Muted FSRC: Stuart-Young, Jack Stroll saga | Editorial

By Kieron Murdoch | Opinion Contributor

It has been alarming to witness the extent to which the Financial Services Regulatory Commission (FSRC) and its Chief Regulatory Officer, Paul Ashe, have been muted in the ongoing saga involving the Global Bank of Commerce (GBC) and its CEO, Brian Stuart-Young, being taken to court by a depositor, Jack Stroll, over monies owed to him. The bank’s “liquidity issues”, as the Bank’s CEO put it, and the Stroll case have been the subject of many headlines and have become even more controversial due to the government and the opposition commenting extensively on the subjects.

Last month, we reported that Stuart Young, having missed a February 28th deadline to pay Stroll, was given until May 19th, 2025 (next Monday) by the High Court to pay the aggrieved depositor. The consequence of not paying is 21 days in prison. We also reported that the GBC CEO was fined $3000 for wasting the court’s time. Stroll took the bank to court back in 2020, won judgment in his favour in 2022, but has not been fully repaid. Deadlines to make good on what was owed were missed.

At the last court hearing, which turned from a formality into a much longer and more involved session, Stroll’s lawyer questioned the bank’s solvency and accused Stuart-Young of trading while the bank was insolvent. The bank’s chief denied this, claiming that the bank was only experiencing “liquidity issues.”

This issue at GBC ought to put a spotlight on the FSRC, whose mission, according to its website, is to “regulate and supervise the international financial services sector” and whose mandate, according to the Financial Services Regulatory Commission Act of 2013, is to be executed with due regard to “the maintenance of market confidence, consumer protection and the reputation of Antigua and Barbuda as a financial centre” among other things.

On its website, GBC states that it was “licensed as an international financial institution in April 1983” and “is regulated by the Financial Services Regulatory Commission (FSRC) of Antigua and Barbuda, West Indies”. It clearly begs the question, with all that has been said in court and out of court about the troubles of the GBC, what does that say about the role of the FSRC?

Where are its Chief Executive Officer and Chief Regulatory Officer? What assessment has it done of the state of the institution and what steps has it taken thereafter? Is it satisfied that all is well? Does it feel it has a duty to report on the health of the institution to the public? When exactly did the bank’s troubles begin, and why? Were there any missteps made by the bank’s management that amounted to lapses in meeting their ethical obligations?  

It is not a stretch to say that to have an international financial institution regulated by the FSRC be found to be in a situation where it is experiencing a serious liquidity problem and being taken to court by a depositor to get their funds out of the bank is rather embarrassing for the FSRC and for Antigua and Barbuda’s reputation.

What’s remarkable is that the FSRC has not been out in front in terms of crisis management communication, seeking to reassure the public here and abroad that it is on top of matters concerning GBC or explaining whether, in their view, there is reason for concern beyond the case of Mr. Stroll. The public cannot be faulted for assumptions in the absence of clear ongoing communication from the relevant authority. Worse, in the absence of that clear communication from the FSRC, we have instead had a deluge of political chatter that has made the situation even more controversial.

The Prime Minister, Gaston Browne, and the main opposition party, the United Progressive Party (UPP), have publicly sparred with each other over the issue, with the UPP pointing to the case as an example of lax management of the offshore financial sector under the Labour administration, and with the Prime Minister defending Stuart-Young.

Browne and Stuart-Young are known to be long-time associates, and Stuart-Young has been a member of Browne’s administration for years, having been appointed to the important post of Ambassador of Antigua and Barbuda to the People’s Republic of China—a post he has retained throughout the saga at GBC.

In March 2024, a billboard displaying a picture of Brian Stuart-Young appeared on Whenner Road on land which hosts a UPP branch office. The billboard quoted Browne defending Stuart-Young, calling him “not a crook” and a “decent man” and questioning why Stuart-Young had not paid back Mr. Stroll. In less than 24 hours, the Development Control Authority (DCA) swooped in and took down the canvas from the billboard, stating that it was “defamatory” and unlawfully placed there.

The billboard itself had been there long before. What changed was the canvas over it. When it became the purview of the DCA and not the courts to determine that something published is defamatory is anyone’s guess. We are inclined to agree with those who viewed the action taken by the DCA as beyond its authority and in violation of the right to speech and expression. But alas, we digress.

Where is the FSRC in all this drama? What has it said to reassure all those watching about its own role and its capacity to avoid situations such as these? It should also be noted that the FSRC has a moral duty to go above and beyond to protect its reputation and its integrity as an effective agency, given the long-lasting reputational fallout from the Allen Stanford Ponzi Scheme.

It was a major embarrassment for Antigua and Barbuda when it was revealed that former CEO Leroy King had been implicated in the fraud. Stanford’s investment schemes, which were based in Antigua and Barbuda, attracted a large number of Antiguan investors and international investors, leading to significant financial losses when the scheme collapsed. The FSRC, while not directly responsible for the fraud itself, was involved in the oversight and regulation of Stanford International Bank, which was a key component of the Ponzi scheme.

King’s main role involved allowing Stanford and his staff to write misleading responses to regulatory questions. The former chief of Antigua’s Financial Services Regulatory Commission (FSRC) was sentenced by a US court in 2021 to 10 years in prison for his role in connection with the USD 7 billion Ponzi scheme involving the Stanford International Bank (SIB).

We rehash that only to say that given the past transgressions that have negatively impacted the FSRC’s reputation, it is paramount that the agency take all necessary steps to maintain its image and to ensure the integrity of the international financial service sector in Antigua and Barbuda. The world is watching.

About the writer:

Kieron Murdoch is an opinion contributor at antigua.news. He worked as a journalist and later as a radio presenter in Antigua and Barbuda for eight years, covering politics and governance, especially. If you have an opinion on the issues raised in this editorial and you would like to submit a response by email to be considered for publication, please email [email protected].