Stilte oor Herman Pretorius verbaas

25 Jul

Author: Sê Maar Net – Tygerberg

Publications: Die Burger – Briewe Kolom

Date Published : 25 Julie 2014

Almal skryf briewe en SMS’e aan Die Burger oor “Die Stem” wat “daardie man wat praat in plaas van sing” op ‘n fees gesing het. Dit gaan my verstand te bowe dat niemand tot dusver geskryf het oor die “skatryk” Herman Pretorius van Welgemoed nie. Dis nou hy wat soveel mense uit hul spaargeld geswendel en toe homself en sy vennoot doodgeskiet het.
Nou sien ek in die koerant sy huis word op 3 Augustus op ‘n veiling verkoop. Ek moes twee keer lees verlede Dinsdag, 15 Julie, net om seker te maak dat ek reg lees dat die vrou R13 miljoen se verbeterings aan die huis aangebring het. Dit skrei ten hemel!
Het niemand wat hier uit hul geld verkul is, iets te sê nie – hulle of hul familie of vriende hier in Bellville?
Ek vra maar net, want eintlik ken ek nie iemand wat só verkul is nie, want ons mense is maar skugter met ons ou geldjies – nie so geldgierig om gou ryk te word nie.

Sê Maar Net
Tygerberg

Ponzi king’s estate bringing in millions – but not enough

22 Jul

Sunday Times
20 July 2014
Nashira Davids

http://www.timeslive.co.za/sundaytimes/

About R20-million could be added next month to the kitty being accumulated to compensate 3000 investors who lost a total of R2.2-billion in Herman Pretorius’s Ponzi scheme.
The Cape Town mansion he shared with his wife, Susan, will be auctioned on August 15. With decor reportedly worth R13-million, it is expected to sell about the same as his Hermanus beach villa, which brought in R17.8-million last year.
zpretorius, from the tiny Western Cape village of Piketberg, rose to become a high-flying businessman with a fleet of luxury cars, at least two mansions and millions in his bank account.
But the good life came to a sudden end when he shot dead his business partner, Julian Williams, reportedly after an argument over money, and then turned the gun on himself.
Since then, the full extent of his scam has come to light and the trustees of the fund he ran have been trying to find his assets.
It is not an easy job, because books and other records were not properly kept and no financial statements were compiled, making it difficult to reconstruct business transactions.
What the trustees did uncover was a life of opulence paid for with money invested in his Relative Value Arbitrage Fund Trust.
Much like her husband’s investors, Susan “lost everything”, her lawyer, Etienne Naude, said.
Susan, who is the registered owner of the Welgemoed house, was sequestrated in October last year.
Naude said his client “is saddened about having to lose that house as well”.
According to the auctioneers ClareMart, the cost of the land and the construction of the home totalled about R20-million.
“There have been countless queries from potential buyers,” said a spokesman for the group.
The house has a marble entrance hall, marble counter tops and wraparound marble patio.
It has its own theatre, gymnasium and sauna, and boasts an excellent view and landscaped gardens.
Pretorius’s estate was sequestrated in the High Court in Cape Town last year.
Judge Owen Rodgers found that Pretorius had “attractedlarge sums from gullible members of the public (many of them from country towns in the Western Cape) by promising above average returns of 14% to 25% per annum – the time-honoured method originally made famous in the 1920s by Mr Charles Ponzi”.
Rodgers noted that Pretorius had no income apart from that derived from his investment scheme and that his wife had not worked since 1991.
But they had 10 properties, reportedly worth R116.9-million, and six cars, including an Aston Martin DBS and a Range Rover.
Rodgers remarked that Pretorius’s wife had said that she and her adult sons “know very little about the investment business and cannot be held accountable if it should transpire that Mr Pretorius acted unlawfully”. Other properties sold include: A luxury three-bedroom apartment in Claremont that fetched R3.3-million; A luxury beach villa in Hermanus – featuried on the cover of House and Leisure magazine in 2012 – scooped up for R17.85-million; Vacant land in Hermanus, auctioned for R 863 840; and “A-Grade” office space at the TygerWaterfront with 51 parking bays, sold for R14.9-million.
They also owned a property in Oranjezicht, vacant land in Wesfleur and a holiday home in Malgas were also on the list of sales.
Piet Serdyn, 73, of Moorreesburg, said he lost all his retirement savings when he invested with Pretorius shortly before his suicide.
He has little hope of getting any of his money back.
All we, as investors, can do is sit and wait. There is nothing we can do about it.

Hedge fund scam: more rulings

21 Jul

Author: Angelique Arde

Publications: iOL

Date Published: 20 July 2014

Michal Calitz, the financial adviser who was paid R8.4 million in share profits from the Relative Value Arbitrage Fund (RVAF), which was, in fact, a scam, has been ordered to compensate two more clients who lost money after he advised them to invest in it.

The RVAF collapsed after Herman Pretorius, the mastermind of the scheme, shot his business partner and committed suicide in July 2012. The scheme collected an estimated R2.2 billion from about 3 000 investors.

In the two latest rulings by the Ombud for Financial Services Providers, Calitz has been ordered to repay Dr Johannes Hartshorne R460 000 and Martha Jooste R165 000.

This brings to four the number of rulings by ombud Noluntu Bam against Calitz (Personal Finance reported recently on the previous two rulings, and the reports can be viewed at http://www.persfin.co.za).

Calitz is the owner of Impact Financial Consultants, an authorised financial services provider with offices in Bellville, Western Cape. Calitz is a member of the Financial Planning Institute (FPI) and an accredited Certified Financial Planner.

Bam’s latest rulings show that in the weeks leading up to Pretorius’s death, Calitz advised both Hartshorne and Jooste to disinvest from the RVAF – “but by that stage it was already too late”.

In both cases, Calitz had been an adviser to the complainants for many years.

Hartshorne contends that Calitz never told him that neither the RVAF nor Pretorius were registered with the Financial Services Board (FSB) and that there could be potential risks.

“On the contrary, Calitz told [Hartshorne’s] wife that Pretorius was a person of integrity and that the RVAF was performing well.”

Hartshorne also told the ombud that Calitz did not carry out a risk assessment on him.

Jooste complained that Calitz assured her that there was no risk of investing in the RVAF and that he had invested some of his own money in the fund, which “was managed by professional people with industry experience”.

Jooste’s R165 000 was her entire investible capital and had been sitting in an Absa money market investment account before Calitz persuaded her that the RVAF was her best option.

In response to both complaints, Calitz claims to have explained to his clients the workings of a hedge fund and that these instruments are not regulated but that investment manager Abante Capital through which the investments were channelled was registered with the FSB.

But in both determinations, the ombud says the key issues, as with previous rulings against Calitz, pertain to the rendering of advice to invest in the RVAF – principally, Calitz’s “failure to understand the entity and the risks to which he was exposing his clients”.

She reiterates that no adviser would have recommended the RVAF as a suitable component in “any” investment portfolio had they exercised the required due skill, care and diligence.

The FPI responds

Jacqui Grovè, the legal and compliance services manager for the FPI, says that when the news broke about the RVAF, the FPI launched an enquiry to find out whether any FPI members might have been involved in the scheme.

By the end of last year the FPI had evidence of the possible involvement of two members, she says.

“Our investigation was made difficult by the fact that, despite our best efforts, we could not find sufficient verifiable evidence with respect to these members. We then took a decision to await the results of the ombud’s investigation.”

The release of the financial advice ombud’s determinations has provided the FPI with [the] information [needed] to proceed with disciplinary action, Grovè says.

“We are now proceeding as speedily as possible, having regard for due process, with finalising hearings. We shall publish the results of these hearings.”

Although the ombud’s rulings carry the weight of a high court ruling, Grovè says an FPI member is “deemed innocent until found guilty by a competent FPI disciplinary panel of his or her peers”.

She says the institute’s purpose is to benefit the public by ensuring that its members can be trusted always to put their clients interests’ first.

Pretorius-weduwee se spoghuis gou opgeveil

15 Jul

Author: Marelize Barnard

Publications: Die Burger

Date Published : 15 Julie 2014

KAAPSTAD. – Susan-Ann Pretorius, weduwee van die swendelaar Herman Pretorius, se ontwerpershuis met sewe slaapkamers, ’n wynkelder, gimnasium, sauna, private bioskoop en “marmer net waar ’n mens kyk” gaan in Augustus opgeveil word.

Dié miljoenêrshuis in Welgemoed en sy “internasionaal ontwerpte inhoud” is met Pretorius se swendelaarsinkomste gebou en ingerig. Beleggers het R2,2 miljard by Pretorius belê.

Nadat Susan-Ann in die Wes-Kaapse hooggeregshof gesekwestreer is, het die trustees van Pretorius se Relative Value Arbi­trage Fund (RVAF) en Seca Trust die afslaers ClareMart gekry om die huis op te veil.

Altesaam 11 bedrae wat aan Bos & Punt-bouers vir bouwerk aan die eiendom betaal is, wissel van R34 200 tot R1,6 miljoen elk. Altesaam R13,3 miljoen is binne twee jaar aan bouers en binneversierders betaal.

Susan-Ann was te alle tye die geregistreerde eienaar van die ­eiendom in Van de Graaffstraat in Welgemoed.

Die weelde word gewys in foto’s waarmee die veiling geadverteer word. Die veiling is op 15 Augustus op die perseel. Die eiendom en inhoud word as ’n eenheid opgeveil.

Jonathan Smiedt, uitvoerende hoof van ClareMart, het gister gesê die huis is eksklusief ontwerp en is “dié huis om in te woon” in die noordelike voorstede.

“Dit is nie jou alledaagse huis nie. Elke hoek en muur is met ’n spesifieke doel ontwerp en afgewerk.

“Die mure is afgewerk deur Marmoran, ’n onderneming wat bekend is vir sy dekoratiewe muurafwerking. Die geoutomatiseerde stelsel sluit in ’n verkoelde wynkelder, en daar is pragtige groot marmerteëls.”

Wanneer Smiedt die huis beskryf, gebruik hy die woorde “duur . . . duur . . . duur” in elke sin.

Die private bioskoop het ’n reuseskerm en sitplek vir sowat 50 mense. Langsaan is die geoutomatiseerde wynkelder.

Dan is daar nog die marmerstoep reg rondom die huis, die ontwerperstuin en die uitsig.

’n Lys van altesaam 115 aankope vir die binneversiering van die huis is vantevore as deel van die aansoek om Susan-Ann se sekwestrasie by die hooggeregshof ingedien.

Dit sluit in ’n sitkamerbank van R59 353, nóg een van R33 375 en ’n koffietafel van R17 800 vir een van die sitkamers.

Nog ’n sitkamerbank vir die Pretorius-gesin se gesinskamer het R48 600 gekos. Twee tafels, een van R35 283 (vir ’n eetkamer) en ’n ander van R45 157 (vir ’n braaikamer), is ook op die lys van aankope.

Met Susan-Ann se sekwestrasie is gelas dat sy al die meubels in die huis moes agterlaat en slegs basiese huisware, soos haar bed en ’n yskas, verwyder.

Die eiendom en inhoud kan op 3 en 10 Augustus deur voornemende kopers besigtig word.

Hedge fund scam: second ruling

13 Jul

Author: Angelique Arde          

Publications: iOL

Date Published: 13 Jul 2014

The Ombud for Financial Services Providers has handed down another ruling against financial planner Michal Calitz of Impact Financial Consultants in Bellville.

Calitz earned R8.4 million in so-called share profits from the Relative Value Arbitrage Fund (RVAF), which purported to be a hedge fund but was, in fact, a scam.

The RVAF collapsed after its architect, Herman Pretorius, shot himself in July 2012. The fund is in liquidation, and its trustees have indicated that some, if not all, investor funds have been lost.

Both of Bam’s rulings against Calitz are the result of complaints by clients who invested in the RVAF on his advice.

The latest ruling states that, acting on Calitz’s advice, Robert Whitfield-Jones invested two amounts in the RVAF: R350 000 in March 2009 and R250 000 in February 2012. The money for both investments came from Whitfield-Jones’s unit trust fund investments. Calitz told his client that he could earn a better return if he invested in the RVAF.

Whitfield-Jones says he knew nothing about the risks associated with investing in a hedge fund and trusted Calitz to render the best advice, particularly because they had a relationship that went back several decades.

Holding Calitz accountable for his loss of R600 000, Whitfield-Jones turned to Bam for compensation.

In her determination, Bam refers to her previous ruling against Calitz in which she found that, “on the objective evidence, he could not have conducted even the most basic due diligences on the RVAF”.

The issues pertain to Calitz’s failure to understand the RVAF and the risks to which he exposed his clients when he advised them to invest in it, she says.

“Quite simply, no adviser would have recommended this product as a suitable component of any investment portfolio had they exercised the required due skill, care and diligence,” Bam says.

Whitfield-Jones, as a client of a registered financial adviser, relied on Calitz’s advice when he made the investment. When rendering financial services to clients, the financial services provider is required to act in accordance with the Financial Advisory and Intermediary Services Act and its code of conduct. Calitz failed in this regard, Bam says.

She ordered him and his company, jointly and severally, to pay Whitfield-Jones R600 000.

Calitz holds a postgraduate diploma in financial planning and has the Certified Financial Planner accreditation. He is a member of the Financial Planning Institute (FPI), which has its own code of conduct.

The FPI has yet to discipline any of its members who advised clients to invest in the RVAF. In October 2013, the FPI said it was expecting to hold disciplinary hearings in December. The outcomes of the disciplinary hearings would be published once the appeal period had expired. But to date no outcomes have been published. Personal Finance has had no response to questions put to the FPI’s legal and compliance services manager.

Pretorius: Makelaar moet geld teruggee

10 Jul

Author: Marelize Barnard

Publications: Die Burger

Date Published : 10 Mei 2014

KAAPSTAD. – ’n Makelaar wat beleggers na wyle Herman Pretorius se beleggingskema gelok het, moet R500 000 plus rente terugbetaal aan een van dié beleggers.

Die ombudsman vir finansiële adviseurs en tussengangers (Fais), Noluntu Bam, het ’n bevel gemaak dat die makelaar van Bellville, Michal Calitz, en sy beslote korporasie, Impact Finansiële Konsultante, die R500 000 en rente van 15,5% per jaar moet terugbetaal.

Die klaer in die saak, Craig Inch, het jare lank pensioengeld bymekaargemaak en dit op Calitz se aanbeveling in Pretorius se Rela­tive Value Arbitrage Fund (RVAF) belê.

Inch se geld was vantevore in die geldmark belê en hy het dit nooit oorweeg om dit in ’n verskansingsfonds te belê nie.

