Gibraltar said yesterday that it would work with the Financial Services Commission [FSC] to protect the Rock’s reputation from any fallout as a result of the Marrache case.The statement came amid concerns that an ongoing criminal investigation into the affairs of prominent local law firm Marrache & Co could impact on the Rock’s financial sector.The association said it would encourage members to take on Marrache clients swiftly and at minimum cost if this was deemed appropriate by regulators.
On Monday, the FSC cancelled the licences of seven entities linked to Marrache & Co, as well as the licences of Benjamin and SolomonMarrache. A day later, police arrested the two brothers and accused them of falsifying documents to hide E1.8m of missing money belonging to a client.The men spent a night in custody but were released on Wednesday after providing sureties worth £600,000 and accepting strict bail conditions.The investigation remains open and further charges and arrests are possible, Attorney General Ricky Rhoda told the Magistrates Court.Finance professionals and lawyers fear that the Marrache case, which will take months to investigate before it is heard in court, could unfairly tarnish Gibraltar’s image.
The finance centre is a major employer in Gibraltar and plays a vital role in the local economy.The aim now to reassure international finance clients, both those who are already here and those who are looking to bring business to Gibraltar.In a statement issued by chairman Nick Cruz, ATCOM welcomed the measures taken by the FSC to “robustly” prevent the suspect entities from further trading until the matter was fully investigated.That step had mitigated the potential loss to any clients of Gibraltar’s trust and companies sector, the association said.ATCOM also welcomed the FSC’s decision to appoint a seasoned auditor, Freddie White, as the authorised administrator of all the suspended companies, a step which the association said would minimise inconvenience to clients.Mr White, managing director of Grant Thornton in Gibraltar, will help clients of Marrache & Co’s Gibraltar office to transfer their business to other licensed entities.ATCOM said it would “…happily engage and assist Mr White and the FSC in whatever way is deemed appropriate, including encouraging its members to accept...the business of the affected companies at minimum cost and as expeditiously as possible so as to minimise interference to their business.”Such transfer would be subject to due diligence and standard checks on customer identity.The ATCOM statement added: “Gibraltar was the first jurisdiction to licence trust and company business in 1989 and its members have consistently met the highest international standards of regulation as recognised by numerous international bodies, including the OECD and IMF.” “ATCOM will continue to work closely with the FSC to develop and encourage a well regulated and prosperous trust and company management sector…that does what it conceivably can to prevent rogue businesses putting at risk Gibraltar’s well earned and respected reputation as a safe place to quite properly do business.”ATCOM’s statement came as the Marrache case began to generate media coverage outside Gibraltar.Yesterday, the international legal profession’s leading trade publication, The Lawyer, published a report on the criminal investigation into the affairs of the Marrache brothers.The publication, which is read by lawyers around the world, sought reaction from Marrache & Co’s London office, where partner Steven Daultrey said he felt “anger, rage and incandescence at certain names working in the firm’s Gibraltar office”.
“I have an office here with people whose livelihoods I have to consider,” he told The Lawyer. “I’m utterly speechless.” According to Mr Daultrey, the Gibraltar firm had nothing to do with the London office, sharing only the brand name. “[Benjamin and Solomon Marrache] aren’t signatories here,” he told The Lawyer. “We do English-law work only.”“I’m concerned for the London office clients too, but at the moment those clients have been nothing but 1,000 per cent supportive.”“We haven’t had one client complain, they’re saying they’ll do anything to help.”
“They receive a good level of advice here but, in terms of reputation, the situation is awful.”Marrache & Co’s offices in Spain, Lisbon, Prague and Luxembourg are also understood to be linked to the firm by name only, The Lawyer said.
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