FSCA investigating Finbok trading platform after complaints about refunds

Finbok, an online trading platform, is being investigated by the FSCA because of complaints about failing to refund clients or process withdrawal requests.

In a media release on 6 June, the FSCA announced an investigation into Finbok, Vector Financial Services (Pty) Ltd, and Astrix Data (Pty) Ltd “following complaints it received from members of the public”.

Finbok, operated by Vector Financial Services, is an online trading platform for forex, shares, and derivatives. Vector Financial is a juristic representative of Astrix Data, a licensed financial services provider with FSP number 52313.

According to Finbok’s website, the trading platform offers CFDs, stocks, and other assets.

“We provide you with the tools you need for your trading,” it reads.

Complaints have been made about these entities not refunding clients or processing withdrawal requests. The FSCA states that its investigation is aimed at determining whether these entities are violating financial sector laws.

“The FSCA records that the investigated parties are co-operating with the investigation. The FSCA emphasises that the investigation is not complete, and it has made no findings to date. This media release is in no manner a suggestion that the investigated parties contravened a financial sector law or acted improperly,” the Authority said.

Talk of the town

Two days before the FSCA’s announcement, Finbok published an article on its blog sharing the positive comments the brokerage firm had received from clients “for its compliant, trusted, and easy-to-use trading platform in South Africa”.

Titled “Finbok trusted broker reviews: why you should start trading in SA!”, the article shares some of the “glowing reviews” Finbok has received.

In the comments listed, Finbok receives high praise for its intuitive, user-friendly platform, and excellent customer service. Users share their appreciation for the personalised updates on investments, with one saying it “gives you investing insights like a crystal ball”, and another noting, “Its intuitive interface makes managing finances a breeze”. Clients also commend Finbok for its reliable trading conditions, low commissions, accurate financial data, and forecasting tools for optimising operations and cash flow.

In the article, Finbok encourages prospective clients to “check out these reviews from Finbok customers available on HelloPeter.com”.

Moonstone did so. Among the 87 reviews listed (as on 7 June) on the platform, 34 were five stars, 27 were four stars, two were three stars, two were two stars, and 22 were one star.

The latter paint a different picture to the positive comments listed in Finbok’s blog.

One such review is posted by Roger R on 30 April.

“Finbok is a **** we joined two weeks ago since then they have convinced us to deposit R73500.00 into their account have since they have pestered us for a further R100000.00 in Tesla since this past weekend that we have refused to invest in Tesla our investment is now zero,” he writes.

In a review dated 8 April, Michelle says Finbok is not to be trusted.

“It is never just R3 500.00 I opened an account with them just wanting to trade the R3 500 and see what happens, in the beginning it went well, but they asked to deposit more and more money all the time, also promising you can withdraw again.”

Nuraan A, who posted on 27 March, agrees.

“I strongly recommend no one to trust these *******. They tell you to deposit min of R3 500. Once you start making some profit then suddenly the account goes into a minus and you almost end up losing your investment, only to end up being stupid enough to invest again and this time I invested 10x more and made a good profit. When trying to withdraw they gave me a story that I didn’t have sufficient free margin.”

In the same article, under the heading “Addressing concerns and highlighting positives”, Finbok writes:

“As is to be expected from a trading place, Finbok has seen a few grumbles raised, but the company investigated these and has resolved all issues swiftly and conscientiously. This speaks volumes for the company.”

Moonstone reached out to Finbok for comment, but none had been received by the time of publication.

At your own risk

Finbok’s website states that clients are assigned a private account manager upon signing up.

“Your devoted private account manager will provide comprehensive guidance on utilizing our wide array of tools, platforms, and services. They will impart valuable knowledge on market analysis techniques, encompassing technical and fundamental analysis, trading strategies, chart patterns, and even exclusive industry insights typically beyond the reach of the average trader,” the website says.

However, Finbok states at bottom of the website’s home-page: “It is worth noting that we do not offer any trading advice, recommendations, or guidance as part of our services or otherwise. The decision to trade is solely your responsibility, and you must be prepared to bear the associated risks.”

This section also includes a risk disclaimer, stating that online trading is inherently speculative and carries significant risks. It warns that online trading may not be suitable for everyone, and individuals must take personal responsibility for their financial decisions, risk tolerance, and exposure levels. The disclaimer emphasises the need for caution when using leveraged trading products, “as they can lead to rapid losses due to unmonitored leverage”. It advises clients to ensure they fully understand Finbok’s products and to assess whether they are financially capable of withstanding potential losses.

“Finbok.com is not liable for any losses suffered. It is always advisable to consult your own legal, financial, and/or tax advisors for advice and assistance,” the website reads.

Risk disclaimer

Under its risk disclaimer, Finbok strongly advises reading the full “Risk Disclosure Statement and Terms and Conditions”. After a search, Moonstone found the link Risk Disclosure at the bottom of the webpage listed under “legal”.

It includes a “General Risk Warning for Complex Financial Instruments (Derivative Financial Instruments such as CFDs)”. It reads as follows:

“Trading CFDs and FX contracts is highly speculative, involves a significant risk of loss, and is not suitable for all investors but only for those customers who:

• understand and are willing to assume the economic, legal and other risks involved;
• are experienced and knowledgeable about trading in derivatives and in underlying asset types; and
• are financially able to assume losses significantly in excess of margin or deposits because investors may lose the total value of the contract not just the margin or the deposit.”

The FSCA has asked affected members of the public or investors who have any information regarding the investigation into Finbok to email the Authority at EnforcementComplaints@fsca.co.za with the subject: Finbok Investor. Include any relevant information that could assist the FSCA with its investigation.