Two Gauteng individuals who solicited deposits for a forex-trading scheme without the required authorisation have been slapped with administrative penalties totalling R2.1 million and banned from the financial services industry for two decades.
The Financial Sector Conduct Authority announced on 13 November that Chantelle Kleynhans and Pieter Willem van der Walt have been fined and debarred following an investigation.
According to the Authority, Kleynhans was fined R1.55m, while Van der Walt was fined R550 000. The FSCA has also confirmed that its investigation report will be referred to the South African Police Service for possible criminal proceedings.
The investigation found that the pair solicited deposits from members of the public on the promise of trading forex on their behalf. They acted as unauthorised discretionary financial services providers by receiving funds and executing trades at their own discretion – conduct that directly contravenes section 7(1) of the Financial Advisory and Intermediary Services Act.
Gerhard van Deventer, the divisional executive for enforcement at the FSCA, said the two mainly operated in Boksburg, Vereeniging, Pretoria, Centurion, and Henley on Klip.
The FSCA received the first report about the scheme on 4 October 2022. Following a preliminary assessment, the matter was escalated to the Enforcement Division, where a full investigation formally began on 10 March 2023.
The Authority’s review covered conduct between April 2021 and October 2022 and included about 380 members of the public. Van Deventer said their involvement varied from personal connections with the pair to referrals through informal networks, with most investors learning about the opportunity through word-of-mouth.
During the investigation period, the FSCA tracked approximately R1.6m in deposits.
Because rendering unauthorised financial services is a criminal offence, the case will now be referred to SAPS. Van Deventer confirmed: “Upon referral of the case, the FSCA will provide active assistance to SAPS where it is required or requested.”
FSCA urges consumers to check authorisation before investing
The enforcement action underscores the FSCA’s ongoing warning to consumers: any person or entity offering investment or forex-trading opportunities must be authorised under the FAIS Act.
To avoid unnecessary risk, the Authority advises the public not to accept financial advice, assistance, or investment offers from individuals or entities not authorised by the FSCA.
“Authorised financial services providers are required to clearly display their authorisation status in their documentation. Where this is absent, individuals are encouraged to verify authorisation directly with the FSCA prior to making any payments,” the FSCA states.
It further cautions: “The public is strongly urged to exercise caution when considering investment or trading offers, particularly those made via social media or received unsolicited.”
To verify whether an individual or entity is authorised to provide financial products, services, or advice, consumers should:
- Confirm the entity or individual is authorised by the FSCA to offer financial products and services, including investment advice.
- Check which category of advice the person is registered to provide.
- Ensure the FSP number matches the name listed on the FSCA’s official database.
Members of the public can verify a provider’s status or FSP number using one of the following methods:
- Toll-free number: 0800 110 443
- Online search by licence and product category: FSCA-regulated entities database
- Online search for authorised FSPs: FAIS FSP search portal