Volgens Inch se weergawe in sy aansoek by Fais het Calitz hom verseker dat dit ’n stabiele fonds is en Inch se geld is op 30 Maart 2010 by RVAF inbetaal.

Hy wou op 26 Julie 2012 sy geld onttrek, maar het ’n dag later uitgevind dat Pretorius dood is.

Preto­rius het op 26 Julie 2010 selfmoord gepleeg nadat hy ’n oudkollega, Julian Williams, doodgeskiet het.

In die Fais-ombudsman se uitspraak word genoem dat Calitz aangevoer het dat hy nie verantwoordelikheid kan aanvaar vir wat blyk die “doelbewuste poging van een persoon was om beleggers te bedrieg nie”.

Verder word genoem dit is kommerwekkend dat Inch se geld reeds op 30 Maart 2010 in die RVAF Trust se bankrekening inbetaal is, terwyl ’n ooreenkoms daaroor eers op 7 April onderteken is. Die belegging is gemaak “voor enige dokumente onderteken is”.

Bam het verder gesê daar is geen bewyse deur Calitz gebied dat die ware risiko aan Inch verduidelik is nie.

“Nóg Pretorius nóg die RVAF was gelisensieer . . . Calitz moes geweet het dat die Fais-wetgewing nie nagekom is nie.”

Verder is daar geen behoorlike boekhouding of rekords deur Pretorius gehou nie. Dit is ’n belangrike kwessie wat Calitz nie kan verduidelik om te bewys dat hy ’n behoorlike ondersoek na die RVAF se sake gedoen het nie.

“Dit is duidelik dat Calitz blindelings aanvaar het wat aan hom gesê is oor die RVAF, want hy het beslis nooit die moeite gedoen om navraag te doen oor die finansiële state wat nooit bestaan het nie,” lui Bam se uitspraak.

Are industry regulators preserving the integrity of the industry?

9 Jul

Author: Jonathan Faurie

Publications: FANews

Date Published: 9 Jul 2014

Are we as an industry being protected by the regulator? We often receive determinations sent to us by the office of the Financial Advisory and Intermediary Services Ombudsman (FAIS Ombud), and there is a common thread in most of the determinations. There are certain advisers in the industry who seemingly have a blatant disregard for the Financial Advisory and Intermediary Services (FAIS) Act and they think that they can get away with defrauding clients.

Predictably they do not always get away, as the Ombud have an open door policy for the public to raise any concerns that they have regarding an adviser. The Ombud then investigates the claim and if it is found that the adviser is guilty a fine will be imposed. But is this enough? This is the question we are left with to reflect on after reading a recent determination handed down by the FAIS Ombud.

Negotiating a normal client interaction

Dr Craig Inch (complainant), a dental practitioner, was seeking an investment plan that would best suit his needs and help grow his savings. After recommendation by a college, the complainant arranged a meeting with Michal Calitz (respondent) to discuss the possible investments which would be best for the complainant.

During the original discussion, a number of unit trusts were discussed and it was recommended that the complainant look into these unit trusts. A follow-up meeting was arranged and the respondent made mention of a hedge fund that the complainant’s college, who was a client of the respondent, had spoken of. The fund was doing well and the complainant asked the respondent if he knew of any other funds which operated in a similar manner. The respondent recommended the Relative Value Arbitrage Fund (RVAF).

The complainant was hesitant to invest in a high risk fund as he was thinking of investing his whole life savings into this fund and could not afford to lose it. In the complainants version to the Ombud, he said that he made this very clear to the respondent. He asked the respondent to explain the RVAF in more detail to which the respondent explained that the fund took long positions in stocks which were expected to increase in value and short positions on stocks which were expected to decrease in value.

The complainant then asked about the performance of the fund to which the respondent assured him that the fund’s performance was in the region of twenty percent per annum.

The plot thickens

The respondent apparently told the complainant that a hedge fund was not regulated in the same way as a unit trust portfolio. The respondent then assured the complainant that the RVAF fund did have all of the correct paperwork and documentation. During the investigation of the Ombud, it was clear that this was not the case.

With regards to the fee structure, the complainant was told (as he remembers it) that he did not have to pay a fee and instead that twenty percent of the profits generated from the fund would be used as a fee.

The complainant obviously felt uneasy about the investment because he once again mentioned his reluctance to invest in a high risk vehicle as he would be investing his whole life savings of R600 000. He asked the respondent how much he should invest and the respondent recommended the complainant invest R500 000. The complainant was assured about the stability of the fund and that it was not influenced by market fluctuations. The respondent reiterated that many of his clients invested in the fund and that he was also an investor in the fund.

When the complainant wanted to withdraw R600 000 from the fund, he emailed a letter of intent to the fund, to which he was informed of the death of Herman Pretorius who was a fund manager and a trustee of the fund.

Opening a can of worms

Unlike many other recent determinations, the respondent did respond to the allegations made to the Ombud.

In his defence, the respondent said that the complainant asked about the RVAF and not the other way around. In the record of advice there was also no indication that the respondent mentioned to the complainant that hedge funds are not regulated in the same way as unit trust funds.

Two articles on a prominent media site unsettled the respondent and prompted him to withdraw all of his client’s savings out of the RVAF. However, he did not mention what particular aspects of the articles made him withdraw the funds.

The respondent further adds that he cannot accept responsibility for what seems to be one person’s deliberate intention to defraud investors.

Unearthing a long list of infringements

The list of aspects of the FAIS Act which the respondent infringed on in this case was very extensive and took up twenty pages in the Ombud’s determination, which can be read here.

One of the most important aspects of the FAIS Act which the respondent contravened was the poor selection of the vehicle in which the funds were invested. During the Ombud’s investigation it was found that there was no financial needs analysis done. The respondent did not present a range of options which could have been invested in other than the RVAF and the complainant never received any documentation that the RVAF was the fund that his capital was invested in. There was also a significant grey area on who the respondent was representing.

Was justice served?

Upon the death of Herman Pretorius, the RVAF went into liquidation and all of the capital invested in the fund was lost. However, the complaint was upheld by the Ombud as it ruled that the capital should never have been invested in this fund in the first place. The respondent was instructed to pay the complainant R500 000 and interest at a rate of fifteen point five percent per year.

What is the role of the Financial Services Board (FSB) in this debacle? Despite the fact that Calitz should have been dealt with by the regulator long before this determination took place, the issue is what will happen to Calitz now? The ruling of the Ombud can hardly be described as a slap on the wrist, but if he is allowed to continue practicing, is justice being served? In all fairness, the FSB should suspend Calitz and never allow him to practice again.

Editor’s Thoughts:
The financial services industry operates on public perception. If the public thinks that one adviser is fraudulent, they may paint a lot of other advisers in the industry with the same brush. The FSB has a duty to fight for the reputation of the industry. Is it fulfilling its role? Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts jonathan@fanews.co.za.

FSP Due Diligence Responsibilities

7 Jul

Author: Paul Kruger

Publications: Moonstone

Date Published: 3 Jul 2014

On Monday, we briefly outlined the background to the first complaint against an advisor who invested client funds in Herman Pretorius’s Relative Value Arbitrage Fund.
In his response to the complaint, the advisor stated, amongst other arguments that he, after reading about possible problems, “…contacted Mr. Pretorius to further investigate the matter. Mr. Pretorius advised me in a meeting at his office that the FSB had visited him and found nothing untoward.”
“If the FSB with all the investigative means at its disposal was not able to detect improper “hedge fund” activities by Pretorius, it surely cannot expect me to have done so.”
He also attached a copy of an e-mail from Tefo Moatshe of the FSB to another adviser dated the 11 May 2009 which states:
“Hedge funds are currently not regulated in South Africa – we only regulate a person who manages a hedge fund portfolio. This means that a person who renders financial services to a client to invest in hedge funds is not a financial services provider and not required to be licensed.”
The Ombud responded to this as follows:
“It is neither considered necessary nor appropriate of this Office to comment on the allegation that the FSB failed to pick up contraventions despite, according to the respondent, the FSB having investigated the business activities of Pretorius on more than one occasion.”
“Whatever the alleged failure on the part of the Financial Services Board, (no opinion is expressed by this Office on this allegation), the respondent’sfailure to conduct even the most basic due diligence is inexcusable. Even more so, given that not only was the respondent directly and regularly interacting with Pretorius and the RVAF, but as discussed hereunder, the respondent was more than amply qualified to pick up on any irregularities.”
The Ombud then expands on the respondent’s membership of a professional body, his obligations under its code of conduct and his professional qualifications.
I find it difficult to reconcile this conclusion with the information published in the media release by the FSB in August 2012 in response to media reports:
“During May 2011 it was brought to the attention of the FSB that Pretorius was “selling shares in unlisted companies” and “promoting these ventures” by making representations to the community.
As the selling of unlisted shares may constitute a financial service as contemplated by the FAIS Act, the FSB followed up on the information which it subsequently received in order to establish whether or not Pretorius was acting in contravention of the FAIS Act, given also the fact that he was not licensed in terms of the FAIS Act.
Some of the findings given were:
“Based on the information supplied in response at the time the FSB was satisfied that:
The private equity or venture capital projects embarked upon or supported by Mr Pretorius did not constitute an activity which was subject to FSB regulation.
Pretorius’s activities did not require a FAIS licence at the time.
The manner in which Pretorius indicated that capital would be raised from investors and the investment vehicle used for the raising of such capital also did not point towards any activity which was subject to FSB regulation or otherwise unlawful…”
The explanations provided to the FSB concerning the nature of the trusts as investment vehicles were such that it could not be established with certainty that their activities were subject to FSB regulation. Some of the ventures were designed for individuals who could properly be considered to be involved in a private domestic affair.”
“Following further complaints received by the FSB in May/June 2012 against Mr. Pretorius it was decided that a formal inspection should be conducted on the affairs of Pretorius and the various investment vehicles utilised in order to establish whether or not the activities of the investment vehicles were subject to FSB regulation. The inspection was under way at the time when Pretorius allegedly committed suicide.”
“There are media reports indicating that concerns were raised with the FSB more than 8 years ago regarding Pretorius’ involvement in hedge funds. In this regard, the FSB wishes to clarify that at that time that these concerns were raised the regulator could not establish any evidence of Pretorius’ activities in hedge funds or any irregularities with regard to the issues that were raised at the time. Further, the FSB wishes to categorically state that, as detailed above, appropriate action was taken from the time that the allegations first surfaced, and that the investigation into this matter is on-going.”
“Concerns have also been raised about how the FSB “allowed what amounts to a gigantic Ponzi scheme to continue under its nose.” Once again, it must be remembered that schemes that are operated outside of and actively in secret from the regulator cannot be said to be operating under the regulator’s nose. Accordingly, to the extent that there was a Ponzi scheme in Pretorius’ activities, such a scheme would have been operated in strict secrecy from the FSB.”
“The FSB is of the view that if there was any non-compliance by Pretorius, it was well-designed not to be subject to regulatory scrutiny. To the extent that investors were lured into any of his projects, such investors carried the risk and obligation to enquire into the merits before parting with their money, especially where above-average returns were being offered. The loss of so much money to so many investors is a sad state of affairs but one for which the regulator is not accountable.”
– See more at: http://www.moonstone.co.za

Investor obtains order for R500 000 refund in RVAF scam

1 Jul

Author: Roy Cokayne          

Publications: iOL

Date Published: 1 Jul 2014

Investor obtains order for R500 000 refund in RVAF scam

Noluntu Bam, the ombud for financial advisory and intermediary services (Fais), yesterday ordered Impact Financial Consultants in Bellville and/or financial adviser Michal Johannes Calitz to repay dentist Dr Craig Stewart Inch the R500 000 he invested in the RVAF.

Bam said the RVAF was nothing short of a scam and initial reports by the joint trustees indicated that most, if not all, investors’ funds had been lost.

She said there were many areas where Calitz was remiss and in direct contravention of the Fais Act. At its simplest, if Calitz had merely requested a set of properly audited financials, the scam would have been revealed, she added.

Bam said this would have been part of basic due diligence. Not only was this elementary step omitted but deficiencies were similarly evident in the lack of any form of proper due diligence study into the fund, its underlying investments or their structure.

Inch said he had trusted Calitz because he was correctly registered as a certified financial planner, a member of the Financial Planning Institute and his company Impact Financial Consultants was correctly licensed with the Financial Services Board (FSB).

He was dismayed that Calitz had not made certain that the investment platform he would be investing his money into was legal, correctly registered and had performed all the necessary due diligences. He had also not checked that RVAF’s fund manager was FSB-licensed, there would be third party verification of returns and valid financial statements and the fund would be correctly audited.

“Calitz acted unethically by investing my money in this ‘hedge fund’. I would never have invested a cent had I known this information.”

Bam said that apart from the issue around the risk profile, the circumstances surrounding the investment were essentially not in dispute, leaving what were essentially allegations about the failure to comply with the Fais Act, including questions of due diligence, appropriateness of advice, licensing and disclosure related to licensing, whether Calitz acted in the interests of his client and the integrity of the financial services industry.

She added that there was no evidence that a need analysis was conducted on Inch and the decision to place the majority of Inch’s savings into such a high risk investment without any diversification defied logic.

Bam said the substantial sums in commissions received by Calitz could simply not be justified when considering the poor quality of advice offered to Inch. She said these commissions were only revealed in a report to creditors in June last year by the trustees of the insolvent estate of the RVAF and a letter dated August 15 last year in which attorneys acting for Calitz conceded that he had received a so-called profit share of R8.44 million.

“Yet on the objective evidence, Calitz could never have conducted even the most basic of due diligences on the RVAF. Calitz placed the funds in a scheme which did not have so much as a financial services provider number, nominee account or even audited financials.

“Schemes such as the RVAF cannot exist without professionals such as Calitz turning a blind eye to legislative requirements,” she said.

FAIS Ombud Rules on RVAF Investment

1 Jul

Author: Paul Kruger

Publications: Moonstone

Date Published: 1 Jul 2014

The reasons for the sad ending to the Relative Value Arbitrage Fund, for both investors and advisors, are evident from this, the first determination by the Ombud on the Herman Pretorius saga.

A client, who invested R500 000 in 2010, complained to the Ombud after losing all his savings when the mastermind behind the fund reportedly committed suicide.

The Ombud quotes the following “important points” from the complaint:

‘I had trust in the respondent as he was correctly registered as a certified financial planner. He was a member of the FPI. His company was FSB licensed. I would never have invested my money in any investment platform by not doing it through a registered financial services provider/certified financial planner. The fact that he is a registered financial services provider makes it certain in my mind that whatever investment platform he would be investing my money in would be:

  • legal
  • correctly registered
  • have all the necessary due diligence performed by himself
  • the fund manager (of RVAF) would be FSB licensed
  • there would be third-party verification of returns
  • there would be valid financial statements
  • the fund would be correctly audited

This, I understand, is not the case at all. I am dismayed that none of the above 7 points were fulfilled and I declare that the respondents acted unethically by investing my money in this “hedge fund”. I would never have invested a cent of my money into this fund had I known this information’ (own emphasis).

