Banxso hit with record R2-billion penalty - and the cops are called in

Key topics:FSCA hits Banxso with record R2bn fine and major director penaltiesProbe finds misused client funds, false info, and unrealistic return promisesKey figures debarred up to 30 years as case referred to SAPS for action.Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox at 5:30am weekdays. Register here.Support South Africa’s bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..By Chris Steyn.The controversial trading platform Banxso (Pty) Ltd has been hit with a penalty fine of R2 billion - over four times higher than the R475 million fine of Steinhoff’s Markus Jooste for publishing false/misleading financial statements.The Financial Sector Conduct Authority (FSCA) has imposed the administrative penalties of R2 billion Banxso (Pty) Ltd and its directors: Harel Adam Sekler, Warwick David Sneider, jointly and severally. A further R16 million penalty has been imposed on Banxso for other contraventions. It is believed to be the largest fine of its kind in recent history.The FSCA has also imposed a fine of R20 million on another director, Manuel de Andrade, as well as R10 million on Mohammed Bux, and R5 million on Henry James Simpson, who are both “key individuals”. Sekler, Sneider, de Andrade and Bux have all been debarred for a period of 30 years each, while Simpson has been debarred for 10 years..Read more:.Banxso hit by triple blow from the FSCA, the FIC & the NPA.Banxso first made headlines in a BizNews interview for allegedly benefiting from deep fake ads featuring billionaires Elon Musk, Johann Rupert and Nicky Oppenheimer. Scores of investors who clicked on the ads reported losses totalling millions.Advocate Petra van Niekerk blew the whistle in the interview after she had lost her life savings. In consequence more victims came forward.Banxso, a sponsor of Ultimate Fighting Championship (UFC) champion Dricus du Plessis and the national football team Bafana Bafana, repeatedly denied any involvement in these fake ads.In its latest statement, the FSCA said the regulatory action followed an extensive investigation which found that Banxso and its key persons, inter alia, misappropriated client funds, provided false and/or misleading information to clients and to the FSCA, promised clients unrealistic returns and failed to act in the best interests of its clients. The FSCA concluded that Banxso and its key persons materially contravened various provisions of the: Financial Sector Regulation Act, No. 9 of 2017; Financial Advisory and Intermediaries Services Act, No. 37 of 2002; General Code of Conduct for Authorised Financial Services Providers and Representatives, 2003; Financial Institutions (Protection of Funds) Act, No. 28 of 2001; Determination of Fit and Proper Requirements for Financial Services Providers, 2017; and the Financial Markets Act Regulations, 2018. “In arriving at the administrative penalties, the Authority considered the financial benefit that Banxso and its key persons derived from their unlawful conduct. This included an assessment of the extent to which client funds were misappropriated; the gains accumulated through misleading practices; and the overall economic advantage obtained as a result of the misconduct. The FSCA also considered the seriousness, deliberateness, extent and impact of the conduct on clients and on the integrity of the financial sector. These factors collectively inform the quantum of the penalties and serve as a strong deterrent against similar misconduct in the market.“Given the seriousness and extent of the misconduct, the FSCA has decided to report the matter to the South African Police Service (SAPS) and to share all the evidence obtained during the investigation with SAPS. The Authority will also provide active assistance to SAPS, if requested.”In its response, Banxso stated: “We acknowledge the seriousness of the FSCA's action and are treating this matter with the urgent attention it demands. Our legal teams have been immediately engaged and are conducting a comprehensive review of the findings, the process followed, and the basis for the penalties imposed. “While we respect the regulatory framework within which we operate, we maintain our position that there are significant issues that warrant thorough legal examination. We are not in a position to detail our legal strategy at this stage, but we can confirm that we are exploring all available mechanisms to address what we believe to be fundamental concerns with this outcome. .Read more:.FSCA investigates alleged financial scams involving Banxso and AfriMarkets.“The stakeholders remain committed to the principle that every party deserves fair treatment under the law, and we will pursue every appropriate avenue to ensure that this matter receives the scrutiny it warrants. Our focus continues to be on achieving a just resolution for all affected parties. “We understand the impact these developments have on clients, partners, and the broader community. Further updates will be provided as our legal review progresses and as we determine the most appropriate course of action.”.Download and read all supporting documentation below

Banxso hit with record R2-billion penalty - and the cops are called in

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