The Securities and Exchange Commission (SEC) has assured all concerned that no customer with validated claims from the planned government bailout will be excluded from the planned government bailout.  

This comes after Blacksheild Fund Managing in a statement alleged that the Commission is working to exclude its customers from the planned claims settlement.

However, in a rebuttal, the SEC has described these claims as unfounded and baseless.


Blackshield alleged that the SEC issued a public notice in 2017 directing Blackshield’s Structure Finance product to be continued within a period of 6 months from the date of the directive.

They further alleged that this directive “set into motion unprecedented demands” from the customers of Blackshield and other fund mangers who sought redemption, leading to a backlog in payment.

The SEC have described this claim as “inaccurate”, as the directive referred to in their claim was issued in 2014 and not 2017 as indicated in Blackshield’s statement.

“In June 2018, the SEC held a meeting with the Executive Management
and Board members of our market operators and reminded them that the practice of offering guaranteed returns to their clients was illegal, and that SEC was going to enforce an earlier directive issued in 2014″.

The Commission added that it went on to ask fund managers to unwind any positions fund managers – of which Blackshield is included – may have with their clients, offering concessions “to fund managers who were unable to unwind their positions due to counterparty defaults” for inform the SEC of their inability to do so by the end of December 2018.

Further to this, fund managers were also to submit a plan for the SEC’s consideration.

SEC notes that from the year 2018 to 2019, “a total of 1,161 complaints from Blackshield’s clients (representing 52% of total complaints) were received valued at GHS782 million by the Commission”.

Unfortunately, even after Complaints Hearings were held by SEC to obtain payment plans for some of the investors, “most payment plans were not adhered to by Blackshield”.

In addition to this, the SEC was accused by Blackshield of refusing “to grant an alternate product”. This according to the Commission, is “another untruth”.

Per their statement, the SEC gave audience to Blackshield in discussions, giving the fund managers the chance to present a concept Blackshield had developed, after which they were required to make a formal submission to the SEC for approval.

However, it wasn’t until a series of follow-ups by SEC that Blackshield submitted the relevant documents supporting the Cardinal Asset Master Trust Offer and listing of bonds for approval in June 2019, 4 months after the presentation.

Upon review, Blackshield was to address some issues raised in their offer, however, they failed to respond to the Commission.

“After a thorough review of the application, with Investor Protection as
a key consideration of a Bond issue, the SEC wrote to Blackshield on July 9, 2019 with issues to redress, but they failed to respond to the Commission,” the statement said.

Some of the issues identified with the application for which Blackshield was asked to address was the omission of basic documents including but not limited to the following: audited Statement of Affairs, Legal Due Diligence report, Board and Shareholder Resolutions and Valuation Reports of their assets”.


On the issue of liquidation, the petition for Blackshield, per SEC’s statement is currently pending due to steps taken by the fund managers after the revocation of their licence.

“Blackshield first appealed to SEC on 11th November, 2019, three (3)
days after the revocation, before formally appealing to the Administrative Hearings Committee (AHC) on 14th November, 2019. Accordingly, the liquidation petition had to be put on hold until the determination by the AHC”.

Their appeal was subsequently dismissed by AHC and same communicated to Blackshield on June 8, 2020. Blackshield then proceeded to file an application in court “alleging that they were not given a fair hearing at the AHC”.

According to SEC, it is to be noted that although the application was filed on June 15, 2020, the date for the hearing was scheduled for July 28, 2020.

Validation of Client Data

With regards to validation, the regulatory body maintains that “the validation of the claims filed against Blackshield is also partially done because of limited access to their records”.

According to their statement, the Commission did not have full access to all the needed client information records to initiate payments.

“The data provided by Blackshield to our agent for the forensic audit and the SF (product were in excel format but our agent did not sight any evidence to support the values in the excel sheets”.

“After persistent requests for access to all the records of Blackshield was unsuccessful”, the SEC was compelled to engage the assistance of a law enforcement agency who was able to retrieve the server on which all client information was kept.

The data obtained will help their agents to process with the validation of the claims filed against Blackshield.

SEC noted that without the proper validation of claims, no Government bailout would be possible.

In conclusion, the Commission assured “all affected clients that the Government bailout package is all inclusive, provided claims have been validated and liquidation orders secured”.

It reiterated the fact that there is no plan to exclude any group of customers, adding that the rollout of the Government bailout will be done in phases.

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DISCLAIMER: The Views, Comments, Opinions, Contributions and Statements made by Readers and Contributors on this platform do not necessarily represent the views or policy of Multimedia Group Limited.