitious property developments in Bermuda's history that eventually turned into a four-year embarrassment for its sponsors has ended in typically ignominious fashion. Bermuda Financial Centre Limited was struck off from the Bermuda companies register on December 19 by the authorities and, three days later, the listing of its preference shares was cancelled by the Bermuda Stock Exchange.

First Cayman Bank – evidence of fraudulent preference

December 30, 1997

First Cayman Bank could be insolvent by as much as $34.5 million and appears to have been stripped of up to $8.3 million in the seven weeks before its collapse through withdrawals by depositors acting on inside information, according to the bank's provisional liquidator, Michael Pilling, of Deloitte & Touche.In a report submitted to the Grand Court of the Cayman Islands this month, Pilling indicated there was evidence that a massive fraudulent preference took place as FCB was on the verge of collapse.

Bank of Bermuda’s ‘poison pill’

December 30, 1997

The Bank of Bermuda has implemented a ‘poison pill' defence to protect the bank in the event of a hostile take-over.The bank announced on December 22 that it had implemented a Shareholder Rights Plan that had been authorized at a Special General Meeting on June 12 of this year.

Clarendon’s dubious business producers

December 30, 1997

Rating agencies who have ‘A' rated the Clarendon Insurance Group, which has companies in the US and Bermuda, might want to take a close look at some of the third-party insurers who are producing business on the group's behalf.Of particular interest should be the business production relationships Clarendon has with New York-based Eton Management and Deep South Surplus General Agency, which is headquartered in Las Colinas, in the Dallas area.

New guidelines to US banks with offshore relationships

December 30, 1997

In a bid to cut down on illegal activity, the US Federal Reserve has produced new guidelines designed to tighten up the practices of American banks who extend cheque-writing privileges to the customers of a foreign bank through ‘Payable Through Accounts'.The guidelines were published in September and form part of the latest edition of the Federal Reserve's ‘Bank Secrecy Act Manual'.

Brian Hall named as defendant in lawsuit

December 30, 1997

Former Johnson & Higgins (Bermuda) chairman Brian Hall has been named as one of 24 defendants in a lawsuit stemming from the controversial sale of J&H's worldwide operations to Marsh & McLennan earlier this year.

Financial troubles of Steven Blumhagen

December 30, 1997

Was Buffalo-based businessman Steven Blumhagen really the source of $30 million that was to have been the start-up capital of Resource Underwriters, as the company's Bermudian front-man, Robin Spencer-Arscott, would have us believe? Highly unlikely, we can report. Unless, that is, 46-year-old Blumhagen has recently won the New York state lottery and checked the ‘no publicity' box.

Insider Talking: December 30, 1997

December 30, 1997

Former 'Acting CEO' of the Cayman Islands Stock Exchange applies to head Bahamas International Stock Exchange, Bermuda Government wants a Bermudian, not British, Governor' Cayman judge rebukes attorney F. Lee Bailey, First Cayman Bank liquidators may want to look at two properties in Florida that belong to the Quraeshi family, further evidence emerges of Cayman Islands Government incompetence in collapse of First Cayman Bank, the hypocrisy of Bermuda's Home Affairs Minister Quinton Edness, Euro Bank Corp. receives Class 'A' banking license in Cayman.

Bermuda MP’s sex conviction overturned

November 30, 1997

The conviction of Bermuda MP Trevor Woolridge for sexually assaulting a woman has been overturned on appeal after a judge ruled that the trial magistrate's links with the ruling United Bermuda Party created a risk of bias.According to a report in The Royal Gazette newspaper, Chief Justice Austin Ward told the appeal hearing: "I am satisfied that the conduct of the trial was unfair to the appellant: there was a real possibility of injustice as regards bias."

Long Botham Boats renegotiates debt

November 30, 1997

Long Botham Boats Company Ltd., the Bermuda-based, publicly-listed company that owns Henry VIII bar/restaurant, has renegotiated its debt facility with the Bank of Butterfield.

Resource Underwriters appears to have been turned down by Bermuda’s regulators

November 30, 1997

An application to incorporate Resource Underwriters, the proposed $300 million reinsurer fronted by Robin Spencer-Arscott, appears to have been turned down by Bermuda's regulators.The Admissions Committee of the Insurance Advisory Committee met on November 7 to determine the fate of the company, said sources.

Battle for right to take BaTelCo private

November 30, 1997

An announcement is expected any day now on the winning bid for the lucrative contract to privatise the Bahamas Telecommunications Corporation.The thirteen original bidders for the BaTelCo contract down was whittled down to four earlier this month.

Stirling Cooke – What you won’t find in its prospectus

November 30, 1997

Investors contemplating taking part in the $50 million IPO of Bermuda-based insurance broker/risk manager Stirling Cooke Brown Holdings Limited, which is 24 per cent owned by Goldman Sachs, may be interested in a few details they will not find in the company's share prospectus. Perhaps the most noteworthy is the involvement of its subsidiary Raydon Underwriting Management in one of the world's largest insurance frauds. Raydon, which shares offices with Stirling Cooke at Victoria Hall, Hamilton, had the dubious distinction of managing reinsurer North American Fidelity & Guarantee.

