Insider trading risk
Integrity Commission calls for strict laws and guidance to mitigate conflict of interest and abuse of authority for financial gain by public officials
Published:Saturday | September 21, 2024 | 12:08 AMKimone Francis/Senior Staff Reporter
The Integrity Commission (IC) is pressing for “strict laws and guidance” that will clamp down on activities that amount to insider trading, amid reports of parliamentarians and public officers acquiring shares and equities in public corporations and private companies regulated by the Government.
The IC’s Director of Investigation, Kevon Stephenson, in the 171-page investigative report into Prime Minister Andrew Holness’ statutory declarations, raised concerns about the issue with respect to public officers and parliamentarians.
Stephenson, in his recommendations, noted that parliamentarians and public officers have engaged in the purchasing of shares and other equities in public corporations, as well as private companies, which fall under the regulatory regime of the Jamaican Government.
Stephenson said without prejudice to the right of any citizen to engage in any of the foregoing activities, he is recommending that the Parliament and the cabinet secretary implement strict laws and guidance to mitigate conflict of interest, and abuse of authority for financial gain, and other actions which may, in substance, amount to insider trading.
“It cannot be overlooked, that parliamentarians and public officers, by virtue of their respective positions, will come into confidential information from time to time, having to do with investment opportunities, directly or indirectly, arising from government interventions and policies, which they could use to their advantage or for the benefit of another,” Stephenson said.
Illegal in Jamaica
Insider trading is the trading of a company’s securities by individuals with access to confidential or material non-public information about the company.
The practice is illegal in Jamaica and constitutes a breach of section 51 of the Securities Act (2014).
A person who contravenes the provision is guilty of an offence and will be liable on conviction before a judge of the Supreme Court sitting without a jury – in the case of an individual, to a fine or imprisonment for a term not exceeding 10 years; or in the case of a company, to a fine.
CLEARER GUIDELINES
On Thursday, Opposition Leader Mark Golding said he supports the call, indicating that the Financial Services Commission has the statutory role and responsibility over the act.
“I agree that there needs to be clearer guidelines or certainly the guidelines, if they exist, should be revisited and tested for accuracy in light of the kind of activities leaders in the country are apparently engaged in while they’re in Government,” said Golding.
Golding said the Ministry of Economic Growth and Job Creation and the Office of the Prime Minister falling under Holness means that he has “huge sway” over the public sector. He said under the two, the prime minister is responsible for board appointments for the plethora of public bodies that come under his portfolio responsibilities.
“For him as a minister or, indeed, Mrs Holness as his wife, being involved actively in commercial activities that are regulated by those bodies or seek permits or approval from them creates real strong possibilities of conflict of interest,” said Golding.
“So, I understand why the Integrity Commission has raised that point and I do support the call for there to be further development of rules and guidelines that can inform how, if at all, persons in these kinds of positions may or may not engage in these kinds of activities.”
The opposition leader said it is really for the Government to engage the processes of government on the issue for it to be addressed via policy which, he said, he would support.