With the next BHI Trust court date for Michael Haldane, the founder of Global & Local Investment Advisors (GLAI), fast approaching, the FSCA has taken decisive action. Haldane and his former associate, Mauro Forlin, former director of Global & Local Asset Management, have each been slapped with a 30-year debarment.
These sanctions result from an FSCA investigation which found that GLAI, Haldane, and Forlin provided financial services through BHI Trust.
“The BHI Trust was not an authorised financial services provider (FSP), although it conducted financial services in contravention of the law. Haldane and Forlin did not properly assess the appropriateness of the BHI Trust product in relation to its client risk profiles (in some instances, pensioners with no other source of income),” the Authority states.
This development follows a confession in early October last year by BHI Trust trustee and fund manager Craig Warriner. Surrendering to authorities, Warriner confessed to orchestrating a large-scale fraud. He admitted to deceiving clients by claiming their investments were spread across various “strategies”. In truth, only a small fraction was traded in securities, while most of the funds remained in an interest-bearing money market account, benefiting only Warriner.
Like many Ponzi schemes, it relied on new investors’ money to pay out existing beneficiaries. By 2023, the scheme collapsed when the BHI Trust ran out of capital, leaving investors defrauded.
Warriner was sentenced to 25 years in prison for fraud after reaching a plea deal in the Palm Ridge Commercial Crimes Court on 27 May. He was convicted of 206 counts of fraud and a charge of breaching the FAIS Act by operating without an FSP licence.
Read: AfriForum criticises Craig Warriner’s plea deal for lack of disclosure
Shortly after Warriner’s sentencing, Haldane and Sona Pillay were arrested on charges of fraud and money laundering. They were both released on R100 000 bail following a hearing at the Palm Ridge Magistrate’s Court on 10 June.
Read: Two more charged in connection with BHI Trust Ponzi scheme
Haldane’s debarment, effective from 20 September, followed the suspension of GLAI’s FSP licence in March. He resigned from the company three months before the suspension order.
Gerhard van Deventer, head of enforcement at the FSCA, previously told Moonstone that the suspension of GLAI’s licence was tied to the relationship between BHI Trust and Global & Local. “Global & Local is one of the FSPs that placed clients with BHI Trust,” Van Deventer said.
The 30-year debarment bars Haldane from providing or being involved with any financial products or services, serving as a key person at any financial institution, or offering services related to financial products.
The same restrictions apply to Forlin.
In addition to his role at GLAI, Haldane served as director of Rubicon Administration Services (RAS) until May 2005 – another entity frequently linked to BHI Trust.
Read: BHI Trust fallout: beneficiaries reluctant to return millions amid sequestration scrutiny
Katrinos Cost served as director from May 2007 to March 2019, before Pillay assumed the role in October 2022. Under Pillay’s leadership, RAS managed all administrative functions for the trust, including confirming deposits, issuing statements, and facilitating investor withdrawals.
According to the charge sheet in the State’s case against Warriner, RAS, under Warriner’s management, issued investment certificates promising a 10% annual return and yearly profit withdrawals. Warriner was also entitled to 10% of all capital gains and interest generated by BHI Trust’s accounts.
In the affidavit presented by the prosecution at Haldane and Pillay’s bail hearing, the State described BHI Trust as “a special purpose entity whose sole purpose was to siphon funds from unsuspecting members of the public”.
The affidavit added: “This trust did not exist without the aid of close and related-party enablers and direct beneficial entities.”
Haldane and Pillay are scheduled to appear in court again on 16 October.