The Ombud then proceeds to dissect the evidence in terms of the legal obligations of the advisor, including the following:

  • The duty to identify the client’s needs
  • Disclosures in terms of section 4 and 5 of the Code
  • Information on the product supplier
  • The Code of Conduct for Discretionary Financial Services Providers
  • Risk and hedge fund strategies disclosure as required by the discretionary code and
  • Authorisation to conduct business as a financial services provider

Having dealt at great length with all of the above, the Ombud concludes:

“There are so many areas where the respondent was clearly remiss and in direct contravention of the FAIS Act that it is difficult to recap without repeating all that has already been discussed. At its simplest, had the respondent just requested a set of properly audited financials, the scam would have been revealed. This would have been part of basic due diligence. Yet not only was this (sic) most elementary of steps clearly omitted, but similarly, deficiencies are evident in the complete lack of any form of proper due diligence into the investment vehicle, underlying investments or their structure.”

She quotes from the ground-breaking Durr vs ABSA Bank Ltd and Another 1997 (3) SA 448 (SCA), case which states:

“The important issue is that even if the adviser himself does not have the personal competence to make the enquiries, I believe it is incumbent upon him to harness whatever resources are available to him or if necessary to ask for professional, legal or accounting opinion before committing his client’s funds to such an investment”.

Concerning the respondent’s obligations as a member of a professional body, she states:

“The Code of Ethics requires that the 2nd respondent undertake to act in a manner that displays exemplary professional conduct and maintain the abilities, skills and knowledge necessary to provide professional services competently. In short, the 2nd respondent was certified to a standard above and beyond that of the average financial adviser and must be held to this standard.”

A thorough reading of this determination is highly recommended to all investment advisors. In particular, the views of the Ombud on due diligence will clarify an aspect which is still very murky for many of us.

In Thursday’s Moonstone Monitor we will discuss the Ombud’s view on why the FSB failed to identify problems with the RAVF during on-site visits, which is also discussed in this determination.

Please click here to download the full determination.

 

Continue reading this article

‘Hedge fund’ advice slammed

22 Jun

Author: Angelique Arde

Publications: iOL

Date Published: 22 June 2014

The Ombud for Financial Services Providers has handed down a scathing determination against a financial planner who placed R500 000 of his client’s savings in the Relative Value Arbitrage Fund (RVAF), which was a scam posing as a hedge fund.

The RVAF collapsed after the architect of the scam, Herman Pretorius, reportedly shot his former business partner and then himself in July 2012.

The determination handed down by ombud Noluntu Bam this week reveals that adviser Michal Calitz of Impact Financial Consultants in Bellville, Western Cape, earned R8.4 million in so-called share profits from the RVAF, “yet on the objective evidence he could not have conducted even the most basic due diligence [tests] on the RVAF”.

Calitz placed his client’s funds in a scheme which did not have a financial services provider number, nominee account or even audited financials, Bam’s determination states.

“Schemes such as the RVAF cannot exist without professionals such as Calitz turning a blind eye to legislative requirements,” Bam says.

Calitz holds a post-graduate diploma in financial planning and is a member of the Financial Planning Institute (FPI). This entitles him to call himself a Certified Financial Planner (CFP). He was certified to a standard above that of the average financial adviser and “must be held to that standard”, Bam says.

The ruling follows a complaint by a dentist, Dr Craig Inch, who became Calitz’s client because a friend had recommended him.

According to the ruling, Inch’s friend had told him about a hedge fund that had been performing well, and the dentist asked Calitz about it or others of a similar ilk. Calitz said he did know about it, and mentioned the RVAF.

Not knowing much about hedge funds other than that they can be risky, Inch asked Calitz to explain the fund. Calitz replied that the fund manager was a gentleman he knew very well and that the fund used a technique involving long-short strategies.

When Inch asked about the risks of losing capital due to poor decision-making by the fund manager, Calitz said that although this was possible, the fund had done consistently “very, very well” and provided a return of 20 percent a year without much deviation.

Calitz explained that hedge funds are not regulated in the way that unit trust funds are, but that this fund has “all the correct paperwork”.

Bam says the RVAF had no paperwork by way of registration or licence whatsoever, and in that regard was conducting business illegally.

With all his savings (R600 000) in a money market fund, Inch was not willing to invest his capital with a high risk of loss. But Calitz assured him that the fund was not influenced by market fluctuations. Furthermore, not only had many of his clients invested in the RVAF, but so too had he. Based on this assurance, Inch deposited R500 000 into the RVAF’s bank account on March 30, 2010, the ruling says.

On July 26, 2012, Inch instructed Calitz that he wanted to withdraw R600 000. The following morning, he heard of the death of Pretorius, “the fund manager and trustee of the RVAF”.

The RVAF is in liquidation, and the trustees have indicated that some, if not all, investor funds have been lost. Bam’s ruling says that in a letter dated November 2012, Calitz wrote: “It is presumed that Dr Inch’s funds are lost, although no definite finding has been made by the liquidators.”

Inch told the ombud he trusted Calitz because he is a CFP and his company is registered with the Financial Services Board (FSB). This led him to believe that the product he was investing in was legal and registered, that Calitz had done the necessary due diligence, that the fund manager was licensed with the FSB, that there were valid financial statements and that the fund was audited.

“This is not the case at all. Had I known this, I would never have invested a cent in this fund,” Inch told the ombud. Calitz acted unethically by investing his money in this “hedge fund”, he says.

In response to questions from Bam’s office, Calitz did not provide evidence of having done a financial needs analysis, justifying investing Inch’s savings in a hedge fund, “which is high risk”, or a record of advice, to explain what other products were considered.

Bam says while Calitz supposedly had the qualifications and experience, “he either failed to properly understand what he was dealing with, or, more worryingly, turned a blind eye in favour of lucrative commission, which he received from the RVAF” .

Bam says Calitz ignored the very legislation designed to protect his client, which led to his client’s loss, and ordered him and his company pay Inch R500 000.

Bam’s office has also referred the determination to the FPI.

Read Article

It’s been a year and a half since Herman Pretorius’s Ponzi collapse?

6 Jun

Author: Julius Cobbett

Publications: Twitter

Date Published: 21 May 2014

CobbettTwitter

Pretorius se vrou moet uit spoghuis trek

8 May

Author: Marelize Barnard

Publications: Die Burger

Date Published : 08 Mei 2014

KAAPSTAD. – Susan-Ann Pretorius, weduwee van die swendelaar Herman Pretorius, sal met net basiese meubels en toerusting, soos haar bed en ’n yskas, uit haar miljoenêrshuis in Welgemoed moet trek.

Haar laaste poging in die regsproses om ’n bevel van finale sekwestrasie teen haar te betwis – haar aansoek om verlof tot appèl in die appèlhof in Bloemfontein – is van die hand gewys.

Met elke moontlike regsproses wat nou uitgeput is, sal ’n kennisgewing binne enkele dae aan Pretorius beteken word met die datum wanneer sy uit die huis moet wees.

Die aansoek om haar finaal te sekwestreer is verlede jaar in die Wes-Kaapse hooggeregshof deur die kurators van Pretorius se Relative Value Arbitrage Fund (RVAF) Trust en die Seca Trust ingedien.

Die kurators het aangevoer sy het gebaat by meer as R17 miljoen se betalings uit die rekenings van dié trusts.

Sy is op 21 Oktober finaal gesekwestreer.

Pretorius het hierna elke moontlike regsproses gevolg om die finale bevel, wat deur waarnemende regter Wilhelm van Staden gemaak is, teen te staan en sy kon sedertdien in die spoghuis aanbly.

Pierre du Toit van Mostert en Bosman, regsverteenwoordiger van die kurators, het gister bevestig dat ’n hofbevel op 22 April in die appèlhof gemaak is en dat ­Pretorius se aansoek om verlof tot appèl van die hand gewys is.

Nou moet sy trek.

“Al die meubels moet in die huis agtergelaat word. Susan-Ann sal basiese huisware, soos haar bed en ’n yskas, mag saamneem,” het Du Toit gesê.

Hierna sal die kurators besluit of die spoghuis en meubels deur ’n eiendomsagent bemark kan word en of dit op ’n openbare veiling verkoop sal word.

Kurators sal Pretorius ook verder ondervra in ’n poging om nog bates te probeer opspoor.

Sy sal die geleentheid kry om presies te verduidelik wat op haar bankstate aangaan, en waarvoor bepaalde betalings gemaak is waaroor die kurators moontlike vrae kan hê.

 

Lees Artikel in Die Burger

Makelaar vir diens betaal, hoor hof

7 May

Author:  JANA BREYTENBACH

Publications: Die Burger

Date Published : 07 Mei 2014

KAAPSTAD. – Al het wyle Herman Pretorius ’n onwettige beleggingskema bedryf, beteken dit nie dat “ ’n makelaar wat nou weier om sy fooie terug te betaal daarvan bewus was nie”.

Só is gister aangevoer deur adv. Alasdair Sholto-DouglasSC wat die makelaar Michal Calitz van Bellville in die Wes-Kaapse hooggeregshof verteenwoordig.

Calitz staan ’n aansoek teen wat deur die kurators van Pretorius se gesekwestreerde Rela­tive Value Arbitrage Fund (RVAF)-trust en sy Seca-trust ingedien is.

Die kurators voer aan dat Calitz R6,54 miljoen aan die RVAF-trust en byna R380 000 aan die Seca-trust moet terugbetaal.

Verder word geëis dat Impact Finansiële Konsultante (’n beslote korporasie waarin Calitz ’n 80%-aandeel het) ook sowat R2,1 miljoen aan die twee trusts terugbetaal.

Beleggers het op advies van Calitz meer as R86 miljoen in Pretorius se skema belê.

Adv. Jannie van der Merwe, vir die kurators, het aangevoer dat die betaling aan Calitz onwettig was.

Hy het ook aangevoer dat Pretorius, sy vrou, Susan-Ann, en Eduard Brand die trustees van die Seca-trust was, en dat Pretorius en Brand die enigste trustees van die RVAF-trust was. Pretorius het, sonder om sy mede-trustees insae te gee, oor betalings besluit.

volgens Van der Merwe was dit onwettig.

Boonop was die betalings deel van ’n “onwettige beleggingskema, of Ponzi-skema”, het Van der Merwe gesê.

Sholto-Douglas het namens Calitz aangevoer dat hy ’n diens gelewer het en daarvoor betaal is.

“Dit is geld wat Calitz verdien het en waarop hy belasting betaal het.”

Volgens Sholto-Douglas grond die kurators hul aansoek op hoorsê-getuienis wat nie in dié aansoek ingedien is nie. “Die kurators steun op getuienis wat in die sekwestrasie-aansoek teen Susan-Ann Pretorius ingedien is, en dat dit hoorsê-getuienis in die aansoek teen Calitz is.”

Van der Merwe het gesê ’n regter het die getuienis in die sekwestrasie-aansoek van Susan-Ann Pretorius aanvaar en dat die aansoek dus daarop kan steun.

Indien Calitz nie die geld kan terugbetaal nie, sal daar moontlik ’n aansoek om sekwestrasie teen hom by die hof ingedien kan word, het Van der Merwe gesê.

Regter Monde Samela het uitspraak voorbehou.

Lees Artikel in Die Burger

Belegger sterf aan hartaanval

2 May

Author: Marelize Barnard

Publications: Die Burger

Date Published : 02 Mei 2014

KAAPSTAD. – ’n Sewentigjarige belegger wat met wyle Herman Pretorius se bedrogspul al sy spaargeld vir mediese uitgawes verloor het, is oorlede kort voor hy vrae oor sy beleggings moes beantwoord.

Die likwidateurs van Preto­rius se Relative Value Arbi­trage Fund (RVAF) Trust en die Seca Trust is tans ingevolge regulasies van die Insolvensiewet met geheime ondervragings van beleggers besig.

Die seun van die man wat verlede week aan ’n hartaanval gesterf het, het vertel hoe sy pa die afgelope twee jaar gely het onder die wete dat al die geld wat hy vir hom en sy vrou se mediese onkostes op hul oudag gespaar het nou verlore is.

“Pretorius het soveel mense se lewe verwoes. Herman het alles wat my pa gehad het, gevat,” het die seun gister gesê. Die seun het gevra dat nóg sy naam nóg dié van sy pa gepubliseer word.

Die seun moes verlede week inderhaas van Pretoria na Kaapstad vlieg ná sy pa se hartaanval.

“Hierdie ou (Pretorius) het net soveel lewens verwoes. Die stres wat my pa die afgelope twee jaar gehad het, was geweldig. Dit het die hele tyd in sy kop gemaal dat hy dinge weer moet probeer regkry.”

Die oorledene se een groot vrees was dat daar op sy oudag nie genoeg geld sou wees vir die mediese onkostes van hom en sy vrou nie.

“My pa het 20 jaar lank dieselfde kar gery. Hy het geld by Pretorius belê om te spaar vir sy oudag. Hy was nie gierig nie.

“En só is daar mense in Riversdal en Riebeek-Kasteel . . . Dit is mense wie se hele lewe – soos my pa s’n – die afgelope twee jaar oorheers is deur stres. Dit is stres waarmee jy gaan slaap en opstaan. Dit gaan deur jou kop as jy eet of gaan stap.”

Pretorius, wat R2,2 miljard van beleggers ingevorder het in ’n piramideskema, het op 26 Julie 2012 ’n voormalige sakevennoot, Julian Williams, in die middestad van Kaapstad doodgeskiet en daarna selfmoord gepleeg.

In ’n kennisgewing aan beleggers waarin die redes vir die likwidateurs se insolvensie-ondersoek uiteengesit word, word genoem dat die Insolvensiewet daarvoor voorsiening maak dat enige persoon ondervra kan word wat moontlike inligting of dokumentasie het met betrekking tot die insolvente boedel wat ondersoek word.

Pretorius het, volgens die kennisgewing, nie behoorlik boekgehou nie en die likwidateurs beskou die geheime ondervraging van getuies as noodsaaklik om inligting te bekom

Lees Artikel in Die Burger

Fraud knows no Boundaries

15 Apr

Author Paul Kruger

Publications: InsuranceGateways

Date Published: 15 April 2014

Consumers at the lower end of the market are often more vulnerable when it comes to being defrauded.

The latest Ombud determination provides details of how the Reformed Christians for Truth Church became the victims of an “advisor” (himself a pastor) who was neither registered with the FSB, nor appointed as an agent of the licensed financial service provider he claimed to represent.

