The Financial Sector Conduct Authority has withdrawn the financial services provider licences of Medbond Insurance Brokers (Pty) Ltd and Medbond Markets (Pty) Ltd.
Medbond Insurance Brokers was authorised to render advice and intermediary services in respect of Category I financial services, and Medbond Markets was authorised as a Category II FSP.
The FSCA provisionally withdrew their licences in August 2021. In addition, the Authority warned the public against conducting financial services business with Medbond Fund Managers (Pty) Ltd and Masjamplan (Pty) Ltd.
At the time, the FSCA stated it had launched an investigation after having received complaints from investors about the status of their investments with Medbond Markets and Medbond Insurance Brokers. The Authority further stated that Medbond Fund Managers and Masjamplan were not authorised to conduct financial services business.
The Authority said in a statement yesterday it is satisfied, based on its investigation findings and after considering Medbond’s submissions, that Medbond Insurance gave inappropriate advice to its clients, to invest in non-existent financial products purportedly issued by Lombard International Life Ltd.
The FSCA has concluded that Medbond Markets acted as a discretionary manager and undertook to manage and/or managed clients’ investments into a group variable annuity purportedly issued by Lombard International.
Medbond Markets also allowed clients’ deposits to be received by entities that were not authorised to act as an FSP. “Medbond Markets participated in an arrangement with other Medbond companies wherein clients were misled, to their prejudice, regarding their investments.”
An analysis of the flow of funds indicated that clients’ investments were misappropriated, the FSCA said.
Medbond Markets materially contravened, inter alia, section 2 of the General Code of Conduct for Authorised Financial Services Providers and Representatives.
Medbond Insurance materially contravened, inter alia, section 2 of the General Code, section 7(3) of the Financial Advisory and Intermediary Services Act, and section 2(b) of the Financial Institutions (Protection of Funds) Act.
Accused of running a Ponzi scheme, Medbond Insurance Brokers was placed under provisional liquidation by the High Court in October last year and underwent final liquidation in January 2024.
In September last year, private investigator Sean Pierce of Coast to Coast Special Investigations said he was investigating 15 Medbond cases involving about R126 million.
