The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian broker/dealer, which admitted to misusing almost $4 million in client monies without permission, has agreed to go into voluntary liquidation after deciding it “made no financial sense” to continue fighting regulators.

Roy Sweeting, the attorney representing Tillerman Securities, told Tribune Business that voluntary winding-up, and appointment of liquidators, was “best outcome that could be achieved in the circumstances”.

The Glinton, Sweeting & O’Brien partner added that with his troubled client barred from doing business, it would have been “bled dry” had it continued its battle against the Securities Commission.

Tillerman’s voluntary liquidation is part of a wider agreement reached with the Securities Commission to end their near two-year battle, with the regulator set to drop its own winding-up petition against the broker/dealer.

The deal was put into effect yesterday before Justice Ian Winder, with Mr Sweeting informing the Supreme Court on Tillerman’s behalf that the company’s directors - Hans Christian Saunders, Anthony Dupuch and attorney Craig Butler - had resolved to place it into voluntary liquidation.

Raymond Winder, Deloitte & Touche (Bahamas) managing partner, and his colleague, Mark Munnings, have agreed to act as Tillerman’s voluntary liquidators.

Tribune Business understands that the accountant duo will, early next week, seen a supervision Order from the Supreme Court to place the liquidation under the latter’s oversight.

At the same time, the Securities Commission will drop its winding-up petition against Tillerman, with the broker/dealer also discontinuing its own action that had - temporarily at least - blocked the regulator’s action.

“It’s done,” Mr Sweeting confirmed to Tribune Business yesterday. “The company [Tillerman] has resolved to go into voluntary liquidation, and Ray Winder and Mark Munnings have been appointed liquidators.

“There’s a couple of procedural things we need to finish, and close out the proceedings that are on record. Once the liquidators have applied for a supervision order, which is part of the agreement made, then [all other] proceedings will be withdrawn.”

Mr Sweeting added that Messrs Winder and Munnings would likely apply for the supervision Order to make themselves joint official liquidators of Tillerman “early next week”.

“I think it’s the best outcome that could be achieved in the circumstances,” Mr Sweeting told Tribune Business of Tillerman’s voluntary winding-up agreement.

“I think they [Tillerman’s directors and shareholders] felt, and I agreed with them, that they had strong arguments to make against some of the decisions the Securities Commission made about their company,” the Glinton, Sweeting & O’Brien attorney continued.

“But they were looking at a long, drawn out fight over this thing, and doing that while prevented from doing business; it made no financial sense to continue with the fight.

“They were going to bleed them dry long before the fight was over. This way they, in fact, have a really good shot... at making their investors whole.”

The Securities Commission had sought to petition for Tillerman’s winding-up after the broker/dealer admitted to using almost $4 million in client monies to fund its operating expenses and business development plans without first getting their permission.

Tribune Business previously revealed that apart from “the improper use of its clients’ funds”, Tillerman Securities has also been unable to meet the minimum $300,000 regulatory capital requirement for two years.

Detailing numerous serious breaches by the Bahamian-owned broker/dealer, in legal filings the Securities Commission added that Tillerman was also “insolvent”, with assets exceeding liabilities following several years of sustained losses.

Its application for Tillerman’s provisional liquidation, made late last year, came following an 18-month saga that concluded with the broker/dealer’s alleged failure to deliver on numerous promises to both reimburse its clients and remedy its regulatory capital deficiency.

Tillerman, though, had managed to temporarily thwart the Securities Commission’s winding-up bid, after persuading Justice Winder that the regulator had failed to comply with the disciplinary process set out in section 157 of the Securities Industry Act 2011.

The broker/dealer’s principals also alleged that they had agreed a ‘rescue plan’ with 13 clients, who had given “retroactive consents” to Tillerman borrowing their assets.

Michael Scott, the attorney representing the Securities Commission, confirmed yesterday’s developments in the Supreme Court, adding that his client was “entirely satisfied” with the agreed resolution.

“The matter will be in the hands of the liquidators, who will become joint official liquidators, and subject to the regime of the courts,” Mr Scott told Tribune Business.

“The Commission is entirely satisfied with the unexpected, but very necessary turn of events. This is a happy result for the Commission, and they’re very pleased.”

Mr Winder yesterday confirmed to Tribune Business that he and Mr Munnings had agreed to act as Tillerman’s liquidators, saying: “That’s accurate. We’re taking it on.”

The Securities Commission is likely to view the voluntary liquidation agreement as a ‘victory’, given that it ends a situation which - in its eyes - threatened the regulatory integrity and reputation of the Bahamas as a jurisdiction, plus the ‘orderliness’ of the capital markets.

From the perspective of Tillerman and its principals, the agreed resolution ends the winding-up petition against them, and possibly also blocks further legal and/or regulatory action being taken.