Bermuda Cablevision settlement talks begin

November 30, 1997

American businessman Bill McDonald, who lost a crucial Privy Council hearing in October in his battle for control of Bermuda Cablevision, has been in Bermuda over the last few weeks to negotiate a settlement with his chief adversary, Bermuda Telephone Company. Sources said that an end to the long-running saga over Cablevision's ownership is in sight and that a listing of the highly profitable company's shares on the Bermuda Stock Exchange will quickly follow a settlement.

First Cayman Bank looted of millions of dollars

November 30, 1997

Investigators have uncovered strong evidence that First Cayman Bank was looted of millions of dollars before it was closed down, partly through the granting of fraudulent loans to related parties and its participation in a scheme to defraud investors in Sweden and the US.The minimum amount of the alleged fraud perpetrated at First Cayman Bank is estimated to be US$5 million and the bank itself is insolvent by at least $6.1 million, according to documents filed at the Grand Court of the Cayman Islands as part of the bank's proposed liquidation.

Insider Talking: November 30, 1997

November 30, 1997

US depositors withdraw $14 million after losing confidence in Cayman Islands, John Jefferson Jr. seeks to sell his shares in Cayman fast-food franchises, mystery surrounds the awarding of a Class 'A' bank license in Cayman to Euro Bank Corp. following a $2 million payment, John Tugwell says he quit as Bank of Bermuda CEO for "personal reasons", Bermuda Gov't Minister Quinton Edness makes difficult-to-believe claim about why Police Commissioner was fired, Bermuda Governor Thorold Masefield takes the public for idiots, did Maples & Calder senior partner Tony Travers really receive $6 million in annual dividends?, profits of First Bermuda Securities revealed, Bermuda lawyer Lynda Milligan-Whyte turns $67,200 into $500,000 at First Bermuda Securities.

Shorex 97 offshore conference

October 31, 1997

Shorex 97, one of the major offshore financial services exhibitions, takes place on December 2-4 at the Business Design Centre in London. Running alongside it will be a conference entitled Offshore 2000.

Swiss firm wins battle to buy duty free stores in Cayman

October 31, 1997

After a court battle lasting nearly 18 months, Swissair-subsidiary Nuance International Holdings Ltd. has finally been given approval to purchase a chain of local duty free shops in the Cayman Islands.The Cayman Islands Immigration Board reversed an earlier ruling - that was itself a reversal of an April, 1996 ruling - and granted Nuance permission to purchase Island Companies Ltd.

Bermuda MP Trevor Woolridge quits party after sex conviction

October 31, 1997

Church minister Trevor Woolridge has quit the opposition Progressive Labour Party after being convicted of sexually assaulting a woman parishioner.

Werner Rey loses extradition appeal in the Bahamas

October 31, 1997

The Bahamas Court of Appeal this month upheld a lower court's decision to extradite businessman Werner Rey to face embezzlement charges involving millions of dollars in his native Switzerland.

Canadian kidnapped in the Bahamas

October 31, 1997

A 31-year-old Bahamian businessman has been charged with 25 offences following the kidnapping and robbery of five Canadian men in Nassau on October 13.

Cayman MLA John Jefferson Jr. loses civil lawsuit

October 31, 1997

Cayman's National Team government has taken no action against one of its members, John Jefferson Jr., who lost a civil lawsuit that included evidence of dishonesty on his part and a letter indicating he may have attempted to extort money from a foreign airline by abusing his position as a Member of the Legislative Assembly.

Credibility concerns hold up Resource Underwriters

October 31, 1997

Concerns about the credibility of some of the people involved are holding up the formation in Bermuda of Resource Underwriters, a new $300 million reinsurer whose front-man is Robin Spencer-Arscott.

McKeeva Bush to be fired after First Cayman Bank collapses

October 31, 1997

McKeeva Bush, a director of First Cayman Bank who lied about his directorship after the bank collapsed amid allegations of fraud, is expected to be officially removed as a government minister when the Cayman Islands Legislative Assembly begins its next session on Friday, October 31.Bush has become an acute embarrassment to the Cayman government since First Cayman collapsed earlier this month, particularly with an international banking conference taking place on the island.

Harris McLean’s Canadian assets frozen

October 31, 1997

The British Columbia Securities Commission has frozen an estimated US$9 million held in Vancouver trading accounts on behalf of Cayman-based broker/dealer Harris McLean Financial Group Ltd. and Ana Jimenez, who is the mother of Richard Harris, one of Harris McLean's principals.

First Bermuda Securities sues former principal

October 31, 1997

First Bermuda Securities, an investment advisor and broker, is suing one of its former principals, Joe Taussig, and a related company, Bitter End Holdings Ltd., for $52,164 in alleged unpaid fees.The claim relates to a management contract FBS said it assigned to Taussig in June, 1995, in return for between 25 and 50 per cent of the fees earned by the contract.

