"Broker blasted for supervision failing - The Tribune" - 22 June 2010

Broker blasted for supervision failing - The Tribune

excerpt:

Tracing the share trading scheme's origins, the Commission panel's
ruling recalled how Commonwealth Bank had established an Employee Stock
Option Plan (ESOP), granting members of its management team options to
acquire the bank's stock at a $6 per share price. These options were due
to expire on April 30, 2006.

During November 2005, Wayde Bethel, a Commonwealth Bank branch manager,
exercised his option at a time when the bank's shares were trading on
the Bahamas International Securities Exchange (BISX) within a price
range of $8.50-$9. Mr Bethel than approached Mr Cox who, using his First
Bahamas Capital post, allegedly sold the stock acquired for $6 per
share at the higher prevailing market price, netting Mr Bethel a profit.

He then informed other Commonwealth Bank managers of what he had done,
and the Commission panel's ruling found: "The Commission was advised
that sometime between November 2005 and February 2006, Mr Cox and Mr
Bethel allegedly facilitated, and participated in, a scheme whereby
other managers of Commonwealth Bank (seven in total) were able to
exercise their options under their respective ESOPs and sell their
shares to third party purchasers, who had unknowingly financed the
exercise of the options by the Commonwealth Bank managers."

Outlining the scheme's intricate details, once contacted by other
managers, Mr Bethel would advise them that their stock options would be
sold for $8 per share, allowing them to pocket the $2 difference between
the option price.

Once this happened, Mr Bethel would advise Mr Cox of how many shares
would be available, with the latter then charged with finding buyers for
the ESOP stock. After this was achieved, Mr Bethel would then obtain a
Power of Attorney from the relevant manager to authorise the transfer of
their shares to FirstBahamas Capital, signing himself as the
Commonwealth Bank representative.