The agreement was that he would provide funeral cover for congregants of the church, and that claims would be paid out within 48 hours. The first claim arose in December 2012. When it was not paid by January 2013, the church conducted an investigation and established that “…no funeral cover was in place.”

They referred the matter to the FAIS Ombud. In response to an enquiry from the Ombud, the respondent undertook to settle the outstanding amount before 30 April 2013, but this never happened, and the respondent seems to have disappeared.

The Ombud concluded:

The second respondent’s conduct is not only illegal in terms of the FAIS Act. His conduct is also unlawful in terms of the common law and amounts to fraud. On that basis alone, the second respondent must be held personally liable for the entire amount claimed.

The respondent was ordered to repay the church’s R18 000 within 7 days from date of the determination, and interest hereafter to the date of final payment.

As in the two cases discussed last week, the perpetrator was aware that he needed to be licensed, and that he had to work through a licensed product provider. It appears that he blatantly lied about this. He even used the FSP number of a registered provider despite not being registered as a rep with them.

It is not clear how the church became aware of the office of the Ombud, but at least it managed to get a determination in its favour. What has happened since is anybody’s guess. By January 2014, the outstanding amount had still not yet been paid and the respondent, who undertook to repay the money by the end of April, is missing in action.

There is, of course, no way that the Regulator would have been able to establish or prevent this.

One can only speculate on how many other incidents of this nature occur without the victims having recourse to remedy through ignorance. It is likely that such occurrences are prevalent in this sector of the market. The only long-term remedy appears to be consumer education regarding the safeguards in place to protect them from such scams.

One of the recent amendments to the FAIS Act concerns fit and proper requirements. The following is an extract from a summary written by Alan Holton, a compliance officer and associate of Moonstone:

A new S 6A (Fit and Proper Requirements) has been added to this statute. In terms of S 6A, the registrar must classify financial services providers into different categories and determine fit and proper requirements for each category of providers.

The registrar must then, in each category of providers, determine fit and proper requirements for the key individuals of providers, representatives of providers, key individuals of representatives of providers and compliance officers.

The challenge, of course, does not lie in regulating those in the flock, in a manner of speaking – it is those who opt to operate outside the legal parameters that are most likely to cause harm.

There are currently a number of investment schemes offering above average returns. They do not operate under the radar, advertise brazenly and must be making millions if one looks at their advertising campaigns. Some may well be doing what they promise, but so did major property syndications before market conditions changed.

It seems that the starting point for many of these operators is to set up structures which fall outside the jurisdiction of the regulatory authorities. This appeared to be the case with the Relative Value Arbitrage Fund which camouflaged its business operations in such a way that the FSB was unable to detect anything untoward during an inspection in May 2011. During a further investigation a year later, Herman Pretorius shot his business partner and himself.

There are no easy solutions to the problem of rogue operators. Hopefully, the implementation of Twin Peaks will cast the net wider, and contribute to a safer financial services environment.

Hedge funds: Really bad investments? SA vs global funds

30 Mar

Author:  Jackie Cameron

Publications: Biznews.com

Date Publiched: 30 Maart 2014

After at least a decade of industry-government talks and planning, South Africa is on the brink of introducing hedge fund regulations, effectively making them legally acceptable to promote. That’s welcome news for the financial services industry because it will thrust these funds into the mix of mainstream investment options, broadening their product suite.

But is it a good idea for you to invest in one? Certain levels of protection will be in place to reduce the risk of your money being stolen by the fund manager. And, investment returns are likely to be produced in a way that will make it easier to compare costs and managers’ investment skill, just as you can with registered unit trusts.

However, a new international report suggests that hedge funds aren’t good investments. Local hedge fund managers insist the situation is different in South Africa. They say that hedge funds in South Africa are different beasts.

Hedge fund managers have not been allowed to punt their portfolios to the wider investment community. These funds do not enjoy as many legal rights or have as much investor protection as other collective schemes, like equity, money market and balanced fund unit trusts.

There are about 100 hedge funds in South Africa, with the top 10 holding half of the money and managed by established asset managers. With hedge fund managers estimating they have R46.5bn in assets under management, the sector is small compared to the collective investment scheme industry which has about R1.5 trillion in funds.

The main reason the authorities have dragged their collective heels on hedge funds is that they are complex financial products. They have been seen as best suited to an elite group of investors who can get their heads around sophisticated-sounding investment strategies or people rich enough to cope with losses if the worst happens.

Hedge funds have developed a bad reputation, too, because of people like Herman Pretorius whose Relative Value Arbitrage Fund – billed as a hedge fund, but effectively a Ponzi scheme – went belly-up. In 2012, Pretorius shot his business partner before turning the gun on himself, owing South African investors billions of rands.

Internationally, Bernard Madoff hasn’t done the hedge fund fraternity any favours. Madoff’s Ponzi scheme that knocked investors around the world was sold as a hedge fund.

The latest blow to the reputation of hedge funds comes in the form of a report put out by global asset management firm JP Morgan, which scrutinised hedge fund returns and gave these investments the thumbs-down. If you are wondering how complicated hedge funds can be, this report will give you just a small taste of the challenges of getting a clear picture of the hedge fund landscape.

In the meantime, here’s a summary of the JP Morgan report courtesy of the Financial Times of London: the “polite conclusion” is that hedge funds stopped being exceptional in 2003. “Less politely, returns to the hedge fund industry have been rubbish ever since money rushed into it, just as economic logic would suggest.”

The FT.com’s recent editorial points out that the sales pitch “continues to be human ingenuity, but what investors have received is expensive mediocrity”. These funds charge billions of dollars every year for “sub-par” returns.

You would think that publicity like this would bother hedge fund providers around the world, particularly in South Africa where fund managers have been lobbying for many years to come out of the shadows. A report like JP Morgan’s would surely threaten to spoil the launch parties that have been planned for later this year when hedge fund legislation is expected to finally be passed.

Domestic hedge fund professionals aren’t particularly fussed, though. Francois Cilliers, chief investment officer at funds-of-hedge-funds manager Novare, says the JP Morgan report is just one of several with a similar line. “I concur broadly that hedge fund returns internationally have been tepid. However, the South African situation really is different,” he says.

Cillers says South African hedge funds have been tested in bear markets. Based on his insights into what is going on in them, they have been “substantially more resilient relative to their international counterparts”.

He notes that it is important to look at “risk-adjusted return”. South African hedge funds have been promoted mostly to pension funds, which are looking for fairly conservative returns to balance investment risks, he says.

Instead of having mostly “high octane” versions, as you might expect in a developing market, South Africa’s hedge funds are designed for more conservative risk profiles, says Cilliers. “There are a variety of strategies, but the domestic mindset is generally to cater for more cautious investors,” he adds.

Robert Foster, convenor of the Association for Savings and Investment South Africa standing committee on hedge funds, agrees that fees can be high and there is frequent trading in hedge fund portfolios, which erodes returns. But, he says: “Fees need to be seen in the context of the value add by the manager when compared to the reduction in market risk achieved.”

Foster argues that the focus should be on the investment benchmarks fund managers set themselves, as performance fees can be charged on overly easy targets. Fund managers generally take a performance fee for outperforming cash plus a hurdle rate and charge an annual management fee of about 1% of assets, says Foster.

For now, there isn’t consistency in reporting performance, so it is impossible to give a definitive answer on whether hedge funds in South Africa are better value than their international cousins. Foster says this will change when the regulations are finally published, making South Africa the first country in the world with legislation specially designed with hedge fund investors’ best interests at heart.

He is optimistic that this could be as soon as June. There will be two categories of funds – Qualified Investor Funds and Retail Investor Funds. Along with new fund offerings, we can no doubt expect a proliferation of advisers offering to do the work of choosing from a wide array of hedge fund investment strategies for us.

See Biznews.com

 

Britse hof oor Pretorius se geld genader

16 Mar

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 16 Maart 2014

KAAPSTAD. – Likwidateurs wat wyle Herman Pretorius se R2,2 miljard-bedrogspul ondersoek, gaan in die Britse howe aansoek doen om toegang tot sy bankbesonderhede daar te kry.

Dié stap is nodig om uit te vind waarheen onder meer R177 miljoen verdwyn het wat Pretorius vermoedelik in die buiteland versteek het.

Dié bedrag geld is in ’n Switserse bankrekening gedeponeer, maar wat Pretorius daarmee gemaak het, bly ’n raaisel.

Die eerste stap vir die likwidateurs is om ’n hofbevel te verkry wat toegang sal verseker tot ’n bankrekening wat Pretorius by die Britse HSBC-bank gehad het.

Volgens die jongste verslag wat die likwidateurs van Pretorius se gesekwestreerde besigheidsentiteite aan beleggers uitgestuur het, het HSBC tot nou toe geweier om die inligting bekend te maak sonder ’n hofbevel.

Met die hofbevel kan die trustees vasstel hoeveel geld in Pretorius se verskeie oorsese bankrekenings is, maar selfs belangriker nog sal die ondersoek kan voortgaan na watter rekening Pretorius geld verskuif het.

Intussen is ’n regsverteenwoordiger ook in Switserland aangestel om inligting te bekom oor Pretorius se bankrekeninge by Anker-bank in Zürich.

Pretorius het ’n maatskappy genaamd MAT Worldwide Beperk op 4 Januarie 2001 in die Britse Maagde-eilande geregis­treer en dit tot September 2009 – aldus die likwidateurs wat sy sake ondersoek – waarskynlik as ’n “front” gebruik as dié oorsese besigheid waarin hy plaaslike beleggers se geld bestuur het.

Maar ten spyte daarvan dat miljoene ponde deur die jare in MAT Worldwide se rekeninge inbetaal is, is daar blykbaar slegs £450 000 (R7,9 miljoen) van die R177 miljoen in die een bankrekening oor. Dit is luidens die likwidateurs se verslag.

) In ’n prokureursbrief deur Duvenage en De Villiers, van Wellington, wat einde 2012 aan HSBC gestuur is, word genoem dat “lede van Pretorius se familie, werknemers of persone wat lojaal aan hom was”, die dag ná Pretorius se afsterwe twee briewetasse uit sy kantore verwyder het. HSBC Bank is daarop bedag gemaak dat die briewetasse moontlik toegangskodes tot Pretorius se buitelandse bankrekeninge gehad het en dat banktransaksies wat ná sy dood op 26 Julie 2012 gedoen is, waarskynlik onwettig is.

Lees Artikel in Die Burger

Vrou gedwing om inligting te openbaar

24 Jan

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 24 Januarie 2014

KAAPSTAD. – Regstappe gaan teen Susan-Ann Pretorius, weduwee van die piramide-swendelaar Herman Pretorius, gedoen word om haar “te dwing” om inligting oor haar persoonlike rykdom te verskaf.

Dié stap gaan volg nadat Susan-Ann tot nou toe “geweier het” om met die kurators van Pretorius se Relative Value Arbi­trage Fund (RVAF) Trust en die Seca Trust saam te werk.

Pierre du Toit van Mostert en Bosman, regsverteenwoordiger van die kurators, het gister by navraag bevestig dat die volgende stap is om Susan-Ann “met regstappe te dwing om saam te werk”.

Intussen is Susan-Ann se aansoek om verlof tot appèl teen ’n vroeëre uitspraak waarin sy finaal gesekwestreer is van die hand gewys.

’n Aansoek om Susan-Ann te sekwestreer, is verlede jaar deur die trustees van Pretorius se RVAF- en Seca Trusts ingedien. Die trustees het aangevoer dat sy gebaat het by meer as R17 miljoen se betalings uit die rekenings van dié trusts.

Susan-Ann was deurgaans die geregistreerde eienaar van ’n huis in Welgemoed waarvoor daar binne twee jaar R13,3 miljoen aan bouers en binneversierders betaal is.

Sy het ’n aansoek om verlof tot appèl ingedien teen die uitspraak van waarnemende regter Wilhelm van Staden wat die finale sekwestrasiebevel toegestaan het.

Dit het beteken dat Susan-Ann se spoghuis nie opgeveil kon word tot die regsproses van haar aansoek om verlof tot appèl afgehandel is nie.

Die kurators het intussen steeds die reg gehad om Susan-Ann te ondervra.

Van Staden het gister uiteengesit waarom hy Susan-Ann se aansoek om verlof tot appèl van die hand gewys het.

Hy het daarop gewys dat Susan-Ann aangevoer het dat die bevel van voorlopige sekwestrasie nié aan haar werknemers of die Suid-Afrikaanse Inkomstediens bedien is nie. Rekords wys egter duidelik dat dit wel gedoen is.

Oor ’n tweede bewering deur Susan-Ann dat die hof gefouteer het deur nié ’n polis van R8 miljoen in ag te neem as deel van haar boedel nie, het Van Staden gesê sy kon versoek het om dié kwessie in ’n beëdigde verklaring te behandel (eerder as om dit in haar aansoek om verlof tot appèl te gebruik).

Dié geld is uitbetaal aan ’n familietrust van die Pretorius-familie, bekend as die Penta Trust, en kon volgens ’n beëdigde verklaring van haar prokureur nie bygereken word as ’n bate by Susan-Ann Pretorius se gesekwestreerde boedel nie.

Adv. John Suttner SC, vir Susan-Ann, het Saterdag in die Wes-Kaapse hooggeregshof aangevoer dat sy nié insolvent is nie en dat sy die begunstigde is van die R8 miljoen-polis.

Sy het aangevoer dat sy, saam met ander bates soos haar huis in Welgemoed, genoegsame bates het om die eis van R17 miljoen teen haar te betaal.

Adv. Chris Eloff SC, bygestaan deur adv. Almero de Villiers, het namens die kurators opgetree.

Lees Artikel in Die Burger

Herman Pretorius’s widow loses sequestration battle

24 Jan

Author: Julius Cobbett

Publications: MoneyWeb

Date Published: 24 January 2014

Leave to appeal sequestration order is denied.

JOHANNESBURG – The widow of Ponzi mastermind Herman Pretorius has lost another battle in the bid to stop her own sequestration. Last week Susan Pretorius applied for leave to appeal a final sequestration order granted against her estate. The order was handed down by acting Judge Wilhelm van Staden last year.

On Thursday January 23 Van Staden dismissed Susan Pretorius’s application for leave to appeal. Van Staden concluded that an appeal had no reasonable prospect of success.

The application to sequestrate Susan Pretorius’s estate was brought by the trustees of the RVAF and Seca trusts, entities that received money from Pretorius’s investors.

Herman Pretorius’s scheme collapsed in July last year. Faced with investor withdrawals he couldn’t meet, Pretorius shot his former business partner Julian Williams before turning the gun on himself. The investment scheme received an estimated R2.2bn from about 3000 investors.

