Rotten Rock – Part 1: A system built for secrecy!

The illusion of oversight

Gibraltar has long branded itself as a compliant and cooperative financial jurisdiction. Officially, it operates under a system that claims to blend robust anti-money laundering procedures with pro-business flexibility. But over the past two decades, patterns have emerged that raise substantive questions about whether this image aligns with the reality, particularly in the context of corporate entities linked to the former Mansion Group.

Mansion, once a licensed operator in multiple jurisdictions including the UK, made strategic use of Gibraltar’s infrastructure throughout its operational history. The group relied on local legal, fiduciary and regulatory structures to support a complex, multi-entity business model. That model is now the subject of regulatory interest and private legal disputes across Europe. Whether the support provided in Gibraltar was negligent, wilfully blind or simply passive is for courts and regulators to determine.

But the facts available raise concerns that merit public discussion.

A framework tested by complexity

In 2020, Gibraltar made headlines for establishing a public register of beneficial ownership. At the time, it was hailed as a progressive step forward. However, two years later, the European Court of Justice invalidated the EU directive requiring full public access to this kind of information, citing privacy concerns. As a result, access to ownership data across the bloc (including for jurisdictions operating under EU-style frameworks like Gibraltar) became more restricted.

This legal reversal, while rooted in privacy law, had the unintended effect of rolling back transparency efforts just as scrutiny over online gambling structures was beginning to intensify.

The OECD's 2020 Global Forum peer review of Gibraltar found gaps in the consistency of beneficial ownership verification, particularly among certain types of legal persons and arrangements. It recommended further reforms to strengthen oversight and enforcement, especially concerning data accuracy and availability.

Who watches the gatekeepers?

The Gibraltar Financial Services Commission, the principal financial regulator, plays a central role in licensing and supervising firms, including fiduciary providers and gambling companies. However, its response record regarding firms operating within the Mansion Group's network has been notably limited, especially in comparison with other EU and UK regulators.

Former executives of Mansion, including Karel Manasco (KM), have publicly highlighted structural inconsistencies and a lack of enforcement coordination across jurisdictions.

Mr Manasco, who served as CEO of Mansion Group until 2021, has since been involved in legal proceedings concerning governance, shareholding and internal disputes. His testimony and supporting documentation, submitted to multiple authorities, allege that the structures used to operate Mansion companies may have deliberately exploited regulatory grey areas; many of which were facilitated by the lack of coordinated scrutiny in Gibraltar.

To be clear, no wrongdoing has been proven against the GFSC or against its staff. Nonetheless, there exists a gap between what is legally permissible and what is ethically responsible. A failure to act on clear red flags (even if not legally mandatory) is worth examining in the public interest.

The blurred mandate of the Gambling Division

The Gambling Division of Gibraltar, which operates under the remit of the Ministry for Digital and Financial Services, has long been presented as both a regulator and a facilitator of industry growth. During Albert Isola’s tenure as Minister, the Division has actively promoted Gibraltar as a hub for online gambling firms, including entities connected to Mansion Group.

While promotional efforts are not inherently problematic, they do introduce tensions when the same body is also tasked with regulatory supervision. It becomes increasingly difficult to separate commercial ambition from regulatory caution, particularly when operators involved have complex cross-border structures and face allegations elsewhere.

The public has a legitimate interest in understanding whether oversight mechanisms were meaningfully engaged or primarily symbolic.

Supportive ecosystem or a blind one?

Much of Mansion Group’s operational structure was built with professional support from local firms. Two of Gibraltar’s most established law firms, Hassans International Law Firm and ISOLAS LLP, have been involved in acting for companies later shown to be part of Mansion’s wider network.

These firms have decades of experience and often represent clients in highly complex transactions, especially in gambling and fintech.

