Scammers impersonate CEOs of VALR and JSE

The first warning concerns individuals misusing the name, logo, and financial services provider number of cryptocurrency trading platform VALR (Pty) Ltd (FSP number 53308). These impersonators have also fraudulently adopted the persona of VALR’s chief executive, Farzam Ehsani, to solicit investments from members of the public.

The fraudulent activities have been primarily conducted through social media platforms, including WhatsApp, Facebook, Telegram, and Instagram, as well as through fake websites purporting to be associated with VALR.

VALR has confirmed that neither the company nor its CEO is associated with these social media groups or websites. The company has further emphasised that it does not conduct business through WhatsApp, Facebook, Telegram, or Instagram.

Despite the FSCA’s attempts to contact the impersonators using the details in its possession, the individuals behind these schemes were unreachable.

This case highlights the dangers of engaging with unverified individuals on social media, where the anonymity and reach of these platforms can be exploited by fraudsters.

Telegram scam involving impersonation of JSE’s CEO

In a separate case, the FSCA has warned the public about a scam involving a Telegram group that fraudulently uses the details and persona of Leila Fourie, the chief executive of the Johannesburg Stock Exchange.

The administrators of the Telegram group have been soliciting funds from members of the public, promising unrealistic returns on investments. For example, the group claims that an initial investment of R5 800 could yield a return of R50 000 within 48 hours – a proposition that is not only improbable but also a common hallmark of investment scams.

When members of the Telegram group attempt to withdraw their funds, they are met with an error message stating that a withdrawal fee of R8 500 must be paid before their funds can be released. This tactic, often referred to as an “advance fee scam”, is designed to extract additional money from victims under false pretences.

The JSE has confirmed that Fourie’s details of have been unlawfully and fraudulently used by the administrators of the Telegram group. Neither the JSE nor Fourie is associated with this platform, and the JSE is addressing impersonations and the unauthorised use of its name and staff across social media.

The FSCA pointed out that offering financial products and services in South Africa requires authorisation from the relevant regulatory bodies.

Despite efforts to contact the administrators of the Telegram group, the FSCA was unable to reach them for comment, further raising suspicions about the legitimacy of their operations.

Unauthorised insurance policies

The third warning from the FSCA involves Frank Kabelo Mashilo and an entity known as Mashram United Funeral Undertakers’ Compliance Organisation (MUFUCO).

The FSCA received a complaint suggesting that Mashilo and MUFUCO might be issuing insurance policies that are possibly not underwritten by an authorised long-term insurer. Upon investigation, the FSCA discovered that MUFUCO is not registered with the Companies and Intellectual Property Commission.

Efforts to contact Mashilo for comment were unsuccessful, and when the FSCA attempted to visit the premises listed as his registered residential address, the residents had no knowledge of MUFUCO or Mashilo’s whereabouts.

The FSCA reiterated that for any entity to issue insurance policies in South Africa, it must be authorised by both the FSCA and the Prudential Authority. Conducting financial services or insurance business without the necessary licences is a criminal offense. As neither Mashilo nor MUFUCO holds any such licences, the public is strongly advised to exercise caution when dealing with them.

Spot the red flags

The FSCA advises the public to remain alert when approached with attractive investment offers. These often come with warning signs that should raise immediate concern. Common red flags include:

• Promises of unrealistic or exaggerated returns.
• Offers made through social media platforms.
• Requests for upfront payments.
• Additional payments required to access your investment returns.
• Charges for training before you can invest.
• Pressure to act and pay urgently.
• Vague or unclear information about the investment product.

To check whether a person or business is authorised by the FSCA to operate as a financial services provider – and to verify their FSP number – the public can use any of the following options:

• Call the FSCA’s toll-free line: 0800 110 443
• Search licensed financial institutions by category:
  https://www.fsca.co.za/Regulated%20Entities/Pages/List-Regulated-EntitiesPersons.aspx
• Search authorised FSPs under the FAIS Act:
  https://www.fsca.co.za/Fais/Search_FSP.htm