Special Investigations
Fais Ombud finds Sharemax directors liable for investor's loss
Scathing determination declares Zambezi syndication 'nothing more than a Ponzi scheme.'
JOHANNESBURG – Fais Ombud Noluntu Bam has found four Sharemax directors liable for an investor’s loss.
The determination is unusual because it is normally only financial advisers who are held liable for bad investment advice.
However, in a lengthy determination, Bam has set out why she believes the Sharemax directors should be held accountable. The determination was signed on Tuesday. It can be downloaded in two parts here: part 1, part 2.
The determination could pave the way for thousands of other investors to claim losses from Sharemax’s directors.
In her latest determination, Bam is scathing of the Sharemax directors, who she accuses of “violating the law.” Bam's determination was received after close of business on Wednesday and the Sharemax directors were not immediately available for comment.
Bam writes: “The facts before this office support the conclusion that the investment, as promoted and executed by Sharemax, was nothing more than a Ponzi scheme. The directors of Sharemax violated the law and on this basis [they too] must be held liable for the investors’ loss.”
The complaint in question was laid by pensioner Gerbrecht Siegrist, 73, who is now destitute after investing her capital in two Sharemax-promoted syndications: Zambezi and The Villa.
The complaint was initially laid against her financial adviser, CJ Botha. However, the following six respondents were added to the complaint: Sharemax Investments, FSP Network (trading as Unlisted Securities South Africa), and the following four Sharemax directors: Gert Goosen, Willie Botha, Dominique Haese and Andre Brand.
Siegrist’s late husband left her an amount of money which was intended to provide her with an income. This money was placed in conventional investments, but on Siegrist’s broker’s advice, she invested R460 000 in Zambezi on April 2, 2008, and a further R120 000 in The Villa on July 15, 2008.
Siegrist’s broker, CJ Botha, claims that Siegrist instructed him to invest in Sharemax. But, says Bam, in the same breath Botha “admits that the complainant wanted an investment where her capital would be safe.”
Bam notes that Zambezi was a risky investment unsuitable for pensioners. Yet she notes that brokers who sold Sharemax products “almost without fail targeted pensioners.”
Bam found that the directors of Sharemax and FSP Network “were aware of the fact that the scheme [Zambezi] was both illegal and not commercially viable and yet they recklessly took investors’ funds. Investors whom within their knowledge were almost without exception pensioners who could ill afford the inevitable loss.”
Key to Bam’s determination is the finding that Sharemax and its directors were ultimately responsible for advice rendered by CJ Botha.
Bam links Sharemax to Botha through FSP Network, which traded under the name Unlisted Securities South Africa (USSA).
USSA provided many financial advisers with the necessary Financial Services Board (FSB) licence necessary to sell Sharemax products. The business was described by Bam in a previous determination as “nothing short of the hiring out of a licence for a small monthly fee.”
For more on USSA, see: the following articles: Broker offers widow costly Sharemax advice, FSB linked to Sharemax “licence for hire” scheme, and FSB official’s husband pays 13% return.
At its peak, USSA had 1376 representative brokers, all of whom sold Sharemax products. Bam notes that all of USSA’s registered brokers were only allowed to market Sharemax products.
What’s more, Sharemax director Gert Goosen was also USSA’s sole director and key individual.
Bam writes that Sharemax and USSA were “joined at the hip.”
“What Sharemax attempted to do was to create a buffer between itself and the brokers and the investors,” notes Bam. “This was a futile exercise as in law, Sharemax and its directors will, ultimately, be responsible for the conduct of their section 13 representatives.”
Bam says that Sharemax director Dominique Haese “gives no explanation as to why Sharemax stood by and took money from investors, via their ‘supervised’ broker network, who were clearly investing in a product that was not suitable for them.
Bam says that Haese must have known that the majority of the investors brought in by the representatives were pensioners.
Bam ordered all seven respondents, jointly and severally, the one paying the other to be absolved, to pay Siegrist the amount of R580 000. If the respondents comply with the order, they are entitled to Siegrist’s share certificate.
