Archive for October 25th, 2011

Medical marijuana shops close in crackdown

| 25/10/2011 | 0 Comments

(Health): The medical marijuana industry in California is in shambles as the federal government proceeds with a crackdown on dispensaries in the state. According to KPBS, many shop owners are having to close their doors to escape criminal prosecution. “I feel heartbroken for my patients,” said one dispensary who is being evicted from her place of business because she offers medical marijuana, among other things. The shop owner told KPBS she initially felt safe about going into the medical marijuana business because President Barack Obama said he wouldn’t use federal resources to crack down on the industry.

Now, however, there is dispute over the California law that allows patients and caregivers to “collectively cultivate” marijuana for medical use.

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Shares tumble as FBI probes Olympus scandal

| 25/10/2011 | 0 Comments

(Reuters): The FBI is investigating the massive advisory fee involved in Olympus Corp's takeover of a British company, a person familiar with the probe said, in a deepening scandal that has wiped out more than half the company's value. The British CEO who says he was fired for questioning the $687million payment to advisers in the $2.2billion takeover of medical equipment maker Gyrus has called on authorities in both Britain and Japan to also investigate the payments. The endoscope and camera maker said last week it would commission its own independent review of past acquisitions, although the ousted CEO, Michael Woodford, said the company was playing for time.

It carried out a review in 2009 that concluded no management wrongdoing, documents he provided show.

The 92-year-old company is struggling to contain the crisis following Woodford's revelations. Olympus acknowledges it made the advisory fee payment and denies any wrongdoing. But it has not explained why it agreed to a fee that amounted to about a third of the value of the takeover when such fees normally come to about 1 percent. At $687 million, the fee is the largest on record.

Woodford, 51, who spent three decades at Olympus, has identified the advisory firms involved in the takeover as New York-based AXES America LLC and AXAM Investments Ltd in the Cayman Islands.

The Federal Bureau of Investigation in New York is currently investigating the payment, according to the person familiar with the investigation. This person was not authorized to speak publicly as the investigation is ongoing.

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Rina churns to category 2 as rains continue locally

| 25/10/2011 | 0 Comments

(CNS): The wet weather associated with Hurricane Rina is expected to continue in Cayman as the category two hurricane rumbles across the region. Situated around 215 miles south-west of Grand Cayman at 7:00am Tuesday Rina is packing winds in excess of 100mph. The National Hurricane Centre said it is expected to strengthen and become a major hurricane by this evening or Wednesday. Moving toward the west- northwest near 3mph a turn toward the northwest with some increase in forward speed is forecast over the next 48 hours. Although Rina poses no direct threat to Cayman local weather experts are warning residents of the continued risk of flooding in low lying areas.

Cayman can expect cloudy skies with sporadic showers and thunder heavy at times. Resident of low-lying areas should take precautions as the heavy showers may enhance any flooding problems in their areas. Temperatures will rise to the mid 80’s. Winds will be east to northeast 10 to 15 knots. Seas will be moderate with wave heights 3 to 5 feet becoming rough in and around showers. Swells are possible especially along the south coast.

The outlook calls for a break in the shower activity on Wednesday morning with an increase in cloudiness and showers from Thursday as a trough approaches the Cayman area.

Meanwhile, an area of low pressure just to the north of Curacao is producing scattered showers and thunderstorms is expected to become more conducive for development as the disturbance moves over the south-central Caribbean, the NHC reports.  The system has a 40 percent chance of becoming a tropical cyclone during the next 48 hours as it moves west-north-westward at 15 to 20 mph.

For more on regional weather go to http://www.nhc.noaa.gov/ and for local forecasts visit www.weather.ky
 

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CNS opens legal defence fund

| 25/10/2011 | 112 Comments

justice-scales.jpg(CNS): In the face of a law suit filed by the premier over an opinion piece published in May, Cayman News Service received so many offers from the community to help fight the legal challenge that it has opened an account to manage the defence fund so that those who are both willing and able to pitch in with the costs can do so. Cayman’s former auditor general, Dan Duguay, will be overseeing the fund to ensure all the contributions made by supporters will be used to pay legal expenses and that the account is fully transparent. CNS has now  retained a lawyer to defend the suit as it prepares to take on the premier in the courts.

On 3 October McKeeva Bush filed suit against CNS owner Nicky Watson and CNS reporter Wendy Ledger over the publication of a Viewpoint about free speech by a regular CNS contributor who writes under the pen name “Bean Counter”. Bush has claimed the opinion piece was defamatory and is seeking damages as a result of its publication. The premier also filed suits on the same day against Randy Merren and Hurley’s Entertainment, the owner of the local radio station Rooster, and Daphne Orrett (a.k.a. Aunt Sookie) for comments broadcast on the morning call-in show CrossTalk.