Last week Susan Pretorius denied that she was insolvent. She claimed the court had erred in holding that she was not the beneficiary of a life insurance policy worth R8m. However, Van Staden said that Pretorius had an opportunity to present further evidence on or before the return day.

Van Staden ordered that the costs of the application for leave to appeal, including the costs of two counsel, be costs in Susan Pretorius’s sequestration.

The curators of Herman Pretorius’s RVAF are still struggling to trace investor money, including funds that were moved to UK and Switzerland.

Continue Reading MoneyWeb

Pretorius-weduwee verlof tot appèl geweier

23 Jan

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 23 Januarie 2014

KAAPSTAD. – Susan-Ann Pretorius – weduwee van Herman Pretorius wat R2,2 miljard se beleggingsgeld laat “verdwyn”het –  se aansoek om verlof tot appèl teen ’n vroeëre uitspraak waarin sy finaal gesekwestreer is, is geweier.

Waarnemende regter Wilhelm van Staden het sy besluit uiteengesit waarom hy Susan-Ann se aansoek geweier het. Hy het onder meer gesê Susan-Ann kon voor haar aansoek Saterdag, in ‘n beëdigde verklaring die kwessie van ‘n R8 miljoen-polis uitgeklaar het.

Susan-Ann se regsverteenwoordiger, Adv. John Suttner SC, het Saterdag in die Wes-Kaapse hooggeregshof aangevoer sy is nié insolvent nie en dat sy die begunstigde is van ‘n polis wat na Pretorius se dood R8 miljoen uitbetaal het.  Sy het aangevoer dat, saam met ander bates soos haar huis in Welgemoed, sy genoegsame bates het om ’n eis van R17 miljoen teen haar te betaal.

Adv. Chris Eloff SC, bygestaan deur adv. Almero de Villiers, het namens die kurators van twee gesekwestreerde trusts van Pretorius, opgetree om Susan-Ann te laat sekwestreer.

Lees Artikel in Die Burger

Bates Wys ek is nie insolvent

20 Jan

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 20 Januarie 2014

 

Hof hoor sy het ondermeer £100 00 in ‘n Britse rekening, plus polisgeld.

 

Die trustees ban Pretorius se Relative Arbitrage Fund (RVAF) se Seca Trust het verlede jaar aansoek gedoen om Susan-Ann te sekwestreer. Die Trustees het aangevoer Susan-Ann meer as R17 miljoen terugbetaal aan die trusts omdat dit die beleggers se geld is wat R2,2 miljard in Pretorius se bedrogspul verloor het.

 

KAAPSTAD. – Susan-Ann Pretorius, weduwee van die swendelaar Herman Pretorius, se sy “het geld”.
Susan-Ann se van haar bates is ‘n bewys sy is nie insolvent nie. Dit sluit in £100 000 in ‘n Britse bankrekening, R8miljoen polis-geld wat na Pretorius se dood uitbetaal is, nog R400 000 in ‘n ander rekening asook haar huis van miljoene rande.
Sy het Saterdag om verlof tot appel aansoek gedoen teen ‘n vroeere uitspraak waarin sy flinaal gesekwestreer is. Sy voer aan sy het wel genoeg bates om ‘n eis van R17miljoen teen haai te kan betaal.
Adv. John Suttner SC, vir Susan-Ann, het gevra dat ‘n opmerking van haar prokureur – en wat in hofstukke ingedien is R8miljoen polisgeld nie ‘n persoonlike bate van haar is nie, nou deur die hof geignoreer moet word.
Hierop het waarnemende regter Wilhelm van Staden (wat diefinale sekwestrasiebevel toegestaan en Saterdag se aansoek om verlof tot appel daarteen aangehoor het) gevra hoe kan hy die kwessie ignoreer dat Susan-Ann se prokureur aangevoer het die R8 miljoen is nie haar eiendom nie.
“Se u nou dat die polisgeld nie in ‘n trust is waarvan sy die begunstigde is nie?” het Van Staden gevra.
Hierop het Suttner geantwoord hy se niks … en die R8 miljoen is nie die kwessie nie – daar is nog geldkwessies wat genoem moet word.
Suttner het hierna voortgegaan en gese Susan-Ann het ook £100 000 in n Britse bankrekening. Die ponde is “Rl,8 miljoen werd, miskien Rl,9 miljoen en dalk die volgende dag R2miljoen”. Dan is daar nog R463 000 in ‘n ander bankrekening.

Maar die groot probleem wat Susan-Ann het, is dat ‘n waardeerder wat haar spoghuis in Welgemoed waardeer het vir die doeleindes van die aansoek van sekwestrasie teen haar, dit bloot op sigwaarde gedoen en die waarde daarvan op R6,75 miljoen geraam het.
Suttner het gese die waardeerder het nie toegang tot die huis gehad nie en ook nie R13 miljoen se verbeterings aan die huis in ag geneem nie. Adv. Chris Eloff SC het namens die kurators aangevoer dit is verstommend dat Susan-Ann nou wil he dat die brief van haar prokureur oor die R8 miljoen-polisgeld geignoreer moet word – so sy se “daar is hierdie beedigde verklaring van my prokureur, maar ignoreer dit”.
Oor die waarde van Susan-Ann se huis het Eloff gevra waarom sy nie self aan die hof kom se wat die waarde daarvan is nie – “dalk is dit nou R20miljoen werd, maar Susan-Ann doen niks daarom trent nie”.
Van Staden het voorlopig uitspraak voorbehou en gese hy sal dit vandeesweek lewer.

 

 

Lees Artikel in Die Burger

Hy was slimste skelm, sê dominee

18 Jan

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 18 Januarie 2014

KAAPSTAD. – Die optrede van die weduwee van Herman Pretorius “kos beleggers baie geld”.

Só meen ’n afgetrede Wes-Kaapse predikant wat saam met sy vrou R2 miljoen by wyle Pretorius belê het.

Hy het gevra dat sy naam nie gepubliseer word nie, en het gesê hy het “ ’n lang pad met Pretorius saamgekom”, maar nooit besef dat daar fout met sy (Pretorius se) beleggingsfondse is nie.

Dié oudpredikant en sy vrou het al hul spaargeld by Pretorius belê.

Pretorius se weduwee, Susan-Ann Pretorius, wat op 21 Oktober verlede jaar finaal gesekwestreer is, gaan vandag dié sekwestrasiebevel in die Wes-Kaapse hooggeregshof betwis.

Maar vir die predikant-belegger is dit slegte nuus dat Susan-Ann nie met die kurators van Pretorius se Relative Value Arbitrage Fund (RVAF) en Seca Trust saamwerk nie.

“Die hofsake kos baie geld, wat in werklikheid aan beleggers behoort,” het hy gesê. “Dit voel vir ons of die derde hond met die been gaan wegstap.”

Hy beskryf Pretorius as die “slimste skelm” wat nog geleef het.

“In die kontakte wat ons met Herman gehad het, het ons nooit ’n sprankie van twyfel ondervind nie, nooit probleme vermoed nie, nooit wantroue gekoester nie . . . Ons het hom ervaar as ’n gewone boermens soos onsself.”

Die oudpredikant was aktief deel van ’n forum vir beleggers wat ná Pretorius se dood gevorm is om hul beleggings te probeer terugkry.

Maar nou gaan hy en sy vrou vir eers net aan met leef. “ ’n Mens raak maar daaraan gewoond, en aanvaar dat jy nie meer die geld het nie.”

Hy glo egter dat daar nog geld vir die beleggers uit die boedel sal kom, maar is bekommerd dat die proses “so lank uitrek”.

In ’n stadium het hy die e-pos-adresse van 300 beleggers gehad wat oor-en-weer by mekaar raad gevra het oor wat om te doen.

“Die beleggers is van Bloemfontein, Pretoria, Doebai, Australië, die Swartland, Overberg . . .  tot by Riversdal.”

En oor die geskinder dat mense uit gierigheid by Pretorius belê het, het die emeritus-predikant gesê: “As daar mense is wat glo dit was as gevolg van gierigheid dat ons by Herman belê het, is hulle welkom – dis hul goeie reg om te dink en glo wat hulle wil. Ek het met ’n paar beleggers kontak gehad wat op die punt was om af te tree of reeds afgetree het en wat moes aanhou werk, of weer begin werk.”

 

Lees Artikel in Die Burger

Weduwee veg môre om weeldehuis te hou

17 Jan

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 17 Januarie 2014

 KAAPSTAD. – Die weduwee van die piramide-beleggingsmous Herman Pretorius klou verbete aan haar weelderige eiendom in Welgemoed, Bellville, vas.

Susan-Ann Pretorius, wat op 21 Oktober verlede jaar finaal in die Wes-Kaapse hooggeregshof gesekwestreer is, betwis nou dié hofbevel.

In ’n ongewone stap ingevolge die toegewysde datums vir aansoeke en verhore in die Wes-Kaapse hooggeregshof sal Susan-Ann môre – op ’n Saterdag – die geleentheid kry om haar saak te stel. Dit is ’n datum waarop al die regslui beskikbaar sal wees.

Sy het ’n aansoek om verlof tot appèl ingedien teen die uitspraak van waarnemende regter Wilhelm van Staden wat die finale sekwestrasiebevel toegestaan het.

Susan-Ann se spoghuis in Welgemoed – met al die deftige ontwerpersmeubels daarin – kan intussen nie opgeveil of verkoop word nie, hoewel Van Staden in Oktober die finale sekwestrasiebevel toegestaan het.

Susan-Ann gaan, luidens haar kennisgewing vir die aansoek om verlof tot appèl, aanvoer dat Van Staden die verkeerde besluit geneem het deur te bevind dat sy insolvent is.

Sy meen die regter het verkeerdelik bevind dat sy nié die begunstigde is van ’n lewenspolis van R8 miljoen wat in Herman Pretorius se naam uitgeneem was nie. Volgens Susan-Ann sal sy ’n “surplus” van bates hê indien dié geld bygereken word, wat dus beteken dat sy nie insolvent is nie.

Die aansoek om Susan-Ann te sekwestreer, is verlede jaar deur die trustees van Pretorius se Relative Value Arbitrage Fund (RVAF) en Seca Trust ingedien. Die trustees het aangevoer dat sy gebaat het by meer as R17 miljoen se betalings uit die rekenings van dié trusts.

Susan-Ann was te alle tye die geregistreerde eienaar van die eiendom in Van de Graaffstraat in Welgemoed. Vir dié eiendom is daar binne twee jaar R13,3 miljoen aan bouers en binneversierders betaal.

’n Lys van altesaam 115 aankope vir die binneversiering van die huis in Welgemoed is vantevore as deel van die aansoek om sekwestrasie by die hooggeregshof ingedien.

Dit sluit in ’n sitkamerbank van R59 353, nóg een van R33 375 en ’n koffietafel van R17 800 vir een van die sitkamers van haar drieverdiepinghuis.

Nog ’n sitkamerbank vir die Pretorius-gesin se gesinskamer het R48 600 gekos. Twee eetkamertafels, een van R35 283 (vir ’n eetkamer) en ’n ander van R45 157 (vir ’n braaikamer), is ook op die lys van aankope.

Die trustees van Pretorius se RVAF en Seca Trust het in hul aansoek om sekwestrasie van Susan-Ann suksesvol aangevoer dat sy geen gronde gehad het om te beweer dat haar oorlede man se beleggingskema wettig was nie. Dus is sy nie geregtig op die geld wat sy van Pretorius gekry het nie.

Van die duurste artikels in dié huis in Welgemoed:

Sitkamerbank: R59 353

Koffietafel: R17 800

Eetkamertafel: R45 15 7

Lees Artikel in Die Burger

Professional Indemnity: Still No Clarity

13 Jan

Author:  Unknown

Publications: Fsb pi insurance

Date Publiched: 13 January 2014

 The fsb says that in earlyLabuschagne failed to render financial services
fairly, with due skill, care and diligence, and in the interests of his clients
and the financial services industry. While the written exam accounts for the
majority of your cet score, your GD and PI scores make between 14 and 15.
Consider the fidelity policy The insured in the fiduciary policy should cover
the fund, trustees, committee members and the principal officer. Risk,
hopefully, will have other resources to pay the compensation – that is, if he
loses his appeal against the determinations. The situation reached a level of
absurdity recently when the fsb, in effect, claimed that it could not be blamed
for not taking action earlier against the Relative Value Arbitrage. Ensure that
the rules of your fund have indemnity provisions 5). The workgroup realized that
it was not possible to eliminate or fully protect the fund against fraud. The
expenses you incur for professional development could be tax deductible. Billion
because the fund, managed by the late Herman Pretorius, did not fall under the
fsb. This includes monies stolen or any direct financial loss suffered by the
insured as a result of fraud or dishonesty by an officer of the fund. Consider
the cost of the cover and remember cheaper is not always better. So right now
the onus is on you to demand details of the PI cover your adviser has,
particularly to cover any potential compensation payable to you. On, the joint
industry workgroup circulated their recommendations on both the scope and extent
of cover in respect of delegated administration arrangements.

See also: http://rvafmediareleases.wordpress.com/2012/10/21/winners-and-losers-in-indemnity-case/

Read Original: http://bywug.org/fsb-pi-insurance.html

2013 in review

12 Jan

The WordPress.com stats helper monkeys prepared a 2013 annual report for this blog.

Here’s an excerpt:

A New York City subway train holds 1,200 people. This blog was viewed about 4,800 times in 2013. If it were a NYC subway train, it would take about 4 trips to carry that many people.

Click here to see the complete report.

‘Kommissie’ teruggeëis

11 Dec

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 11 December 2013

            Net R469 000 was ‘egte wins’

             KAAPSTAD. – Herman Pretorius het R1 miljoen aan ’n makelaar geleen met slegs ’n handdruk om dié transaksie te beklink.
Boonop het Pretorius later R250 000 van dié R1 miljoen-lening aan die makelaar, Michal Calitz, gegee – ’n geskenk wat hy met nog ’n handdruk as afgehandel beskou het.En volgens ’n transkripsie van getuienis wat in ’n sekwestrasie-ondervraging deur Calitz gelewer is, het Pretorius gesê: “Ek sê vir jou ek het soveel geld gemaak . . . ek betaal vir jou ’n miljoen rand oor . . . dan kan jy dit weer vergoed vir my later (sic).”Dié inligting is vervat in ’n beëdigde verklaring van Lambertus von Wielligh Bester, een van die kurators van Pretorius se Rela­tive Value Arbitrage Fund.

Bester se verklaring is deel van ’n aansoek wat gister in die Wes-Kaapse hooggeregshof teen Calitz ingedien is om miljoene rande “kommissie” wat Pretorius aan hom betaal het, te verhaal.