Image source: A risk-reward matrix from Bigstock
Special InvestigationsFais Ombud finds Sharemax directors liable for investor's loss |
Scathing determination declares Zambezi syndication 'nothing more than a Ponzi scheme.'
JOHANNESBURG – Fais Ombud Noluntu Bam has found four Sharemax directors liable for an investor’s loss.
The determination is unusual because it is normally only financial advisers who are held liable for bad investment advice.
However, in a lengthy determination, Bam has set out why she believes the Sharemax directors should be held accountable. The determination was signed on Tuesday. It can be downloaded in two parts here: part 1, part 2.
The determination could pave the way for thousands of other investors to claim losses from Sharemax’s directors.
In her latest determination, Bam is scathing of the Sharemax directors, who she accuses of “violating the law.” Bam's determination was received after close of business on Wednesday and the Sharemax directors were not immediately available for comment.
Bam writes: “The facts before this office support the conclusion that the investment, as promoted and executed by Sharemax, was nothing more than a Ponzi scheme. The directors of Sharemax violated the law and on this basis [they too] must be held liable for the investors’ loss.”
The complaint in question was laid by pensioner Gerbrecht Siegrist, 73, who is now destitute after investing her capital in two Sharemax-promoted syndications: Zambezi and The Villa.
The complaint was initially laid against her financial adviser, CJ Botha. However, the following six respondents were added to the complaint: Sharemax Investments, FSP Network (trading as Unlisted Securities South Africa), and the following four Sharemax directors: Gert Goosen, Willie Botha, Dominique Haese and Andre Brand.
Siegrist’s late husband left her an amount of money which was intended to provide her with an income. This money was placed in conventional investments, but on Siegrist’s broker’s advice, she invested R460 000 in Zambezi on April 2, 2008, and a further R120 000 in The Villa on July 15, 2008.
Siegrist’s broker, CJ Botha, claims that Siegrist instructed him to invest in Sharemax. But, says Bam, in the same breath Botha “admits that the complainant wanted an investment where her capital would be safe.”
Bam notes that Zambezi was a risky investment unsuitable for pensioners. Yet she notes that brokers who sold Sharemax products “almost without fail targeted pensioners.”
Bam found that the directors of Sharemax and FSP Network “were aware of the fact that the scheme [Zambezi] was both illegal and not commercially viable and yet they recklessly took investors’ funds. Investors whom within their knowledge were almost without exception pensioners who could ill afford the inevitable loss.”
Key to Bam’s determination is the finding that Sharemax and its directors were ultimately responsible for advice rendered by CJ Botha.
Bam links Sharemax to Botha through FSP Network, which traded under the name Unlisted Securities South Africa (USSA).
USSA provided many financial advisers with the necessary Financial Services Board (FSB) licence necessary to sell Sharemax products. The business was described by Bam in a previous determination as “nothing short of the hiring out of a licence for a small monthly fee.”
For more on USSA, see: the following articles: Broker offers widow costly Sharemax advice, FSB linked to Sharemax “licence for hire” scheme, and FSB official’s husband pays 13% return.
At its peak, USSA had 1376 representative brokers, all of whom sold Sharemax products. Bam notes that all of USSA’s registered brokers were only allowed to market Sharemax products.
What’s more, Sharemax director Gert Goosen was also USSA’s sole director and key individual.
Bam writes that Sharemax and USSA were “joined at the hip.”
“What Sharemax attempted to do was to create a buffer between itself and the brokers and the investors,” notes Bam. “This was a futile exercise as in law, Sharemax and its directors will, ultimately, be responsible for the conduct of their section 13 representatives.”
Bam says that Sharemax director Dominique Haese “gives no explanation as to why Sharemax stood by and took money from investors, via their ‘supervised’ broker network, who were clearly investing in a product that was not suitable for them.
Bam says that Haese must have known that the majority of the investors brought in by the representatives were pensioners.
Bam ordered all seven respondents, jointly and severally, the one paying the other to be absolved, to pay Siegrist the amount of R580 000. If the respondents comply with the order, they are entitled to Siegrist’s share certificate.
Image source: A risk-reward matrix from Bigstock
The determination is unusual because it is normally only financial advisers who are held liable for bad investment advice.
