The Financial Services Board (FSB), despite having extraordinary powers to take action against miscreants in the financial services industry, is increasingly giving the impression of being a sleeping watchdog that allows thieves to slip by under its nose.
At a recent symposium, the FSB huffed and puffed about how it plans to get tougher on offenders, but even the financial ser-vices industry is becoming increasingly concerned that the FSB is not doing the job that it should. And if it doesn’t, there is a loss of investor confidence.
The FSB is simply not doing a good enough job to give consumers confidence that they will not be misled into investing in some foreign currency scam, an imploding, crooked property syndication or yet another Ponzi scheme. It is still “buyer beware”.
Last week, the FSB revealed the glaring gaps in its processes when it confessed that last year it had given the all-clear to Herman Pretorius, enabling him to pull a total of R1.8 billion from 3 000 investors into his Relative Value Arbitrage Fund (RVAF), a Ponzi scheme masquerading as a hedge fund. The FSB gave the all-clear after Personal Finance asked the regulator to investigate Pretorius in May last year.
RVAF collapsed last week, when Pretorius shot business associate Julian Williams, of Basileus Capital, before turning the gun on himself.