Luidens die transkripsie van Calitz se ondervraging deur die kurators het hy Pretorius só beskryf: “Herman was een van daai mense . . . en agterna kom ons dit agter . . . wat hand geskud het en niks was op papier nie . . .”

Bester het in sy verklaring aangevoer dat Pretorius se Ponzi-skema ongetwyfeld een van die grootste skelmstreke van sy soort tot nog toe in Suid-Afrika was.

Die ondersoeke wat tot nou deur die kurators en ouditeurs gedoen is, het gewys dat die meeste van die beleggers boere of plattelandse inwoners is.

Bester het gesê Calitz se regsverteenwoordiger het bevestig dat beleggers verskeie klagtes teen Calitz en Impact Finansiële Konsultante by die Ombudsman van Finansiële Diensverskaffers ingedien het. Die Finansiële Diensteraad ondersoek ook Calitz en ander makelaars.

Bester voer aan dat Pretorius, ten einde te verseker dat makelaars “geesdriftig” bly en daar ’n gereelde kapitaalstroom van beleggers inkom, “kommissies of winsdeling” van tussen 5% en 7,5% van die beleggingsbedrae aan hulle betaal het. Makelaars het hul wins ontvang die oomblik wat beleggers se geld inbetaal is.

Ekstra “administratiewe fooie” is ook aan makelaars betaal.

Terwyl beleggers meer as R2,2 miljard aan Pretorius toevertrou en hy deurentyd “opbrengste” van tussen 14% en 25% per jaar op die beleggings verseker het, het die hele beleggingskema oor al die jare nie meer as R469 000 egte wins gemaak nie.

Daar word nou van Calitz en Impact Finansiële Konsultante (’n beslote korporasie waarin Calitz ’n 80%-aandeel het) verskeie bedrae aan “kommissiegelde” teruggeëis. Dit wissel van R489 000 tot R2,45 miljoen en R3,6 miljoen.

Die aansoek is tot 6 Mei uitgestel.

Lees Artikel in Die Burger

Makelaar vandag in hof gepak

10 Dec

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 10 December 2013

KAAPSTAD. – ’n Makelaar wat beleggers na Herman Pretorius se beleggingskema verwys het, word vandag in die Wes-Kaapse hooggeregshof gepak oor die terugbetaling van miljoene rande se kommissie.Een van die kurators van Pretorius se Relative Value Arbitrage Fund (RVAF), Lambertus von Wielligh Bester, dien vandag ’n aansoek by die Wes-Kaapse hooggeregshof in teen Michal Calitz om kommisie terug te betaal.

Bester het by navraag gesê die regstap teen Calitz is die “eerste van vele” om kommissie te probeer verhaal van die makelaars wat beleggers na Pretorius se skema verwys het.

’n Ondersoek na die kommissie wat aan makelaars betaal is, is “die aspek waaraan ouditeure nou aandag gee”, het Bester gesê. “Die makelaars word nou een vir een nagegaan.

Calitz se prokureur, Jean Kotze (van Laäs en Scholtz Prokureurs), het gesê Calitz gaan vandag die aansoek in die hooggeregshof teenstaan.

“Calitz staan dit teen en ontken aanspreeklikheid vir die bedrag geld wat van hom geëis word.”

Volgens Kotze is Calitz, soos die duisende beleggers wat by Pretorius belê het, “ook deur Pretorius bedrieg” en het hy nie geweet waarmee Pretorius besig was nie.

Calitz is vroeër vanjaar deur die likwidateurs van Pretorius se RVAF Trust ondervra as deel van hul likwidasie-ondersoek.

Die Burger het vantevore berig ’n verslag is daarna deur die likwidateurs by die meester van die hooggeregshof ingedien waarin gesê is dat Calitz ’n kommissie van meer as R15 miljoen ontvang het.

Calitz het hierop beswaar teen die likwidateurs se verslag by die meester van die Wes-Kaapse hooggeregshof ingedien en aangevoer dat die bedrag aansienlik minder is.

R8,44 miljoen

Die likwidateurs het geantwoord dat dit nie die bedoeling van die verslag was nie, en het dit op rekord gestel dat Calitz in sy ondervraging te kenne gegee het dat hy ’n bedrag van sowat R8,44 miljoen van Pretorius ontvang het.

Dié bedrag sluit enige moontlike betalings uit wat verband hou met beleggings in entiteite soos SA Superalloys, Lehumo en Wesizwe.

Dit is nog onduidelik hoeveel die likwidateurs van Calitz eis omdat die aansoek hieroor volgens die hofrol eers vandag deur ’n regter aangehoor sal word.

Lees Artikel in Die Burger

FAIS Supervision Annual Report

5 Dec

Author: Unknown

Publications: InsuranceGateways

Date Published: 05 December 2013

The FAIS Supervision Department of the FSB supervises financial services providers (FSPs) in terms of a risk-based approach. In response to the changing face of the regulatory landscape, international trends and outcomes of previous years’ on-site visits, the department introduced a new Medium to High risk category to define the risk of non-compliance more accurately.
A total of 10 297 FSPs were categorised. Interestingly, the number “only” decreased by 493, but a closer look at the table below shows a marked decline in the number of small FSPs from 6 839 to 3 362 – a loss of 3477, or nearly 51%. The table below reflects the categorisation of FSPs in terms of the new risk-based supervision approach as at 31 March 2013. The categorisation was changed with the introduction of a Medium-High Impact (MHI) category. During the period under review, the emphasis was placed on off-site monitoring of High Impact and MHI FSPs.

2012/2013

2011/2012

High Impact

283

262

Medium-High Impact (MHI)

973

0

Medium Impact

3 411

2 331

Small-Medium Impact (SMI)

2 268

1 358

Small FSPs

3 362

6 839

Total

10 297

10 790

Risk Assessment Visits to FSPs
A total of 643 FSPs received visits. Of these, 490, or 76.2% occurred at the medium to high impact categories.
The report states that the overall compliance of FSPs was satisfactory, and a definite improvement was noticeable during the period under review. The overall understanding of key individuals and representatives with regard to compliance was far better, which can mainly be attributed to the knowledge gained in their preparation for the regulatory examinations. The following issues of concern were noted:

Description

Percentage occurrence %

Sections 4 and 5 of the General Code of Conduct (GCOC): Disclosure of documentation is non-compliant

35.40

License conditions: Business information is not updated within 15 days of change taking place

26.55

Good business practices are not followed

20.06

None-compliance with part VIII of the Determination of Fit and Proper Requirements: FSPs not having a business continuity plan in place

16.81

Sections 11 and 12 of the GCOC: FSPs of which the Risk Management Plan is inadequate

16.22

No register/records kept of training undergone by key individuals and representatives

14.75

Section 7 of the GCOC: Disclosure made to client in terms of the product and services are inadequate

14.16

Non-compliance with part IX of the Determination of Fit and Proper Requirements: FSPs not complying with the financial soundness requirements

14.16

Section 3A of the GCOC: FSPs that have not adopted, maintained and implemented a conflict of interest management policy

9.44

Corporate governance measures are inadequate

8.85

Compliance Practice Visits
During the period under review, the Supervision Department reviewed 33 independent compliance practices. The majority of the compliance practices provided acceptable compliance services to clients.
However, there were some areas that needed improvement, which were identified and addressed with the respective practices. During the review of the risk-based framework, a process of recording of information on compliance practices was developed and is being introduced. It is envisaged that this will enable supervisors to focus proactively on specific concerns relating to external compliance officers.
Specific On-site Visits The Registrar of FSPs ordered an inspection into the affairs of Mr Herman Pretorius, RVAF and Polus Capital (Pty) Ltd. During the inspection, the RVAF scheme collapsed and it was established that 16 authorised FSPs were involved in soliciting clients on behalf of the late Mr Pretorius. On-site visits to probe their participation in assisting clients to place investments in the RVAF and other schemes offered by the late Mr Pretorius were conducted. At the end of the period under review, these investigations were still continuing.
Communication with FSPs
The FAIS Supervision Department implemented a comprehensive communication strategy during the period under review, including newsletters, information circulars, workshops, conferences and telematics broadcasts. Guest speakers at the conference and workshops included speakers from other FSB departments, as well as industry experts.
A joint exercise between FAIS Supervision and FAIS Registration was focused on the funeral industry. A large number of workshops were held to assist this part of the industry to understand the registration (licensing) requirements, as well as the ongoing requirements for maintaining a license. During these workshops, FSPs were specifically assisted to complete compliance reports and financial statements.
Specialisation Areas As part of the Department’s risk-based approach, supervisory staff members are involved in specialisation areas. Seven focus groups, including ones for unconventional FSPs (foreign FSPs, forex investment providers, retailers, motor dealers, estate agents and auditors), banking, medical schemes and compliance officers were tasked with providing guidance in these specific specialisation areas. Research into industry practices and thematic work, as well as focused on-site visits, was conducted. Issues that came to the fore led to the compilation of information circulars on bulk client transfers and the re-signing of client mandates, cash management system accounts, fee disclosure and material irregularity reporting by compliance officers.

Continue reading this article

Makelaars in skema ondersoek

27 Nov

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 29 November 2013

KAAPSTAD. – Finansiële raadgewers wat “minstens R100 miljoen” kommissie gemaak het uit beleggers in Herman Pretorius se piramideskema, word ondersoek.Die Finansiële Beplanningsinstituut (FPI) het heelparty klagtes ontvang en doen dissiplinêre ondersoeke na dié makelaars, wat by die instituut geregistreer is.Adv. Jacqui Grovè, hoof van regsdienste van die FPI, het gister gesê die ondersoek gaan voort.

“Ons het al redelik inligting bekom, maar aangesien die tipe oortredings as baie ernstig beskou word, wil ons seker maak ons maak behoorlik werk van die klagtes en ondersoeke,” het Grovè gesê.

Ingevolge die FPI se dissiplinêre regulasies sal die uitslag van verhore oor die makelaars gepubliseer word.

Die FPI kan egter geen inligting bekend maak alvorens die proses afgehandel is nie.

Grovè het gesê die FPI het heelparty klagtes ontvang, maar het die meerderheid van die klaers na die ombudsman verwys, aangesien die FPI se jurisdiksie om klagtes te ondersoek, beperk is tot FPI-lede.

Luidens die jongste verslag van die kuratore van Pretorius se Relative Value Arbitrage Fund (RVAF) is minstens R100 miljoen as kommissie aan makelaars betaal.

Die kurators, Rynette Pieters en Bessie Bester, het in hul verslag gesê verskeie mense is reeds gedagvaar vir ondervraging.

Die kurators volg inligting oor die mense en instansies op waarheen beleggers se geld “gevloei” het en elke transaksie word ondersoek in ’n poging om geld vir die beleggers te herwin.

Een van die kurators se eerste doelwitte is om geld wat in oorsese rekeninge is, na Suid-Afrika terug te bring. Bankstate word ook nagegaan om die geld wat uit dié oorsese rekeninge uitbetaal is, na te spoor.

Pieters het gesê sover die kurators weet, “word al die geld by finansiële instellings in Engeland bewaar”.

Daar word ook ’n prokureur in Switserland aangestel wat sal probeer om die state van bankrekenings in dié land te bekom.

Die kurators het in Oktober by die Wes-Kaapse hooggeregshof aansoek gedoen om die sperdatum vir ’n eerste likwidasierekening uit te stel. Dié rekening moes op 30 Oktober gelewer word.

Pretorius het nie behoorlik boekgehou van die RVAF en ander beleggingsrekeninge se transaksies nie. Dit blyk dat Pretorius bloot die een beleggingsentiteit gesluit en dan ’n volgende begin het.

Hy het geld van die een na die ander oorgeplaas en dan voortgegaan om nuwe beleggers te lok.

Lees Artikel in Die Burger

Pretorius ponzi probe bubbles on

4 Nov

Author: Julius Cobbett

Publications: The Citizen

Date Publiched: 4 November 2013

Brokers who sold the investment products of the late Herman Pretorius were paid commission of “at least” R100m, the most recent letter from the curators of his failed investment scheme, the Relative Value Arbitrage Fund (RVAF), says.

It has been more than a year since Pretorius shot first his former business partner and then himself. The incident confirmed what some had already suspected: Pretorius had been running a massive Ponzi scheme. It has been estimated that the scheme took nearly R2.2bn from 3 000 investors.

The Financial Services Board (FSB) and the Financial Planning Institute (FPI) have launched investigations into brokers who peddled the scheme. But there has been no disciplinary action announced as yet.

Likewise the financial advice ombudsman Noluntu Bam has yet to issue a determination connected with a Herman Pretorius investment.

Earlier this year the RVAF identified Michal Calitz as one of the more prominent brokers. Calitz, who was a close friend of Herman Pretorius, received more than R15m from the scheme. Calitz is still a representative of Impact Financial Consultants CC, which is an FSB-authorised financial service provider and is listed as an FPI member.

The FPI says it is finalising charges against members in relation to the RVAF, but it will pronounce on the matter only once a December disciplinary hearing has been held.

The FPI’s Disciplinary Regulations require publication of the outcomes of disciplinary hearings, but after finalisation only, it says.

The FSB says its own investigation into the Pretorius matter is not finalised; the “FAIS supervision department is still in a process of engaging with the identified financial services providers and other interested parties”.

The RVAF’s curators are trying to trace investor money that was moved by Pretorius to the UK and Switzerland.

Continue reading this article

The pitfalls of DIY investing

1 Nov

Author: Hannes Smuts

Publications: PSG Konsult

Date Published: 1 November 2013

This is a warning. Yet, regular readers need not fear: this is not an alarm bell sounding the dangers of another investment scheme promising unrealistic returns. For most, the name Herman Pretorius should ring a bell. Obviously that threat remains ever present, but there is a much more subtle trend that needs to be recognized. We call it DIY investing. Let me explain:

Hardly a day goes by that people with funds to invest are not bombarded by advertisements and other communication prompting them to manage their investments themselves. The nature and content of these ads might differ, but the message is the same: you do not need the input of an investment professional to invest on the stock market or to guide you towards a sensible investment plan tailor made for your unique situation.

Does the following sound familiar? Cut out “the middleman” and become a stock market entrepreneur (more likely millionaire) – we will give you 3 share tips to start your millionaire portfolio. Such exhortations appear continuously on television, in the printed media and via electronic communication.  Interwoven into these campaigns is the emphasis on the relative ease with which one’s affairs can be conducted online.

On the face of it DIY investing has become child’s play. The perception is created that most people can manage their own investment affairs without incurring the “extra costs” of a professional investment advisor. The message reverberates: professional advice has become too expensive and redundant. Do your investments, including purchases of unit trusts, online! Oh yes, and if you want to save even more money, skip the asset manager (and his unnecessary fees) as well by going for a really “cost effective” index tracker.

