D-Day for David Smith and Olint

Today is D-Day for David Smith and Olint. Today payments for persons who made requests for withdrawals in January 2008, five months ago, should begin.  In the an excellent article, ‘Olint at a Cross Roads’, the writer Al Edwards presented the following quote that is of note.

If the goal post starts shifting, club members will voice their disgruntlement. 

After much delay the latest dates were announced on Tuesday, June 3, 2008 and therefore today, critics and supporters will watch eagerly to see whether or not Olint will deliver or will they join the long list of “investment” clubs that collapsed and disappointed or are collapsing  and disappointing their members. 

The situation is interesting as many observers have expressed great alarm at the delays, especially the length. Another quote from the article, ‘OLINT at a Cross Roads’ echos the sentiment;

With FX trading, your inventory is cash. It’s not like you have to liquidate assets to make payments. It is the one area where available assets can readily match your liabilities. That’s why I find Olint’s inability to make payments at this time disturbing.

However, the confident members point to the fact that OLINT has survived multiple runs, has paid everyone and is still standing. However, this time the delay in payment has been the longest. One reason given for the delay has been ” Due Dilligence” especially relating to its relationship with Wachovia Bank. An Wachovia employee however voiced a contrary position;

“It has been said that Wachovia has been conducting a due diligence report on Olint for the better part of five years, but as far as I am aware that’s not the way Wachovia goes about it,” said the banking exec. “I know of no banking rules that allow a commercial bank to freeze customer accounts without the authority of a Government agency or court. Also, to inform a client of the existence of an investigation would be illegal. 

Even if OLINT crosses this initial hurdle, it will not be until the end of September before things will settle down.  One contentious point continues to be section (IV) in the new encashment policy. Investors have no clue, about the volume of funds under management nor the number of accounts managed by Olint and its feeder and affiliate clubs.

One wrong move and the lawsuits, similar to those that hit Carlos Hill, be begin to appear. Those United States million dollar lawsuits might make the Jamaican multi-million dollar lawsuits look like peanuts. Observers and ‘investors’ not sure if they are on the single track must be careful not to take any little light at the end of the tunnel as hope as it might just be the train of destruction rolling in.