The Financial Sector Conduct Authority (FSCA) has imposed an administrative penalty of R1 million on Mr. Mareo Nel (Nel). The FSCA also debarred Nel for a period of 15 years.
The regulatory action against Nel followed an investigation by the FSCA into complaints it received from Nel’s clients.
The finding of the FSCA investigation was that Nel breached section 7(1) (a) of the Financial Advisory and Intermediary Services Act No. 37 of 2002 (FAIS Act). Nel rendered financial services by offering to trade in forex derivates on behalf of clients. These financial services required Nel to be authorised as a financial services provider, which he was not.
Nel is accordingly prohibited from:
- providing, or being involved in the provision of, financial services;
- acting as a key person of a financial institution; and
- providing specified financial services to a financial institution, whether under outsourcing arrangements or otherwise.
Members of the public should always check:
- that an entity or individual is authorised by the FSCA to provide financial products and services, including for giving recommendations about how to invest.
- what category of advice the person is registered to provide, as there are instances where companies or people are registered to provide basic advice for a low-risk product and then offer advice on far more complex and risky products.
- that the FSP number utilised by the entity or individual offering financial services matches to name of the FSP on the FSCA database.
What is Fraud? “Fraud” is any activity that relies on deception in order to achieve a gain. Fraud becomes a crime when it is a “knowing misrepresentation of the truth or concealment of a material fact to induce another to act to his or her detriment” (Black’s Law Dictionary). In other words, if you lie in order to deprive a person or organization of their money or property, you’re committing fraud.