Property syndication advisers’ appeals against ombud decisions dismissed by tribunal
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The Financial Services Tribunal has dismissed appeals against several determinations issued by the Financial Advice Ombud (also known as the FAIS Ombud) where financial advisers were ordered to compensate clients for losses after advising on inappropriate investment products. All involved investments in high-risk property syndication schemes that collapsed, resulting in huge losses for investors, many of them pensioners.
1. Johann Nell Financial Services. This was an appeal against two determinations issued by the ombud after this adviser persuaded two clients to invest R107 000 and R180 000 respectively in the ill-fated Sharemax property syndication scheme.
2. Ernst Venter Brokers. In this case, the broker was ordered to pay an elderly farmer R200 000 in compensation for advising him to invest in two Sharemax property investments.
3. Becker Financial Advisers. This firm was ordered by the ombud to repay an elderly woman the R650 000 she had received in a divorce settlement and, on the firm's advice, invested in another property syndication that collapsed, PIC Syndication.
4. Jose Castro. In this case, Castro was ordered to repay two investments, one of R100 000 and one of R790 000, a client made in two Sharemax developments.
In all cases the Tribunal found in favour of the original complainants and upheld the decisions of the ombud.