Importantly, the provision of legal services is not in itself evidence of complicity. Both firms operate within the bounds of the law and are entitled to represent clients as they see fit. However, where senior figures from such firms hold roles on government advisory boards or appear on the boards of companies operating in the same sectors, the question of divided loyalties becomes difficult to avoid.

It is fair to ask how regulators can ensure independence when advisers to government are also advisers to industry.

Albert Isola, formerly Minister for Digital and Financial Services, has been a partner at ISOLAS. This is a matter of public record and was not, at the time, deemed inappropriate. But such overlaps raise legitimate concerns about whether Gibraltar’s political and legal communities are too tightly interwoven to allow for truly independent supervision.

A culture of polite inaction?

The larger issue is not the legality of individual actions, but the pattern that emerges when viewed holistically. Repeated examples of entity proliferation, shareholder obfuscation and decision-making routed through nominees or disconnected jurisdictions point to a system that, if not built for secrecy, certainly hasn’t resisted it.

In KM’s own words, provided during litigation and internal correspondence seen by Malta-Media, the Gibraltar structure “served the purpose of fragmenting liability, delaying enforcement and minimising public exposure.” Whether that was a strategic business decision or the result of poor design, the outcome was the same: it prevented scrutiny.

That cannot be dismissed lightly.

Time for institutional honesty

Gibraltar has an opportunity to distinguish itself; not through branding or diplomatic rhetoric, but through decisive reform. This includes improved publication of corporate enforcement actions, greater limits on cross-appointments between public and private sectors and clearer guidelines on the duties of regulated legal and fiduciary providers when dealing with high-risk clients.

Such changes won’t be easy. There are legacy relationships, entrenched networks and vested interests. But a modern financial centre cannot afford to appear indifferent to regulatory arbitrage or perceived complicity.

FAQs

What is the main issue highlighted in the article about Gibraltar?
The article questions Gibraltar’s claimed regulatory robustness, especially in connection with the oversight of complex corporate structures linked to the former Mansion Group.

Who is the Mansion Group and how are they related to Gibraltar?
Mansion Group was an online gambling operator that utilized Gibraltar’s legal and regulatory systems to run its operations, raising questions about compliance and enforcement standards.

What role did the Gibraltar Financial Services Commission (GFSC) play?
The GFSC is responsible for licensing and supervising financial firms, but its limited response to concerns around Mansion Group has sparked criticism.

Why is beneficial ownership transparency significant in this case?
Transparency of beneficial ownership helps identify who truly controls a company. Gibraltar’s measures were weakened after a European Court ruling, undermining scrutiny efforts.

What criticisms were made against Gibraltar's legal and fiduciary firms?
While not accused of wrongdoing, top law firms like Hassans and ISOLAS were involved in advising entities linked to Mansion, raising concerns about divided loyalties and oversight.

Who is Karel Manasco and what did he allege?
Karel Manasco, former CEO of Mansion Group, claimed the group used Gibraltar’s regulatory loopholes to avoid scrutiny and liability, submitting evidence to multiple authorities.

How did the Gibraltar Gambling Division contribute to the controversy?
The Gambling Division promoted Gibraltar as a hub for online gambling while also regulating it, creating a conflict between industry support and regulatory responsibility.

Was any illegal activity proven against Gibraltar regulators or law firms?
No illegal activity has been proven, but the article raises ethical and structural concerns about oversight and potential conflicts of interest.

What reforms does the article suggest for Gibraltar?
It proposes better corporate enforcement transparency, restrictions on public-private cross-appointments, and clearer responsibilities for legal service providers dealing with risky clients.

Why is this issue important for the public and financial sector?
It reflects on the integrity of financial governance in small jurisdictions and underscores the global need for accountable, independent, and transparent regulation.

 

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This article is published by Malta-Media for informational and journalistic purposes only. The content herein is based on publicly available sources, regulatory filings, legal documents and statements made by individuals involved in the matters described. All information is presented in good faith and reflects the understanding and interpretation of the authors at the time of publication.

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