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Caledonian in hands of controllers

| 11/02/2015 | 8 Comments

(CNS Business): The Cayman Islands Monetary Authority has appointed two number crunchers from Ernst & Young to take charge of the affairs of Caledonian Bank and Caledonian Securities after placing the firms in controllership. The news follows revelations that the bank and its securities arm is being sued by the US Securities and Exchange Commission over allegations it was involved in a $75 million penny stock scam.

In a public notice posted on the regulator’s website (see below), CIMA announced that Keiran  Hutchinson and Clair Loebell have been appointed as controllers and assumed control of the bank, effective 10 February, in the interest of depositors, investors, clients and creditors.

Hutchinson and Loebell will also assess the financial situation of the bank in light of the serious allegations levelled against it by SEC and report back to CIMA on the situation shortly.

One of Cayman’s oldest offshore financial institutions, the bank was established in 1970 by the late William Walker. In 2011 it was acquired by New World Holdings Inc, a privately held investment company based here in the Cayman Islands.

CNS understands that there are over 65 Cayman-based jobs at the bank that may now be lost but we have not yet been able to confirm the number of posts held by Caymanians.

2015-02-10 – Public Notice – Controllership – Caledonian Securities Limited and Caledonian Bank Limited

Related article on CNS Business: Caledonian accused of $75M penny stock scam

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Category: Finance, Financial Crime

Comments (8)

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  1. Anonymous says:


    The media has FINALLY named Mr. Terrence “Terry” Duffy, Head of Lionhart Advisors Group (Canada) Ltd., in the Caledonian lawsuit.

    Mr. Duffy was previously alleged to be the UBO of Caledonian Group, a subsidiary of New World Holdings Inc. – despite CIMA’s counter.

    Standby readers & the Caymans, to see what E&Y JOLs & CIMA will report between now and its scheduled “1st Creditors Meeting” on April 16th, 2015 .

  2. Anonymous says:

    Lives have been ruined no comments on that? Typical looking at the money anyone th thinking about jobs lost and how Caymans financial industry has been pushed back 25years!

    Don’t sensationalize this anymore, it’s not riveting, it’s extremely sad news.

  3. islanderboi says:

    What a mess it was only a matter of time. Well done CIMA.

    • asrk2mouth says:

      There is no way CIMA could have stopped this because I really don’t think anyone at CIMA understands the scope of this… on the other hand, when Caledonian was making tons of money all of sudden they should have at least looked into why… and would have found the extremely corrupt OTCBB market.

  4. C'Mon Now! says:

    The questions arises about who knew what and when. We do not know what has really gone on but the defense seems to be that they didn’t realize what they were allowing some of their clients to do. That may be true but it certainly makes you question the competence and or ethics of the CEO’s, in-house Counsel and managers of the Securities division. Under the new ownership group Caledonian went from being a long-standing Cayman Institution to a high flying finance house where the CEO’s drove Ferrari’s and held extravagant parties that were splashed across the society pages as they literally broke the deck at Grand Old House. One has to wonder, where did this money all come from?

  5. asrk2mouth says:

    When the whole financial world is running away from OTCBB stocks, the brains at Caledonian think they have a discovered a niche market and dive in head first… do they not have a risk management team or a compliance officer? Greed and stupidity go hand in hand…. I guess no more lavish Calloween parties…. what do you think I can get Kobe’s Maserati for?

    • AnnaMouse says:

      Money talks and BS walks, you know the drill. Compliance and legal were not their strong suit. They added a lawyer in house on a part time basis around the same time rumours started flying about the bank’s trading activity. Then they fired a whole bunch of clients for risk purposes but were ready to take out a full page ad in the paper to capitalize on RBC exiting the wealth management business. It was a greedy marketing led machine where the legal and compliance personnel were seen as speed bumps on the road to riches. For any organization to state they oversee $30b in assets not to have a strong full-time legal team and compliance managers is ridiculous.

    • Anonymous says:

      Don’t know how much the Maserati is going for, but his position as speaker at the Alternative Investment Summit disappeared in a hurry.

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