The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

A Bahamian broker/dealer embroiled in a furious legal battle with the Securities Commission yesterday confirmed it will close this week with multiple job losses having already occurred.

Guy Gentile, principal of SureTrader and MintBroker International, told Tribune Business in an e-mail last night that it had been a "sad weekend" after the operation based in Bay Street's Elizabeth on Bay plaza released "around 15" staff on Friday.

He added that SureTrader's clients had been asked to either close their accounts or have them transferred to another broker by this Friday, after sending this newspaper a signed missive headlined "Exiting the brokerage industry" that started with the phrase: "In life there is a rule 'everything has a beginning and an end'. Business is not exempt from this rule."

However, Mr Gentile did not respond to Tribune Business's e-mail asking whether SureTrader's closure has any connection to his and the company's current legal battles with the Securities Commission of The Bahamas, the local capital markets regulator.

This newspaper can reveal that Philip Davis QC, the Opposition's leader, is the attorney representing Mr Gentile and SureTrader/Mintbroker in the Judicial Review action they launched against the Securities Commission in the Supreme Court following the regulator's recent bid to suspend their licence and registration for five days.

Both sides are due to appear today before Justice Ruth Bowe-Darville today for a hearing on whether the injunction she granted to Mr Gentile and his business, which stayed the five-day licence suspension, should be continued and revoked.

Tribune Business understands that the Securities Commission was infuriated that SureTrader/MintBroker effectively went behind its back to obtain the injunction, having previously agreed to meet with the regulator to discuss its concerns and the broker/dealer's proposed resolutions on September 24.

Yet that very same day, SureTrader was triumphantly boasting on its website: "We have good news. By court order, our suspension has been lifted and trading has resumed. We will also resume normal business operations tomorrow, Tuesday, September 24, and our priority will be to ensure that all client queries, concerns and requests are responded to in a timely manner."

Tribune Business sources familiar with the matter, speaking on condition of anonymity, told this newspaper that the Securities Commission was especially concerned that the injunction could block its investigation into SureTrader/MintBroker's business activities.

"It's actively involved in an investigation and doesn't want all regulatory proceedings against him [Mr Gentile] to be stayed because it needs to remain active," one contact said. "They [SureTrader] clearly wanted to throw a wrench into the Commission's ongoing investigation, and that is most worrisome to the Commission."

Besides getting an injunction, Mr Gentile's business has also launched a Judicial Review challenge on the basis that the Securities Commission had exceeded its authority and was not properly exercising its power in relation to the five-day suspension. It is understood that the regulator is being represented by John Delaney QC, principal of Delaney Partners and the former attorney general.

Mr Gentile did not respond to Tribune Business's questions on any of these legal issues, but did confirm that his Bahamian business - at one point said to employ 60 persons - was closing this week.

"We are asking clients to transfer out by Friday," he confirmed. As for job losses, Mr Gentile added: "Unfortunately around 15 were let go Friday. It's been a very sad weekend." A message online, purportedly from SureTrader to its clients, said: "We would like to advise that without notice and reason our clearing broker has recently changed the terms of our relationship. In light of this there will be changes to your trading account."

Clients have the option of either transferring their account to another broker, F1Trade, by Friday, November 8, or closing it and having all cash and assets remitted to them. "On Monday, November 4, all client will be placed on closing transactions only," the notice said.

In his personal note, Mr Gentile wrote: "When I started SureTrader in 2011 it was an exciting time for opening up a brokerage in The Bahamas. Not only a beautiful country but one that was hospitable to business that also offered a great deal of talent that enabled SureTrader to grow and prosper, having opened accounts for over 40,000 clients and employing over 100 staff persons who ran SureTrader day-to-day.

"I am very proud to gave given such talented Bahamians the opportunity to build careers and grow as professionals. I have been in the brokerage business for over 20 years. Many know my story due to hard work and pulling myself up by my own bootstraps to learn this business on my own, which led me to thrive and prosper."

Then, seemingly alluding to his legal challenges, Mr Gentile wrote: "My business model has been a great inspiration to many other start-ups because my model has been copied many times over and those businesses have also thrived.

"As have many things in this life, this business has evolved: Increased competition, a major movement into commission-free models, as well as many other challenges with banking, clearing and regulations."

Tribune Business understands that the Securities Commission has kept Mr Gentile and his businesses under close scrutiny for some time, and this is not the first time he has had a run-in with the Bahamian regulator.

Mr Gentile and Swiss America Securities, which trades under the SureTrader and Mintbroker International names, previously agreed to a $120,000 settlement with the Securities Commission in 2018 after failings were identified failings in their customer due diligence processes and record-keeping procedures.

The fines were spread over 10 failings, which included not verifying client accounts; not conducting KYC and risk monitoring of clients; failing to provide details on insurance coverage and an outsourcing agreement; and not notifying the Securities Commission of its name change.

Mr Gentile told Tribune Business at the time that all the breaches had been adequately addressed, but he has subsequently been engaged in a long-running battle with the the Securities Commission's US counterpart, the Securities & Exchange Commission (SEC), over multiple allegations that he and Swiss America/SureTrader violated US securities laws.

While the SEC's first effort was defeated in the US courts, it quickly came back with claims that Swiss America and Mr Gentile were breaching securities laws by acting as an unregistered broker/dealer and soliciting US clients without the necessary registration and permissions.

This was vehemently denied by Mr Gentile, but the SEC has been making progress in its bid to obtain potential evidence via subpoenas issued to one of his former attorneys and a Florida-based business. The south Florida district court has said it is minded to grant the SEC's subpoena enforcement requests despite resistance from the targets and Mr Gentile.

Mr Gentile has enjoyed a somewhat colourful career in the Bahamas, with Tribune Business reporting in 2016 how he and his broker/dealer were allegedly used as "bait" by the Federal Bureau of Investigation (FBI) to help snare numerous international securities fraudsters.

He claimed that he and his Bahamian businesses, including the now-closed Sur Club Sushi Bar, were "forced" to play key roles in undercover 'sting' operations targeting criminals earning millions of dollars from market manipulation scams.

Their participation even extended to the 'bugging', both by video and sound, of Swiss-America's Bahamian head office in a successful bid to gain evidence against a Canadian fraudster who subsequently pleaded guilty to the charges against him.

Mr Gentile also attracted international media coverage more recently after his Russian-born, model girlfriend, Kristina Kuchma, 24, in a fit of rage drove his Mercedes S400 hybrid into the pool at his Ocean Club home after he ended their 18-month relationship by text and allegedly reneged on a promise to provide $50,000 for one of her business ventures.