It is to be applauded that technological advances during the last decade have opened up new avenues for making informed investment decisions. However, it is the way this is being portrayed, combined with the inherent lurking risks, which need to be addressed.

We have identified mainly two dangers. The first is that DIY investment encourages short term thinking. The second is that it almost certainly does not address the risks created by investor behaviour.

Markets that generate positive returns, especially during a long upswing, are known as bull markets. Statistics have shown that bull and bear markets lead to irrational investor behaviour.

Think back to the bull run in the residential property market between 1995 and 2006. For a decade, returns were not only around “20% p.a”., but also a dead cert. The natural consequence was that everyone and anyone that could, started trading in property and made money. When finances were discussed around the braai fires reassuring remarks abounded such as: property prices don’t drop – they might move sideways, but never down!

Investors conveniently ignore the past which would have taught them that property is as cyclical an asset class as other growth assets. The rest is history: the property market contracted by as much as 30% to 40% in a year and many speculators were left stranded. It took years for the residential property market to show signs of recovery and guess what: most “investors” now believe it’s a bad investment.

What has this sad story got to do with cheap and convenient DIY investing?

Generating good, inflation beating investment returns in South Africa (and even abroad) has been fairly easy for the last 10 years. The reality is that these returns were driven by a rampant bull run on the JSE. Therefore one cannot really blame those who have ventured into DIY investing and for spreading the word about their successes.

Reality is that most investors who have been in the markets during the last 10 years have yet to experience the pain and frustration of a bear market. Unless they have a good understanding of the risks involved, and in particular the interaction between risk and reward, they will be well advised to use professional investment advice.

But you do not have to take only our word for it. In a recent article on 21st Century Megatrends, well known future-scenario planning expert, Clem Sunter, suggests that retirees will still need “an astute financial adviser”, otherwise, as he puts it, it becomes a race between poverty and death.  This remark should not be limited to retirees.

Note: This article does not constitute formal advice. Past performance is not indicative of future returns. Always remember the prudent way is to consult your stockbroker before investing.

Hannes Smuts is a senior portfolio manager at PSG Hermanus Portfolio Management & Stockbroking.

Herman Pretorius brokers got at least R100m

31 Oct

Author: Julius Cobbett

Publications: MoneyWeb

Date Published: 31 October 2013

Financial Planning Institute says it is finalising charges against members.

JOHANNESBURG – Brokers who sold the investment products of the late Herman Pretorius were paid commission of “at least” R100m. This is according to the most recent letter from the curators of his failed investment scheme, the Relative Value Arbitrage Fund (RVAF). A copy of the letter can be downloaded here.

It has been more than a year since Pretorius shot first his former business partner and then himself. The incident confirmed what some had already suspected: Pretorius had been running a massive Ponzi scheme. It has been estimated that the scheme took roughly R2.2bn from 3000 investors.

Both the Financial Services Board (FSB) and the Financial Planning Institute (FPI) have launched investigations into brokers who peddled the scheme. But there has been no disciplinary action announced as yet. Likewise the financial advice ombudsman Noluntu Bam has yet to issue a determination connected with a Herman Pretorius investment.

Earlier this year the RVAF identified Michal Calitz as one of the more prominent brokers. Calitz, who was a close friend of Herman Pretorius, received more than R15m from the scheme.

Calitz is still a representative of Impact Financial Consultants CC, which is an FSB-authorised financial service provider.

Calitz is also listed on the FPI’s website as a valid member.

The FPI tells Moneyweb that it is finalising charges against members in relation to the RVAF. It says it will only pronounce on the matter once a disciplinary hearing has been held. The hearing is expected to be held in December, the exact date yet to be confirmed.

“In terms of the FPI’s Disciplinary Regulations the outcomes of disciplinary hearings will be published – however, this is done once the matter is finalised and the period for an appeal has expired,” it says.

Similarly the FSB says its own investigation into the Herman Pretorius matter is not finalised yet as the “FAIS supervision department is still in a process of engaging with the identified financial services providers and other interested parties”.

The RVAF’s curators are trying to trace investor money that was moved by Pretorius to the UK and Switzerland. The curators have appointed attorneys in both those countries to assist them trace the funds.

Continue Reading MoneyWeb

Polis mag nie skuld delg van weduwee

23 Oct

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 23 Oktober 2013

Welgemoed

Welgemoed

KAAPSTAD. – ’n Lewenspolis van R8 miljoen wat aan ’n familietrust van wyle Herman Pretorius uitbetaal is, kan nié deur kurators gebruik word om sy weduwee, Susan-Ann, se skuld te delg nie.

Dié geld is uitbetaal aan ’n familietrust van die Pretorius-familie, bekend as die Penta Trust, en kan nie bygereken word as ’n bate by Susan-Ann Pretorius se gesekwestreerde boedel nie.

Die kurators van Herman Pretorius se Relative Value Arbitrage Fund (RVAF) Trust en die Seca Trust se aansoek in die Wes-Kaapse hooggeregshof om Susan-Ann Pretorius te sekwestreer, het wel geslaag, maar hulle kan nie aan die R8 miljoen raak nie.

Waarnemende regter Wilhelm van Staden, wat Maandag ’n aansoek om die finale sekwestrasie van Susan-Ann Pretorius in die Wes-Kaapse hooggeregshof toegestaan het, het gister die redes vir sy bevel gegee en gesê haar skuld beloop meer as R17 miljoen.

Die waarde van haar huis in Van de Graaffstraat, Welgemoed, die enigste merkbare bate in haar boedel, is op R6,75 miljoen geskat.

Van Staden het in sy bevel uitgewys dat Susan-Ann Pretorius nie die begunstigde van die lewenspolis is nie.

Haar regsverteenwoordiger, Etienne Naude, het dit in ’n beëdigde verklaring bevestig.

Pierre du Toit van Mostert en Bosman, regsverteenwoordiger van die kurators, het gesê selfs al doen Susan-Ann Pretorius nou aansoek om teen die sekwestrasiebevel te appelleer, word ’n kurator steeds aangestel om haar boedel te ondersoek.

 

Lees Artikel in Die Burger

Pretorius-eiendomme opgeveil

22 Oct

Author: Marelize Barnard

Publications:  Die Burger

Susan nn


Een van twee lyste van betalings wat in hofdokumente ingesluit is in die aansoek om sekwestrasie van Susan-Ann Pretorius. Dié bedrae is uit die Seca Trust betaal.
Die huis in Welgemoed wat in Susan-Ann Pretorius se naam geregistreer is, moet nou verkoop word nadat sy finaal in die Wes-Kaapse hooggeregshof gesekwestreer is. Foto: yunus mohamed

KAAPSTAD. – Die glaspaleis in Welgemoed wat die piramide-beleggingsmous Herman Pretorius met tjeks van miljoene rande vir sy vrou, Susan-Ann, gebou het, gaan opgeveil word.

Susan-Ann Pretorius is gister finaal in die Wes-Kaapse hooggeregshof gesekwestreer.

Dit beteken dat die huis in Welgemoed, al die flambojante meubels, asook van haar ander eiendom, verkoop gaan word.

Waarnemende regter Wilhelm van Staden het beveel dat die aansoek om ’n finale sekwestrasiebevel toegestaan word. Hy het aangedui dat hy vandag die redes vir die bevel sal gee.

Die aansoek is deur Susan-Ann Pretorius teengestaan.

Die eerste applikant in die aansoek, die likwidateur Lambertus von Wielligh Bester, het gesê al die eiendom wat in Susan-Ann Pretorius se boedel is, sal nou verkoop word sodat skuldeisers betaal kan word.

Luidens hofdokumente wat in die aansoek om voorlopige sekwestrasie ingedien is, het Bester aangevoer dat Susan-Ann Pretorius geen gronde het om aan te voer dat haar oorlede man se beleggingskema wettig was nie. Dus is sy nie geregtig op die geld wat sy van Pretorius gekry het nie.

Susan-Ann Pretorius was te alle tye die geregistreerde eienaar van die eiendom in Van de Graaffstraat in Welgemoed. Vir dié eiendom is daar binne twee jaar R13,3 miljoen betaal aan bouers en binneversierders.

Altesaam 11 bedrae wat aan Bos & Punt-bouers betaal is vir bouwerk aan die eiendom in Welgemoed wissel van R34 200 tot R1,6 miljoen elk.

’n Lys van altesaam 115 aankope vir die binneversiering van die Welgemoed-huis is ook in die aansoek by die hooggeregshof ingedien.

Twee lyste van betalings wat uit Pretorius se Seca Trust aan Susan-Ann Pretorius gemaak is, wys dat daar van 6 Mei 2004 tot 25 Julie 2012 minstens 26 keer geld oorbetaal is. Die bedrae wissel van R100 000 tot R300 000.

Op 21 Januarie 2008 en weer op 21 Maart dieselfde jaar is bedrae van R300 000 elk uit die Seca Trust aan “SAP (SA Pretorius) betaal”.

Verder is daar uit Pretorius se Relative Value Arbitrage Fund (RVAF) Trust R4,18 miljoen ten gunste van Susan-Ann Pretorius betaal, luidens die hofdokumente.

Herman Pretorius, wat R2,2 miljard van beleggers ingevorder het in ’n belegging-piramideskema, het op 26 Julie verlede jaar ’n voormalige sakevennoot, Julian Williams, in die middestad van Kaapstad doodgeskiet en daarna selfmoord gepleeg.

Lees Artikel in Die Burger

Oh my hat, do I really need a financial advisor?

17 Oct

Author: Sasha Planting

Publications: MoneyWeb

Date Published: 17 October 2013

Is it not enough to google like crazy and learn that way?

CAPE TOWN: For a long time I had a deep distrust of any kind of financial advisor, associating them with several ill-advised and costly investments made back in my twenties and thirties.

So I did my own research, invested in a retirement scheme without the benefit of a broker; started a savings plan and began building a small portfolio of shares which I manage myself.

I was pleased with myself. Then this year our friendly taxman lobbed a R25 000 tax penalty at me. Suddenly I had a different view on advisors and scrambled for a tax consultant. Needless to say he was worth every cent. I was even able to get the better part of the penalty back – to my advisor’s surprise, I might add.

So then I wondered, if I could mess up my simple tax that badly, perhaps I could mess up my financial planning too. Hmmm. Do we really need financial advisors? Is it not enough to google like crazy and learn that way? I wasn’t sure any more. And assuming I did need an advisor, how on earth would I find someone independent and trustworthy? Because now I’m starting to think that finding a good financial advisor might be more important than finding a good husband.

So I chatted to some advisors for their views. Rita Cool is a financial consultant with Alexander Forbes; Gavin Gehlig is co-founder of CGN Wealth and Warren Ingram is co-founder of Galileo Capital who has coincidentally written a book entitled ‘Become Your Own Financial Advisor’. All are certified financial planners.

Of course asking a financial consultant if one really needs a financial advisor is like Little Red Riding Hood asking the wolf if he is hungry. But let’s face it, when the wolf answered yes, he was telling the truth.

So it was not surprising that all three advisors agreed that most people – note, not all – would be financially better off had the enlisted the services of an advisor early on in life. They also agree that the internet is a useful resource, specifically when you are looking for targeted information.

What the internet lacks is the ability to take all the information and compile it into a holistic plan. “Advisors add value by helping you get from where you are now to where you want to be – financially that is,” says Cool. “They help you quantify and qualify your goals and will devise a personal, step-by-step plan to get there. They are also aware of things the ordinary person may not be – changes in regulation or which product is more or less suitable in different circumstances. So many people become paralysed by the amount of information available that good intentions remain just that.”

Even financial advisors have their own financial advisors Ingram says. “It is difficult to be knowledgeable about all aspects of your finances. For instance, I pay someone to do my tax and update my will even though I am in the industry.”

So how on earth do you find an advisor? Everyone says ‘by word of mouth’, but it doesn’t help if your friends don’t have someone either. It also doesn’t help if their trusted advisor turns out to be less than kosher, as investors in Herman Pretorius’s Real Value Arbitrage Fund discovered.

As a general rule it is advisable to seek out advisors with a professional qualification. This means they need to be a CFP® professional and you can find a list of them in your area from the Financial Planning Institute’s website www.fpi.co.za. Another general rule is to focus on advisors who work for independent companies rather than those who work for a product provider or a bank.

Of course their advice comes at a price. I used to struggle with this idea because in my experience product advice was ‘free’. But when I noticed that commissions (paid to the agent who sold the product) were eating up my returns I learned that ‘free’ also has a price.

“A great financial planner can make an enormous difference to your life while a bad advisor can set you back very badly,” says Ingram. “So you should choose your advisor very carefully and not necessarily focus on the cheapest.” Would you choose the cheapest bridge-building engineer or the cheapest doctor, or would you pay for the best you could afford? “I think the same applies to your money.”

Most advisors still earn an income from product commissions. “This is fine,” says Cool, “but clients should always be informed of the commission component charged on a product.” She notes that the commission-based structure is slowly changing towards a fee structure where a client pays a set fee for a specific service.

Some planners work on an hourly rate which varies from R700 all the way up to R2500, depending on complexity. Others prefer to charge a flat rate for the plan itself. “This way the potential client is aware of the cost upfront. I would charge R3000 (vat inclusive) for a retirement and estate plan which could include creating or updating a client’s last will and testament,” Gehlig says.

Younger clients when starting out won’t be earning a fortune and will still be in the build up phase of their lives and probably change jobs a few times prior to settling and finding their niche. “As a planner your services for a client earning R10 000 per month would be different to a client earning R100 000 per month but each client deserves to be treated identically,” he says.

It’s a good idea to check if there is a fee for the initial advice consultation.  In many offices there is no fee for an initial consultation and fees are only charged if and when a product is set up.

That is a good enough reason to just give it a try.

Read More on Moneyweb

Staat het skelm skemas in sy visier

27 Sep

Author: Alet Rademeyer

Publications:  Die Burger

Date Publiched: 27 September 2013

PRETORIA. – “Moenie koebaai sê vir jou geld nie.”

Met dié nasionale veldtog wil die Suid-Afrikaanse Reserwebank 11 miljoen Suid-Afrikaners bereik en bewus maak van onwettige piramide- of ponzi-skemas.

Hlengani Mathebula, hoof van groepstrategie en kommunikasie by die Reserwebank, het gister hier op ’n nuuskonferensie gesê duisende Suid-Afrikaners word slagoffers van onwettige skemas wat hul geld vat en vinnige rykdom belowe.

Mense moet baie versigtiger wees en hul huiswerk behoorlik doen voordat hulle geld in enige skema belê…….

