The banned contracts-for-difference (CFD) platforms Banxso and AfriMarkets may have had their licences withdrawn or suspended, but they appear to remain in business.

New operators continue to benefit from South Africans lured through fake social media ads that promise automated monthly returns of more than R500 000 from a once-off ‘investment’ of as little as R4 300.

These platforms claim legitimacy by citing their Financial Sector Conduct Authority (FSCA) licence.

However, they offer high-risk CFD trading without disclosing that clients will be trading CFDs.

They also fail to warn that most people lose money on such trades and instead downplay the risk, telling would-be investors that a ‘success manager’ or ‘trading professional’ will significantly reduce risks and help them make profits.

Moneyweb exposed Banxso and AfriMarkets last year as benefitting from fake ads that lure clients to the platforms.

The FSCA provisionally suspended Banxso’s licence in October last year and withdrew it permanently in July this year, describing the company as having ‘contravened various financial sector laws in a material manner’, ‘misappropriated client funds’, ‘provided false and/or misleading information to clients and to the FSCA’, and ‘failed to act in the best interests of clients’.

Banxso is also fighting a liquidation application.

Both Banxso and AfriMarkets are owned by Israeli national Harel Sekler, who was also a director of both companies, along with SA businessman Warwick Sneider.

Full Moneyweb report