Deputy Director of the Financial Services Commission (FSC), George Roper, says this week's court ruling against two investment clubs will have significant implications for the financial sector.

Investment club Olint lost its appeal in the case it brought against the FSC in the Supreme Court.

The court also dismissed the appeal of Neil Lewis and Janice Lewis of LewFam Investments, who were also having their appeal heard against the cease-and- desist orders issued by the FSC last year.

First impression

"This was a case of first impression because, I believe, it was the first time in our jurisdiction that we were examining what was an investment contract," Mr. Roper said on Monday after the ruling was announced. The cease-and-desist orders had instructed Olint and LewFam to stop conducting securities and investment advice businesses until the requisite licences had been acquired.

On Monday afternoon, Supreme Court judge, Justice Norma McIntosh, ruled in favour of the FSC.

Olint had obtained an order from the Supreme Court which allowed it to continue its business with the existing members until the court made a ruling in the matter. In its appeal, the investment club contended that there was no need for it to be regulated as it did not deal in securities, but strictly in foreign exchange.

However, the FSC argued that it has the authority to regulate Olint because it was engaged in the business of investment.