Rotten Rock – Part 3: From compliance to complicity.

When oversight means silence, not scrutiny!

For years, Gibraltar has projected itself as a safe, structured and cooperative financial centre. It boasts modern laws, a central regulator in the Gibraltar Financial Services Commission and longstanding commitments to international compliance standards. But if regulation is to mean more than brochures and taglines, the real test lies in action.

In recent years, several high-profile cases have tested that promise. And too often, the result has been inertia.

The Mansion Group case is one such example. A group of gambling entities once licensed in the UK and other jurisdictions, Mansion maintained a significant operational footprint in Gibraltar. It also developed a labyrinthine corporate structure, one that has drawn scrutiny from tax authorities, AML bodies and plaintiffs in private litigation. Despite these signals, there is scant evidence that the GFSC took any material regulatory steps during key periods of the group's evolution.

Repeating patterns, missed signals.

The case of Castle Trust and Management Services Ltd (CTMS) offers a similar story. Although not linked to Mansion, CTMS was a regulated entity that collapsed while handling large-scale pension assets, triggering reported investor losses of over £200 million. Here again, the GFSC was the assigned supervisor.

Yet red flags appear to have been missed, delayed or deprioritised. Public confidence was shaken and critics began to question whether the Commission was capable of meaningful intervention.

A similar pattern has emerged with Mansion. Despite extensive public documentation of the group's structural complexity and even after the former CEO Karel Manasco (KM) submitted sworn materials alleging governance breakdowns, Gibraltar's regulators remained notably quiet.

Mr Manasco has claimed, in legal proceedings and supporting documentation, that parts of Mansion’s network were deliberately designed to limit regulatory exposure and delay enforcement across jurisdictions. These claims have not yet been adjudicated and no wrongdoing is alleged against the GFSC or its personnel.

However, the absence of a regulatory response is itself telling.

The proximity problem!

It would be unfair to assign all responsibility to the Commission. In Gibraltar’s tightly knit ecosystem, regulatory, legal and political actors often cross paths. Former senior figures at ISOLAS LLP and Hassans International Law Firm have held advisory positions within the government, while also acting for clients subject to licensing or supervision.

That’s not illegal. But when individuals help draft regulations, serve on industry panels and advise private entities (often at the same time) the lines begin to blur.

Chief Justice Anthony Dudley, whose name appears in other chapters of the Rotten Rock series, has faced formal recusal motions in cases where proximity to the legal ecosystem was raised as a concern. Those motions do not suggest misconduct, but rather highlight how deep the overlap runs between judiciary, regulator and private service provider in Gibraltar.

If the same lawyers, judges and regulators sit at both sides of the table (drafting rules, interpreting them and enforcing them) the question of independence becomes harder to ignore.

What the records show?

We conducted a review of corporate filings, licensing records and sanction notices between 2017 and 2023. Of more than a dozen companies linked directly or indirectly to Mansion’s Gibraltar operations, none appear to have faced public sanction by the GFSC. This includes companies sharing directors, registered agents or address proxies with Mansion-linked firms. In some cases, we found firms granted multiple licences despite parallel warnings issued abroad.

The Commission's own enforcement reports show few sanctions issued across the gambling and fiduciary services sectors. By contrast, regulators in France, the Netherlands and Germany have been active in naming and fining similar structures, even when located offshore.

The concern isn't simply the absence of enforcement. It's the lack of visible scrutiny. If firms can operate unchecked while allegations pile up elsewhere, it sends a clear message: that regulation in Gibraltar may be reactive at best and permissive at worst.

A culture of deferment!

Speaking with compliance professionals who worked in the sector during Mansion’s prime operational years, we often heard a recurring sentiment, which Gibraltar's regime worked “on trust, not teeth.” One advisor, who requested anonymity, described the licensing process as “tight on paper, but built on professional assumptions.” Another noted that scrutiny often came only after a foreign regulator raised questions first.

Whether this is a question of under-resourcing, regulatory capture or institutional habit, the effect is the same. Trust becomes discretion. Discretion becomes delay. Delay becomes silence.

And for the wrong kind of operator, that silence can be golden.

Restoring credibility requires transparency

No regulator can monitor every firm, every day. But when patterns emerge, in multiple sectors, involving overlapping individuals and recurring structures, the responsibility to investigate becomes more than a checkbox. It becomes an obligation to the public.

The GFSC has an opportunity now to revisit its approach. That includes public disclosures of how it responds to cross-jurisdictional alerts, timelines for enforcement reviews and clear separation between licensing and promotional functions. This also means revisiting the role of gatekeepers (legal and fiduciary) and whether closer scrutiny is warranted when they represent high-risk clients.

We believe the majority of professionals within Gibraltar’s system act in good faith. But good intentions do not guarantee effective oversight. And structural enablers (no matter how competent or reputable) cannot serve the public and the client at the same time without raising fair questions.

FAQs

What is the main concern highlighted in the article?
The article raises concerns about the lack of regulatory enforcement and visible oversight by Gibraltar’s Financial Services Commission (GFSC) in high-risk cases.

Which companies are mentioned as case studies in the article?
Mansion Group and Castle Trust and Management Services Ltd (CTMS) are cited as examples where regulatory action appeared delayed or absent.

What happened in the Castle Trust case?
CTMS collapsed while managing significant pension assets, causing over £200 million in investor losses, despite being under GFSC supervision.

What are the allegations involving Mansion Group?
Mansion developed a complex structure allegedly aimed at avoiding regulatory exposure. Its former CEO, Karel Manasco, provided sworn documentation highlighting governance failures.

Did the GFSC take public action against Mansion or related entities?
No. Despite multiple red flags and public warnings abroad, there is no public record of sanctions by the GFSC against Mansion-linked firms.

What is meant by “the proximity problem”?
The article highlights the close ties between legal professionals, regulators, and government advisors in Gibraltar, raising concerns about independence and conflict of interest.

Is there any suggestion of wrongdoing by the GFSC?
No direct allegations are made against the GFSC or its personnel. However, the article criticizes their apparent inaction and lack of transparency.

How does Gibraltar's approach compare to other jurisdictions?
Regulators in countries like France, Germany, and the Netherlands have been more proactive in investigating and penalizing similar offshore structures.

What cultural issue is mentioned regarding Gibraltar’s regulatory environment?
The article describes a culture of “trust, not teeth,” where regulation often relies on professional assumptions rather than active scrutiny.

What reforms are suggested to restore regulatory credibility?
Recommendations include greater transparency, independent oversight, stricter gatekeeper accountability, and clearer separation between regulatory and promotional roles.

Legal disclaimer

This article is published for informational and journalistic purposes only. It is based on publicly available sources, regulatory records, legal filings and statements made during formal proceedings. No part of this article should be interpreted as alleging unlawful conduct by any individual, firm or regulatory body unless confirmed by a competent legal authority.

Gibraltar Financial Services Commission, ISOLAS LLP and Hassans International Law Firm are mentioned solely in the context of their public roles and reported affiliations. All individuals named, including Karel Manasco, Anthony Dudley, Peter Isola, Albert Isola, Marcus Killick, Michael Castiel, James Lasry and Peter Montegriffo KC, are presumed to have acted lawfully and ethically. Where opinions are expressed, they do not assert fact beyond what has been documented or publicly disclosed.

Malta-Media invites any party referenced to submit corrections, clarifications or responses for publication, which will be reviewed and considered in good faith.