When Bush first threatened Watson and Ledger with legal action in June, Watson responded to the premier with a comprehensive letter setting out why Bean Counter’s article was ‘fair comment’ and why the news site had decided not to publish an apology, among other demands. However, the premier continued with his action and filed suit on 3 October in the Grand Court.

Watson and Ledger have both said they will be contesting the action as it is important to defend the rights of people to criticise their government and leaders without fear.

“We have been very touched by the response from members of the community and the many words of encouragement and support from so many diverse quarters,” said Watson. “Since the suit was filed, many people have expressed their appreciation of CNS, not only for the bolder editorial style than they have been used to but also for the platform it provides for free speech to flourish in these islands.

“Wendy and I honestly feel that we are contributing to the maturing of politics in the Cayman Islands by supporting a vibrant forum for discussion about current affairs and a place to express both praise and dissatisfaction in our elected representatives. It is gratifying that others feel the same way and we want to assure CNS readers that we intend to continue throughout this rather turbulent period in the history of this country, and beyond.”

CNS has retained James Kennedy of Samson & McGrath to defend against the suit.  As a very small and relatively new media house (CNS was launchedin March 2008) and given the cost of legal action, Watson has set up an account that will allow people to contribute to the defence, which will be managed by the former auditor general.

“I am delighted to help CNS in this endeavour,” Duguay said “I am sure that I agree with most Caymanians that it is vitally important that we all help ensure a strong and vibrant press. As a former auditor general, I am a great advocate of transparency and accountability in public activities. A strong Auditor General's Office (which Cayman has) helps to promote these objectives. However, they must partner with a strong press to ensure that the public is informed and aware of public activities. I have always admired CNS for their strong stance regarding Cayman politics.
 
“Wendy and Nicky have agreed that I will be able to review all expenditures from this fund and no funds will be expended without my agreement. Funds contributed for this purpose will be used only to defend CNS from Mr Bush's lawsuit. We will be fully transparent and provide an accounting to all Caymanians, whether you contributed or not, as to how CNS spent any funds donated to them. Of course, all donations will be anonymous and we will not reveal the identity of any donors,” he explained, noting that any donated funds left in the account after the suit was won, lost or dropped would be given in an even split to the Pines Retirement Home and the Cayman Islands Crisis Centre.

Grateful to the former AG for his support and happy that an auditor of his calibre and integrity was willing to help, Watson said she hoped that the wider community would agree that, despite the obvious expense such a courtroom battle could create, it was important to take a stand.

“We believe that defending this case is the right thing to do for the sake of all our readers and the wider public, and we hope that those who agree with us and are able to do so will support us. It goes without saying that all financial contributions are gratefully recieved but just a few kind words to let us know that people are behind us also mean a great deal,” Watson said.

Fund details:

Cayman National Bank
Account name: Cayman News Service (Defence Fund)
Chequing account #: 011-12950

(Tibbetts Square branch for online deposits)

CNS address:

Cayman News Service
PO Box 132
KY2-2101  Cayman Brac
CAYMAN ISLANDS

A PayPal donation button has also been added to the CNS site under the first headline to enable donations by credit card and Paypal accounts.

Defence Fund account update by Dan Duguay

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Bush wants support not criticism on cruise berthing

| 25/10/2011 | 37 Comments

(CNS): The latest arrival statistics from government have revealed that cruise arrivals continued the glooming decline in August and were down by almost 32% compared to last year. The anticipated fall in numbers reflects the decision by cruise lines to by-pass the Cayman Islands and head to ports of call with cruise berthing facilities. In the face of the continued drop in cruise visitors the premier said his government was wellaware of the need to develop facilities but asked critics to point the finger at those who have opposed his efforts to develop them and not at him. With the FCCA issuing a “final chance” to construct the piers Bush asked the sector to support him.

Blaming those who have opposed the development of cruise tourism as well as the previous administration for not continuing with the agreement Bush had signed with Misner Marine when he was last in office, the premier gave no details on current the status of the ongoing talks with China Harbour Engineering Company the latest company in line to take on the project. Government signed an MOU with the Bejing based firm in June which is due to expire next month. He said that government was working hard to secure the best deal possible but did not elaborate on the negotiations.

“I have started the process and I will get it done and I ask the tourism sector to support me with encouragement, rather than criticism,” he said in a statement released Monday afternoon. “If criticism on these low cruise arrival numbers has to be properly placed, and if persons are intent on pointing fingers, they should be pointing toward those who opposed me and stopped the initiatives I put in place, which, had they been left to come to fruition, would have been up and operating at this time.”

Bush said that he recently attended the FCCA conference where the cruise line executives “very pointedly iterated” cruise berthing was essential and if the Cayman Islands doesn’t have berthing facilities in place by March 2013 it will see s drastic reduction in numbers. With cruise companies planning to use only the new generation of mega cruise ships in the Caribbean and to send the smaller ships to other parts of the world, Cayman will be excluded from the cruise business, the premier stated.

