CLOSE X
Advertisement

'Forex' trader must repay investor his lost R45 000

Personal Finance

The sole owner of an unlicensed investment firm must pay back R45 000 to an investor who was promised returns of 40 percent a year through a forex trading scheme.

Pierre-Louis van der Walt and his company, Trading to Get Results, of Centurion in Gauteng, have been ordered by the Ombud for Financial Services Providers, Noluntu Bam, to repay Mr K the R40 414 he invested, plus his R4 950 sign-on fee.

Tell a friend

Mr K invested the money in February 2014, with Van der Walt promising him a return of 40 percent after 12 months. A year later, in March 2015, Mr K filed a complaint with the ombud after struggling in vain to retrieve a cent of his money.

According to Bam’s ruling, Van der Walt purportedly invested Mr K’s money in an offshore trading operation, AVA Forex. On investigating the offshore operation, Bam’s office found that AVA is a legitimate forex and stockbroking firm based in the British Virgin Islands, and it is now registered with the Financial Services Board (FSB) as a financial services provider in South Africa. However, it was not registered with the FSB when Mr K invested his money, and Bam says it is likely that Van der Walt “was not conducting any legitimate business” with AVA, but simply misappropriated Mr K’s money, with “no intention of returning it”.

Bam says that if Trading to Get Results did indeed trade in a forex account, it was “irresponsible and even reckless” to promise a return of 40 percent within a year.

“AVA definitely made no such promise and actually warned the public that this was a high-risk investment, with the possibility that more than 100 percent of invested funds could be lost,” the ombud says in her determination. “There is also no record as to what happened to Mr K’s funds.”

Bam found against Van der Walt and his company for several reasons:

  • He provided financial services without the required licence;

  • He failed to inform Mr K that AVA was a high-risk investment where all of his capital could be lost; and

  • He failed to comply with several sections of the code of conduct under the Financial Advisory and Intermediary Services Act.

All attempts by her office to elicit a response from Van der Walt failed. His last known address was in Port Elizabeth, Eastern Cape.


ANOTHER REALCOR RULING

Bam also recently added another determination to a long list of determinations against Huis van Oranje Financial Services of Pretoria and its representatives, in this case Barend Petrus Geldenhuys, for advising clients to invest in a high-risk property syndication, Realcor. Among other things, Realcor, through an intricate web of companies, invested clients' money in the Blaauwberg Beach Hotel development, which was liquidated in 2012. In 2010, after hearing adverts on Radio Pretoria promoting the development as a good investment, Mrs S invested R25 000 through Huis van Oranje. She was promised a monthly income based on an annual return of 12 percent. She never received a cent. Mrs S complained to the ombud in 2016.

As in the other Realcor determinations involving Huis van Oranje, Bam ruled that the client had been badly advised. Geldenhuys had not properly guaged the high degree of risk in the investment and had falsely promised Mrs S a steady, risk-free income.

Gendelhuys and Huis van Oranje were ordered to repay Mrs S her R25 000.


Tell a friend
Advertisement
X