BHI Ponzi: Day-trading Ferrari, jet owner Warriner took clients for R3bn

By Alec Hogg

The Ponzi scheme operated by Craig Warriner through an unregulated trust called BHI had a reputed notional value of R3bn – nothing now exists. Indeed, given the manner of his operations, the trust may have substantial liabilities through debts or positions in the options or futures markets.

This means that not only do his clients have little chance of receiving any money back, but those who have received distributions of any kind in the past 15 years are likely to have this disgorged by the authorities – in the same way that clients of the famous Wall Street fraudster Bernie Madoff were forced to repay their proceeds of his crime.

Warriner, who drove a Ferrari and travelled long-distance on his own private jet, handed himself in to the authorities this month, pleading guilty to all and any charges. He represented himself when appearing in the Katlehong Magistrates Court last week.

Warriner’s marketing ‘schtick’ to a client base that included the elite set of Sandton was as an expert day trader who focused on just two stocks – BHP Billiton and Anglo American – claiming to understand their price movements so well that he was guaranteed to make small profits daily which were immediately banked.

He refuted sceptics by claiming his disclosed performance figures always revealed low double-digit annual growth because of his unique model. Financial insiders have long warned that because of the volatility of markets, the most obvious warning that a Ponzi scheme is being operated is when the vendors claim extended periods of consistent growth without a single down year.

Since giving himself up, the fraudster whose business address is 4 Gremlin Road, Sandton, admitted he had been “robbing Peter to pay Paul” for the past 15 years. He says the Ponzi started in 2008 when a stock market crash led to massive and unexpected reverses in share prices, particularly commodity stocks like the two that Warriner specialised in.

A former chairman of The Old Stithian Association, he was a regular and generous donor to the St Stithians private school, including its sports science initiative at its Sandton campus, the Craig Warriner High-Performance Centre. He also contributed through numerous rugby scholarships and other bursaries.

Nobody from the school was prepared to discuss the implications of Warriner’s jailing or whether it was true that numerous teachers had indeed invested in Warriner’s trust. The old boy Association’s secretary said its would wait until after the court case scheduled for 29 November before commenting. Warriner has already said he will plead guilty and as such there is no need to delay matters. He has, however, requested a private cell as he fears being harmed by other inmates.

Pretoria law firm Cawood Attorneys of Melk Street, Nieuw Muckleneuk, is among those affected (see PDF at bottom of the page). When we called we were told its senior partner Werner Cawood was unavailable but to please send our questions via email. A screenshot of that email is below. We await their response.

Warriner

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