“It was clearly evident that the cruise executives were giving us a final chance and were once again warning us – as they had done several years ago – that the Cayman Islands cruise tourism industry is in jeopardy,” Bush said of his recent meeting. He said the executives were encouraged by his assurances that Cayman will have at least one pier operational by 2013 and in the meantime more talks were planned to see how arrivals could be increased before the berthing facilities are finished.

Although the cruise statistics compared very poorly to the 2010 figures with just over 79,000 visitors in August 2011 against just under 116,000 last year, the story at Owen Roberts Airport was a very different one.

Those arriving in Cayman by air and staying overnight are continuing to increase and August showed close to a 5% increase on arrival figures compared to last year with 20,017 people flying into Grand Cayman in August 2011 compared to 19,097 in August 2011. This is part of a continuing trend of growth in air arrivals with the 2011 showing a 7.7% increase so far on 2010. Canada continues to be driving the number of arrivals joined this month by Europe where there was an increase of more than 30% from both regions.

See the premier’s full statement below

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US confused over real financial crime, says lawyer

| 25/10/2011 | 8 Comments

(CNS): Onshore jurisdictions such as the United States which accuse offshore countries such as the Cayman Islands of harbouring stolen assets in bank accounts do not understand the concept of ‘stolen assets’ and are passing the buck by not dealing with the origins of crime in their own countries, John Masters, Senior Crown Counsel-International Cooperation for the Cayman Islands, has said. Speaking at a compliance conference last week, Masters explained the difference between proceeds of crime and stolen goods but he said onshore jurisdictions were getting the two confused and then pointing the finger at jurisdictions like Cayman.

Masters said the John Grisham image of criminals bringing in bags of money could not be a reality because it was a physical impossibility to transfer huge sums of money in this way when the US was talking about a trillion dollars of so-called ‘stolen assets’, he said.

During a session entitled There are no stolen assets in off-shore bank accounts – who is truly responsible for financial crime and balances appearing in offshore accounts? at this month’s Global Compliance Solutions Conference held at the Marriott Beach Resort, the lawyer said that if people tried to bring in large volumes of cash, they would be stopped by border control as a declaration has to be made if large sums were being brought into the islands.

And even if they got past the border, they would not be able to place it with local banks because they must file a suspicious activity report on large sums or risk prosecution themselves.

Masters also challenged the notion that such funds were even ‘stolen’ in the first place, explaining that when a bank customer makes a deposit, they were in essence creating a debtor/creditor relationship,whereby the bank promises to pay the customer the cash upon demand.

When a wire transfer of funds takes place, there is no actual movement of property; rather, what actually happens is a transfer of a debt. To underline the point he used the analogy of a criminal stealing the Mona Lisa painting, saying that the cash paid by someone for the stolen painting was not itself stolen property, although it was the proceeds of crime.

“All stolen property is the proceeds of crime but not all proceeds of crime are stolen property,” he explained, adding that a recent ruling in the UK House of Lords backed up this view.

Masters said it was important that the wrong label was not attributed in these cases because certain words conjured up particular negative sentiments and responsibility just by the label that was attached. He went on to say that there was a need for further clarity because once a jurisdiction was identified as in possession of stolen property there was a suggestion that theywere somehow at fault.

The reality was that if a jurisdiction was in possession of the proceeds of crime, they often don’t know about it, Masters said. He illustrated his point when he describe the concept of a corrupt politician in the US receiving a bribe of a million dollars and spending it on vacation, jewellery, cars and transferring half of the money to a bank account in the Cayman Islands.

“How often would you hear the travel agent or jeweller criticized for taking the money?” he said. “Yet when it comes to the Cayman Islands it is infamously described as a haven for stolen property.”

By describing the money that gets sent to the Cayman Islands as “stolen assets” it shifted the responsibility from the jurisdiction where the offence was committed to the jurisdiction where the proceeds of crime had ended up, he said. “There has literally and metaphorically been a passing of the buck,” he said.

Offshore jurisdictions were, of course, eager to repatriate illicit funds, Masters said, but it was difficult for the authorities in the Cayman Islands to make their investigations when the crime was committed onshore. That said, investigators in Cayman were working extremely hard to track down the criminals in the onshore country, even when manpower in countries like the US were many times that of officers in the Cayman Islands.

When it came to transferring money via wire transfer, Masters wondered, if the money transfer to an offshore bank was suspicious, why the bank making the transfer in the first place had not also thought the transfer was suspicious. Masters said that even though places like the US believed that jurisdictions such as Cayman were at fault, the Cayman Islands were actually the solution, an attitude evident in the strength of Cayman’s laws, which he said were equalled by none.

“In reality when the Cayman Islands confiscates the property it has remedied the problem of some other jurisdiction and is never part of the problem,” he said, adding that it was, however, easy for the onshore country to shift the blame to the offshore.

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