OM Bridge to pay R3.1m fine as part of agreement with FSCA

OM Bridge (Pty) Ltd must pay a fine of R3.1 million in terms of an agreement with the FSCA, which provisionally withdrew the broker’s licence in 2021.

The terms of the agreement were disclosed in an enforceable undertaking signed by OM Bridge’s director, Ori Mishkal, in May this year.

OM Bridge – trading as eXcentral – was authorised as a Category I FSP to render intermediary services in respect of derivatives only.

The FSCA launched an investigation into OM Bridge in March 2021, to ascertain whether the company had contravened any financial sector law – specifically section 2 of the General Code of Conduct – between May 2020 and February 2021.

In August 2021, the FSCA informed the public that it had provisionally withdrawn OM Bridge’s authorisation with immediate effect. The Authority said the decision followed the receipt of complaints from numerous members of the public, including foreign clients of OM Bridge, and was based on the evidence collected during the investigation to date.

The FSCA completed its investigation in May 2022 and informed the “implicated parties” of the regulatory and administrative actions it proposed to take. The implicated parties are OM Bridge, Mishkal, Oupa Madonsela, and Lance Druker.

In correspondence with the FSCA between May and December 2022, the implicated parties said the proposed actions were unreasonable and subject to administrative review.

The FSCA and the implicated parties subsequently reached an agreement.

The Authority said it took the following into account in reaching the agreement:

• The implicated parties co-operated fully with the FSCA during the investigation and enforcement action period;
• The implicated parties have not previously been found to have contravened the FAIS Act; and
• OM Bridge has ensured that its clients were paid any funds due to them after having ceased business operations.

The FSCA debarred Madonsela for five years, and it debarred Druker for 10 years.

The agreement includes an enforceable undertaking by Mishkal that he will not:

• Provide, or be involved in the provision of, all financial products or services defined in all the financial sector laws administered by the FSCA;
• Act as a key person of any financial institution; and
• In any capacity, provide any financial services to any financial institution, whether under outsourcing arrangements or otherwise.

The above undertaking is binding on Mishkal in South Africa for seven years from the signature date, whereafter the undertaking will have no further force and effect.

Meanwhile, the South African Reserve Bank published a notice in the Government Gazette on 5 April in terms of which €48 917.21 (about R1.03m) in the name of OM Bridge in a Standard Bank account has been forfeited to the state. The order was made under the Exchange Control Regulations.