The crooked empire of Charles Gordon-Seymour

October 31, 1997

Regulators might want to take a close look at Bermuda-based insurance management firm Sussex International Ltd. following the collapse by fraud over the last six months of an Antigua-registered insurer and another company based in Nevada.All three were run by Charles Gordon-Seymour, a discredited British businessman and former Bermuda resident whose ventures frequently collapse in suspicious circumstances with debts of millions of dollars.

Anything for a fee? A look at CD&P’s role in the NimsTec fiasco

October 31, 1997

If investors who pumped $2.6 million into Bermuda-based hi-tech firm NimsTec on the basis of misleading and inaccurate information are looking for someone to sue for negligence, they could do worse than to explore the role of law firm Conyers Dill & Pearman in helping NimsTec to raise capital. Before parting with their funds, investors in NimsTec who bought shares in two private placements were assured by NimsTec's officers and directors - who included CD&P partners - that no material facts were omitted from a share prospectus and that "all reasonable care" had been taken in its compilation. However, we can reveal that CD&P should have known about the appalling track record of NimsTec's 3-D camera and printing technology and its management that was not disclosed to investors because the law firm previously represented a similar company called Nimslo.

Bahamas stock offerings cancelled by regulators

October 31, 1997

Regulators in the Bahamas acted this month to prevent two public offerings from going ahead due to regulatory breaches by the companies selling the shares.Perhaps the most embarrassing postponement involved Caribbean Health & Fitness Ltd., the major developers of Gold's Gym in the Caribbean.

Cayman court enforces foreign judgment

October 31, 1997

In a ruling that could have implications for other offshore ‘paper' companies registered in the Cayman Islands and operated elsewhere, the Grand Court of the Cayman Islands has allowed the enforcement of a foreign judgement against a Cayman entity called Socoa International.The Grand Court rejected one of the main defence arguments that to allow the enforcement of a foreign judgement would be against the national interests of the Cayman Islands and ruled that the Canadian judgement could be enforced without the plaintiff having to prove its case all over again in Cayman.

BVI passes anti-money laundering legislation

October 31, 1997

Twelve months after a similar law was introduced in the Cayman Islands, the British Virgin Islands, which is home to more than 200,000 foreign companies, became the second Caribbean Dependent Territory to pass wide-ranging anti-money laundering legislation at the behest of the UK government. Bermuda is expected to be next, possibly before the end of the year.

‘Stolen’ Cayman bank records in hands of the IRS

October 31, 1997

The liquidator of Cayman-based Guardian Bank & Trust (in liquidation) has lost a petition he filed against the US government for the return of a computer tape containing details of accounts held at the bank.John Mathewson, the former chairman of the bank, handed over the tape to the FBI in June, 1996, as part of a plea bargain agreement after he was charged with money laundering offences in New Jersey.

Details about the collapse of First Cayman Bank

October 16, 1997

Two loans - one of more than $5 million to the owner and another of about $10 million to Texas oil-man Tom Hajecate - form a major part of the Cayman Islands Monetary Authority inquiry into the collapse of First Cayman Bank, Offshore Alert can reveal. These and further details about the bank's financial problems have emerged over the last few days - a period in which this newsletter has been threatened with legal action by government minister McKeeva Bush, who is a director of First Cayman, and warned by his lawyer that we faced criminal prosecution if we continued to pursue the story.

Cayman regulators close down First Cayman Bank and Gulf Union Bank

October 14, 1997

Cayman regulators yesterday closed down Gulf Union Bank and its subsidiary, First Cayman Bank, after evidence of financial irregularities was found during due diligence carried out by a prospective buyer of First Cayman.

Gulf Union’s bank license suspended in the Bahamas

October 7, 1997

The Bahamian authorities have suspended the banking licence of the Gulf Union Bank (Bahamas) Ltd. following problems at the bank's financially troubled parent and sister companies in the Cayman Islands.Regulators are investigating allegations that suspiciously large amounts of money have flowed from the Bahamas bank to its Cayman affiliates and possibly on to foreign entities over the last few months.

Bermuda Telephone Company appears to have won battle for control of Bermuda Cablevision

October 7, 1997

Bermuda Telephone Company yesterday won a major court victory in its battle to gain control of the highly profitable Bermuda Cablevision from a foreign entity. The Privy Council in London effectively refused to strike out a lawsuit brought on behalf of BTC at Bermuda Supreme Court against Bermuda Cablevision and the US-based McDonald group.

BSX de-lists NimsTec shares

October 3, 1997

The Bermuda Stock Exchange yesterday announced that it was de-listing the shares of 3-D firm NimsTec Limited for publishing an inaccurate and misleading share prospectus. The de-listing of NimsTec's shares is a direct result of an investigation carried out by Offshore Business News & Research which publishes Offshore Alert and Inside Bermuda, into NimsTec earlier this year.