FSCA warns against dealing with Crowd1
The Financial Sector Conduct Authority (FSCA) warns against dealing with an entity called Crowd1, which is not authorised to render the financial services it is providing. Crowd1 is neither an authorised financial services provider (FSP), nor is it a representative of an authorised FSP. There is also no record of this entity having applied for a license with the FSCA.
The FSCA is mandated by the Financial Sector Regulation Act to regulate, investigate and impose enforcement on any individual and/or entity rendering financial services and/or financial products as defined in the relevant legislation. Any activity or entity outside our jurisdiction is referred to the relevant authority or law enforcement agency.
In the case of Crowd1, the FSCA referred it to the Prudential Authority at the South African Reserve Bank, where it is currently being investigated.
While the FSCA cannot comment on the status of another agency’s investigation we urge the public to only do business with financial entities that are registered with the FSCA or are registered under the Companies Act (2008). Any investment or business opportunity that is offered to South African consumers (that is not regulated by the Companies Act) must be offered by an authorised financial services provider (FSP).
While it is true that all investments hold risk, one with an unauthorised FSP should be considered extremely high-risk. It is also often fraudulent in nature, and likely to lead to losses for customers, for which there is little or no recourse. Therefore, the FSCA urges the public to always be mindful of this whenever approached by an individual or entity offering an investment opportunity. It is also important to remember that if it sounds too good to be true. it probably is.