Fierce Fiduciaries of the Cook Islands

Rarotonga beach, Cook Islands. Photo via Wikimedia Commons.

Think fast! The SEC is after you. Where do you stash the loot?

The Cook Islands, a four-hour flight from New Zealand. The islands' population may be small – about 20,000 – but their zeal for protecting trust funds is unrivaled, as Floyd Norris explains in his Times column:

Under Cook Islands law, foreign court orders are generally disregarded, which is helpful for someone trying to keep assets away from creditors.

In fact, getting an American court order can make it harder to get money out of the Cook Islands. If someone who stashed funds in a Cook Islands trust asks for the money back because a court ordered him to do so, Cook Islands law says that person is acting under duress, and the local trustee can refuse to return the money.

Over the years, a number of less-than-upstanding Americans have found the islands attractive for that reason, among them former corporate raiders, penny stock promoters and telemarketers who defrauded customers.

The latest to use that tactic is the wife of Jamie L. Solow, a former broker in Florida who evidently has a silver tongue and certainly has a lot of angry former customers. In one year, he earned more than $3 million in commissions selling a form of collateralized debt obligations known as “inverse floaters” to individual investors who claim he never warned them of the risks.