Gibraltar FSC Wins Compensation For RFSL Investors

by Phillip Morton, Investors Offshore.com

06 January 2011

In a first of its kind judgment, the Supreme Court of Gibraltar has granted an application by the Financial Services Commission (FSC) to enforce the liquidation of the assets of Rock Financial Services Limited (RFSL), to pay restitution to investors.

The FSC on January 4, 2011, said that it had obtained a GBP6.3m judgment against the former directors of RFSL, Michael Whitting, Anthony Whitting and Stephen Putnam.

RFSL had been wound up by the Supreme Court on the application of the FSC in 2003.

The FSC had waited before taking action to allow the liquidators to undertake the pursuit and collection of assets and for a criminal investigation to be undertaken. However, in the face of difficulties encountered by the liquidators the FSC issued proceedings for regulatory breaches seeking a civil restitution order, among other orders, against the directors of RFSL.

The Court heard evidence from a number of witnesses, considered various statements filed by parties and heard legal submissions by counsel for the parties. The Chief Justice ruled that Michael Whitting, Anthony Whitting and Stephen Putnam should pay the sum of GBP6,269,111 to enable the FSC to constitute a fund to compensate investors who suffered losses as a result of the collapse of RFSL. The FSC was also awarded its costs of the action. This was the culmination of action taken against those named directors and followed the award of judgment against them in November 2009.

The FSC has announced that it is now considering its options leading to an enforcement of the order made by the court.

Commenting on the proceedings, the FSC’s Chief Executive Officer, Marcus Killick, stated: “This again demonstrates that the FSC will not shy away from taking whatever action necessary to protect the public from financial loss or deal with those who have caused it. The action we have taken in the Supreme Court of Gibraltar underlines the commitment of my team to pursue every possible avenue to seek restitution for the investors in RFSL. It has been a long process and, quite rightly, we stood aside whilst the criminal investigations were ongoing. Nevertheless, as soon as we were able, we used the powers granted to us to bring this matter to a conclusion.”

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