Authority slaps R2bn fine on Banxso
The Financial Sector Conduct Authority (FSCA) yesterday confirmed that it has fined Banxso and its directors more than R2bn. The regulator issued several additional fines ranging from R5m to R20m and debarred four ‘key individuals’ linked to its investigation.
The Daily Maverick reports that the 30-year debarment is the maximum debarment period ever imposed by the FSCA on an adviser.
The administrative penalties of R2bn were imposed jointly and severally on Banxso and its directors Harel Sekler – whom the FSCA previously identified as the sole shareholder – and Warwick Sneider.
‘This (investigation) included an assessment of the extent to which client funds were misappropriated; the gains accumulated through misleading practices; and the overall economic advantage obtained as a result of the misconduct. The FSCA also considered the seriousness, deliberateness, extent and impact of the conduct on clients, and on the integrity of the financial sector. These factors collectively informed the quantum of the penalties and serve as a strong deterrent against similar misconduct in the market,’ the FSCA said.
A further R16m was imposed on Banxso for other contraventions, while an additional R20m fine was given to director Manuel de Andrade.
Mohammed Bux and Henry Simpson, who were also identified as key individuals, were fined R10m and R5m respectively.
Sekler, Sneider, De Andrade and Bux have all been debarred for 30 years, while Simpson is debarred for 10 years.
The regulator said it issued the hefty fines based on the financial gains Banxso and its key persons had accumulated due to their unlawful behaviour.
‘This included an assessment of the extent to which client funds were misappropriated; the gains accumulated through misleading practices; and the overall economic advantage obtained as a result of the misconduct,’ the FSCA said.
It further considered the ‘seriousness, deliberateness, extent and impact of the conduct on clients and the integrity of the financial sector’.
News24 reports that the penalties were intended as a ‘strong deterrent’, it explained. The matter will also be handed over to the SAPS, and the financial watchdog says it intends to hand over all the relevant evidence.
News24 notes that the investor who lost R500 000 on Banxso took legal action in a bid to have the platform wound up.
Following its probe, the FSCA found that Banxso and the key individuals it identified had contravened several laws governing financial institutions.
These included provisions of the Financial Sector Regulation Act, Financial Advisory and Intermediaries Services Act, the General Code of Conduct for Authorised Financial Services Providers and Representatives and the Financial Markets Act Regulations, among others.
The Western Cape High Court in August placed Banxso in provisional liquidation, with Judge Andre le Grange saying he was satisfied that the online platform’s business model was illegal.
Article disclaimer: While we have made every effort to ensure the accuracy of this article, it is not intended to provide final legal advice as facts and situations will differ from case to case, and therefore specific legal advice should be sought with a lawyer.
