Garth Rattray

The recent Las May Gleaner editorial cartoon depicting Cash Plus as a smashed Humpty Dumpty that fell off the wall was brilliant and amusing. Beside Humpty Dumpty was a concerned woman and approaching him (with stethoscope and medical bag) was the depiction of a representative from Pricewaterhouse- Coopers. However, I believe that the cartoon could do with a few minor adjustments. Although Humpty Dumpty would have fallen eventually, he was pushed by the Financial Services Commission (FSC) and fell on his many investors. This resulted in egg on their faces and widespread trauma.

High-risk investment

Most felt that Cash Plus was not sustainable. The company informed lenders that theirs was a high-risk investment. But, warnings from the FSC were staid, generalised and didn't inform people that the regulatory body could suddenly halt all Cash Plus activities. They did not advertise the detail of anyone's chequered past and, as far as I recalled, they did not specifically instruct people not to invest in Cash Plus unless and until it was regulated.

Consequently, Cash Plus became very popular as many investors came on-board. Cash Plus committed itself to funding football and it was even strongly rumoured that it funded both political parties. Recent accusations and challenges from certain politicians would certainly seem to confirm this. I would therefore love to know if it was politics, tardiness, timidity, pressure from the banks, waiting on the enactment of a law, waiting on a court ruling or sheer happenstance that made the FSC fail to act against Cash Plus until after the general election.

Aura of credibility

Because Cash Plus was able to operate unregulated for so long and consistently deliver a 10 per cent-per-month interest rate for several years, it had an aura of credibility. And, when a certain financial authority figure publicly gave tacit support to unregulated investment activities, legitimacy was added to its existence.

I often wonder if the FSC was formed to protect investors from crooks and/or rapacious businesspeople. Was it also formed to protect investors from themselves? If so, that body failed to protect hapless investors because it achieved none of the above. Tame ads and warnings of possible financial ruin pale in comparison to what pertains in our harsh present-day economic climate. The banks give high-interest loans while offering paltry saving rates, the government taxes them, our sliding dollar and steep inflation rate effectively gobble up any real interest on our savings. Established, secured and bona fide financial institutions have fallen just like Humpty Dumpty so what's the average Jamaican to do? Depend on Lotto, Cash Pot, Lucky Five, Pick Three, Dollaz, Win Quick, horse racing or divine intervention to provide some comforts in life and for his/her financial security and future?

Surely, people are going to try investing in any scheme, club or entity that offers tangible returns on monies. A responsible regulator must be bold, vociferous, informative and effective in decrying or blocking suspicious organisations. Telling people to be careful and to check out companies before investing has proven to be totally inadequate.

Failed to protect investors

I also strongly believe that (for whatever reason), having failed to protect investors, the FSC should have sought to protect those same investors by giving a well-publicised, medium-term plan for action against Cash Plus if it failed to comply. New and established investors would have been infinitely more cautious.

Blame for the current Cash Plus debacle must be shared between our high cost of living, the low-savings rates in the banks, desperation spawned by an uncertain economy, the Cash Plus organisation and the FSC.