However, in a lengthy determination, Bam has set out why she believes the Sharemax directors should be held accountable. The determination was signed on Tuesday. It can be downloaded in two parts here: part 1, part 2.
The determination could pave the way for thousands of other investors to claim losses from Sharemax’s directors.
In her latest determination, Bam is scathing of the Sharemax directors, who she accuses of “violating the law.” Bam's determination was received after close of business on Wednesday and the Sharemax directors were not immediately available for comment.
Bam writes: “The facts before this office support the conclusion that the investment, as promoted and executed by Sharemax, was nothing more than a Ponzi scheme. The directors of Sharemax violated the law and on this basis [they too] must be held liable for the investors’ loss.”
The complaint in question was laid by pensioner Gerbrecht Siegrist, 73, who is now destitute after investing her capital in two Sharemax-promoted syndications: Zambezi and The Villa.
The complaint was initially laid against her financial adviser, CJ Botha. However, the following six respondents were added to the complaint: Sharemax Investments, FSP Network (trading as Unlisted Securities South Africa), and the following four Sharemax directors: Gert Goosen, Willie Botha, Dominique Haese and Andre Brand.
Siegrist’s late husband left her an amount of money which was intended to provide her with an income. This money was placed in conventional investments, but on Siegrist’s broker’s advice, she invested R460 000 in Zambezi on April 2, 2008, and a further R120 000 in The Villa on July 15, 2008.
Siegrist’s broker, CJ Botha, claims that Siegrist instructed him to invest in Sharemax. But, says Bam, in the same breath Botha “admits that the complainant wanted an investment where her capital would be safe.”
Bam notes that Zambezi was a risky investment unsuitable for pensioners. Yet she notes that brokers who sold Sharemax products “almost without fail targeted pensioners.”
Bam found that the directors of Sharemax and FSP Network “were aware of the fact that the scheme [Zambezi] was both illegal and not commercially viable and yet they recklessly took investors’ funds. Investors whom within their knowledge were almost without exception pensioners who could ill afford the inevitable loss.”
Key to Bam’s determination is the finding that Sharemax and its directors were ultimately responsible for advice rendered by CJ Botha.
Bam links Sharemax to Botha through FSP Network, which traded under the name Unlisted Securities South Africa (USSA).
USSA provided many financial advisers with the necessary Financial Services Board (FSB) licence necessary to sell Sharemax products. The business was described by Bam in a previous determination as “nothing short of the hiring out of a licence for a small monthly fee.”
For more on USSA, see: the following articles: Broker offers widow costly Sharemax advice, FSB linked to Sharemax “licence for hire” scheme, and FSB official’s husband pays 13% return.
At its peak, USSA had 1376 representative brokers, all of whom sold Sharemax products. Bam notes that all of USSA’s registered brokers were only allowed to market Sharemax products.
What’s more, Sharemax director Gert Goosen was also USSA’s sole director and key individual.
Bam writes that Sharemax and USSA were “joined at the hip.”
“What Sharemax attempted to do was to create a buffer between itself and the brokers and the investors,” notes Bam. “This was a futile exercise as in law, Sharemax and its directors will, ultimately, be responsible for the conduct of their section 13 representatives.”
Bam says that Sharemax director Dominique Haese “gives no explanation as to why Sharemax stood by and took money from investors, via their ‘supervised’ broker network, who were clearly investing in a product that was not suitable for them.
Bam says that Haese must have known that the majority of the investors brought in by the representatives were pensioners.
Bam ordered all seven respondents, jointly and severally, the one paying the other to be absolved, to pay Siegrist the amount of R580 000. If the respondents comply with the order, they are entitled to Siegrist’s share certificate.
Image source: A risk-reward matrix from Bigstock
The Afrikaner Broederbond is an ugly creed......
ReplyDeleteLike the ANC they steal from the poor pensioners to fatten their "Brothers!"
Sometimes not even AFRIKANERS!!
ALL THEIR ASSETS MUST BE SEIZED IMMEDIATELY!!
WHEN WILL JUSTICE BE SERVED?