In the first case, Noluntu Bam, correctly known as the Ombud for Financial Services Providers, ordered that Optimum Investments and its key representative, Jannie van der Merwe of Upington in the Northern Cape, pay the estate of the late Ms Z the R335 000 she invested in a property development through the complex web of companies under the Picvest umbrella. Picvest collapsed in 2009, leaving thousands of investors, mainly pensioners, without an income or their capital.
Like most of Bam's property syndication rulings, the grounds were that the adviser contravened the Financial Advisory and Intermediary Services Act by not establishing the risk of the investment or conveying that risk to the client.
In the second case, Bam dismissed a complaint because it could not be established that the adviser had been instrumental in the complainant making the investment. Mr O asked the ombud that he be compensated by Ernest Lehanie, previously Ernest Venter, of Ernest Venter Makelaars, for his investments of R200 000 (in 2009) and R300 000 (in 2010) in The Villa, a Sharemax development that imploded when the company went into liquidation in 2011. Mr O had made several previous investments in Sharemax, from which he had received income over some five years.
Mr O said Lehanie had advised him to make the 2009 and 2010 investments. However, Lehanie argued in response that Mr O had invested directly in the scheme after attending a Sharemax presentation, and he was asked to sign the documents only once Mr O had made the decision to invest. Receiving no evidence to the contrary, and taking into account, among other things, that Mr O had not mentioned the Sharemax presentation in his complaint, Bam threw out the case.
In her third recent ruling, Bam ordered that a client of Model Insurance Company, owned by Pieter de Wet of Pinetown in KwaZulu-Natal, be compensated for his R25 000 loss. De Wet had operated the company illegally (the company was never registered under the Short Term Insurance Act), signing up clients and taking premiums from them, but not paying out when they claimed. The client, Mr R, took out a car insurance policy on his Toyota in 2011, but when he claimed for damage to the car in an accident, the claim was never settled and Mr R was forced to pay the panelbeater out of his own pocket.
Bam has made several rulings against the now defunct Model Insurance.