• Die publiek kan verdagte skemas by 0800 313 626 aanmeld en ook hier uitvind of instellings geregistreer is.

Lees Artikel in Die Burger

Ponzi scheme alert: How to know when it really is too good to be true

27 Sep

Author: Dawie de Villiers, CEO, Sanlam Employee Benefits

Publications:  Sanlam

Date Publiched: 27 September 2013

The extended economic downturn and interest rates hovering around the 5 or 6% mark make investment returns all too elusive right now. With many South Africans, in particular retirees, struggling to make ends meet, it is fertile ground for fraudulent investment schemes – known popularly as Ponzi schemes – to flourish.

The SA Reserve Bank recently launched a national campaign to increase awareness of pyramid or Ponzi schemes. The campaign encourages people to be careful when looking at potential investment opportunities.

South Africans seem to repeatedly entrust their hard-earned savings to operations which, at best, have short-term track records and, at worst, knowingly sell promises that they are unable to deliver on. Investors buy into these promises without fully understanding how these operators achieve their alleged returns.

Over the past six years the following schemes – which have had traumatic consequences for unsuspecting investors – come to mind: Fidentia, Leaderguard, Sharemax, King Group, the Herman Pretorius saga, and Defencex. There is a golden thread running through this list; each one promised a return far superior to that of the financial market, at a very low risk. In hindsight, such promises were too good to be true. But why do we continue to move from one such scandal to the next?

Spotting a Ponzi or pyramid scheme is actually relatively easy – here is a checklist ………

Continue reading

Sharemax director warns against Fais Ombud complaints

24 Sep

Author: Julius Cobbett

Publications: MoneyWeb

Date Published: 24 September 2013

Dominique Haese claims investors might lose their right to investment returns.

JOHANNESBURG – Investors in Nova Group Investments have been cautioned against pursuing complaints with Fais Ombud Noluntu Bam. Investors have been warned that if they pursue their complaints, they may forfeit their rights to investment returns or repayments from the Nova Group

Continue Reading

Pretorius-weduwee voorlopig gesekwestreer

17 Sep

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 17 September 2013

KAAPSTAD. – Susan-Ann Pretorius, weduwee van die piramide-beleggingsmous Herman Pretorius, is voorlopig gesekwestreer.

Regter André Blignaut het gister die bevel van voorlopige sekwestrasie uitgevaardig nadat Susan-Ann Pretorius ’n aansoek om sekwestrasie in die Wes-Kaapse hooggeregshof teengestaan het.

Blignaut het bevind Susan-Ann Pretorius was, ondanks ’n “magdom dokumentasie” wat haar met betalings in haar guns verbind, nie bereid “om selfs een” te erken nie. “Terselfdertyd ontken sy ook nie dat sy dit (die betalings) ontvang het nie.”

Die regter het gesê hy stem saam met die regspan van die kurators van wyle Herman Pretorius se Relative Value Arbitrage Fund (RVAF) en die Seca Trust dat Susan-Ann Pretorius “ontwykend” is.

’n Forensiese ondersoek het getoon dat R17,7 miljoen regstreeks aan of namens haar betaal is.

Sy was die geregistreerde eienaar van ’n eiendom, Van de Graaffstraat 26 in Welgemoed, waarvoor daar tussen 23 Februarie 2005 en 16 Januarie 2007 R13,3 miljoen betaal is aan bouers en binnehuisversierders.

Die eerste applikant teen haar, die likwidateur Lambertus von Wielligh Bester, het aangevoer ’n eis van R107 miljoen teen haar is geregverdig omdat sy haar plig as ’n trustee van die Seca Trust versuim het. Bester voer aan ongeveer R130 miljoen van beleggers se geld is deur Pretorius uit die RVAF-bankrekening na die Seca Trust oorgeplaas.

Verder is daar uit die RVAF Trust R4,18 miljoen ten gunste van Susan-Ann Pretorius betaal. Hiervan is R900 000 in haar verbandrekening betaal. Op 31 Mei 2011 is ’n bedrag van R350 000 in haar Nedbank-rekening gestort.

Blignaut het in sy beslissing uitgewys hoewel elke betaling ondersteun is deur dokumentasie wat Susan-Ann Pretorius met die RVAF en Seca Trusts verbind, haar verweer was dat die applikante nie bewyse daarvan gelewer het nie.

Volgens Blignaut is daar wel bewyse dat die betalings van die onderskeie trusts aan of namens Susan-Ann Pretorius gemaak is.

“Daar is ook rede om te glo dat haar sekwestrasie tot voordeel van haar krediteure sal wees,” het Blignaut in sy uitspraak gesê.

Die aansoek is tot 14 Oktober uitgestel as deel van die proses van ’n bevel vir finale sekwestrasie.

 

Lees Artikel in Die Burger

This year’s hottest home

9 Sep

Author: Biénne Huisman

Publications:  City Press

Date Publiched: 9 September 2013

Architects and designers toast house of the year

South Africa’s house of the year boasts braais on two levels, a pizza oven next to a swimming pool and sweeping views of Cape Town.

A five-bedroom mansion on the slopes of Table Mountain beat 10 other finalists to clinch top honours in a national luxury-housing competition this week.

The country’s top address in Cape Town’s Higgovale is home to structural engineer Craig Sutherland, his wife, Colleen, their teenagers, Keegan, Adrienne and Casey, and their two dogs, Stitch and Mia.

“The stoep is my favourite. It’s lovely in summer with views up to the sea,” said Colleen.

“I have loads of entertainment options, which is just great,” added Craig.

The country’s foremost architects and home designers toasted the pair’s home at a function in Cape Town on Wednesday.

The winning property was voted for by readers of House and Leisure magazine, with about 20 000 votes cast in an online poll.

Commenting on the winning house, editor Naomi Larkin said: “It is a proper family home and yet it is extremely sophisticated.”

The Sutherlands bought the property 11 years ago and had major renovations done last year.

The air at the party was thick with intrigue as one of the competition’s top contenders was the Hermanus beach house built by Herman Pretorius, the alleged pyramid scheme fraudster who shot himself and a business partner in Cape Town last June.

The controversial sea-facing Voëlklip villa was featured on the cover of House and Leisure’s “luxury issue” in August 2012, which apparently went to print before Pretorius died.

It was alleged in court papers that the sprawling three-bedroom house was built with investors’ money.

Read More

Wenner lê knus teen die berg

8 Sep

Author: Biénne Huisman

Publications:  Rapport

Date Publiched: 20 Augustus 2013

Suid-Afrika se huis van die jaar lê knus teen die hang van Tafelberg in die rykmansbuurt Higgovale.

Hier woon die ingenieur Craig Sutherland, sy vrou, Colleen, hul tieners Keegan, Adrienne en ­Ca­sey, en die twee honde, Stitch en Mia.

Daar is ’n braaiplek op twee vlakke, ’n pizza-oond reg langs die swembad en ’n asemrowende uitsig oor Kaapstad.

Die luukse vyfslaapkamer-woning het die afgelope week tien finaliste geklop in ’n nasionale kompetisie waarin lesers van die tydskrif Home and Lei­sure aanlyn kon stem vir hul guns­teling.

Sowat 20 000 mense het aan die kompetisie deelgeneem.

Volgens Colleen is die stoep haar spesiale plek. “Dit is heerlik om in die somer daar tyd deur te bring terwyl jy oor die see uitkyk.” Vir Craig is al die onthaalkeuses ’n groot pluspunt.

Naomi Larkin, redakteur van Home and Leisure, sê hoewel dit ’n regte gesinswoning is, is dit baie gesofistikeerd.

Die Sutherland-gesin het die huis 11 jaar gelede gekoop en verlede jaar verbou.

Van die ander huise wat ook om dié gesogte titel meegeding het, was die Hermanus-strandhuis wat deur Herman Pretorius gebou is. Hy is van ’n piramide-skema aangekla en het hom en sy vennoot in Junie verlede jaar om die lewe gebring.

Dié huis met sy see-aansig in Voëlklip het volgens die argitek Stefan Antoni “’n gevoel van vrede, baie ruimte en is gevul met sonlig”.

Die eiendom het verlede jaar die Suid-Afrikaanse Instituut vir Argitekte se toekenning vir uitnemendheid gewen. Dit is in April vir R16,5 miljoen op ’n veiling verkoop.

Die binnenshuise versierder Astrid van der Heim se huis in Killarney, die argitekte Xavier en Carine Huyberechts se huis in Houghton en Kobus Nieuwoudt s’n in Nature’s Valley was ook onder die finaliste.

Verslag oor Pretorius bevraagteken

24 Aug

MARELIZE BARNARD

Saterdag 24 Augustus 2013

KAAPSTAD. – Waarom word niks gesê van die groot beleggers in wyle Herman Pretorius se “beleggingsfondse” en al die geld wat aan hulle uitbetaal is nie?
Dié vraag is deur Michael Calitz, voorheen ’n makelaar vir Pretorius, aan die likwidateurs van Pretorius se Relative Value Arbitrage Fund (RVAF) gevra.
Calitz het ’n beswaar teen die likwidateurs se verslag wat op 13 Junie uitgereik is by die meester van die Wes-Kaapse hooggeregshof ingedien.

Lees Verder

‘Kom, sê iets, mev. Pretorius’

22 Aug

MARELIZE BARNARD
Donderdag 22 Augustus 2013
KAAPSTAD. – “Kom, mev. Pretorius, praat . . . sê iets.”
Dít was gister die beroep wat in die Wes-Kaapse hooggeregshof gedoen is op Susan-Ann Pretorius, vrou van wyle Herman Pretorius wat R2,2 miljard van beleggers ingevorder het in ’n vermeende piramideskema voordat hy verlede jaar selfmoord gepleeg het.

Lees Verder

Pretorius moet sê oor interdik

21 Aug

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 21 Augustus 2013

KAAPSTAD. – Het Herman Pretorius se weduwee geweet dat ’n interdik verontagsaam word toe miljoene rande se aandele ná haar man se dood verkwansel is om haar eie regskostes te betaal?

Dit is die vraag wat Susan-Ann Pretorius moet beantwoord wanneer sy vandag ’n sekwestrasie-aansoek teen haar in die Wes-Kaapse hooggeregshof beveg. Haar regspan kan dalk lig werp oor die bewering dat ’n groot getal Wesizwe-aandele verkoop is ten spyte daarvan dat dit strydig kon wees met ’n hofbevel.

Lambertus von Wielligh Bester van Progressive Administration, ’n mede-kurator van Pretorius se beleggingstrust (Relative Value Arbitrage Fund), voer in ’n beëdigde verklaring aan dat aandele verkoop is nadat ’n interdik op 9 Oktober verlede jaar verkry is wat Susan-Ann verhinder om enige bates te vervreem.

Maar Susan-Ann voer in haar beëdigde verklaring aan dat die opbrengste uit die verkoop ………

Continue reading this article

Telematic Broadcasts Keeping you Updated

21 Aug

Author: Paul Kruger

Publications: Moonstone

Date Published: 20 August 2013

In the aftermath of the Herman Pretorius matter, and the latest warning from the FSB concerning an institution who offers a 25% return per month, it sounds like a good presentation to attend, and to ask some questions. ………

Continue reading this article

Als donasies, sê weduwee

20 Aug
Welgemoed

Welgemoed

Author: Marelize Barnard

Publications:  Die Burger

Date Publiched: 20 Augustus 2013

KAAPSTAD. – Die weduwee van die piramide-beleggingsmous Herman Pretorius gaan môre aan die hof verduidelik waarom sy nie gesekwestreer moet word nie.

Susan-Ann Pretorius beveg ’n sekwestrasie-aansoek teen haar en voer aan sy was bloot ’n huisvrou wat “donasies” ontvang het van haar “eertydse suksesvolle sakeman-eggenoot”.

Lambertus von Wielligh Bester, likwidateur wat die sekwestrasie-aansoek teen Susan-Ann in die Wes-Kaapse hooggeregshof bring, meen egter sy het nie enige bewyse gelewer dat Pretorius ’n suksesvolle sakeman was nie.

“My oorlede man het voor 2004 suksesvolle besighede gehad wat ons, byvoorbeeld, daartoe in staat ………

Continue reading this article

Liquidation of a Herman Pretorius Company Sees Claremont Property Sold on Auction

28 Jul

Author: Property Wheel

Publications: Property Wheel

Date Published: 27 July 2013

A luxurious Claremont apartment which formed part of the assets of a company in liquidation and of which the late Herman Pretorius, known for his involvement in various hedge fund investment schemes was a Director, was confirmed as sold by the ClareMart Auction Group for an inclusive R3.3million on Friday, July 19. The auction took place on-site auction on Wednesday, July 10.

“Our Group received joint instruction from the liquidators of RZT Zelpy 4005 (Pty) LTD to proceed to auction with this premier southern suburb apartment together with all of its luxurious and décor appointed contents and our Group is pleased to have been able to once again assist a high profile liquidation linked to Pretorius” says Chief Executive Officer, Jonathan Russell Smiedt.

The on-site auction held at 12 noon on Wednesday was attended by approximately fifty members of the public. “Although we are experiencing a high number of members of the public attending and registering at our auctions in general, we were certain that this particular property would achieve a similar interest to our successful and well-attended auction of Pretorius’ …..

Continue reading this article

Moneyweb shines at Sanlam Awards

18 Jul

Author: Julius Cobbett

Publications: MoneyWeb

Date Published: 18 July 2013

Clark and Rees honoured with three category awards.

Two Moneyweb journalists scooped three category awards at the prestigious Sanlam Awards for Excellence in Financial Journalism. Moneyweb founder Alec Hogg also received a Lifetime Achievement Award.

Moneyweb’s financial services correspondent Jeanette Clark won in the categories of Personal Finance and Infrastructure Development.

Malcolm Rees was honoured in the category for the Economy and Industry for his in-depth reporting on developments in the unsecured lending market. He was the co-winner with Business Report veteran Ann Crotty.

Julius Cobbett was also a finalist in the category for Personal Finance for his reporting on the Herman Pretorius saga.

Continue Reading 

Brief: Is dit hoe jy jou integriteit verkoop?

16 Jul

Author: Lesersbrief

Publications:  Die Burger

Date Publiched: 16 Julie 2013

Ek het ook deur ’n makelaar aandele by Herman Pretorius gekoop. Herman het sekere beloftes in die teenwoordigheid van die makelaar gemaak. Toe dit nie realiseer nie, kontak ek die makelaar, wat my meedeel dat ek nou op my eie is. Noudat ek lees van die R15 000 000-kommissie, maak baie dinge sin. Dat ’n mens nou jou integriteit vir geld kan verkoop!

Izak

Eendekuil

 

Lees Die Burger

Follow

Get every new post delivered to your Inbox.