Misconduct allegations against Cornerstone withdrawn as legal battle ends

The committee managing businesswoman Rita Humphries-Lewin’s affairs has formally withdrawn allegations of misconduct against investment firm Cornerstone, its subsidiary Barita Investments Limited, and two of the firm’s top executives, Paul Simpson and Jason Chambers.

The three-man committee was led by Humphries-Lewin’s husband, Karl Lewin.

The decision to withdraw is part of a settlement that ends a legal battle concerning over $2-billion worth of transactions involving the retired businesswoman, who has reportedly been diagnosed with dementia.

Details of the settlement and what each party agreed to have not been made public, which is typical of settlements.

The retraction, published in The Sunday Gleaner yesterday, was made by the committee established by a Supreme Court order in July 2023.

It stated that further documentation had been reviewed, leading to the withdrawal of accusations of deceptive practices in Humphries-Lewin’s sale of over 28.2 million Barita shares and subsequent purchase of Cornerstone shares. The statement expressed regret for any harm caused to Cornerstone United Holdings Jamaica Limited and Cornerstone Financial Holdings Limited (the Cornerstone Companies), Chambers and Simpson.

“In light of the further information and documentation and having consulted with and taken advice from attorneys-at-law, and in the interest of justice, the committee withdraws all allegations and imputations of misconduct and wrongdoing against the Cornerstone companies and their officers, Paul Simpson and Jason Chambers,” the committee said.

It added, “We appreciate that certain complaints would have called into question their professional characters, integrity and judgment and may have included inflammatory statements about them, and that it may have raised concerns on the part of the relevant regulators.”

FID probe

The initial allegations prompted scrutiny by the Financial Investigations Division (FID) which noted that there could be “some merit” to parts of the claim. The FID drew no conclusions in the matter.

Meanwhile, the Financial Services Commission at the time acknowledged receiving a complaint.

The background to the case stretches back to September 2021, when Humphries-Lewin sold shares in Barita valued at over US$15 million (J$2 billion) to purchase approximately 1.4 million shares in Cornerstone.

Her husband, Karl Lewin, in an affidavit, claimed his wife was mentally impaired during the negotiations and that it should have been apparent to those familiar with her that she was not fully competent.

Karl Lewin asserted that Humphries-Lewin, founder of Barita Investments in 1977, was diagnosed with dementia in January 2019 and showed noticeable cognitive decline. He alleged that Simpson, CEO of Cornerstone, visited their home frequently bearing gifts, which he argued aligned with efforts to gain favour. He also contended that neither legal nor financial advice was sought independently by his wife during negotiations.

Simpson, Chambers, and other representatives of Cornerstone denied any wrongdoing, stating that they had no knowledge of the dementia diagnosis and saw no signs of cognitive issues during their interactions. They insisted that the transactions were legitimate and included detailed discussions with Humphries-Lewin and claimed that Lewin even sought legal advice.

As of November 10, the committee, citing legal advice and new evidence, announced that it had agreed to discontinue the counterclaim against Cornerstone, Barita, and their executives. The statement also extended an apology, specifically to Simpson and Chambers.

“We sincerely regret any harm that may have been caused to the Cornerstone companies, Barita, their subsidiaries and their officers, especially Messrs Simpson and Chambers, the chairman of the companies and their families,” read the statement.

The issue became public last year after Cornerstone companies, Chambers, and Simpson filed a claim in the Supreme Court seeking declarations that the arrangements and the transactions involving Humphries-Lewin were “legally justified, valid and enforceable”. They had named Humphries-Lewin and her niece, Deborah Ann Mordecai-Edwards, as respondents.

The court action was triggered by allegations levelled by Mordecai-Edwards against Cornerstone and the two top executives.

The Supreme Court trial of that matter was set to start today. However, the matter was not among the cases listed for this week, based on the court schedule published on Friday.

EDITOR’S NOTE: Cornerstone, its senior executives Paul Simpson and Jason Chambers, along with Barita, filed a lawsuit against The Gleaner in 2023, alleging defamation associated with the coverage of the matters filed in court.