Unauthorised financial services business: FSCA issues a long list of entities and individuals

The recent publication of a list of 24 entities and individuals who may be conducting unauthorised financial services business underscores the FSCA’s advice to the public to exercise caution when investing.

“There are many fraudsters operating scams, and the number is growing. South Africans lose millions of rands every year to fraudsters,” the Authority said in a media statement released last week.

The statement alerted the public to exercise caution when dealing with the listed entities or individuals in financial services. The FSCA said these entities or persons may be rendering financial services to members of the public without being authorised to do so.

“Without commenting on the business of these entities or persons, the FSCA points out that offering financial products or services in South Africa requires authorisation by the FSCA. None of the entities or persons referred to below are licensed or authorised under any financial sector law to provide financial products or financial services in South Africa,” the Authority said.

The list includes:

• Simphiwe Dennis Manana and Pol Empire (Pty) Ltd
• Hillary Thabiso Mogaladi and Profound Forex Traderz (Pty) Ltd
• Theapool
• Bestgradeoption
• Prime FX Zone
• Signix Ltd trading as Portrades
• Forex Royal Trading
• Ian Harris, Stacey van Rooyen and Lifestyle Supplementary Program (Pty) Ltd
• Albert Nakampe Maenetja and Redbillion Forex
• Globallightmarket
• AGX ZEN
• Munei Khumalo and 4125 Red Sands Digital Company
• IA-Digtal Markets
• Century21 Trades
• Gerald Smith and EagleFX
• Florentin Bertolucci
• Daniela Thompson
• Quispel Michiel
• RETURNPROFITS 247
• Quantum AI
• Nasboyz (Pty) Ltd
• Immanuel Kabulo/Yannick Katende (Novatech)
• Modular Advisory Group
• Danex Mega Trade

Surge in scams on social media

The Authority said social media platforms have become popular for illegal operations and scams.

Individuals claiming to represent Denker Capital (Pty) Ltd are operating groups on Telegram. They promise unrealistic returns, using forged screenshots of supposed investment pay-outs, and encourage members of the group or the public to recruit their friends and family.

Denker Capital, an authorised FSP (FSP number 47075), does not have a Telegram account and is in no way associated with these groups.

The Telegram groups are unlawfully using the boutique asset manager’s name and logo and the names and photos of its employees to trick people into investing in cryptocurrency-related investments.

The FSCA also warned the public about SpaceX Investment and SpaceXShares-Investment, which are operating on Facebook.

“The individuals behind the Facebook pages are purporting to be associated with Space Exploration Technologies Corp (SpaceX), an entity linked to Mr Elon Musk. The FSCA suspects that the individuals are using Space X’s branding without authorisation,” the Authority said, adding that the individuals in question were not available for comment.

The individuals behind the SpaceX Investment and SpaceX-Shares-Investment Facebook pages are offering investment products with unrealistic returns.

Neither SpaceX Investment nor SpaceX-Shares-Investment are licensed to provide financial products or financial services in South Africa.

Stay alert for red flags

Authorised financial services providers must display the fact that they are authorised on their documentation.

“If this is absent, the public should avoid paying any funds to such a person without investigating it further,” the Authority advises.

Illegal operations are sometimes well-disguised as legitimate operations.

The public is advised to watch for warning signs when considering attractive investment opportunities.

These red flags include:

• unrealistic returns;
• claims that the entity or person does not require an FSCA licence;
• vague information about the investment product, or the company that provides the financial product;
• claims that the investor must act urgently; and
• requiring investors to pay more money to have their investment returned to them.

“If in doubt, the public is encouraged to seek advice from an authorised financial services provider,” the FSCA says.

Members of the public should always check:

• That an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest.
• What category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
• That the FSP number utilised by the entity or individual offering financial services matches to name of the FSP on the FSCA database.

Use one of the following methods to confirm the status and FSP number of a service provider or a person that claims to be an authorised service provider:

• Toll-free number: 0800 110 443
• Online search for authorised financial institution by license category: https://www.fsca.co.za/Regulated%20Entities/Pages/List-Regulated-EntitiesPersons.aspx
• Online search for a financial institution that is an authorised FSP in terms of the FAIS Act: https://www.fsca.co.za/Fais/Search_FSP.htm