Reuters – For some, the Cayman Islands conjure images of beaches and turquoise waters. But this wind-swept trio of Caribbean islands also has a recurring image as a haven for shadowy financialdealings, a reputation Caymanians are trying to change.
The latter was reinforced by the movie The Firm, depicting a powerful but fictional U.S. law firm that launders vast cash hordes in the Caymans, islands where just 300 years ago Caribbean pirates roamed and pillaged.
And perhaps more than any other offshore banking center, there has been a Caymans link to an array of the past decade’s financial scandals, including brokerage Refco, mining company Bre-X, Enron Corp., Parmalat, Refco, Philadelphia Alternative Asset Management Co., Beacon Hill and others.
Cayman officials argue that any image of financial impropriety isn’t borne out by the facts. They say money is attracted to the Caymans for its strong regulatory climate and infrastructure of banks, law and accounting firms. Naturally, as in New York, London or Tokyo, some frauds will involve institutions with links to the Caymans, they say.
“Frauds like Refco had nothing to do with the Caymans,” said Gary Linford, head of investments and securities for the Cayman Islands Monetary Authority. “I can’t think of an investor in the last 10 years that has complained about lost money in the Caymans.”
But while Caymanians work to dispel what they say is an unfair image, it hasn’t affected growth in a resurgent Cayman hedge fund industry in this balmy tax haven.
